Introductory Note
As previously disclosed, on April 12, 2022, Sierra Oncology, Inc. (which we refer to as the “Company” or “Sierra Oncology”) entered into an Agreement and Plan of Merger (which we refer to as the “Merger Agreement”) with GSK plc (formerly GlaxoSmithKline plc) (which we refer to as “GSK”) and Orikum Acquisition Inc. (which we refer to as “Acquisition Sub”).
Pursuant to the Merger Agreement, following the satisfaction or waiver of each of the applicable conditions set forth in the Merger Agreement, Acquisition Sub merged with and into Sierra Oncology (which we refer to as the “Merger”), with Sierra Oncology surviving as a wholly owned subsidiary of GSK. The Merger was consummated on July 1, 2022.
Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in the Introductory Note, Item 2.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by reference.
On July 1, 2022, in connection with the consummation of the Merger, Sierra Oncology terminated the Loan and Security Agreement (the “Loan Agreement”), dated January 21, 2022 among Oxford Finance, LLC, as collateral agent, the lenders from time to time a party thereto and Sierra Oncology Canada, LLC and repaid in full all outstanding obligations due under the Loan Agreement as well as paid a prepayment fee of $100,000.
Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As described in the Introductory Note, which is incorporated herein by reference in this Item 2.01, on July 1, 2022, pursuant to the terms of the Merger Agreement, the Merger was consummated. As a result of the Merger, each issued and outstanding share of Sierra Oncology’s common stock (other than shares (1) held by the Company as treasury stock; (2) owned by GSK or Acquisition Sub; or (3) held by stockholders who have neither voted in favor of the adoption of the Merger Agreement nor consented thereto in writing and properly and validly exercised their statutory rights of appraisal under Delaware law) was canceled and extinguished and automatically converted into the right to receive cash in an amount equal to $55.00, without interest (the “Per Share Price”).
In addition, pursuant to the Merger Agreement, at the effective time of the Merger, each of Sierra Oncology’s outstanding and unexercised stock options accelerated vesting in full and was cancelled and converted into a right to receive an amount in cash, without interest, equal to the product obtained by multiplying (1) the amount of the Per Share Price (less the exercise price per share attributable to such stock option) by (2) the total number of shares of Sierra Oncology’s common stock issuable upon exercise in full of such stock option. To the extent any stock options had performance-based vesting, the performance requirement was deemed to be satisfied to the maximum achievement of performance criteria. Any stock option with an exercise price per share equal to or greater than the Per Share price was canceled without any cash payment being made in respect thereof.
Pursuant to the Merger Agreement, at the effective time of the Merger, Sierra Oncology’s outstanding warrants were treated in accordance with their respective terms. The Series A warrants were cancelled and the holders received an amount in cash, without interest, equal to the Black Scholes Value (as defined in the Series A warrants), which was calculated under the terms of the Series A warrants to be $45.98 per share of Sierra Oncology’s common stock subject to the Series A warrants. Sierra Oncology’s outstanding pre-funded warrants were deemed exercised in full as a ‘cashless exercise’ (as described in the pre-funded warrants), and the holder thereof received an amount in cash, without interest, equal to the product obtained by multiplying (1) the amount of the Per Share Price by (2) the number of shares of common stock deemed issuable upon exercise in full of the Pre-Funded Warrants as a ‘cashless exercise.’
The description of the Merger does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed by Sierra Oncology as Exhibit 2.1 to Sierra Oncology’s Current Report on Form 8-K filed on April 13, 2022 and is incorporated by reference.