Item 1.01 Entry into a Material Definitive Agreement.
On May 3, 2019, Athenex, Inc. (the “Company”) entered into a share purchase agreement (the “Share Purchase Agreement”) with Perceptive Life Sciences Master Fund, Ltd. (“Perceptive”), venBio Select Fund LLC, OrbiMed Partners Master Fund Limited, and The Biotech Growth Trust PLC (the “Investors”), pursuant to which the Company agreed to sell an aggregate of 10 million shares of its common stock to the Investors at a purchase price of $10.00 per share for aggregate gross proceeds of $100 million (the “Private Placement”). The Private Placement is expected to close on or about May 7, 2019, subject to customary closing conditions. The Share Purchase Agreement contains customary representations, warranties, covenants and indemnification obligations of the Company and the Investors.
Pursuant to the Share Purchase Agreement, the Company agreed to enter into a registration rights agreement (the “Registration Rights Agreement”) with the Investors at the closing of the Private Placement. Under the Registration Rights Agreement, the Company will agree to register for resale the shares of common stock the Investors purchased in the offering under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Registration Rights Agreement, the Company will prepare and file a registration statement with the Securities and Exchange Commission within 90 days of the closing date of the Private Placement and has agreed to use its best efforts to have the registration statement declared effective as soon as practicable. If the Company is unable to meet its obligations to have the registration statement declared effective, the Company will be obligated to pay each Investor an amount in cash equal to one percent of the aggregate purchase price paid by that Investor pursuant to the Share Purchase Agreement, provided that in no event will this payment exceed 25% of that amount. In addition, subject to certain limitations, following the signing of the Registration Rights Agreement, the Investors will have piggy-back registration rights if no registration statement registering the shares sold in the Private Placement is effective and the Company is otherwise filing a registration statement under the Securities Act for the sale of the Company’s securities for its own account or for the account of any of its stockholders.
The Company is also party to a5-year, $50 million senior secured loan agreement with Perceptive Credit Holdings II, LP, an affiliate of Perceptive, which bears interest at a floating rate per annum equal to the London Interbank Offering Rate (with a floor of 2%) plus 9% and is secured by substantially all of the Company’s assets and guaranteed by certain of the Company’s subsidiaries. Under the loan agreement, the Company is required to make monthly interest-only payments with a bullet payment of the principal at maturity. Perceptive Advisors LLC, the investment manager to Perceptive, is the beneficial owner of greater than five percent of the Company’s outstanding common stock, according to its Amendment No. 1 to Schedule 13G filed with the Securities and Exchange Commission on February 14, 2019.
A copy of the Share Purchase Agreement and a form of the Registration Rights Agreement are filed with this Current Report on Form8-K as Exhibit 10.1 and 10.2, respectively.
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