Item 1.01. Entry into a Material Definitive Agreement.
On March 10, 2022, in connection with the Transaction (as defined in Item 2.01 below), Homology Medicines, Inc. (“Homology”) entered into (i) a Contribution Agreement, (ii) an Amended and Restated Limited Liability Company Agreement (the “Newco Operating Agreement”), (iii) a Manufacturing and Supply Agreement, (iv) an Assignment and Assumption Agreement, and (v) a Sublease Agreement (collectively, the “Closing Agreements”). The material terms of the Closing Agreements are described in Item 1.01 of the Current Report on Form 8-K filed by Homology on February 3, 2022 (the “Signing 8-K”), and are incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On March 10, 2022, Homology closed the previously announced transaction with Oxford Biomedica Solutions LLC (f/k/a Roadrunner Solutions LLC) (“Newco”), Oxford Biomedica (US), Inc. (“OXB”) and Oxford Biomedica plc (“OXB Parent” and, collectively with OXB, “Oxford”), pursuant to the Equity Securities Purchase Agreement (the “Purchase Agreement”), dated as of January 28, 2022, by and among Homology, Newco and Oxford, whereby, among other things, Homology and Oxford agreed to collaborate to operate Newco, which will provide adeno-associated virus (“AAV”) vector process development and manufacturing to pharmaceutical and biotechnology companies (the “Transaction”).
Immediately prior to the closing of the Transaction (the “Closing”), Homology and Newco entered into a Contribution Agreement (as previously disclosed in the Signing 8-K), pursuant to which Homology assigned and transferred to Newco all of Homology’s assets that are primarily used in the manufacturing of AAV vectors for use in gene therapy or gene editing products, but excluding certain assets related to manufacturing or testing of Homology’s proprietary AAV vectors (collectively, the “Transferred Assets”), in exchange for 175,000 common equity units in Newco (“Units”) and Newco assumed from Homology, and agreed to pay, perform and discharge when due, all of Homology’s duties, obligations, liabilities, interests and commitments of any kind under, arising out of or relating to the Transferred Assets.
Effective as of the Closing, Homology sold to OXB, and OXB purchased from Homology, 130,000 Units (the “Transferred Units”) in exchange for $130.0 million. In connection with the Closing, OXB contributed $50.0 million in cash to Newco in exchange for an additional 50,000 Units. Immediately following the Closing, (i) OXB owned 180,000 Units, representing 80 percent (80%) of the fully diluted equity interests in Newco, and (ii) Homology owned 45,000 Units, representing 20 percent (20%) of the fully diluted equity interests in Newco. Pursuant to the Newco Operating Agreement, at any time following the three-year anniversary of the Closing, Homology will have an option to require OXB to purchase from Homology, and OXB will have an option to require Homology to sell to OXB, in each case all of Homology’s equity ownership interest in Newco at a price equal to 5.5 times the revenue for the immediately preceding 12-month period, subject to a specified maximum amount.
The disposition of the Transferred Assets and the Transferred Units constituted a disposition of a significant amount of assets for the purposes of Item 2.01 of Form 8-K. Accordingly, the pro forma financial information required by Item 9.01 is included as Exhibit 99.1 to this Current Report on Form 8-K.
Homology intends to file copies of the Purchase Agreement and the Closing Agreements, in certain cases with confidential portions redacted, with Homology’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Forward-Looking Statements Disclaimer
This Current Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding the collaboration between Homology and Oxford and the operation of Newco. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
