| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 14, 2022, Inozyme Pharma, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Jefferies LLC and Cowen and Company, LLC (collectively, the “Underwriters”), relating to an underwritten offering of 16,276,987 shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), and, in lieu of Common Stock to certain investors, pre-funded warrants (the “Pre-Funded Warrants”) to purchase 3,523,013 shares of Common Stock (the “Warrant Shares”). The closing of the offering is expected to take place on or about April 19, 2022, subject to the satisfaction of customary closing conditions. All of the Shares and Pre-Funded Warrants will be sold by the Company. The offering price of the Shares to the public is $3.69 per share, and the offering price of the Pre-Funded Warrants to the public is $3.6899 per share underlying each Pre-Funded Warrant. The Underwriters will purchase the Shares from the Company pursuant to the Underwriting Agreement at a price of $3.4686 per share and the Pre-Funded Warrants from the Company pursuant to the Underwriting Agreement at a price of $3.46851 per share underlying each Pre-Funded Warrant.
The Company estimates that the net proceeds from the offering will be approximately $68.3 million, after deducting underwriting discounts and commissions and estimated offering expenses.
Purchasers in the offering include a select group of healthcare focused institutional investors, including new and existing investors.
The Shares and the Pre-Funded Warrants will be issued pursuant to a shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (“SEC”) on August 11, 2021 and declared effective by the SEC on August 23, 2021 (File No. 333-258702). A prospectus supplement relating to the offering has been filed with the SEC.
Each Pre-Funded Warrant will have an exercise price per share of Common Stock equal to $0.0001 per share. The exercise price and the number of shares of Common Stock issuable upon exercise of each Pre-Funded Warrant is subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock. Each Pre-Funded Warrant will be exercisable from the date of issuance until the seventh anniversary thereof by means of a cashless exercise. Under the Pre-Funded Warrants, the Company may not effect the exercise of any Pre-Funded Warrant, and a holder will not be entitled to exercise any portion of any Pre-Funded Warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) to exceed 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of the Company’s securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrant, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon 61 days’ notice to the Company.
In addition, in certain circumstances, upon a fundamental transaction, a holder of Pre-Funded Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded Warrants immediately prior to the fundamental transaction; provided, however, that in the event of a fundamental transaction where the consideration consists solely of cash, solely of marketable securities or a combination thereof, each Pre-Funded Warrant will be deemed to be exercised in full in a cashless exercise effective immediately prior to and contingent upon the consummation of such fundamental transaction.
The foregoing descriptions of the terms of the Underwriting Agreement and the Pre-Funded Warrants are each qualified in their entirety by reference to the Underwriting Agreement and the Form of Pre-Funded Warrant, respectively, which are attached as Exhibit 1.1 and Exhibit 4.1 hereto and are herein incorporated by reference.
A copy of the legal opinion and consent of Wilmer Cutler Pickering Hale and Dorr LLP relating to the Shares, the Pre-Funded Warrants and the Warrant Shares is attached as Exhibit 5.1 hereto.
