| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 27, 2021, Amgen Inc., a Delaware corporation (“Amgen”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Amgen, Teneobio, Inc., a Delaware corporation (“Teneobio”), Tuxedo Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Amgen (“Merger Sub”) and Fortis Advisors LLC, as the Stockholder Representative (as defined in the Merger Agreement) whereby, subject to the terms and conditions contained therein, Merger Sub will be merged with and into Teneobio (the “Merger”), with Teneobio continuing as a wholly owned subsidiary of Amgen. As consideration for the Merger, and subject to the terms and conditions contained in the Merger Agreement, Amgen will pay to the equity holders of Teneobio (i) $900,000,000 in cash at closing, subject to customary adjustments for closing working capital and other transaction matters (the “Initial Purchase Price”) and (ii) certain future contingent milestone payments of up to $1,600,000,000 in cash that may become payable upon the achievement of certain qualifying events described in the Merger Agreement (the Initial Purchase Price and the Milestone Payments, if any, collectively, the “Transaction Payments”).
Pursuant to the Merger Agreement, Amgen and Teneobio have agreed to customary representations, warranties and covenants, as well as indemnification arrangements, subject to certain limitations, with respect to certain losses resulting from inaccuracies in or breaches of the representations, warranties and covenants made in the Merger Agreement and certain excluded liabilities specified in the Merger Agreement. In connection with indemnification obligations under the Merger Agreement of the former equity holders of Teneobio, a portion of the Initial Purchase Price will be retained and held in escrow, and a portion of the future Milestone Payments, if and when paid, will be available to satisfy certain claims by Amgen. The covenants provided for in the Merger Agreement include, among others, Teneobio’s commitment to conduct and operate its business in the ordinary course consistent with past practice during the period prior to the closing of the Merger, subject to certain limitations.
The obligation of Amgen to consummate the Merger and make the Transaction Payments is subject to the satisfaction or waiver, to the extent permitted under applicable legal requirements, of customary conditions, including, among others, (i) there being received validly obtained and not validly withdrawn consents executed by (a) stockholders of Teneobio representing ninety percent of the votes represented by all outstanding shares of Teneobio’s capital stock voting together as a single class on an as-converted basis and (b) certain stockholders owning in excess of five percent of Teneobio’s capital stock issued and outstanding on a fully diluted basis, (ii) Teneobio’s completion of certain restructuring arrangements with respect to its subsidiaries, including the spin out of three of Teneobio’s subsidiaries to the pre-closing equity holders of Teneobio and the closing of AbbVie Inc.’s (“AbbVie”) acquisition of TeneoOne, Inc., (iii) the accuracy of Teneobio’s representations and warranties (subject to customary materiality qualifiers), (iv) Teneobio’s compliance with or performance in all material respects of the obligations, covenants and agreements it is required to comply with or perform at or prior to the Merger, (v) the absence of a Material Adverse Effect (as defined in the Merger Agreement), (vi) the expiration or termination of the waiting period(s) applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (vi) the absence of any law or order prohibiting the consummation of the Merger. The Merger
