United States securities and exchange commission logo
July 15, 2021
Andrew McDonald
Chief Executive Officer
Lifesci Acquisition II Corp.
250 W 55th St #3401
New York, NY 10019
Re: Lifesci Acquisition
II Corp.
Draft Registration
Statement on Form S-1
Submitted June 16,
2021
CIK No. 0001819113
Dear Mr. McDonald:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
DRS on Form S-1 filed June 16, 2021
Prospectus Cover Page, page 1
1. Please disclose on the
prospectus cover page that the current LSAQ Public
Stockholders will own
approximately 6% of the combined company s outstanding shares
of common stock, and
that the Science 37 stockholders would own approximately 75.1%
of the outstanding
common stock of the combined company.
2. We note that the
consideration for the business combination will include converting
each Science 37 Warrant
that is outstanding and unexercised into a warrant exercisable to
receive common stock.
Please clarify if you are registering these converted warrants and
their underlying common
stock in this offering, as your fee table and related notes
suggest otherwise.
Andrew McDonald
Lifesci Acquisition II Corp.
July 15, 2021
Page 2
Summary of the Proxy Statement
Redemption Rights, page 21
3. We note your disclosure on page F-7 that the Sponsor and Chardan
Healthcare
Investments LLC have agreed to (i) waive their redemption rights with
respect to Founder
Shares and any Public Shares they may acquire during or after the
Initial Public Offering
in connection with the consummation of a Business Combination.
Please describe any
consideration provided in exchange for these agreements.
Interests of Certain Persons in the Business Combination, page 22
4. In your disclosure here and on page 86 under the same caption, please
revise your
disclosure to also include the private warrants that would be
cancelled and the value of the
warrants. In addition, please augment your disclosure here to clarify
if the sponsor and its
affiliates can earn a positive rate of return on their investment,
even if other
LSAQ stockholders experience a negative rate of return in the
post-business combination
company.
Risk Factors, page 28
5. Disclose the material risks to unaffiliated investors presented by
taking the company
public through a merger rather than an underwritten offering. These
risks could
include the absence of due diligence conducted by an underwriter that
would be subject to
liability for any material misstatements or omissions in a
registration statement.
6. We note your disclosures on page 82 that "[i]n light of the COVID-19
Pandemic and
recent logistical technology developments, the FDA has reiterated its
support of
decentralized clinical trials" and on page 122 that "[m]uch of the
growth in DCTs was
catalyzed by the COVID-19 pandemic in early 2020...The U.S. Food and
Drug
Administration ( FDA ) and European Medicines Agency ( EMA )
each issued guidance
directing sponsors to implement DCT techniques in order to maintain
study continuity."
Please address the risk that the FDA may not continue to promote the
use of DCT
techniques after the pandemic and its potential effect on Science 37's
business, if
applicable.
In the event that a significant number of public shares are redeemed, our
common stock ..., page
62
FirstName LastNameAndrew McDonald
Comapany
7. NameLifesci
Please Acquisition
discuss here, as you do II
onCorp.
page 67, the risk that if too many
shareholders redeem
their shares
July 15, 2021 Page 2it may impact your ability to proceed with the Business
Combination.
FirstName LastName
Andrew McDonald
FirstName LastNameAndrew
Lifesci Acquisition II Corp. McDonald
Comapany
July NameLifesci Acquisition II Corp.
15, 2021
July 15,
Page 3 2021 Page 3
FirstName LastName
Background of the Business Combination, page 78
8. We note your February 23, 2021 discussion with PWP, and that as a
result of the
discussion LSAQ submitted a revised LOI to PWP that contemplated a $1
billion pre-
money valuation with no earnouts. Please revise your disclosure to
describe the basis for
the change in your pre-money valuation.
9. Please expand the disclosure in this section to include a more
detailed description of the
negotiations which occurred in order to establish the core terms of
the business
combination, such as the share consideration, including the exchange
ratio and earnout
structure. For example, we note your disclosure that [o]n February
23, 2021...LSAQ and
PWP discussed a number of key commercial terms of LSAQ s proposals,
including
valuation, concurrent financing size, and earnout structures," and
that "[i]n March 21,
2021, LSAQ emailed a further revised LOI to Science 37, PWP, and
Cowen, which
included changes to the earnout shares, including an increase in both
the quantity of shares
issued and the strike prices that would trigger the earnouts, and
synchronization of the
sponsor and Science 37 stockholder lockup periods. Please address
the substance of the
parties' multiple conversations and discussions that resulted in the
changes to the core
terms included in the various drafts of the Merger Agreement and
Letters of Intent, as well
as any key points of disagreement and how they were resolved.
Selected Comparable Public Company Analysis, page 85
10. To provide additional context for investors, please revise your
disclosure to disclose the
material aspects of the underlying information and analyses used by
the Board such as, if
applicable, actual (i.e. numbers) financial and market data, and
comparable companies
analysis (including the names of the companies), so that shareholders
can understand how
this information supported the Board's recommendation. In this regard,
we note your
disclosure that "LSAQ then compared selected implied valuations of
these comparable
companies to the proposed pre-money valuation for Science 37 of
$1,000,000,000," and
that based on that information the Board determined that the
pre-money valuation of
Science 37 was fair." However, we do not note a discussion of the
implied valuations of
the comparable companies.
11. We note that you have provided Science 37's projected sales for 2021
through 2024 which
results in a Sales CAGR of 87.1% for 2021-2023. Please provide
additional information
with respect to the underlying assumptions of Science 37's sales
projections so
stockholders can evaluate the projections and their reasonableness
when making
their investment decision. As a related matter, please describe how
these projected sales
relate to the proposed pre-money valuation for Science 37 of
$1,000,000,000. In this
regard, we note your disclosure the the Board determined that the
pre-money valuation of
Science 37 was fair, in-part due to the projected sales.
Andrew McDonald
FirstName LastNameAndrew
Lifesci Acquisition II Corp. McDonald
Comapany
July NameLifesci Acquisition II Corp.
15, 2021
July 15,
Page 4 2021 Page 4
FirstName LastName
12. None of the factors discussed here appear to pertain to the
consideration to be paid as part
of the transaction. Explain if the Board took this factor into account
in recommending the
transaction.
Certain Engagements in Connection with the Business Combination and Related
Transactions,
page 86
13. Please revise your discussion in this section to address in greater
detail the role that the
financial advisors played in the transaction negotiations and
valuation discussions. Please
clarify whether the financial advisors delivered any reports to the
Board that were
materially related to the transaction. If they did, please revise your
disclosure to state as
much and provide the information required by Item 4(b) of Form S-4.
Interests of Certain Persons in the Business Combination, page 86
14. We note your disclosure that "[p]ursuant to the Sponsor Support
Agreement, the Sponsor
has agreed, among other things, to amend the agreement relating to the
Private Placement
Warrants held by the Sponsor such that they will represent the right
to receive 3,146,453
shares of common stock at the Effective Time." Please discuss the
potential dilutive
effect to public stockholders, if applicable.
Proposal No. 2 - The Charter Approval Proposal, page 90
15. It appears that this proposal includes three changes from majority to
supermajority voting
requirements. Please ensure your proxy card will allow shareholders to
vote on each
material change to the charter separately. Alternatively, provide us
with your analysis as
to why you are not required to unbundle these proposals. Please refer
to Rule 14a-4(a)(3)
of Regulation 14A, as well as Question 201.01 of the Compliance and
Disclosure
Interpretations Regarding Unbundling under Rule 14a-4(a)(3) in the M&A
Context.
Overview, page 117
16. Please provide support for the following statements or characterize
them as your beliefs.
Your statement in the last sentence of the second full
paragraph of this section that
"[i]f a typical drug can get to market three months earlier, it
is estimated that between
$54 million and $720 million of additional revenue can be
generated over the life of
that drug..."
Your statement in the last sentence of the third paragraph that
"[o]nly about 8% of
patients are approached to join a clinical trial because most do
not live near a
participating research site. About 20% of the patients recruited
do not complete the
full study. In parallel, only about 5% of providers participate
in clinical research due
to the high cost and low incentives to house clinical teams or
send patients out of
their practice for a clinical trial. In the end, approximately
80% of trials experience
delays, 94% of them greater than one month, resulting in
timelines of 7-13 years to
launch drug treatments globally."
Andrew McDonald
FirstName LastNameAndrew
Lifesci Acquisition II Corp. McDonald
Comapany
July NameLifesci Acquisition II Corp.
15, 2021
July 15,
Page 5 2021 Page 5
FirstName LastName
Your statement on page 119 that "Global annual research and
development spending
has increased from $33.4 billion in 1993 to current annual
spending of approximately
$195 billion, growing at a 4% to 5% compounded annual growth
rate."
With respect to the information you cite, if any reports were
commissioned by you for use
in connection with the registration statement, please file consents of
such third parties
pursuant to Rule 436 of the Securities Act as exhibits to your
registration statement or tell
us why you believe you are not required to do so.
Disrupting a $195 Billion Total Addressable Market, page 121
17. We note your statement that "Science 37 estimates that its serviceable
available market is
approximately $60 billion, and expects its serviceable available
market to grow at an
approximately 6% CAGR over the next five years." Please define and
disclose any
material assumptions and limitations associated with the estimate
underlying
the calculation of Science 37's serviceable available market.
Information About Science 37, page 128
18. In order to better understand the source of revenue, please disclose
the percentage of
revenue contributed by each of the three primary product offerings, as
well as the number
of customers in each product offering. Please also discuss, in an
appropriate place in your
prospectus, the general type of contracts entered into by customers in
such service lines,
including material terms such as pricing terms, performance periods,
renewal terms and
termination provisions.
19. We note that you included months in the "Traditional Trial Workflow"
diagram included
as Exhibit 1. To ensure comparability, please also consider including
months in Exhibit
2, which includes the diagram for the "Decentralized Trial Workflow"
or tell us why you
believe such disclosure is not required.
Trusted, Deep Relationships with Science 37's Large and Growing Customer Base:
, page 129
20. We note that Science 37 has "numerous strategic collaborations [that]
demonstrate its
strong relationships with customers." Please file any material
agreements associated with
such relationships as exhibits and revise your disclosure to include a
description of the
material terms of such agreements. In this regard, we also note your
disclosure that "[f]or
the year ended December 31, 2019, four customers Boehringer
Ingelheim
International, GmbH ( Boehringer Ingelheim ), Sanofi US Services
Inc, Otsuka
Pharmaceutical Development & Commercialization, Inc. and UCB Biopharma
SPRL
individually each represented greater than 10% of revenue."
Exclusive forum for certain lawsuits, page 163
21. We note here your disclosure that the exclusive provision contained in
your amended and
restated certificate of incorporation will not apply to Exchange Act
claims and there will
Andrew McDonald
FirstName LastNameAndrew
Lifesci Acquisition II Corp. McDonald
Comapany
July NameLifesci Acquisition II Corp.
15, 2021
July 15,
Page 6 2021 Page 6
FirstName LastName
be concurrent state and federal jurisdiction for Securities Act
claims. However, your risk
factor on page 58 states that "the federal district courts of the
United States of America
shall be the exclusive forum for the resolution of any complaint
asserting a cause of action
arising under the Securities Act." Please revise to ensure consistent
disclosure concerning
claims filed under the Securities Act. In this regard, we note that
Section 22 of the
Securities Act creates concurrent jurisdiction for federal and state
courts over all suits
brought to enforce any duty or liability created by the Securities Act
or the rules and
regulations thereunder. If this provision does not apply to actions
arising under the
Securities Act or Exchange Act, please also ensure that the exclusive
forum provision in
the governing documents states this clearly.
2020 Bonuses, page 188
22. Please explain in greater detail how you calculated the annual bonus
for each executive
officer. Please provide the actual targets and the actual performance
of the company or
the executive that resulted in the annual bonus. Refer to Item
402(b)(1)(v) of Regulation
S-K.
Security Ownership of Certain Beneficial Owners and Management, page 199
23. Please revise your tabular disclosure to identify the natural
person(s) who have sole or
shared voting or investment power for the securities beneficially
owned by the entities
identified in the table. For example, please provide the identity of
the natural persons who
serve as managers of Foresite Capital Management. For guidance, please
refer to Item 403
of Regulation S-K.
Settlement Agreement with Former Executive Officer and Director, page 206
24. Please revise your disclosure to name Noah Craft and Belinda Tan as
the parties to the
settlement agreement as you did in the financial statements for
Science 37.
Certain Relationships And Related Party Transactions, page 207
25. We note references to the section of this proxy statement/prospectus
entitled 'Management
Conflicts of Interest', throughout your registration statement.
However, we cannot
locate such section in your filing. Please revise as necessary or tell
us where you have
included this section.
Business Combination Marketing Agreement, page F-14
26. We note your disclosure here that LSAQ s IPO underwriter, Ladenburg
Thalmann & Co.
Inc., provided additional services after your IPO. In an appropriate
place in the body of
the prospectus, please quantify the aggregate fees payable to
Ladenburg Thalman & Co.
that are contingent on completion of the business combination.
Andrew McDonald
FirstName LastNameAndrew
Lifesci Acquisition II Corp. McDonald
Comapany
July NameLifesci Acquisition II Corp.
15, 2021
July 15,
Page 7 2021 Page 7
FirstName LastName
LifeSci Acquisition II Corp.
Notes to Condensed Financial Statements, March 31, 2021
Note 7. Stockholders' Equity, page F-14
27. We note that you account for the private warrants as equity. Please
provide us with your
analysis under ASC 815-40 to support your accounting treatment for the
warrants. As part
of your analysis, please address whether there are any terms or
provisions in the warrant
agreement that provide for potential changes to the settlement amounts
that are dependent
upon the characteristics of the holder of the warrant, and if so, how
you analyzed those
provisions in accordance with the guidance in ASC 815-40.
General
28. In an appropriate place discuss the terms of the earnout shares, such
as the triggering
events.
29. Please revise your disclosure throughout the filing to address the
potential impact of
redemptions on non-redeeming shareholders and all possible sources and
the extent of
dilution that shareholders who elect not to redeem their shares may
experience in
connection with the business combination, including:
the potential impact on the per share value of the shares owned
by non-redeeming
shareholders by revising your sensitivity analysis to show a
range of redemption
scenarios, including interim redemption levels. In this regard,
we note that you have
only included minimum and maximum redemption levels on page 22;
and
disclose the effective underwriting fee on a percentage basis
for shares at each
redemption level presented in your sensitivity analysis related
to dilution. In this
regard, we note that it appears that underwriting fees remain
constant and are not
adjusted based on redemptions.
30. Please quantify the aggregate dollar amount and describe the nature of
what the Sponsor
and its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended, fees
due, and out-of-pocket
expenses for which the Sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material.
Andrew McDonald
Lifesci Acquisition II Corp.
July 15, 2021
Page 8
You may contact Scott Stringer at 202-551-3272 or Lyn Shenk at
202-551-3380 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Scott Anderegg at 202-551-3342 or Jennifer L pez-Molina at
202-551-3792 with any
other questions.
FirstName LastNameAndrew McDonald Sincerely,
Comapany NameLifesci Acquisition II Corp.
Division of Corporation
Finance
July 15, 2021 Page 8 Office of Trade &
Services
FirstName LastName