United States securities and exchange commission logo
September 3, 2021
Jim Tananbaum
Chief Executive Officer
FS Development Corp. II
900 Larkspur Landing Circle, Suite 150
Larkspur, CA 94939
Re: FS Development
Corp. II
Registration
Statement on Form S-4
File No. 333-258442
Filed August 4,
2021
Dear Dr. Tananbaum:
We have reviewed your 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 amending your registration
statement and providing the
requested information. 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 any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed August 4, 2021
Exhibit 23.1 Consent of WithumSmith+Brown, PC, independent registered
public accounting
firm of FS Development Corp. II, page 1
1. The audit report date
of February 18, 2021 in the auditors' consent does not agree with the
audit report date of
January 26, 2021 on page F-16. Please revise for consistency in your
next amendment.
Market and Industry Data, page 2
2. Please amend your
disclosure to clarify that you are liable for the market and industry data
you included in your
registration statement.
Questions and Answers About the Proposals
Jim Tananbaum
FirstName LastNameJim
FS Development Corp. II Tananbaum
Comapany 3,
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2021 Development Corp. II
September
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What equity stake will current stockholders of FS Development II and Pardes
Equityholders hold
in the Combined Entity after the Closing?, page 9
3. We note your disclosure regarding the ownership percentage with
respect to the combined
entity following the business combination. Please revise your
disclosure to clarify the
sponsor and its affiliates total potential ownership interest in
the combined company,
assuming exercise and conversion of all securities.
What interests do FS Development II's current officers and directors have in
the Business
Combination?, page 12
4. We note your disclosure regarding current investments by the sponsor
and its affiliates
that are at risk and depend on completion of a business combination.
Please revise your
disclosure here and throughout the prospectus, as appropriate, to
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.
5. We note your disclosure here and throughout the prospectus that
entities affiliated with the
sponsor and FS Development II's officers and directors have made an
investment in shares
of Series A Preferred Stock of the target. Please expand your
disclosure regarding the
sponsor s ownership interest in the target company. Disclose the
approximate dollar value
of the interest based on the transaction value and recent trading
prices as compared to the
price paid.
Summary of the Proxy Statement/Prospectus, page 19
6. Revise your summary to clearly state that PBI-0451 is currently in a
pre-clinical stage and
that you have not yet submitted an IND to the FDA. Additionally,
determinations
regarding safety, efficacy and approval are within the sole authority
of the FDA. Remove
all statements regarding the safety and efficacy of your product
candidate, imply safety or
efficacy, or predict safety, efficacy or FDA approval throughout your
prospectus. For
example:
"Potential to address an area of high unmet medical need (page
21);"
"Lead product candidate PBI-0451... may have significant benefits
as an antiviral
able to treat or prevent infection with SARS-CoV-2 and important
emerging variants
of concern (page 22):"
"Pardes is well positioned to become a leader in treatment of
prevention of infection
with SARS-CoV2(page 22):"
"Robust preclinical activity observed (page 22);"
"Preclinical safety studies support entry into human trials (page
22);" and
"in preclinical studies PBI-0451 demonstrated the potential to
inhibit replication of a
broad range of coronaviruses...(page 22)."
Jim Tananbaum
FirstName LastNameJim
FS Development Corp. II Tananbaum
Comapany 3,
September NameFS
2021 Development Corp. II
September
Page 3 3, 2021 Page 3
FirstName LastName
Please note that this list is for illustrative purposes and your
filing contains additional
inappropriate statements regarding safety, efficacy and lily FDA
approval. You may
replace statements of safety and efficacy with objective information
about observations
from your preclinical trials, as opposed to your conclusions drawn
from such trials.
7. We note that on pages 233 and 234 you state there is an indication
that substantial doubt
exists related to the ability of Pardes to continue as a going
concern. Please expand your
disclosure in your Prospectus Summary as well as in your Risk Factors
to include this
information.
8. Please delete your statements that the financial and other terms of
the Merger Agreement
and the transactions contemplated thereby were the product of arm s
length negotiations
between FS Development II and Pardes. Such statements are
inappropriate given Dr.
Tananbaum's affiliation with both FS Development II and Pardes.
Impact of the Business Combination on FS Development II's Public Float, page 26
9. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
tabular presentation
relating to redemptions showing a range of redemption scenarios,
including an interim
redemption level in addition to the minimum and maximum levels that
you are already
showing.
10. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
business
combination. Provide disclosure of the impact of each significant
source of dilution,
including the amount of equity held by founders, convertible
securities, including warrants
retained by redeeming shareholders, at each of the redemption levels
detailed in your
sensitivity analysis, including any needed assumptions.
11. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
Risk Factors
The Amended Bylaws will provide that the Court of Chancery of the State of
Delaware and the
federal district courts of the United States, page 96
12. Please revise this risk factor to disclose that there is also a risk
that your exclusive forum
provision may result in increased costs for investors to bring a
claim.
Special Meeting of FS Development II Stockholders
Vote of the Sponsor, Directors and Officers, page 101
13. We note that certain shareholders agreed to waive their redemption
rights. Please describe
Jim Tananbaum
FirstName LastNameJim
FS Development Corp. II Tananbaum
Comapany 3,
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2021 Development Corp. II
September
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any consideration provided in exchange for this agreement.
Background of the Business Combination, page 117
14. Please disclose when you retained White & Case and engage Jeffries,
SVB Leerink and
Cooley.
15. We note that your IPO priced on February 16, 2021 and you decided to
pursue a business
combination with Pardes on February 17, 2021. Please expand the
discussion to disclose
any efforts to solicit interest in a business combination or
accumulate a list of potential
candidates. Your discussion should explain how the initial list of
companies considered
was produced.
16. Please expand your disclosure to quantify the number of acquisition
candidates
considered, explain how the list was narrowed to Pardes and the
additional two
candidates, and the information you had with respect to the candidates
being considered.
For example, your disclosure should explain if interested potential
candidates submitted
information about products/product candidates, financial statements,
etc. and provide
more information about the comparisons between the three candidates
that were
considered further scientific and those that were not with respect to
the factors identified.
17. To what extent was the very early development stage of PBI-0451
considered in the
decision to pursue Pardes as an acquisition candidate? Please disclose
the number of
product candidates the other acquisition candidates had in their
respective pipelines and
the development stages of such candidates.
18. Please clarify whether Dr. Tananbaum was involved in the determination
of an enterprise
value of $546 million.
The Business Combination Proposal
Reasons for Approval of the Business Combination, page 126
19. We note your disclosure here that "each of the Transaction Committee
and the Board also
considered that the Sponsor and certain of the officers and directors
of FS Development II
may have interests in the Business Combination as individuals that are
in addition to, and
that may be different from, the interests of our stockholders
generally." Please revise to
clarify how the board considered those conflicts in negotiating and
recommending the
business combination.
Opinion of H.C. Wainwright & Co., LLC, page 131
20. Please revise the selected companies analysis to identify the criteria
used to select the
companies used in the analysis. To the extent there were other
companies that met the
criteria used but were not included in the analysis, please disclose
this information and
explain why they were excluded from the analysis.
21. We note your disclosure regarding the selection criteria of the
precedent transaction
Jim Tananbaum
FirstName LastNameJim
FS Development Corp. II Tananbaum
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2021 Development Corp. II
September
Page 5 3, 2021 Page 5
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analysis. To the extent there were other transactions that met the
criteria but were
excluded from the analysis, please disclose this information and
provide the basis for the
exclusion.
Conditions to Closing , page 145
22. Please clarify which conditions are subject to waiver.
Registration Rights Agreement, page 149
23. Please file this registration rights agreement as an exhibit to the
registration statement, or,
in the alternative, please tell us why you believe that you are not
required to file the
agreement. Refer to Item 601 of Regulation S-K.
Executive Officers and Directors of FS Development II
Conflicts of Interest, page 181
24. Your charter waived the corporate opportunities doctrine. Please
address this potential
conflict of interest and whether it impacted your search for an
acquisition target.
Information about Pardes
Overview, page 190
25. We note your disclosure that in preclinical studies, PBI-0451 has
"demonstrated activity
supporting its potential to be an effective oral direct acting
antiviral" and that you believe
that "PBI-0451 has the potential to be an effective oral DAA."
Conclusions regarding
efficacy and safety are determinations that only the FDA or a foreign
government
equivalent has the authority to make. Please revise your disclosure
throughout your
document, including but not limited to the statements noted above, to
eliminate the
implication that your product candidates have been or will ultimately
be determined safe
and/or effective or have demonstrated safety and/or efficacy for
purposes of approval by
the FDA or comparable agency. Alternatively, we advise you that you
may present the
objective data from pre-clinical and clinical trials without drawing a
conclusion from the
results. For example, you may note that a candidate was well
tolerated, the absence of
serious adverse events or the number of trial participants who met the
identified trial
endpoints.
Our Approach, page 197
26. Your statement that you believe your platform allows you to rapidly
find potentially "best-
in-class" compounds implies the likelihood of regulatory approval and
comparisons to
other product candidates. Please remove the "best-in-class" reference
as the statement
is speculative in light of the regulatory status of the product
candidate you are currently
pursuing.
27. In your discussion of the non-clinical and preclinical trials for
PBI-0451 conducted to
Jim Tananbaum
FirstName LastNameJim
FS Development Corp. II Tananbaum
Comapany 3,
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2021 Development Corp. II
September
Page 6 3, 2021 Page 6
FirstName LastName
date as well as the phase 1 clinical trials that you are planning for
this lead program,
please revise your disclosure to specify the primary and secondary
endpoints of the
different trials, the results as they relate to the endpoints and any
statistical analysis that
was done or will be done.
28. We note your tables 1 and 2 showing the biochemical activity and cell
culture activity of
PBI-0451, respectively. Please revise to include an explanation of the
measurement
ranges shown in the tables and their significance with respect to the
biochemical and cell
culture activity of PBI-0451. For example, please explain why the line
for SARS-CoV-2
is shown in bold in Table 1.
Intellectual Property, page 201
29. We note your disclosure of your pending patent estate for PBI-0451 as
well as for your
platform and discovery pipeline. Please revise to disclose for each
material patent and
patent application the specific product(s) to which such patents or
patent applications
relate, the type of patent protection, the expiration dates, and
applicable material
jurisdictions, including specific foreign jurisdictions.
Certain Relationships and Related Person Transactions
FS Development II, page 264
30. We note your discussion here regarding how the number of founders
shares outstanding
was determined to represent 20% of the issued and outstanding shares
of common stock
after the IPO. We also note your disclosure on page F-14 that "In the
case that additional
shares of Class A common stock or equity-linked securities are issued
or deemed issued in
connection with the initial Business Combination, the number of shares
of Class A
common stock issuable upon conversion of all Founder Shares will
equal, in the
aggregate, on an as-converted basis, 20% of the total number of shares
of Class A
common stock issued and outstanding (excluding the Private Placement
Shares) after such
conversion." We understand the sponsor may receive additional
securities pursuant to an
anti-dilution adjustment based on the company s additional financing
activities. Please
quantify the number and value of securities the sponsor will receive.
In addition, disclose
the ownership percentages in the company before and after the
additional financing to
highlight dilution to public stockholders.
31. We note in your disclosure on page 265 that certain affiliates of the
sponsor will
participate in a private placement PIPE investment that will occur
concurrently with the
consummation of the business combination. Please highlight material
differences, if any,
in the terms and price of securities issued at the time of the IPO as
compared to private
placements contemplated at the time of the business combination.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Jim Tananbaum
FS Development Corp. II
September 3, 2021
Page 7
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Kristen Lochhead at 202-551-3664 or Terence O'Brien at
202-551-3355
if you have questions regarding comments on the financial statements and
related
matters. Please contact Jessica Ansart at 202-551-4511 or Suzanne Hayes at
202-551-3675 with
any other questions.
Sincerely,
FirstName LastNameJim Tananbaum
Division of
Corporation Finance
Comapany NameFS Development Corp. II
Office of Life
Sciences
September 3, 2021 Page 7
cc: Joel Rubinstein
FirstName LastName