Health Sciences Acquisitions Corporation (“HSAC,”NASDAQ: HSAC), a special purpose acquisition company sponsored by RTW Investments, and Immunovant Sciences Ltd. (“Immunovant”), a clinical-stage biopharmaceutical company focused on enabling normal lives for patients with autoimmune diseases, today announced that they have entered into a definitive share exchange agreement (“SEA”). HSAC will acquire 100% of the issued and outstanding shares in Immunovant. Upon closing, the combined company will be called Immunovant, Inc.
“We are thrilled to have the opportunity to partner with the team at Immunovant. We believe IMVT-1401 is a uniquely compelling asset within the FcRn drug class, which we expect will become a cornerstone therapy for treating many auto-antibody driven diseases,” said Roderick T. Wong, M.D., President, Chief Executive Officer and Chairman of HSAC and Managing Partner and Chief Investment Officer of RTW Investments.
In addition to the merger described above, Immunovant also announced today that it completed a $35 million private bridge financing with RTW Investments, BVF Partners, and Roivant Sciences Ltd. (“Roivant”). The notes issued in this financing will convert into common shares of Immunovant immediately prior to the closing of the business combination.
The combined company is expected to have more than $100 million at closing and will be led by Immunovant’s experienced management team, headed by Chief Executive Officer Pete Salzmann, M.D. HSAC has received written commitments from certain HSAC shareholders to vote in favor of the transaction and to not redeem their shares, which, in aggregate, more than satisfies the minimum cash closing condition set forth in the SEA. Current HSAC shareholders supporting the transaction include RTW Investments, Adage Capital Management, Cormorant Asset Management, Eventide Asset Management, and Perceptive Advisors.
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“I am proud of the many milestones delivered by the Immunovant team this year, including completion of a comprehensive Phase 1 program demonstrating robust IgG reductions with simple subcutaneous injections and initiation of a broad Phase 2 program with both first-in-class and best-in-class potential in multiple diseases with high unmet patient need. We believe the potency of IMVT-1401 and the ability to administer IMVT-1401 as a simple subcutaneous injection represent important potentially differentiating features of this product candidate. Today’s financing transaction will allow us to continue to pursue our vision of enabling normal lives for patients with autoimmune diseases,” said Pete Salzmann, M.D., Chief Executive Officer of Immunovant.
Immunovant is developing IMVT-1401, a fully human anti-FcRn monoclonal antibody with the potential to treat IgG-mediated autoimmune diseases. IMVT-1401 is the result of a multi-year research program by Immunovant’s partner, HanAll Biopharma, to engineer a highly potent anti-FcRn antibody specifically optimized for subcutaneous injection with a small gauge needle. In a Phase 1 study of healthy volunteers receiving 4 weekly subcutaneous injections, IMVT-1401 delivered a mean IgG reduction of 63% at a dose of 340 mg and a mean IgG reduction of 78% at a dose of 680 mg.
Proceeds from this transaction are expected to finance Phase 2 development of IMVT-1401 in three indications. IMVT-1401 is currently being tested in a Phase 2a trial for Graves’ ophthalmopathy (potentially a first-in-class anti-FcRn), with top-line data expected by Q1 2020, and in a Phase 2a trial for myasthenia gravis, with top-line data expected by Q2 2020. Immunovant plans to file an IND for a third indication, warm autoimmune hemolytic anemia, later this year. The company also intends to pursue additional indications in the future.
A corporate presentation describing Immunovant’s development plans can be found at www.immunovant.com.
Summary of Transaction
On September 29, 2019, HSAC entered into the SEA with Immunovant and its shareholders, including Roivant. Upon the closing of the transactions contemplated in the SEA, HSAC will acquire all of the shares of Immunovant for the consideration described below, and Immunovant will become a wholly owned subsidiary of HSAC.
Upon the closing of the transactions, the current Immunovant shareholders will sell to HSAC, and HSAC will purchase from the current Immunovant shareholders, all of the issued and outstanding Immunovant shares, and HSAC will issue (or reserve for issuance upon the exercise of options) approximately 43 million HSAC shares to the current Immunovant shareholders. The aggregate value of the consideration to be paid by HSAC in the business combination is $395 million, before giving effect to Immunovant’s bridge financing.
Assuming no redemption from HSAC shareholders, it is estimated that the current security holders of Immunovant will own approximately 77% of the combined company.
Immunovant shareholders may, subject to the terms of the SEA, receive up to an additional 20 million HSAC shares (the “Earnout Shares”): 10 million shares if the share price exceeds $17.50 by March 31, 2023 and an additional 10 million shares if the share price exceeds $31.50 by March 31, 2025.
In connection with the transactions, HSAC’s sponsor has agreed to cancel all 10 million of its private warrants. Furthermore, subject to terms of the SEA, 1.8 million of the sponsor’s founder shares will be cancelled unless HSAC’s common stock exceeds certain stock prices on substantially identical terms and conditions as the Earnout Shares.
The description of the transaction contained herein is only a high-level summary and is qualified in its entirety by reference to the definitive agreement relating to the transaction. A copy of the definitive agreement, this press release and a corporate presentation will be filed today by HSAC with the Securities and Exchange Commission (the “SEC”) as exhibits to a Current Report on Form 8-K, which can be accessed through the SEC’s website at www.sec.gov.
Chardan is acting as HSAC’s M&A and capital markets advisor. Leerink is acting as financial advisor to Immunovant. Loeb & Loeb LLP is representing HSAC. Cooley LLP is representing Immunovant.
Date: October 07, 2019
Source: PR Newswire