Item 8.01 Other Events.
On October 5, 2020, Eidos Therapeutics, Inc., a Delaware corporation (the
"Company") and BridgeBio Pharma, Inc., a Delaware corporation ("BridgeBio"),
entered into an Agreement and Plan of Merger, dated as of October 5, 2020 (the
"Merger Agreement"), by and among the Company, BridgeBio, Globe Merger Sub I,
Inc., a Delaware corporation ("Merger Sub") and an indirect wholly owned
subsidiary of BridgeBio, and Globe Merger Sub II, Inc., a Delaware corporation
("Merger Sub II") and an indirect wholly owned subsidiary of BridgeBio,
providing for the acquisition of the Company by BridgeBio (the "Transaction").
Since the October 5, 2020 announcement of the Merger Agreement, five putative
class action complaints have been filed in United States District Courts
(collectively, the "Transaction Litigation"). Two putative class action
complaints have been filed in the United States District Court for the Southern
District of New York against the Company, its directors, BridgeBio, Merger Sub
and Merger Sub II and are captioned Alex Ciccotelli v. Eidos Therapeutics, Inc.
et al., Case No. 1:20-cv-10592 (filed December 15, 2020) and Marc Waterman v.
Eidos Therapeutics, Inc. et al., Case No. 1:21-cv-00213 (filed January 11,
2021). Two putative class action complaints have been filed in the United States
District Court for the Northern District of California against the Company and
its directors and are captioned Stephen Bushanksy v. Eidos Therapeutics, Inc. et
al., Case No. 3:20-cv-09308 (filed December 23, 2020) and William Ballard v.
Eidos Therapeutics, Inc. et al., Case No. 3:21-cv-00228 (filed January 11,
2021). One putative class action complaint has been filed in the United States
District Court for the Eastern District of New York against the Company and its
directors and is captioned John Mullen v. Eidos Therapeutics, Inc. et al., Case
No. 1:20-cv-06337 (filed December 29, 2020). The plaintiffs in the Transaction
Litigation (the "plaintiffs"), who purport to be stockholders of the Company,
generally allege that the Company's definitive proxy statement filed with the
U.S. Securities and Exchange Commission ("SEC") on December 15, 2020 (the
"Definitive Proxy Statement") omitted certain material information in connection
with the Transaction. The plaintiffs seek various remedies, including, among
other things, injunctive relief to prevent the consummation of the Transaction
unless certain allegedly material information is disclosed, an award of
attorneys' fees and expenses, rescission of the Transaction or an award of
damages should the Transaction be consummated.
The Company believes that the claims asserted in the Transaction Litigation are
without merit and no supplemental disclosure is required under applicable law.
However, in order to avoid the risk of the Transaction Litigation delaying or
adversely affecting the Transaction and to minimize the costs, risks and
uncertainties inherent in litigation, and without admitting any liability or
wrongdoing, the Company has determined to voluntarily supplement the Definitive
Proxy Statement as described in this Current Report on Form 8-K. Nothing in this
Current Report on Form 8-K shall be deemed an admission of the legal necessity
or materiality under applicable laws of any of the disclosures set forth herein.
To the contrary, the Company specifically denies all allegations in the
Transaction Litigation that any additional disclosure was or is required.
These supplemental disclosures will not affect the merger consideration to be
paid to stockholders of the Company in connection with the Transaction or the
timing of the special meeting of the stockholders of the Company, scheduled for
January 19, 2021, at 9:00 a.m. Pacific time, to be held virtually at
www.virtualshareholdermeeting.com/EIDX2021SM. The Company board of directors,
acting upon the unanimous recommendation of the Company's special committee of
independent directors, continues to unanimously recommend that you vote "FOR"
the proposal to adopt the Merger Agreement and "FOR" the other proposals being
considered at the special meeting.
Supplemental Disclosures to Definitive Proxy Statement in Connection with the
Merger Litigation
The following disclosures in this Current Report on Form 8-K supplement the
disclosures contained in the Definitive Proxy Statement and should be read in
conjunction with the disclosures contained in the Definitive Proxy Statement,
which in turn should be read in its entirety. To the extent that information in
this Current Report on Form 8-K differs from or updates information contained in
the Definitive Proxy Statement, the information in this Current Report on Form
8-K shall supersede or supplement the information in the Definitive Proxy
Statement. All page references are to the Definitive Proxy Statement and terms
used below, unless otherwise defined, shall have the meanings ascribed to such
terms in the Definitive Proxy Statement.
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The disclosure in the section entitled "The Mergers" under the heading
"Background of the Mergers", beginning on page 62 of the Definitive Proxy
Statement, is hereby amended by:
Amending and restating the fourth full paragraph on page 71 under the heading
"Background of the Mergers" as follows (with new text in underline):
On July 23, 2020, Eidos entered into a mutual confidentiality agreement with a
large international pharmaceuticals company, Company C, to facilitate the
sharing of information with respect to a potential licensing and collaboration
transaction. The confidentiality agreement did not contain a standstill
provision.
On August 16, 2020, Company C, delivered a proposal to Eidos management with
respect to a potential licensing and collaboration transaction between Eidos and
Company C (the "August 16 collaboration proposal"). Eidos management shared the
August 16 proposal with the Eidos board promptly thereafter.
Amending and restating the second full paragraph on page 75 under the heading
"Background of the Mergers" as follows (with new text in underline):
On September 24, 2020, the Eidos special committee held a videoconference
meeting, with representatives of Centerview, Cravath and Guidehouse
participating. Representatives of Guidehouse reviewed the assumptions underlying
the BridgeBio management projections and assumptions regarding Eidos that had
been discussed with Eidos management during due diligence calls, as well as
Guidehouse's recommended adjustments to such assumptions. The Eidos special
committee discussed the assumptions made by management of BridgeBio and Eidos as
well as Guidehouse's recommended adjustments, and directed Centerview to make
additional adjustments to the BridgeBio management projections, including
adjustments to the probability of success of, timing of regulatory approval and
expected launch dates for, and pricing and peak net sales amounts in respect of,
certain of BridgeBio's product candidates.
Amending and restating the third full paragraph on page 84 under the heading
"Background of the Mergers" as follows (with new text in underline):
After the meeting, representatives of Cravath contacted representatives of
outside legal counsel to Company C to convey the Eidos special committee's
request and also shared a draft confidentiality agreement between Company C and
Eidos, which would replace the existing confidentiality agreement between Eidos
and Company C in order to facilitate the sharing of information with respect to
a potential acquisition of Eidos by Company C. The draft confidentiality
agreement did not contain a standstill provision. Company C did not execute the
confidentiality agreement.
Following the partial first paragraph on page 86 under the heading "Background
of the Mergers" inserting the following new paragraphs:
On December 11, 2020, BridgeBio filed an amendment to the registration statement
on Form S-4 of which this joint proxy statement/prospectus forms a part, which
included disclosures regarding the inquiries from Company C regarding a
potential transaction with Eidos.
Later on December 11, 2020, Company C delivered a letter to the Eidos special
committee (the "December 11 Company C letter") informing the Eidos special
committee that given the circumstances, following the amendment to the
registration statement, Company C had determined not to submit a revised
proposal for a transaction involving Eidos at that time.
On December 12, 2020, the Eidos special committee held a telephonic meeting,
with representatives of Centerview and Cravath participating. The Eidos special
committee noted that, in light of BridgeBio's positions on Company C's prior
inquiries and the fact that each of the transactions previously proposed by
Company C included terms and conditions that by their nature could only be
granted or satisfied with the approval of BridgeBio in its capacity as majority
stockholder of Eidos, Company C would need to revise its proposals to either
propose a transaction that BridgeBio, in its capacity as majority stockholder of
Eidos, was willing to approve or propose a transaction that would not require
the approval of BridgeBio. After discussion, the Eidos special committee
determined that, notwithstanding the December 11 Company C letter, it was
advisable to indicate its willingness to continue discussions with Company C.
On December 13, 2020, the Eidos special committee delivered a letter to Company
C informing Company C that the Eidos special committee was willing to continue
engaging in further discussions with Company C, particularly in connection with
a revised proposal for a transaction which would offer increased consideration
payable to Eidos' stockholders (other than BridgeBio and its subsidiaries)
compared to the merger agreement and is reasonably capable of being consummated
on the terms proposed.
On December 23, 2020, the Eidos special committee held a telephonic meeting to
prepare for an upcoming meeting with a proxy advisory firm regarding the
mergers, with representatives of Centerview and Cravath participating. The Eidos
special committee discussed the previous inquiries from Company C, noting that
(1) Company C had not submitted any
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further proposals or expressed continued interest in a transaction with Eidos
since the Eidos special committee delivered the letter to Company C on
December 13, 2020, (2) the prior proposals submitted by Company C, including for
the acquisition of Eidos common stock not owned by BridgeBio and its
subsidiaries, required the approval of BridgeBio, (3) BridgeBio, in its capacity
as majority stockholder of Eidos, had repeatedly advised the Eidos special
committee that it is not willing to sell its stake in Eidos and does not
support, and would not approve, the grant of the governance and other rights
requested by Company C and (4) based on the closing price of $67.92 per share of
BridgeBio common stock on the Nasdaq on December 22, 2020, the stock
consideration under the merger agreement represented approximately $125.65 per
share of Eidos common stock, which amount was above the value that Company C had
previously indicated its willingness to offer per share of Eidos common stock.
After discussion, the Eidos special committee determined that the best available
alternative for Eidos and its stockholders (other than BridgeBio and its
subsidiaries) was the transactions contemplated by the merger agreement due to
the absence of an actionable offer from Company C and the risks of remaining a
standalone company as Eidos approaches a critical phase in clinical development
and commercial preparedness, as well as the significant value and other
potential benefits that the transactions with BridgeBio contemplated by the
merger agreement would provide to Eidos and its stockholders (other than
BridgeBio and its subsidiaries). The Eidos special committee also noted that
entering into a collaboration agreement with Company C would not provide
increased value to Eidos stockholders (other than BridgeBio and its
subsidiaries) compared to the merger agreement.
The disclosure in the section entitled "The Mergers" under the heading "Opinion
of the Special Committee's Financial Advisor", beginning on page 95 of the
Definitive Proxy Statement, is hereby amended by:
Amending and restating the fourth full paragraph on page 100 under the heading
"Discounted Cash Flow Analysis" as follows (with new text in underline):
In performing this analysis, Centerview calculated a range of illustrative
equity values for Eidos by (a) discounting to present value as of December 31,
2020 using discount rates ranging from 10.0% to 12.0% (reflecting Centerview's
analysis of Eidos's weighted average cost of capital using the capital asset
pricing model and based on considerations that Centerview deemed relevant in its
professional judgment and experience, taking into account certain metrics
including levered and unlevered betas for comparable group companies) and the
mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free
cash flows of Eidos over the period beginning in 2021 and ending in 2035, as set
forth in the each of the Eidos low case, the Eidos mid case and the Eidos high
case and (ii) an implied terminal value of Eidos, calculated by Centerview
assuming that Eidos's after-tax unlevered free cash flows for the terminal year
would decline 80% year-over-year in perpetuity (which perpetuity decline rate
was based on considerations that Centerview deemed relevant in its professional
judgment and experience) and (b) adding to the foregoing results Eidos's
estimated net cash of $105 million as of December 31, 2020, as set forth in the
adjusted Eidos projections. Centerview divided the result of the foregoing
calculations by the number of fully diluted outstanding shares of Eidos common
stock (determined using the treasury stock method and based on approximately
38.6 million shares of Eidos common stock outstanding and taking into account
approximately 1.9 million outstanding options with a weighted average exercise
price of $27.89 and 9,052 restricted stock units) as of October 2, 2020. In
performing its discounted cash flow analysis, Centerview (a) subtracted
$45 million for the net present value of the estimated cost of an assumed
$300 million future capital raise by Eidos in 2022, as set forth in the adjusted
Eidos projections, and (b) added between approximately $45 million and
$55 million for the net present value of federal net operating losses and future
losses. This analysis resulted in the following implied per share equity value
ranges for the shares of Eidos common stock, rounded to the nearest $0.05:
Amending and restating the fourth and fifth full paragraphs on page 102 under
the heading "Discounted Cash Flow Analysis" as follows (with new text in
underline):
In calculating the range of illustrative equity values for BridgeBio excluding
Eidos, Centerview first discounted to present value as of December 31, 2020
using discount rates ranging from 10.0% to 12.0% (reflecting Centerview's
analysis of BridgeBio's weighted average cost of capital using the capital asset
pricing model and based on considerations that Centerview deemed relevant in its
professional judgment and experience, taking into account certain metrics
including levered and unlevered betas for comparable group companies) and
the mid-year convention: (a) the forecasted risk-adjusted, after-tax unlevered
free cash flows of BridgeBio (excluding Eidos) over the period beginning in 2021
and ending in 2047, adjusted for assumed synergies and BridgeBio's ownership in
its subsidiaries, as set forth in the adjusted BridgeBio projections, (b) an
implied terminal value of BridgeBio (excluding Eidos), calculated by Centerview
assuming that BridgeBio's after-tax unlevered free cash flows for the terminal
year would decline 80% year-over-year in perpetuity (which perpetuity decline
rate was based on considerations that Centerview deemed relevant in its
professional judgment and experience) (as set forth in the adjusted BridgeBio
projections), adjusted for BridgeBio's ownership in its subsidiaries.
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Centerview then adjusted the foregoing results by (i) adding BridgeBio's
estimated cash (excluding Eidos) of $493 million, (ii) subtracting BridgeBio's
estimated debt (excluding Eidos) of $630 million (which, for purposes of
Centerview's analysis assumed BridgeBio's Convertible Notes are treated as debt
at per share equity value below $62.12) as of December 31, 2020, as set forth in
the adjusted BridgeBio projections. The calculation of the range of illustrative
equity values for Eidos is described in the section entitled "Eidos Financial
Analysis-Discounted Cash Flow Analysis."
After summing the illustrative equity values for BridgeBio excluding Eidos and
the illustrative equity values for Eidos, Centerview then divided the result of
each by the number of fully diluted outstanding shares of BridgeBio common stock
(determined using the treasury stock method and based on approximately
122.6 million shares of BridgeBio common stock outstanding and taking into
account approximately 8.0 million outstanding options with a weighted average
exercise price of $21.38 and approximately 1.4 million restricted stock units,
and which for purposes of Centerview's analysis assumed BridgeBio's Convertible
Notes are treated as debt at per share equity values below $62.12) as of
October 2, 2020. In performing its discounted cash flow analysis, Centerview
adjusted for (a) the net present value of the estimated cost of a $300 million
future capital raise by BridgeBio in each of 2021 and 2022, in each case as set
forth in the adjusted BridgeBio projections, (b) the net present value of the
estimated cost of a $400 million future capital raise by BridgeBio in each of
2023, 2024 and 2025, in each case as set forth in the adjusted BridgeBio
projections and (c) the net present value of the estimated cost of a
$300 million future capital raise by Eidos in 2022, as set forth in the adjusted
Eidos projections. Centerview also added between approximately $200 million and
$240 million for the net present value of federal net operating losses and
future losses.
Replacing the first full bullet on page 104 under the heading "Other Factors"
with the following:
Analyst Price Target Analysis. Centerview reviewed stock price targets for Eidos
common stock in nine Wall Street research analyst reports publicly available as
of October 2, 2020, noting that these stock price targets indicated low, median
and high stock price targets for Eidos of $34.00, $56.00 and $80.00,
respectively, per share of Eidos common stock. Centerview also reviewed stock
price targets for BridgeBio common stock in eleven Wall Street research analyst
reports publicly available as of October 2, 2020, noting that these stock price
targets indicated low, median and high stock price targets for BridgeBio of
$38.00, $44.00 to $52.00, respectively, per share of BridgeBio common stock.
Amending and restating the third full paragraph on page 104 under the heading
"General" as follows (with new text in underline):
Centerview is a securities firm engaged directly and through affiliates and
related persons in a number of investment banking, financial advisory and
merchant banking activities. In 2019, Centerview was engaged to provide
financial advisory services to the 2019 special committee in connection with
such committee's evaluation of strategic alternatives, including a potential
transaction between BridgeBio and Eidos. In connection with such services
provided to the 2019 special committee, in the second quarter of 2020,
Centerview became entitled to receive fees from Eidos of $5 million,
$2.5 million of which was paid by Eidos to Centerview in the third quarter of
2020 and the remaining $2.5 million of which will become payable following any
announcement by Eidos of pivotal trial top-line data with respect to acoramidis,
or on June 30, 2022, if earlier, in each case unless the mergers have been
consummated. Such fees will be creditable against the fee that is payable to
Centerview contingent upon the consummation of the mergers. In the two years
prior to the date of its written opinion, Centerview has not been engaged to
provide financial advisory or other services to Eidos or BridgeBio, and
Centerview has not received compensation from Eidos (except for the work
performed for the 2019 special committee, as described above) or BridgeBio
during such period. In the two years prior to the date of its written opinion,
Centerview was engaged to provide, and/or is currently providing, financial
advisory services unrelated to Eidos, BridgeBio or the transaction to (i) an
affiliate of KKR Genetic Disorder L.P. (which owns approximately 28% of
BridgeBio's outstanding common stock), (ii) a portfolio company of KKR and other
private equity sponsors and (iii) Sungard Availability Services Capital, Inc.
("Sungard"), a portfolio company of KKR, Bain Capital, Blackstone Group LP,
Silver Lake Management and TPG Capital, in connection with Sungard's bankruptcy
proceeding, which was completed in July 2019. Centerview received approximately
$23 million in aggregate fees, and in the future may receive additional
compensation, for the foregoing services.
Amending and restating the third full paragraph on page 105 under the heading
"General" as follows (with new text in underline):
In connection with Centerview's services as the financial advisor to the Eidos
special committee, Eidos has agreed to pay Centerview an aggregate fee of
approximately $46 million (estimated as of January 6, 2021), $2,500,000 of which
was payable upon the rendering of Centerview's opinion and the remainder of
which is payable contingent upon the consummation of the transaction. In
addition, Eidos has agreed to reimburse certain of Centerview's expenses
arising, and indemnify Centerview against certain liabilities that may arise,
out of Centerview's engagement.
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The disclosure in the section entitled "The Mergers" under the heading "Certain
Unaudited Prospective Financial Information", beginning on page 105 of the
Definitive Proxy Statement, is hereby amended by:
Amending and restating the sixth full paragraph on page 105 under the heading
"Certain Unaudited Prospective Financial Information" as follows (with new text
in underline):
The Eidos management projections were reviewed and subsequently adjusted by the
Eidos special committee based on the Eidos special committee's and its advisors'
due diligence investigation including without limitation (i) risk adjusting the
forecasted revenue contained in the Eidos management projections for each
product candidate based on the estimated probability of success of, among other
things, obtaining regulatory approvals for such product candidate,
(ii) modifying certain assumptions about the probability of success of, timing
of regulatory approval and expected launch dates for, and pricing and peak net
sales amounts in respect of certain of Eidos's product candidates,
(iii) reflecting the estimated cost of future capital raises and (iv) reflecting
the benefit of certain estimated cost synergies from the proposed transaction
(such modified projections, the "adjusted Eidos projections"). The adjusted
Eidos projections were based on certain internal assumptions approved by the
Eidos special committee about the probability of success of, timing of
regulatory approval and expected launch dates and addressable patient population
for, and pricing and peak net sales amounts in respect of Eidos' product
candidate, acoramidis, as well as other relevant factors relating to
commercialization, loss of exclusivity, and research and development and general
administrative expenses, and reflected risk adjustments to the forecasted
revenue contained in the Eidos management projections for acoramidis. The
adjusted Eidos projections consisted of a "Low Case", "Mid Case" and "High
Case", based on the Eidos special committee's reasonable best estimates and
assumptions with respect to the future financial performance of Eidos on a
standalone basis, including but not limited to a range of probability of success
of acoramidis of 60% in the "Low Case", 70% in the "Mid Case" and 80% in the
"High Case" and a range of assumptions regarding the addressable patient
population for acoramidis. All of these factors are difficult to predict and
many are beyond Eidos' control. The adjusted Eidos projections were considered
by the Eidos special committee for purposes of considering and evaluating
strategic alternatives, including BridgeBio's acquisition proposal, and were
approved by the Eidos special committee for use by Centerview in connection with
the rendering of Centerview's opinion to the Eidos special committee and in
performing its financial analyses, as described above under the heading "The
Mergers-Opinion of the Eidos Special Committee's Financial Advisor."
Amending and restating the second full paragraph on page 106 under the heading
"Certain Unaudited Prospective Financial Information" as follows (with new text
in underline):
The BridgeBio management projections were reviewed and subsequently adjusted by
the Eidos special committee, after consultation with its advisors, including
without limitation (i) risk adjusting the forecasted revenue contained in the
BridgeBio management projections for each product candidate based on the
estimated probability of success of, among other things, obtaining regulatory
approvals for such product candidate, (ii) modifying certain assumptions about
the probability of success of, timing of regulatory approval and expected launch
dates for, and pricing and peak net sales amounts in respect of certain of
BridgeBio's product candidates, (iii) reflecting the estimated cost of future
capital raises and (iv) reflecting the benefit of estimated cost synergies (the
"synergies") from the proposed transaction of $25 million per year beginning in
the fiscal year ending December 31, 2021 and growing at a rate of 3%
year-over-year thereafter through the fiscal year ending December 31, 2033 (as
adjusted, the "adjusted BridgeBio projections"). The adjusted BridgeBio
projections consisted of a "Low Case," "Mid Case," "High Case," based on the
Eidos special committee's reasonable best estimates and assumptions with respect
to the future financial performance of BridgeBio (excluding Eidos), reflecting a
range of various assumptions for certain product candidates. The adjusted
BridgeBio projections were considered by the Eidos special committee for
purposes of evaluation BridgeBio's acquisition proposal, and were approved by
the Eidos special committee for use by Centerview in connection with the
rendering of Centerview's opinion to the Eidos special committee and in
performing its financial analyses, as described above under the heading "The
Mergers-Opinion of the Eidos Special Committee's Financial Advisor."
Replacing the third full paragraph on page 107 under the heading "Certain
Unaudited Prospective Financial Information" with the following:
Modeling and forecasting the future commercialization of clinical stage drug
candidates is a highly speculative endeavor. In addition to the various
limitations described above, there can also be no assurance that either Eidos or
BridgeBio obtain and maintain any of the regulatory approvals necessary for the
commercialization of its product candidates, or that Eidos' or BridgeBio's
competitors will not commercialize products that are safer, more effective or
more successfully marketed and sold than any product that Eidos or BridgeBio may
commercialize. The information set forth in the financial projections is not
fact and should not be relied upon as being necessarily indicative of future
results. The financial projections
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were developed for each of Eidos and BridgeBio (excluding Eidos) on a standalone
basis without giving effect to the mergers, and therefore the financial
projections do not give effect to the mergers or any changes to Eidos' or
BridgeBio's operations or strategy that may be implemented after the
consummation of the mergers, including cost synergies realized as a result of
the mergers, or to any costs incurred in connection with the mergers (except
that the adjusted BridgeBio projections reflect the estimated impact of the
synergies). Furthermore, the financial projections do not take into account the
effect of any failure of the mergers to be completed and should not be viewed as
accurate or continuing in that context.
Amending and restating the second full paragraph on page 108 under the heading
"Certain Unaudited Prospective Financial Information" as follows (with new text
in underline):
Certain of the line items in the projections set forth below may be considered
non-GAAP financial measures. Non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial information
presented in compliance with U.S. GAAP, and non-GAAP financial measures as used
. . .
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