ADAPTIMMUNE THERAPEUTICS PLC
Item 8.01 Other Events.
As previously disclosed, TCR2 Therapeutics Inc. ("TCR2") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Adaptimmune
Therapeutics plc ("Adaptimmune") and CM Merger Sub, Inc. , a Delaware corporation
("Merger Sub"), pursuant to which Merger Sub will be merged with and into TCR2
(the "Merger"), with TCR2 surviving the merger as a wholly-owned direct
subsidiary of CM Intermediate Sub II, Inc. , a Delaware corporation and
wholly-owned subsidiary of Adaptimmune ("CM Intermediate"). On April 20, 2023 ,
each of Adaptimmune and TCR2 filed the definitive version of the joint proxy
statement with the United States Securities and Exchange Commission (the "SEC")
in connection with the Merger (the "Proxy Statement").
Since the filing of the Proxy Statement, two complaints have been filed by
purported TCR2 stockholders as individual actions against TCR2 and the members
of its Board of Directors. One complaint has been filed in the United States
District Court for the Southern District of New York , captioned Scott v. TCR2
Therapeutics, Inc. et al., Case No. 1:23-cv-3763 (filed May 4, 2023 ), and one
complaint has been filed in the United States District Court for the District of
Delaware , captioned Thompson v. TCR2 Therapeutics, Inc. et al., Case
No. 1:23-cv-503 (filed May 8, 2023 ). The foregoing complaints are referredto as the "Merger Actions." The Merger Actions allege that the Proxy Statement misrepresents and/or omits certain purportedly material information. The Merger Actions assert claims for violation of Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14a-9 promulgated thereunder against TCR2and its Board of Directors, and violations of Section 20(a) of the Exchange Act against TCR2's Board of Directors. Additionally, onApril 20, 2023 ,April 21, 2023 ,April 26, 2023 ,May 5, 2023 ,May 12, 2023 ,May 15, 2023 , andMay 17, 2023 , five purported TCR2 stockholders and three purportedAdaptimmune shareholders sent demand letters alleging similar insufficiencies in the disclosures in the Proxy Statement in violation of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, and Section 20(a) of the Exchange Act (such letters, the "Demands" and collectively with the Merger Actions, the "Litigation Matters"). The plaintiffs in the Litigation Matters seek various remedies including, among other things, an order enjoining the consummation of the Merger, requiring the defendants to file an amended Proxy Statement, rescinding the Merger in the event it is consummated or granting rescissory damages, and awarding costs of the action, including plaintiff's attorneys' fees and experts' fees, and other relief the court may deem just and proper. TCR2 andAdaptimmune believe that the claims asserted in the Litigation Matters are without merit. TCR2 andAdaptimmune deny that any further disclosure beyond that already contained in the Proxy Statement is required under applicable law to supplement the Proxy Statement, as claimed in the Litigation Matters. Nonetheless, to moot these purported stockholders' unmeritorious claims, avoid the risk that litigation may delay or otherwise adversely affect the consummation of the Merger and to minimize the expense of defending against the Complaints and the Demands, TCR2 andAdaptimmune are making the following supplemental disclosures to the Proxy Statement. 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 supplemental disclosures set forth herein. To the contrary, TCR2 andAdaptimmune specifically deny all allegations in the Litigation Matters that any additional disclosure was or is required. Supplemental Disclosures This supplemental information to the Proxy Statement should be read in conjunction with the Proxy Statement, which should be read in its entirety. All page references in the information below are to pages in the Proxy Statement, and all terms used but not defined below shall have the meanings set forth in the Proxy Statement. To the extent the following information differs from or conflicts with the information contained in the Proxy Statement, the information set forth below shall be deemed to supersede the respective information in the Proxy Statement. New text within the amended and supplemented language from the Proxy Statement is indicated in bold and underlined text (e.g., bold, underlined text), and deleted text within the amended and supplemented language from the Definitive Proxy Statement is indicated in bold and strikethrough text (e.g., bold, strikethrough text).
The disclosure in the section entitled "Background of the Merger," beginning on page 55 of the Proxy Statement, is hereby amended and supplemented as follows:
The following text is added to the second sentence of the fourth full paragraph on page 66 of the Proxy Statement:
Also, onFebruary 10, 2023 , following negotiation between the parties and after hearing from Party G and concluding that Party H was uninterested in pursuing any discussion, TCR2 andAdaptimmune entered into theFebruary 10 NDA, which included customary non-disclosure provisions and mutual standstill provisions that prohibited either party, for three months from the date of the agreement, from offering to acquire or acquiring the other party, and from taking certain other actions, including soliciting proxies, without the prior written consent of the other party. The confidentiality agreement provided for the termination of the standstill provision on customary terms three-month standstill provision in theFebruary 10 NDA terminates: (i) immediately upon the public announcement that either TCR2or Adaptimmune has entered into a definitive agreement with a third party for a business combination transaction or the entry into a definitive agreement for the strategic transaction between TCR2 andAdaptimmune ; or (ii) 11 business days following the commencement by any person of a cash tender offer seeking to acquire beneficial ownership of more than 50% of TCR2's orAdaptimmune's outstanding voting securities, as applicable, unless that party's Board of Directors publicly recommended to its respective stockholders that such tender offer be rejected.
The following text is added after the first full paragraph on page 71 of the Proxy Statement:
OnMay 18, 2023 , the TCR2Board held a meeting at which members of TCR2 senior management and representatives of Goodwin were present. At this meeting, TCR2 senior management provided an update to the TCR2 Board about certain information sourcing and calculation errors (as summarized in this joint proxy statement/prospectus under the section titled "The Merger - Opinion of TCR2's Financial Advisor") in Piper Sandler'sMarch 5, 2023 presentation to the TCR2Board that impacted Piper Sandler's analyses and that Piper Sandler had identified afterMarch 5, 2023 and after the joint proxy statement/prospectus was filed onApril 20, 2023 , and the ongoing review of those errors. Representatives of Goodwin reviewed with the members of the TCR2 Board their fiduciary duties. The TCR2 Board discussed such matters and determined to reconvene to further discuss them with representatives of Piper Sandler. OnMay 20, 2023 , the TCR2 Board held a meeting at which members of TCR2 senior management and representatives of Goodwin were present. TCR2 senior management updated the TCR2 Board on their discussions with representatives of Piper Sandler and their review of the information sourcing and calculation errors that Piper Sandler had identified in itsMarch 5, 2023 presentation. Representatives of Goodwin next reviewed with the members of the TCR2 Board their fiduciary duties. Representatives of Piper Sandler then joined the meeting and reviewed with the TCR2 Board those information sourcing and calculation errors (as summarized in this joint proxy statement/prospectus under the section titled "The Merger - Opinion of TCR2's Financial Advisor") in Piper Sandler'sMarch 5, 2023 presentation to the TCR2 Board that impacted Piper Sandler's analyses and that Piper Sandler had identified afterMarch 5, 2023 and after the definitive version of the joint proxy statement/prospectus was filed with theSEC onApril 20, 2023 . Representatives of Piper Sandler informed the TCR2 Board that, after preliminarily identifying certain errors in itsMarch 5, 2023 analyses, in addition to the members of the Piper Sandler team that advised on the potential business combination reviewing its analyses in theMarch 5, 2023 presentation to the TCR2 Board, Piper Sandler also had assembled a separate review team, whose members were not part of the original transaction team advising on the potential business combination withAdaptimmune , to review its analyses contained in theMarch 5, 2023 presentation to the TCR2 Board under the direction and oversight of additional members of the Piper Sandler opinion committee senior leadership, who themselves were not involved on the transaction team advising on the potential business combination withAdaptimmune . Representatives of Piper Sandler then discussed with the TCR2 Board the results of that supplemental review, including certain corrections to Piper Sandler's prior analyses resulting therefrom, and the impact of those corrections on its analyses. Representatives of Piper Sandler informed the TCR2 Board that these corrections had no impact on Piper Sandler's fairness opinion conclusion, as previously provided to the Board onMarch 5, 2023 . During this discussion, members of the TCR2 Board asked questions of the representatives of Piper Sandler. Following this discussion, the representatives of Piper Sandler left the meeting. TCR2 senior management then discussed their meetings with representatives of Piper Sandler and their review of the corrections to Piper Sandler's analyses. The TCR2 Board further discussed the corrections to Piper Sandler'sMarch 5, 2023 analyses, the fact that Piper Sandler had assembled a separate review team whose members were not part of the original transaction team advising on the potential business combination withAdaptimmune to review theMarch 5 analyses, including the Piper Sandler opinion committee senior leadership, and the fact that TCR2 senior management had met with representatives of Piper Sandler and reviewed the corrections to Piper Sandler's analyses. The TCR2 Board also discussed that there were a number of reasons why the TCR2 Board approved and recommended the Merger in addition to the Piper Sandler fairness opinion, including the factors summarized in this joint proxy statement/prospectus in the section entitled "TCR2's Reasons for the Merger; Recommendation of the TCR2 Board that TCR2 Stockholders Approve the Merger Proposal." On the basis of all of the foregoing considerations, the TCR2 Board determined that it was reasonable to rely on Piper Sandler's corrected analyses and Piper Sandler's determination that the corrections had no impact on the fairness opinion conclusion previously provided to the TCR2 Board onMarch 5, 2023 . The TCR2 Board further determined that, had the TCR2 Board been aware of Piper Sandler's corrected financial analyses onMarch 5, 2023 , those corrected analyses would not have changed the TCR2 Board's determination that the terms of the merger and the other transactions contemplated by the merger agreement were advisable, fair to, and in the best interests of TCR2 and TCR2 stockholders for the reasons discussed in the section entitled "TCR2's Reasons for the Merger; Recommendation of the TCR2 Board that TCR2 Stockholders Approve the Merger Proposal." The TCR2 Board also determined that, had representatives of Piper Sandler presented and the TCR2 Board considered the corrected analyses onMarch 5, 2023 , the TCR2 Board would not have made a different recommendation to the TCR2 stockholders concerning the merger.
The disclosure in the section entitled "Opinion of
The disclosure under the subheading "Selected Publicly Traded Companies Analyses" is hereby amended and supplemented by adding the following text to the first sentence of the fourth full paragraph on page 79 of the Proxy Statement:
Although theAdaptimmune selected companies and the TCR2 selected companies were used for comparison purposes, none of those companies is directly comparable toAdaptimmune or TCR2 nor, except as otherwise disclosed, were individual enterprise values derived from theAdaptimmune selected companies and the TCR2 selected companies independently determinative of the results of the selected publicly traded companies analyses described above. The disclosure under the subheading "Selected Precedent Transactions Analysis" is hereby amended and supplemented by adding the following text to the first sentence of the third full paragraph on Page 80 of the Proxy Statement: Although the selected transactions were used for comparison purposes, none of those transactions is directly comparable to the merger, and none of the companies involved in those transactions is directly comparable to TCR2, nor, except as otherwise disclosed, were individual enterprise values derived from the selected transactions independently determinative of the results of the selected precedent transactions analysis described above.
The disclosure under the subheading "Discounted Cash Flow Analyses-Adaptimmune" is hereby amended and supplemented by modifying the third sentence of the fifth full paragraph on page 80 of the Proxy Statement as follows: TD Cowen calculated implied terminal values forAdaptimmune by applying toAdaptimmune's estimated unlevered, after-tax free cash flows for the fiscal year endingDecember 31, 2031 a selected range of perpetuity growth rates of (10)% to 3% selected based on TD Cowen's professional judgment. The disclosure under the subheading "Discounted Cash Flow Analyses-Adaptimmune" is hereby further amended and supplemented by adding the following text to the fourth sentence of the fifth full paragraph on page 80 of the Proxy Statement:
The present values (as of
The disclosure under the subheading "Discounted Cash Flow Analyses-TCR2" is hereby amended and supplemented by modifying the third sentence of the sixth full paragraph on page 80 of the Proxy Statement as follows:
TD Cowen calculated implied terminal values for TCR2 by applying to TCR2's
estimated unlevered, after-tax free cash flows for the fiscal year ending
The disclosure under the subheading "Discounted Cash Flow Analyses-TCR2" is hereby further amended and supplemented by adding the following text to the fourth sentence of the sixth full paragraph on page 80 of the Proxy Statement:
The present values (as of
The disclosure under the subheading "Certain Additional Information" is hereby amended and supplemented by adding the following text to the third bullet point of the first paragraph on Page 81 of the Proxy Statement:
· the implied premiums paid or proposed to be paid in 19 selected acquisition
transactions involving biotechnology target companies announced during the
two-year period ended
of less than
approximately 45% to 175% (reflecting the overall 25th and 75th percentile
implied premiums derived from such transactions based on the closing stock
prices of the target companies involved in such transactions one trading day
prior to public announcement of such transactions) to the closing price of TCR2
Common Stock on
implied equity value reference range for TCR2 of
The disclosure under the heading "Opinion of TCR2's Financial Advisor," beginning on page 90 of the Proxy Statement, is hereby amended as follows:
The following text is added to the fourth full paragraph on page 91 of the Proxy Statement:
Unless the context indicates otherwise, for purposes of the financial analyses
described below, Piper Sandler calculated (i) enterprise value (defined as the
relevant company's common equity value, plus book value of preferred stock, plus
debt, less cash and cash equivalents, and less short and long term marketable
securities ("net debt"), plus, where applicable, book value of non-controlling
interests), for TCR2, Adaptimmune and each selected public company based on
(a) the market value of the relevant company's diluted common equity, using
closing stock prices as of March 3, 2023 , calculated using the treasury stock
method ("TSM") and (b) the relevant company's net debt as of such company's most
recently reported quarter end, except in the case of each of TCR2 and
Adaptimmune , for which Piper Sandler used estimated net debt as of March 31,
2023 (which estimates were net cash of approximately $120 million and
approximately $165 million , respectively, as of such date) and (ii) implied per
share values for each of TCR2 and Adaptimmune , using diluted shares, calculated
using TSM as of March 4, 2023 (based on the closing price per share of TCR2
Common Stock and the closing price per Adaptimmune ADS as of March 3, 2023 , such
diluted shares were approximately 40.8 million and 187.5 million, respectively).
The disclosure under the subheading "Selected Public Companies Analyses - TCR2 - Standalone" is hereby amended and supplemented by adding the following text after the third table on page 92 of the Proxy Statement:
Subsequent to the
This discovery did not result in any change to Piper Sandler's fairness opinion or its conclusion. Piper Sandler did, however, provide the TCR2 Board onMay 20, 2023 with a revised selected public companies analysis for TCR2 on a standalone basis as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 . This revised analysis indicated the maximum, 75th percentile, mean, median, 25th percentile and minimum equity values and enterprise values for the selected public companies set forth below: ($ in millions) Equity Value Enterprise Value Maximum $ 237 $ (4 ) 75th Percentile $ 129 $ (61 ) Mean $ 115 $ (94 ) Median $ 109 $ (104 ) 25th Percentile $ 70 $ (137 ) Minimum $ 44 $ (156 )
Piper Sandler then derived a range of implied enterprise values for TCR2 as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 , based on the foregoing revised implied enterprise value ranges for the selected public companies. Piper Sandler then adjusted for estimated net cash for TCR2 as ofMarch 31, 2023 and used the diluted share information described above to calculate an implied value range of TCR2 Common Stock per share. This analysis did not account for any assumed additional cash needs of TCR2 to fund its business plan. Based on the minimum, 25th percentile, median, mean, 75th percentile and maximum implied equity values for TCR2, Piper Sandler calculated the following corresponding implied value range for TCR2 Common
Stock
per share:
Minimum 25th Percentile Median Mean
75th Percentile Maximum
Implied TCR2 Per
Share Value NM NM $ 0.41 $ 0.66 $ 1.45 $ 2.81 The disclosure under the subheading "Selected Public Companies Analyses -
Subsequent to the
This discovery did not result in any change to Piper Sandler's fairness opinion or its conclusion. Piper Sandler did, however, provide the TCR2Board onMay 20, 2023 with a revised selected public companies analysis forAdaptimmune on a standalone basis as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 . This revised analysis indicated the maximum, 75th percentile, mean, median, 25th percentile and minimum equity values and enterprise values for the selected public companies set forth below: ($ in millions) Equity Value Enterprise Value Maximum$ 1,666 $ 1,141 75th Percentile$ 1,422 $ 997 Mean $ 783 $ 480 Median $ 353 $ 107 25th Percentile $ 336 $ 101 Minimum $ 137 $ 53 Piper Sandler then derived a range of implied enterprise values forAdaptimmune as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 based on the foregoing revised implied equity values and enterprise value ranges for the selected public companies. Piper Sandler then adjusted for estimated net cash forAdaptimmune as ofMarch 31, 2023 and used the diluted share information described above to calculate an implied value range ofAdaptimmune per ADS. This analysis did not account for any assumed additional cash needs ofAdaptimmune to fund its business plan. Based on the minimum, 25th percentile, median, mean, 75thpercentile and maximum implied equity values forAdaptimmune , Piper Sandler calculated the following corresponding implied value range forAdaptimmune per ADS, which Piper Sandler provided to the TCR2 Board onMay 20, 2023 : Minimum 25th Percentile Median Mean 75th Percentile Maximum Implied Adaptimmune Per ADS Value$ 1.17 $ 1.43$ 1.46 $ 3.37 $ 6.02$ 6.75
The disclosure under the subheading "Selected Public Companies Analyses - Implied Exchange Ratio Reference Ranges" is hereby amended and supplemented by adding the following text after the last table on page 93 of the Proxy Statement:
Subsequent to the
This discovery did not result in any change to Piper Sandler's fairness opinion or its conclusion. Piper Sandler did, however, provide the TCR2 Board onMay 20, 2023 with the revised implied exchange ratio reference ranges set forth below, based on the revised public companies analyses for each of TCR2 andAdaptimmune on standalone bases described above as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 , as compared to the
Exchange Ratio: Minimum Median Mean Maximum Exchange Ratio 0.0000x 0.2831x 0.1957x 2.3942x 1.5117x
The disclosure under the subheading "Discounted Cash Flow Analyses - TCR2 - Standalone" is hereby amended and supplemented by adding the following text to the first sentence of the first full paragraph on page 94 of the Proxy Statement:
Using a discounted cash flow analysis, Piper Sandler calculated an estimated range of theoretical enterprise values for TCR2 based on the net present value of (i) projected unlevered after-tax free cash flows fromApril 1, 2023 toDecember 31, 2043 (which reflected estimated net operating loss generation and usage, as well as estimated research and development tax credits usage, over such period), discounted back toApril 1, 2023 , and (ii) a projected terminal value atDecember 31, 2043 calculated using a range of perpetuity growth rates ranging from (1.0)% to 1.0% selected by Piper Sandler based on its professional judgment, discounted back toApril 1, 2023 .
The disclosure under the subheading "Discounted Cash Flow Analyses - TCR2 - Standalone" is hereby amended and supplemented by adding the following text after table on page 94 of the Proxy Statement:
Subsequent to the
This discovery did not result in any change to Piper Sandler's fairness opinion or its conclusion. Piper Sandler did, however, provide the TCR2 Board onMay 20, 2023 with a revised discounted cash flow analysis for TCR2 on a standalone basis as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 . This revised analysis indicated the minimum, 25th percentile, median, mean, 75th percentile and maximum implied value for TCR2 Common Stock per share set forth below: Minimum 25th Percentile Median Mean 75th Percentile Maximum Implied TCR2 Per Share Value$ 0.82 $ 1.24$ 1.70 $ 1.74 $ 2.22$ 2.80 The disclosure under the subheading "Discounted Cash Flow Analyses -Adaptimmune - Standalone" is hereby amended and supplemented by adding the following text to the first sentence of the third full paragraph on page 94 of the Proxy Statement: Using a discounted cash flow analysis, Piper Sandler calculated an estimated range of theoretical enterprise values forAdaptimmune based on the net present value of (i) projected unlevered after-tax free cash flows fromApril 1, 2023 toDecember 31, 2031 , discounted back toApril 1, 2023 , and (ii) a projected terminal value atDecember 31, 2031 calculated using a range of perpetuity growth rates ranging from 0.0% to 2.0% selected by Piper Sandler based on its professional judgment, discounted back toApril 1, 2023 . The disclosure under the subheading "Discounted Cash Flow Analyses -Adaptimmune - Standalone" is hereby amended and supplemented by adding the following text after the first table on page 95 of the Proxy Statement:
Subsequent to the
This discovery did not result in any change to Piper Sandler's fairness opinion or its conclusion. Piper Sandler did, however, provide the TCR2 Board onMay 20, 2023 with a revised discounted cash flow analysis forAdaptimmune on a standalone basis as if such corrections had been made in the materials presented to the TCR2 Board onMarch 5, 2023 . This revised analysis indicated the minimum, 25th percentile, median, mean, 75th percentile and maximum implied value forAdaptimmune per ADS set forth below: Minimum 25th Percentile Median Mean 75th Percentile Maximum Implied Adaptimmune Per ADS Value$ 0.51 $ 0.85$ 1.06 $ 1.09 $ 1.29$ 1.80 The disclosure under the subheading "Discounted Cash Flow Analyses - Implied Exchange Ratio Reference Ranges" is hereby amended and supplemented by adding the following text after the second table on page 95 of the Proxy Statement:
Subsequent to the
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