Item 1.01 Entry into a Material Definitive Agreement.
As previously announced, on May 5, 2020, Alexion Pharmaceuticals, Inc., a
Delaware corporation ("Alexion"), entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Odyssey Merger Sub Inc., a Delaware corporation
and a wholly owned subsidiary of Alexion ("Purchaser"), and Portola
Pharmaceuticals, Inc., a Delaware corporation ("Portola").
The Merger Agreement provides that, upon the terms and subject to the conditions
thereof, as promptly as practicable (but in no event later than 15 business days
following the date of the Merger Agreement), Purchaser will commence a tender
offer, which will not expire prior to July 1, 2020 (the "Offer"), to purchase
all of the issued and outstanding shares of common stock of Portola, par value
$0.001 per share (the "Shares"), other than any Shares held immediately prior to
the effective time of the Merger (the "Effective Time") by Portola (or held in
Portola's treasury) or by any direct or indirect wholly owned subsidiary of
Portola and any Shares held immediately prior to the Effective Time by Alexion,
Purchaser or any other direct or indirect wholly owned subsidiary of Alexion, at
a price of $18.00 per Share (the "Per Share Amount"), net to the seller thereof
in cash, without interest and subject to any applicable withholding taxes.
Promptly following the completion of the Offer, upon the terms and subject to
the conditions of the Merger Agreement, Purchaser will be merged with and into
Portola, with Portola surviving as a wholly owned direct subsidiary of Alexion
(the "Merger"). The Merger Agreement contemplates that the Merger will be
effected pursuant to Section 251(h) of the Delaware General Corporation Law,
which permits completion of the Merger without a vote of the holders of Shares
upon the acquisition by Purchaser of a majority of the aggregate voting power of
the Shares. At the Effective Time , each Share, other than Shares accepted for
payment in the Offer and certain Shares held by Portola, Alexion or their
respective subsidiaries, will be canceled and converted into the right to
receive the Per Share Amount (other than dissenting Shares and Shares held by
Portola and Alexion and their respective subsidiaries).
Under the terms of the Merger Agreement, Purchaser's obligation to accept and
pay for Shares that are tendered in the Offer is subject to customary
conditions, including: (i) the condition that, prior to the expiration of the
Offer, there have been validly tendered and not validly withdrawn a number of
Shares that, together with Shares then owned by Alexion and its affiliates,
would represent at least a majority of the then-outstanding Shares; (ii) the
expiration or termination of the applicable mandatory waiting period (and any
extensions thereof) applicable to the Offer under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (iii) the receipt of approvals,
consents or authorizations under certain other specified antitrust laws; (iv)
the accuracy of Portola's representations and warranties in the Merger
Agreement, subject to customary materiality qualifications; (v) compliance by
Portola with its covenants in the Merger Agreement in all material respects,
subject to a specified exception; (vi) the absence of a Company Material Adverse
Effect (as defined in the Merger Agreement) of which the existence or
consequences are continuing and (vii) the absence of legal restraints or
applicable law making illegal or otherwise prohibiting the consummation of the
transactions.
The Merger Agreement provides that at the Effective Time: (i) all vested,
in-the-money options will be canceled for the right to receive the Per Share
Amount for each Share covered by such options, less the applicable exercise
price, (ii) all unvested, in-the-money options held by non-employee directors
and certain employees of Portola who have timely delivered and not revoked
executed restrictive covenant and release agreements (collectively, "Qualified
Holders") will become fully vested (at target for performance-based options) and
will be cancelled for the right to receive the Per Share Amount for each Share
covered by such options, less the applicable exercise price, (iii) all unvested,
in-the-money options held by non-Qualified Holders will be converted into
options to acquire Alexion common stock (at target for performance-based
options) in accordance with the formula set forth in the Merger Agreement; (iv)
all out-of-the money options, whether vested or unvested, will be canceled
without payment of consideration; (v) all restricted stock units held by
non-employee directors will become fully vested and will be canceled for the
right to receive the Per Share Amount for each Share covered by such restricted
stock units; (vi) all restricted stock units held by persons who are not
non-employee directors will be converted into restricted stock units relating to
Alexion common stock in accordance with the formula set forth in the Merger
Agreement and (vii) all performance stock units will be converted at target into
corresponding restricted stock units relating to Alexion common stock (but
excluding any performance conditions) in accordance with the formula set forth
in the Merger Agreement.
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The Merger Agreement contains representations, warranties and covenants for both
Portola and Alexion that are customary for a transaction of this nature,
including among others, the covenant regarding Portola's obligation to conduct
its business and the business of its subsidiaries in the ordinary course,
consistent with past practice in all material respects during the pendency of
the transactions, and both Alexion's and Portola's covenants regarding public
disclosures and the use of reasonable best efforts to cause the conditions to
the Offer and the Merger to be satisfied. In addition, Portola has agreed to
certain non-solicitation obligations related to alternative acquisitions
proposals.
The Merger Agreement provides certain termination rights for both Portola and
Alexion and further provides that a termination fee of $51.5 million will be
payable by Portola to Alexion upon termination of the Merger Agreement under
certain circumstances, including if the board of directors of Portola (the
"Board") effects an adverse recommendation change to enter into a transaction
agreement in respect of a "superior proposal" and if Alexion terminates the
Merger Agreement as a result of an adverse recommendation change of the Board.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by the full text of the Merger Agreement, a copy of which is filed as
Exhibit 2.1 hereto and is incorporated by reference herein. The Merger Agreement
has been attached to provide investors with information regarding its terms. It
is not intended to provide any other factual information about Alexion,
Purchaser or Portola. In particular, the representations, warranties and
covenants of each party set forth in the Merger Agreement have been made only
for the purposes of, and were and are solely for the benefit of the parties to,
the Merger Agreement, may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential disclosure
letters made for the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as facts, and may
be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. These confidential disclosure
letters contain information that modifies, qualifies and creates exceptions to
the representations and warranties and certain covenants set forth in the Merger
Agreement. Accordingly, the representations and warranties should not be relied
on by any investor as characterizations of the actual state of facts and
circumstances about Portola, Alexion or Purchaser at the date they were made or
at any other time, and information in the Merger Agreement should be considered
in conjunction with the entirety of the factual disclosure about Alexion and
Portola in their public reports filed with the SEC. Information concerning the
subject matter of the representations and warranties may change after the date
of the Merger Agreement, which subsequent information may not be fully reflected
in Alexion's and Portola's public disclosures.
Additional Information about the Transaction and Where to Find It
The tender offer for the outstanding common stock of Portola has not been
commenced. This communication does not constitute a recommendation, an offer to
purchase or a solicitation of an offer to sell Portola securities. The
solicitation and offer to buy shares of Portola common stock will only be made
pursuant to an Offer to Purchase and related materials. At the time the tender
offer is commenced, Alexion and Purchaser will file a Tender Offer Statement on
Schedule TO with the SEC and thereafter, Portola will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
tender offer. Once filed, investors and security holders are urged to read these
materials (including an Offer to Purchase, a related Letter of Transmittal and
certain other tender offer documents, as each may be amended or supplemented
from time to time) carefully when they become available since they will contain
important information that investors and security holders should consider before
making any decision regarding tendering their common stock, including the terms
and conditions of the tender offer. The Tender Offer Statement, Offer to
Purchase, Solicitation/Recommendation Statement and related materials will be
filed with the SEC, and investors and security holders may obtain a free copy of
these materials (when available) and other documents filed by Alexion and
Portola with the SEC at the website maintained by the SEC at www.sec.gov. In
addition, the Tender Offer Statement and other documents that Alexion and
Purchaser file with the SEC will be made available to all investors and security
holders of Portola free of charge from the information agent for the tender
offer. Investors may also obtain, at no charge, the documents filed with or
furnished to the SEC by Portola under the "Investors and Media" section of
Portola's website at www.portola.com.
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Cautionary Note Regarding Forward-Looking Statements
To the extent that statements contained in this communication are not
descriptions of historical facts, they are forward-looking statements reflecting
the current beliefs, certain assumptions and current expectations of management
and may be identified by words such as "believes," "plans," "anticipates,"
"projects," "estimates," "expects," "intends," "strategy," "future,"
"opportunity," "may," "will," "should," "could," "potential," or similar
expressions. Such forward-looking statements are based on management's current
expectations, beliefs, estimates, projections and assumptions. As such,
forward-looking statements are not guarantees of future performance and involve
inherent risks and uncertainties that are difficult to predict. As a result, a
number of important factors could cause actual results to differ materially from
those indicated by such forward-looking statements, including: the risk that the
proposed acquisition of Portola by Alexion may not be completed; the possibility
that competing offers or acquisition proposals for Portola will be made; the
delay or failure of the tender offer conditions to be satisfied (or waived),
including insufficient shares of Portola common stock being tendered in the
tender offer; the failure (or delay) to receive the required regulatory
approvals of the proposed acquisition; the possibility that prior to the
completion of the transactions contemplated by the acquisition agreement,
Alexion's or Portola's business may experience significant disruptions due to
transaction-related uncertainty; the effects of disruption from the transactions
of Portola's business and the fact that the announcement and pendency of the
transactions may make it more difficult to establish or maintain relationships
with employees, manufactures, suppliers, vendors, business partners and
distribution channels to patients; the occurrence of any event, change or other
circumstance that could give rise to the termination of the acquisition
agreement; the risk that stockholder litigation in connection with the proposed
transaction may result in significant costs of defense, indemnification and
liability; the failure of the closing conditions set forth in the acquisition
agreement to be satisfied (or waived); the anticipated benefits of Portola's
therapy (Andexxa) not being realized (including expansion of the number of
patients using the therapy); the phase 4 study regarding Andexxa does not meet
its designated endpoints and/or is not deemed safe and effective by the Food and
Drug Administration ("FDA") or other regulatory agencies (and commercial sales
are prohibited or limited); future clinical trials of Portola products not
proving that the therapies are safe and effective to the level required by
regulators; anticipated Andexxa sales targets are not satisfied; Andexxa does
not gain acceptance among physicians, payers and patients; potential future
competition by other Factor Xa inhibitor reversal agents; decisions of
regulatory authorities regarding the adequacy of the research and clinical
tests, marketing approval or material limitations on the marketing of Portola
products; delays or failure of product candidates or label extension of existing
products to obtain regulatory approval; delays or the inability to launch
product candidates (including products with label extensions) due to regulatory
restrictions; failure to satisfactorily address matters raised by the FDA and
other regulatory agencies; the possibility that results of clinical trials are
not predictive of safety and efficacy results of products in broader patient
populations; the possibility that clinical trials of product candidates could be
delayed or terminated prior to completion for a number of reasons; the adequacy
of pharmacovigilance and drug safety reporting processes; and a variety of other
risks set forth from time to time in Alexion's or Portola's filings with the
SEC, including but not limited to the risks discussed in Alexion's Annual Report
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated as of May 5, 2020, by and among
Portola Pharmaceuticals, Inc., Alexion Pharmaceuticals, Inc. and Odyssey
Merger Sub Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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