Item 1.01. Entry into a Material Definitive Agreement.
Share Purchase Agreement
On December 31, 2020 (the "Closing Date"), the Company entered into a Share
Purchase Agreement (the "Share Purchase Agreement") with Ocumension
Therapeutics, incorporated in the Cayman Islands with limited liability (the
"Investor" or "Ocumension"), pursuant to which the Company offered and sold to
the Investor 3,010,722 shares of the Company's common stock, par value $0.001
per share (the "Common Stock"), at a purchase price of $5.2163 per share, which
was the five-day volume weighted average price of the Common Stock as of the
close of trading on December 29, 2020 (the "Transaction"). The shares of Common
Stock issued to the Investor in the Transaction represented approximately 19.9%
of the shares of Common Stock outstanding immediately prior to the closing of
the Transaction on the Closing Date.
The aggregate gross proceeds from the Transaction were approximately $15.7
million. The Company intends to use the net proceeds from the Transaction to
continue to fund research and development expenditures related to the
advancement of EYP-1901 for retinal diseases and the Company's other product
candidates, the commercialization of DEXYCU and YUTIQ and for general corporate
purposes, which may include working capital, capital expenditures, clinical
trial expenditures, acquisitions of new technologies, products or businesses in
ophthalmology, and investments.
Pursuant to the Share Purchase Agreement and subject to certain limited
exceptions, the Investor is prohibited from selling, transferring or otherwise
disposing of the shares of Common Stock acquired in the Transaction for a period
of 12 months following the Closing Date.
In addition, for so long as the Investor owns a number of shares of Common Stock
equal to at least 75% of the shares of Common Stock it acquired on the Closing
Date, the Investor is entitled to participate in subsequent issuances of equity
securities of the Company in order to maintain its ownership percentage, subject
to certain exceptions for, among other things, the issuance of equity awards
pursuant to equity incentive plans, inducement awards and/or employee stock
purchase plans and the issuance of shares of Common Stock pursuant to
"at-the-market" equity offering programs, including pursuant to that certain
Controlled Equity OfferingSM Sales Agreement, dated August 5, 2020, by and
between the Company and Cantor Fitzgerald & Co, as may be amended from time to
time.
Pursuant to the Share Purchase Agreement, the Company is required, within 45
days following the Closing Date, to file a shelf registration statement with the
Securities and Exchange Commission (the "SEC") registering for resale the shares
of Common Stock issued to the Investor in the Transaction, and use commercially
reasonable efforts to cause such shelf registration statement to be declared
effective by the SEC within 120 days following the Closing Date.
The shares of Common Stock sold and issued in the Transaction have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws, and may not be offered or sold in the United
States absent registration with the SEC or an applicable exemption from the
registration requirements.
Voting Agreement
On the Closing Date, the Company also entered into a Voting and Investor Rights
Agreement (the "Voting Agreement" and together with the Share Purchase
Agreement, the "Transaction Agreements") with the Investor and EW Healthcare
Partners, L.P. and EW Healthcare Partners-A, L.P. (collectively, the "EW
Investors"). Pursuant to the Voting Agreement, for so long as the Investor owns
a number of shares of Common Stock equal to at least 75% of the shares of Common
Stock it acquired on the Closing Date, and subject to compliance with applicable
law and the Company's guidelines with respect to the nomination of directors,
the Investor is entitled to designate for nomination one person (the "Investor
Designee") to serve as a member of the Board of Directors of the Company (the
"Board"), the Science Committee of the Board and certain other ad-hoc committees
of the Board. Notwithstanding the foregoing, in accordance with Nasdaq Listing
Rule 5640, the Investor will not be entitled to designate for nomination any
person to serve as a member of the Board if, at any time, the Investor owns a
number of shares of Common Stock representing less than 5% of the shares of
Common Stock outstanding. Pursuant to the Voting Agreement, for so long as the
EW Investors beneficially own at least 10% of the outstanding shares of Common
Stock, the EW Investors agreed to vote in favor of the Investor Designee at each
election of the Board. The initial Investor Designee is Ye Liu.
Pursuant to the Voting Agreement, for so long as the Investor is entitled to
. . .
Item 2.02. Results of Operations and Financial Conditions.
On January 3, 2021, EyePoint Pharmaceuticals, Inc. (the "Company") issued a
press release announcing, among other things, certain preliminary cash and cash
equivalent balances as of December 31, 2020. The amounts included in the press
release are preliminary, have not been audited and are subject to change upon
completion of the Company's audited financial statements for the year ended
December 31, 2020. Additional information and disclosures would be required for
a more complete understanding of the Company's financial position and results of
operations as of December 31, 2020. A copy of the press release is furnished as
Exhibit 99.1 hereto.
Item 3.02. Unregistered Sales of Equity Securities.
The information regarding the Transaction and the issuance of the shares of
Common Stock in connection therewith included under Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
The Transaction is exempt from the registration requirements of the Securities
Act, and the shares of Common Stock issued in the Transaction are being offered
and sold without registration under the Securities Act pursuant to the exemption
provided by Section 4(a)(2) of the Securities Act and Rule 506 promulgated
thereunder as transactions not involving a public offering, as well as similar
exemptions under applicable state securities laws, in reliance upon the
following facts: no general solicitation was used in the offer or sale of such
securities; the recipients of the securities had adequate access to information
about the Company; each recipient of such securities represented its acquisition
thereof as principal for its own account and its lack of any arrangements or
understandings regarding the distribution of such securities; each recipient of
such securities represented its capability of evaluating the merits of an
investment in the Company's securities due to its knowledge, sophistication and
experience in business and financial matters; and such securities were issued as
restricted securities with restricted legends referring to the Securities Act.
No such securities may be offered or sold in the United States in the absence of
an effective registration statement or exemption from applicable registration
requirements. No statement in this document or the attached exhibits is an offer
to purchase or sell or a solicitation of an offer to sell or buy the Company's
securities, and no offer, solicitation or sale will be made in any jurisdiction
in which such offer, solicitation or sale is unlawful.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Director Resignation
On the Closing Date, Kristine Peterson resigned from the Board, effective as of
the Closing Date. Ms. Peterson's resignation was unrelated to the Transaction
and not the result of any dispute or disagreement with the Company or the Board
on any matter relating to the operations, policies or practices of the Company.
(d) Appointment of New Director
On the Closing Date, the Board appointed Ye Liu to serve as a director to fill
the vacancy created by the resignation of Ms. Peterson, with a term commencing
on the Closing Date and expiring at the Annual Meeting of Stockholders of the
Company in 2021 and until his successor is duly elected and qualified, except in
the case of his earlier death, retirement or resignation. Mr. Liu will also
serve as a member of the Science Committee of the Board and the ad-hoc pricing
committee of the Board. Mr. Liu will not be compensated for his service on the
Board although he is entitled to seek reimbursement for reasonable expenses
incurred in connection
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with his service on the Board and is entitled to the same benefits, including
benefits under any director and officer indemnification or insurance policy
maintained by the Company, as any other non-employee director of the Board. In
connection with his appointment, Mr. Liu has entered into the Company's standard
director indemnification agreement, the form of which is filed as Exhibit 10.5
to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2019, which was filed with the SEC on August 7, 2019.
Mr. Liu was appointed to the Board as the initial Investor Designee pursuant to
the terms of the Share Purchase Agreement. There are no family relationships
between Mr. Liu and any director or executive officer of the Company. Mr. Liu is
Chief Executive Officer of the Investor and serves as an executive director of
the Investor.
In November 2018, the Company entered into an exclusive license agreement with
Ocumension for the development and commercialization of its three-year micro
insert using the Durasert technology for the treatment of chronic non-infectious
uveitis affecting the posterior segment of the eye (YUTIQ in the U.S.) in
Mainland China, Hong Kong, Macau and Taiwan. The Company received a one-time
upfront payment of $1.75 million from Ocumension and is eligible to receive up
to (i) $7.25 million upon the achievement by Ocumension of certain prescribed
development and regulatory milestones, and (ii) $3.0 million commercial
sales-based milestones. In addition, the Company is entitled to receive
mid-single digit sales-based royalties. Ocumension has also received a special
approval by the Hainan Province People's Government to market this product for
chronic, non-infectious posterior segment uveitis in the Hainan Bo Ao Lecheng
International Medical Tourism Pilot Zone ("Hainan Pilot Zone"). In March 2019,
the Company entered into a Memorandum of Understanding ("2019 MOU"), pursuant to
which, the Company will supply product for the clinical trials and Hainan Pilot
Zone use. Paralleling to Ocumension's normal registration process of the product
with the Chinese Regulatory Authorities, the 2019 MOU modified the Company's
entitlement to the development and regulatory milestones of up to $7.25 million
under the license agreement to product supply milestones or development
milestones, whichever comes first, totaling up to $7.25 million. In August 2019,
the Company began shipping this product to Ocumension.
The Company was required to provide a fixed number of hours of technical
assistance support to Ocumension at no cost, which support has been completed
and no future performance obligation exists. Ocumension is responsible for all
development, regulatory and commercial costs, including any additional technical
assistance requested. Ocumension has a first right of negotiation for an
additional exclusive license to the Company's shorter-duration line extension
candidate for this indication.
In August 2019, the Company received a $1.0 million development milestone
payment from Ocumension triggered by the approval of its Investigational New
Drug ("IND") in China for this program. The IND allows the importation of
finished product into China for use in a clinical trial to support a regulatory
filing.
In January 2020, the Company entered into an exclusive license agreement with
Ocumension for the development and commercialization in Mainland China, Hong
Kong, Macau and Taiwan of DEXYCU for the treatment of post-operative
inflammation following ocular surgery. Pursuant to the terms of the license
agreement, the Company received upfront payments of $2.0 million from Ocumension
in February 2020 and will be eligible to receive up to (i) $6.0 million upon the
achievement by Ocumension of certain prescribed development and regulatory
milestones, and (ii) $6.0 million commercial sales-based milestones. In
addition, the Company is entitled to receive mid-single digit sales-based
royalties. In exchange, Ocumension will receive exclusive rights to develop and
commercialize DEXYCU in Mainland China, Hong Kong, Macau and Taiwan, at its own
cost and expense with the Company supplying product for clinical trials and
commercial sale. In addition, Ocumension will receive a fixed number of hours of
technical assistance support from the Company at no cost.
In August 2020, the Company entered into a Memorandum of Understanding ("2020
MOU"), pursuant to which the Company received a one-time non-refundable payment
of $9.5 million (the "Accelerated Milestone Payment") from Ocumension as a full
and final payment of the combined remaining development, regulatory and sales
milestone payments under the Company's license agreements with Ocumension for
the treatment of chronic non-infectious uveitis affecting the posterior segment
of the eye and for the treatment of post-operative inflammation following ocular
surgery, respectively. Upon payment of the Accelerated Milestone Payment, the
remaining $11.75 million in combined remaining development and sales milestone
payments under the Company's original license agreement with Ocumension upon the
achievement by Ocumension of (i) remaining development and regulatory milestones
of $6.25 million and commercial sales-based milestones of $3.0 million for the
development and commercialization of its three-year micro insert using the
Durasert technology for the treatment of chronic non-infectious uveitis
affecting the posterior segment of the eye; and (ii) $6.0 million upon the
achievement by Ocumension of certain prescribed development and regulatory
milestones, and $6.0 million commercial sales-based milestones for the
development and commercialization in Mainland China, Hong Kong, Macau and Taiwan
of DEXYCU for the treatment of post-operative inflammation following ocular
surgery, totaling up to $21.25 million, were permanently extinguished and will
no longer be due and owed to the Company. In exchange, Ocumension also received
. . .
Item 8.01. Other Events.
On January 3, 2021, the Company issued a press release announcing the
consummation of the Transaction and the changes to its Board composition, a copy
of which is filed at Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Share Purchase Agreement, dated December 31, 2020, by and between
EyePoint Pharmaceuticals, Inc. and Ocumension Therapeutics .
10.2 Voting and Investor Rights Agreement, dated December 31, 2020, by
and among EyePoint Pharmaceuticals, Inc., Ocumension Therapeutics, and
EW Healthcare Partners, L.P. and EW Healthcare Partners-A, L.P .
99.1 Press Release of EyePoint Pharmaceuticals, Inc., dated January 3,
2021 .
104 Cover Page Interactive Data File (embedded within the inline XBRL
document).
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