Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
OnSeptember 29, 2022 ,Solid Biosciences Inc. (the "Company") entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company,Greenland Merger Sub LLC , aDelaware limited liability corporation and a wholly owned subsidiary of the Company ("Transitory Subsidiary"),AavantiBio, Inc. , aDelaware corporation ("AavantiBio"), and, solely in his capacity as equityholder representative,Doug Swirsky . The Merger Agreement provides for the acquisition of AavantiBio by the Company through the merger of Transitory Subsidiary into AavantiBio, with AavantiBio surviving as a wholly owned subsidiary of the Company (the "Merger"). AavantiBio is a privately-held gene therapy company focused on advancing innovative gene therapies in areas of high unmet medical need, including a lead program in Friedreich's Ataxia, a rare inherited genetic disease that causes cardiac and central nervous system dysfunction. At the effective time of the Merger, by virtue of the Merger and without any action on the part of the holders of capital stock of AavantiBio, all issued and outstanding shares of the preferred stock of AavantiBio will be converted into the right to receive, subject to certain adjustments based on AavantiBio's indebtedness as of the closing, an aggregate, of (i)$1,000 and (ii) a number of shares of the Company's common stock (the "Stock Consideration") (rounded to the nearest whole share) equal to fifteen percent (15%) of outstanding shares of the Company's common stock as of immediately prior to the closing of the Merger (and for the avoidance of doubt, before giving effect to the issuance of any securities pursuant to the Private Placement (as defined below)), calculated on a fully diluted basis using the treasury stock method (including, for clarity, calculated by disregarding any out-of-the-money outstanding stock options of the Company). In connection with the Merger, the Company will prepare, file and mail a proxy statement and seek the approval of its stockholders to, among other things, issue the Stock Consideration issuable in connection with the Merger under the rules ofThe Nasdaq Stock Market LLC ("Nasdaq") (the "Company Voting Proposals"). Each of the Company and AavantiBio has agreed to customary representations, warranties, covenants and indemnification rights in the Merger Agreement, including, among others, covenants relating to the conduct of their respective businesses during the period between the date of signing the Merger Agreement and the closing of the Merger, using its reasonable best efforts to cause the Merger to be consummated, non-solicitation of alternative acquisition proposals, and the conduct of their respective businesses during the period between the date of signing the Merger Agreement and the closing of the Merger. The Merger Agreement includes customary closing conditions, including regarding receipt of the required approvals by the parties' stockholders, the accuracy of the representations and warranties, compliance by the parties with their respective covenants, and Nasdaq's approval of the listing of the Stock Consideration. The Merger Agreement contains certain termination rights of each of the Company and AavantiBio, including if the Company's stockholders fail to adopt and approve the Company Voting Proposals. Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay AavantiBio a termination fee of$310,000 and reimburse AavantiBio's expenses up to a maximum of$750,000 . It is expected that, subject to and effective upon the closing of the Merger,Alexander (Bo) Cumbo , the current President and Chief Executive Officer of AavantiBio, will be appointed as the President and Chief Executive Officer of the Company, andMr. Cumbo andAdam Koppel , Managing Director ofBain Capital Life Sciences, will join the board of directors (the "Board") of the Company.
Support Agreements
Concurrently with the execution of the Merger Agreement, (i) certain stockholders of AavantiBio (solely in their respective capacities as AavantiBio stockholders) holding approximately 79% of the outstanding shares of AavantiBio capital stock entered into support agreements with the Company and AavantiBio to vote all of their shares of AavantiBio capital stock in favor of adoption of the Merger Agreement and against any alternative acquisition proposals (the "AavantiBio Support Agreements") and (ii) certain stockholders of the Company holding approximately 29.8% of the -------------------------------------------------------------------------------- outstanding shares of Company common stock entered into support agreements with the Company and AavantiBio to vote all of their shares of Company common stock . . .
Item 3.02 Unregistered Sales of
The information contained above in Item 1.01 related to the Merger and the Private Placement is hereby incorporated by reference into this Item 3.02.
The issuance of the Stock Consideration in the Merger and the offering and sale of PIPE Shares in the Private Placement will be made in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Rule 506 of Regulation D promulgated under the Securities Act and corresponding provisions of state securities or "blue sky" laws. The Stock Consideration to be issued in the Merger and the PIPE Shares to be issued and sold in the Private Placement have not been registered under the Securities Act or any state securities laws and such securities may not be offered or sold inthe United States absent registration with theSEC or an applicable exemption from the registration requirements. The issuance of the Stock Consideration in the Merger and the issuance and sale of the PIPE Shares will not involve a public offering and will be made without general solicitation or general advertising. The AavantiBio stockholders receiving Stock Consideration have or will, and thePIPE Investors have represented that they are accredited investors, as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and that they are acquiring the securities for investment purposes only and not with a view to any resale, distribution or other disposition of the securities in violation ofthe United States federal securities laws.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Principal Officers
OnSeptember 29, 2022 ,Ilan Ganot notified the Company of his intention to resign as the Company's Chief Executive Officer and President, subject to, and contingent and effective upon, the closing of the Merger (such date, the "Effective Date"). Following the resignation,Mr. Ganot will continue to serve on the Board.
On
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Executive Employment Agreement
OnSeptember 29, 2022 , the Company entered into an employment agreement withAlexander Cumbo (the "Cumbo Employment Agreement"), pursuant to whichMr. Cumbo will serve as the Company's President and Chief Executive Officer, subject to his appointment to such position by the Board and subject to, and contingent and effective upon, the Effective Date. The Cumbo Employment Agreement sets forth the terms ofMr. Cumbo's compensation, including his base salary, and annual performance bonus opportunity. In addition, the Cumbo Employment Agreement provides that, subject to eligibility requirements under the plan documents governing such programs and the Company's policies,Mr. Cumbo is entitled, on the same basis as other Company employees, to participate in and receive benefits under, any medical, vision and dental insurance policy maintained by the Company and the Company will pay, consistent with its then current employee benefit policy, a portion of the cost of the premiums for any such insurance policy in which the executive elects to participate.Mr. Cumbo will also be eligible to receive paid vacation time, sick time, and Company holidays consistent with the Company's policies as then in effect from time to time and equity awards at such times and on such terms and conditions as the Board may determine. Pursuant to the Cumbo Employment Agreement,Mr. Cumbo will be entitled to receive an annual base salary of$585,000 . His base salary will be reviewed by the Board from time to time and is subject to change in the discretion of the Board. Under the Cumbo Employment Agreement,Mr. Cumbo is also eligible to earn an annual performance bonus, with a target bonus amount equal to a specified percentage of his annual base salary, based upon the Board's assessment of his performance and the Company's attainment of targeted goals as set by the Board in its sole discretion. The bonus may be in the form of cash, equity award(s), or a combination of cash and equity. Beginning onJanuary 1, 2023 ,Mr. Cumbo will be eligible for an annual discretionary bonus of up to 55% of his base salary.Mr. Cumbo must be employed on the date that bonuses are paid in order to receive the bonus, provided that if such executive is terminated by the Company without cause (as "cause" is defined in the Cumbo Employment Agreement) betweenJanuary 1 following the performance year and the date of payment, he will be entitled to the same bonus that he would have received had he remained employed through the payment date. Effective as of the Effective Date and subject to Board approval, the Company will grantMr. Cumbo a nonstatutory stock option (the "Option") to purchase 3,433,500 shares of the Company's Common Stock, at an exercise price per share equal to the closing price of the Common Stock on the Nasdaq Global Select Market on the Effective Date, which will vest as to 25% of the shares underlying the Option on the first anniversary of the Effective Date and, following that, as to an additional 1/48th of the total shares underlying the Option upon his completion of each additional month of service over the 36-month period measured from the first anniversary of the Effective Date. Effective as of the Effective Date and subject to Board approval, the Company will also grantMr. Cumbo restricted stock units with respect to 1,716,749 shares of the Company's Common Stock (the "RSU"), which will vest as to 25% of the shares underlying the RSU on each anniversary of the Effective Date, subject to continued service. The Option and the RSU will be granted as an inducement material toMr. Cumbo's acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).Mr. Cumbo will be bound by proprietary rights, non-disclosure, developments, non-competition and non-solicitation obligations pursuant to the restrictive covenants provided for in his employment agreement. Under these restrictive covenants, he will agree not to compete with the Company during his employment and for a period of one year after the termination of his employment, not to solicit the Company's employees, consultants, or actual or prospective customers or business relations during his employment and for a period of one year after the termination of his employment, and to protect the Company's confidential and proprietary information indefinitely. In addition, under these restrictive covenants, he will agree that the Company owns all inventions that are developed by him during a specified period of time with respect to any inventions made by him that are related to his activities while employed by the Company. The Cumbo Employment Agreement and the employment ofMr. Cumbo may be terminated as follows: (1) upon the death of the executive or at the election of the Company due to the executive's "disability" (as disability is defined in the . . .
Item 7.01 Regulation FD Disclosure.
OnSeptember 30, 2022 , the Company and AavantiBio issued a joint press release announcing the execution of the Merger Agreement and the Securities Purchase Agreement. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference, except that the information contained on the websites referenced in the press release is not incorporated herein by reference. The investor presentation that will be used by the Company and AavantiBio in connection with the Merger is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. The Company and AavantiBio plan to host a live webcast presentation to discuss the Merger, the Private Placement and the combined company's platform and pipeline assets at8:00 a.m. Eastern time onSeptember 30, 2022 . The live webcast presentation can be accessed under the "News & Events" tab in the Investor Relations section of the Company's website, www.solidbio.com. Participants may also access the call by dialing 877-407-2991 (domestic) or 201-389-0925 (international) five minutes prior to the start of the call and providing the Conference ID# 13733092. The information furnished in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto shall not be deemed to be "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 8.01 Other Events. SGT-003 OnSeptember 30, 2022 , the Company announced that it made the strategic decision to prioritize SGT-003, its next-generation adeno-associated virus ("AAV") gene transfer therapy candidate that utilizes a rationally designed, novel muscle-tropic AAV capsid (AAV-SLB101), to deliver the Company's proprietary and differentiated nNOS microdystrophin protein.
The Company also released new SGT-003 non-clinical data which reinforced previous comparative analyses that demonstrated increased microdystrophin expression using the novel muscle-tropic capsid AAV-SLB101 compared to
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AAV9. In an in vivo mdx mouse study, muscle tissues collected 28 days post-dosing from mice treated with SGT-003 manufactured using a transient-transfection based process showed approximately 2.3 fold higher levels of microdystrophin protein, as measured by west blot, compared to mice treated at equivalent doses with SGT-001 manufactured using an HSV based process. The Company believes these data continue to suggest that the AAV-SLB101 capsid, which is used in SGT-003, may be a superior candidate for muscle-targeted gene therapies, with the potential of achieving higher levels of microdystrophin expression with lower total doses, and support the advancement of the development of SGT-003 for the treatment of Duchenne.
Development activities for SGT-003 continue and the Company anticipates submitting an investigational new drug application ("IND") for SGT-003 in mid-2023 and, subject to IND clearance, initiating patient dosing in late-2023.
SGT-001
OnSeptember 30, 2022 , the Company announced that it will be pausing activities for SGT-001, its first-generation gene transfer therapy candidate. The Company intends to complete currently ongoing SGT-001 preclinical and manufacturing activities in order to be in a position to reactive the program in the future, if desired. OnSeptember 30, 2022 , the Company reported interim data from skeletal muscle biopsies from Patients 6-8 in the Company's IGNITE DMD clinical trial collected 12 months after infusion of SGT-001 at the 2E14 vg/kg dose level. The muscle biopsy results were analyzed by two methods, western blot and immunofluorescence. 3 months 12 months (Mean % - Pts. (Mean % - Pts. 18 months 24 months Biopsy Results (2E14 Cohort) 4-9) 6-8) (Pt. 5) (Pt. 4) % Normal Dystrophin (Western Blot) 6.6% 8.4% 70% BLQ* % Positive Fibers (Immunofluorescence) Blinded Assessment (MCW) 31% 30% 85% 10% Automated Assessment (Flagship) 40% 40% 84% 32%
* Below the limit of quantification (5%)
The following table summarizes the interim efficacy results for Patients 4-8 in IGNITE DMD at 12-months post-doing:
Summary of 12-Month Interim Efficacy Results of IGNITE DMD for Patients 4-8 (2E14 vg/kg cohort) Mean Change from Mean Difference vs Baseline Untreated Mean Difference vs (Range) Control Cohort Natural History 6 Minute Walk Test (meter) 52.2 (12 to 85) +60.7
+94.5(1)
North Star Ambulatory Assessment (units) 1.2 (-1 to 3) +5.2
+4.2(2)
Forced Vital Capacity (%p) 12.9 (-10.7 to 36.7) +23.6
+17.9(3)
Peak Expiratory Flow (%p) 1.2 (-28.4 to 26.7) +10.9
+6.2(4)
Forced Expiratory Volume in One 10.1 (-10 to Second (%p)
31.3) +22.6 Not Available PODCI Global Function (points) 12.0 (2 to 27) +26.0
+17.1(5)
PODCI Transfer/Basic Mobility (points) 7.0 (-5 to 20) +13.0 +17.0(6)PODCI Sports /Physical Functioning (points) 21.0 (0 to 39) +34.5 +24.1(7) Stride Velocity 95th Centile 8.8 (-4.8 to (%) 28.8) +26.0 +23.9(8)
(1): -42.3m expected decline in 12 months after age 7 (Mercuri et al 2016)
(2): -3.0 unit expected decline in 12 months after age 6.3 (Muntoni eta al 2019)
(3): -5.0%p expected decline in 12 months after age 6 (Mayer et al 2015)
(4): -5.0%p expected decline in 12 months after age 6 (Mayer et al 2015)
(5): -5.05 point expected decline in 12 months (Henricson et al 2013)
(6): -9.95 point expected decline in 12 months (Henricson et al 2013)
(7): -3.11 point expected decline in 12 months (Henricson et al 2013)
(8): -15.1% expected decline in 12 months after age 5 (EMA SV95C Endpoint
Qualification Dossier, SYSNAV (Vernon,France )
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Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding: future expectations, plans and prospects for the Company, AavantiBio and the combined company following the anticipated consummation of the proposed Merger; the anticipated benefits of the Merger; the anticipated timing of the Merger and Private Placement; the anticipated milestones, business focus and pipeline of the combined company; the expected cash and cash investments of the combined company at closing of the transactions and the cash runway of the combined company; the excepted management team and Board of the combined company; the Company's SGT-003 program, including expectations for filing an IND and initiating dosing; AavantiBio's AVB-202 program and AVB-401 program, including expectations for filing an IND for AVB-202, and other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would," "working" and similar expressions. Any forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in, or implied by, such forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with: completion of the proposed Merger and Private Placement in a timely manner or on the anticipated terms or at all; the satisfaction (or waiver) of closing conditions to the consummation of the merger and the private placement, including with respect to the approval of the Company's stockholders; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement or the Private Placement; the effect of the announcement or pendency of the Merger on the Company's or AavantiBio's business relationships, operating results and business generally; the ability to recognize the anticipated benefits of the Merger; the outcome of any legal proceedings that may be . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofSeptember 29, 2022 , by and amongSolid Biosciences Inc. ,Greenland Merger Sub LLC ,
AavantiBio,
Inc. and, solely in his capacity as the Equityholder
Representative,
Doug Swirsky . 10.1 Form of Parent Support Agreement 10.2 Form of Support and Joinder Agreement 10.3 Securities Purchase Agreement, datedSeptember 29, 2022 , by and amongSolid Biosciences Inc. and the persons party thereto 10.4 Registration Rights Agreement, datedSeptember 29, 2022 , by and amongSolid Biosciences Inc. and the persons party thereto
10.5 Employment Agreement, dated
Biosciences Inc. andAlexander Cumbo
10.6 Executive Transition and Separation Agreement, dated
2022, by and betweenSolid Biosciences Inc. andIlan Ganot
10.7 Consulting Agreement, dated
Biosciences Inc. andIlan Ganot
10.8 Executive Transition and Separation Agreement, dated
2022, by and betweenSolid Biosciences Inc. andErin Powers
Brennan
10.9 Consulting Agreement, dated
Biosciences Inc. andErin Powers Brennan 99.1 Joint Press Release issued onSeptember 30, 2022 99.2 Investor Presentation, datedSeptember 30, 2022 104 Cover Page Interactive Data File (formatted as Inline XBRL)
* Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of
Regulation S-K.
of any of the omitted exhibits and schedules upon request by the
however, that the Company may request confidential treatment pursuant to Rule
24b-2 of the Exchange Act for any exhibits or schedules so furnished. A list
identifying the contents of all omitted exhibits and schedules can be found on
pages iii and iv of Exhibit 2.1.
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