We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arena Pharmaceuticals Inc | NASDAQ:ARNA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 99.99 | 99.00 | 99.99 | 0 | 01:00:00 |
Filed by the Registrant ☒
|
| |
Filed by a party other than the Registrant ☐
|
Check the appropriate box:
|
|||
☒
|
| |
Preliminary Proxy Statement
|
☐
|
| |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
☐
|
| |
Definitive Proxy Statement
|
☐
|
| |
Definitive Additional Materials
|
☐
|
| |
Soliciting Material under §240.14a-12
|
☐
|
| |
No fee required.
|
|||
☒
|
| |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|||
|
| |
(1)
|
| |
Title of each class of securities to which transaction applies:
|
|
| |
|
| |
|
|
| |
|
| |
Common stock, par value $0.0001 per share, of Arena Pharmaceuticals, Inc.
|
|
| |
(2)
|
| |
Aggregate number of securities to which transaction applies:
|
|
| |
|
| |
|
|
| |
|
| |
Estimated solely for purposes of calculating the registration fee, the proposed maximum aggregate number of securities to which this transaction applies for the purpose of calculating the registration fee is as follows: as of the close of business on December 16, 2021, 61,424,497 shares of common stock, options to purchase 8,056,793 shares of common stock with exercise prices at or below $100.00 per share, restricted stock units to acquire 719,241 shares of common stock, performance restricted stock units to acquire 367,392 shares of common stock, and 45,763 shares of common stock issuable through the end of the current offering period under Arena Pharmaceuticals, Inc.’s 2019 Employee Stock Purchase Plan.
|
|
| |
(3)
|
| |
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
|
|
| |
|
| |
|
|
| |
|
| |
The maximum aggregate value was determined based upon the sum of: (A) 61,424,497 shares of common stock multiplied by $100.00 per share; (B) options to purchase 8,056,793 shares of common stock multiplied by $52.78 (the difference between $100.00 and the weighted average exercise price of $47.22 per share); (C) 719,241 shares of common stock underlying restricted stock units multiplied by $100.00 per share; (D) 367,392 shares of common stock underlying performance restricted stock units (assuming achievement of all vesting criteria) multiplied by $100.00 per share; and (E) 45,763 common stock issuable through the end of the current offering period under Arena Pharmaceuticals, Inc.’s 2019 Employee Stock Purchase Plan multiplied by $100.00 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying $0.0000927 by the sum of the preceding sentence.
|
|
| |
(4)
|
| |
Proposed maximum aggregate value of transaction:
|
|
| |
|
| |
|
|
| |
|
| |
$6,680,926,834.54
|
|
| |
(5)
|
| |
Total fee paid:
|
|
| |
|
| |
|
|
| |
|
| |
$619,321.92
|
☐
|
| |
Fee paid previously with preliminary materials.
|
|||
☐
|
| |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
|
|||
|
| |
(1)
|
| |
Amount Previously Paid:
|
|
| |
|
| |
|
|
| |
(2)
|
| |
Form, Schedule or Registration Statement No.:
|
|
| |
|
| |
|
|
| |
(3)
|
| |
Filing Party:
|
|
| |
|
| |
|
|
| |
(4)
|
| |
Date Filed:
|
|
| |
|
| |
|
|
| |
|
Amit D. Munshi
|
| |
|
President and Chief Executive Officer
|
| |
|
1.
|
To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated December 12, 2021 (such agreement, as it may be amended, modified or supplemented from time to time, the “Merger Agreement”), by and among Arena, Pfizer Inc., a Delaware corporation (“Pfizer”), and Antioch Merger Sub, Inc., a Delaware corporation (“Merger Sub”). Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into Arena, with Arena continuing as the surviving corporation and a wholly owned subsidiary of Pfizer (the “Merger”).
|
2.
|
To consider and vote on the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Arena’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (the “Compensation Proposal”); and
|
3.
|
To consider and vote on any proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the proposal to adopt the Merger Agreement if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (the “Adjournment Proposal”).
|
|
| |
|
Amit D. Munshi
|
| |
|
President and Chief Executive Officer
|
| |
|
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| |
•
|
a proposal to adopt the Merger Agreement;
|
•
|
a proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Arena’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (the “Compensation Proposal”); and
|
•
|
a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies to approve the proposal to adopt the Merger Agreement if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting (the “Adjournment Proposal”).
|
(i)
|
the stockholders will not be entitled to, nor will they receive, any payment for their respective shares of common stock pursuant to the Merger Agreement;
|
(ii)
|
(A) Arena will remain an independent public company, (B) Arena’s common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and (C) Arena will continue to file periodic reports with the SEC; and
|
(iii)
|
under certain specified circumstances, Arena will be required to pay Pfizer a termination fee of $235,000,000 (the “Arena Termination Fee”) upon or following the termination of the Merger Agreement. For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Effect of Termination; Termination Fees.”
|
(i)
|
Arena Option granted that is outstanding as of immediately prior to the Effective Time, whether or not then vested, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the product of (1) the excess, if any, of the Merger Consideration over the per-share exercise price of such Arena Option, multiplied by (2) the number of shares then subject to such Arena Option;
|
(ii)
|
Arena RSU, except as described in subclause (iii) below, subject to vesting conditions based solely on continued employment or service to Arena or any of its subsidiaries that is unvested and outstanding as of immediately prior to the Effective Time, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash in respect thereof equal to the Merger Consideration;
|
(iii)
|
Arena RSU that is granted after December 12, 2021 (each, a “2022 Arena RSU”) that is unvested and outstanding as of immediately prior to the Effective Time will be substituted automatically with a Pfizer restricted stock unit with respect to that number of shares of Pfizer common stock (each, an “Adjusted RSU”) that is equal to the product of (1) the total number of shares of common stock subject to the 2022 Arena RSU immediately prior to the Effective Time multiplied by (2) the Arena RSU Exchange Ratio (as defined below), with any fractional shares rounded to the nearest whole share. Each Adjusted RSU will otherwise be subject to the same terms and conditions applicable to such 2022 Arena RSU immediately prior to the Effective Time (including vesting terms, and subject to accelerated vesting in connection with certain qualifying terminations of employment following the Effective Time), as described in the section of this proxy statement captioned “The Merger—Interests of Arena’s Directors and Executive Officers in the Merger—Payments Upon Termination at or Following Change in Control”; and
|
(iv)
|
Arena PRSU that is unvested and outstanding as of immediately prior to the Effective Time will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the Merger Consideration (with all the performance-based vesting conditions associated with such Arena PRSU being deemed achieved at the greater of actual completed performance at the Effective Time or at target).
|
•
|
at the Effective Time of the Merger, each Arena Option, Arena RSU and Arena PRSU will receive the treatment described in the section of this proxy statement captioned “The Merger—Interests of Arena’s Directors and Executive Officers in the Merger—Treatment of Arena Options, Arena RSUs and Arena PRSUs”;
|
•
|
continued eligibility of Arena’s executive officers to receive severance payments and benefits (including equity award vesting acceleration) under the Severance Plan (as defined below) and under the terms of the 2022 Arena RSUs, as described in more detail in the section of this proxy statement captioned “The Merger—Interests of Arena’s Directors and Executive Officers in the Merger—Payments Upon Termination at or Following Change in Control”;
|
•
|
eligibility of Arena’s non-employee directors to receive accelerated vesting of their Arena RSUs, as described in more detail in the section of this proxy statement captioned “The Merger—Interests of Arena’s Directors and Executive Officers in the Merger—Equity Awards Held by Arena’s Executive Officers and Non-employee Directors”; and
|
•
|
continued indemnification and directors’ and officers’ liability insurance to be provided by the Surviving Corporation.
|
•
|
Arena’s receipt of the approval of the stockholders representing a majority of the outstanding shares of common stock (the “Requisite Vote”);
|
•
|
expiration or termination of any waiting periods applicable to the consummation of the Merger under the HSR Act and any agreement not to consummate the Merger with any governmental body, and the receipt of certain additional clearances or approvals of certain other governmental bodies applicable to the Merger;
|
•
|
the absence of any law, rule, regulation or order prohibiting or making illegal the consummation of the Merger;
|
•
|
in the case of Pfizer and Merger Sub, the absence of any Material Adverse Effect (as defined below) having occurred since the date of the Merger Agreement that is continuing as of the Effective Time;
|
•
|
the accuracy of the representations and warranties of Arena, Pfizer and Merger Sub in the Merger Agreement, subject to certain qualifiers, as of the date of the Merger Agreement, the Closing or the date in respect of which such representation or warranty was specifically made; and
|
•
|
the performance and compliance in all material respects by Arena, Pfizer and Merger Sub of their respective covenants and obligations of the Merger Agreement required to be performed and complied with by Arena, Pfizer and Merger Sub at or prior to the Effective Time.
|
Q:
|
Why am I receiving this proxy statement and proxy card or voting instruction form?
|
A:
|
You are receiving this proxy statement and proxy card or voting instruction form in connection with the solicitation of proxies by the Board of Directors for use at the Special Meeting because you have been identified as a holder of Arena common stock as of the close of business on the Record Date for the Special Meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of Arena common stock with respect to such matters.
|
Q:
|
When and where is the Special Meeting?
|
A:
|
The Special Meeting will be held virtually on , 2022, at Pacific Time at www.virtualshareholdermeeting.com/ARNA2022SM.
|
Q:
|
What am I being asked to vote on at the Special Meeting?
|
A:
|
You are being asked to consider and vote on:
|
•
|
a proposal to adopt the Merger Agreement pursuant to which Merger Sub will merge with and into Arena, and Arena will become a wholly owned subsidiary of Pfizer;
|
•
|
a proposal to approve, on an advisory (non-binding) basis, the Compensation Proposal; and
|
•
|
a proposal to approve the Adjournment Proposal.
|
Q:
|
Who is entitled to vote at the Special Meeting?
|
A:
|
Stockholders as of the Record Date are entitled to receive notice of, and to vote at, the Special Meeting. Each holder of Arena common stock is entitled to cast one vote on each matter properly brought before the Special Meeting for each share of Arena common stock that such holder owned as of the close of business on the Record Date. If you are a beneficial owner, you will need to contact the broker, bank or other nominee who is the stockholder of record with respect to your shares to obtain your control number (as described below) prior to the Special Meeting.
|
Q:
|
May I attend the Special Meeting virtually and vote at the Special Meeting?
|
A:
|
Stockholders of Record and Beneficial Owners. Stockholders as of the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. If you are a stockholder of record, you do not need to do anything in advance to attend and/or vote your shares at the Special Meeting, but to attend the Special Meeting, stockholders of record will need to use their control number on their Notice of Internet Availability or proxy card to log into www.virtualshareholdermeeting.com/ARNA2022SM. Beneficial stockholders who do not have a control number may gain access to the meeting by logging into their brokerage firm’s website and selecting the stockholder communications mailbox to link through to the Special Meeting; instructions should also be provided on the voting instruction card provided by their broker, bank, or other nominee. We encourage you to access the Special Meeting before it begins. Online check-in will start approximately fifteen (15) minutes before the Special Meeting is scheduled to begin at Pacific Time on , 2022.
|
Q:
|
What will I receive if the Merger is completed?
|
A:
|
Upon completion of the Merger, you will be entitled to receive the Merger Consideration of $100.00 in cash, without interest thereon and subject to any withholding of taxes, for each share of common stock that you own immediately prior to the Effective Time, unless you are entitled to and have properly exercised and not withdrawn, failed to perfect or otherwise lost your appraisal rights under Section 262 of the DGCL. For example, if you own 100 shares of common stock, you will receive $10,000.00 in cash in exchange for your shares of common stock, subject to any withholding of taxes. You will not receive any shares of the capital stock in the Surviving Corporation.
|
Q:
|
What will holders of Arena stock awards receive if the Merger is consummated?
|
A:
|
At the Effective Time, subject to all required withholding taxes, each:
|
(i)
|
Arena Option that is outstanding as of immediately prior to the Effective Time, whether or not then vested, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the product of (1) the excess, if any, of the Merger Consideration over the per-share exercise price of such Arena Option, multiplied by (2) the number of shares then subject to such Arena Option;
|
(ii)
|
Arena RSU, except as described in subclause (iii) below, subject to vesting conditions based solely on continued employment or service to Arena or any of its subsidiaries that is unvested and outstanding as of immediately prior to the Effective Time, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash in respect thereof equal to the Merger Consideration;
|
(iii)
|
2022 Arena RSU that is unvested and outstanding as of immediately prior to the Effective Time will be substituted automatically with an Adjusted RSU that is equal to the product of (1) the total number of shares subject to the 2022 Arena RSU immediately prior to the Effective Time multiplied by (2) the Arena RSU Exchange Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU will otherwise be subject to the same terms and conditions applicable to such 2022 Arena RSU immediately prior to the Effective Time (including vesting terms, and subject to accelerated vesting in connection with certain qualifying terminations of employment following the Effective Time); and
|
(iv)
|
Arena PRSU that is unvested and outstanding as of immediately prior to the Effective Time will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the Merger Consideration (with all the performance-based vesting conditions associated with such Arena PRSU being deemed achieved at the greater of actual completed performance at the Effective Time or at target).
|
Q:
|
When do you expect the Merger to be completed?
|
A:
|
We are working toward completing the Merger as quickly as possible. In order to complete the Merger, Arena must obtain the Requisite Vote described in this proxy statement, and the other closing conditions under the Merger Agreement must be satisfied or waived. Assuming timely satisfaction of necessary closing conditions, including obtaining the Requisite Vote, Arena is currently targeting to consummate the Merger in the first half of 2022, although Arena cannot assure completion by any particular date, if at all. Since the Merger is subject to a number of conditions, the exact timing of the Merger cannot be determined at this time.
|
Q:
|
What happens if the Merger is not completed?
|
A:
|
If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, stockholders will not receive any payment for their shares of common stock. Instead, Arena will remain an independent public company, our common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and we will continue to file periodic reports with the SEC. Under specified circumstances, Arena will be required to pay Pfizer the Arena Termination Fee upon the termination of the Merger Agreement, as described in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Effect of Termination; Termination Fees.”
|
Q:
|
What vote is required to adopt the Merger Agreement?
|
A:
|
The affirmative vote of the holders of a majority of the shares of common stock that are issued and outstanding as of the Record Date is required to adopt the Merger Agreement.
|
Q:
|
Why are the stockholders being asked to cast an advisory (non-binding) vote to approve the Compensation Proposal?
|
A:
|
The Exchange Act and applicable SEC rules thereunder require Arena to seek an advisory (non-binding) vote with respect to certain payments that may be paid or could become payable to certain of its named executive officers in connection with the Merger.
|
Q:
|
What vote is required to approve the Compensation Proposal and the Adjournment Proposal, if necessary or appropriate?
|
A:
|
The affirmative vote of a majority of the votes cast virtually or by proxy at the Special Meeting is required to approve the Compensation Proposal, on an advisory (non-binding) basis, and the Adjournment Proposal.
|
Q:
|
What will happen if the stockholders do not approve the Compensation Proposal at the Special Meeting?
|
A:
|
Approval of the Compensation Proposal is not a condition to the completion of the Merger. The vote with respect to the Compensation Proposal is an advisory vote and will not be binding on Arena. Therefore, if the other requisite stockholder approvals are obtained and the Merger is completed, the amounts payable under the Compensation Proposal will continue to be payable to Arena’s named executive officers in accordance with the terms and conditions of the applicable agreements.
|
Q:
|
What is a “broker non-vote”?
|
A:
|
Under the rules of Nasdaq, banks, brokerage firms or other nominees who hold shares in “street name” for customers have the authority to vote on “discretionary” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-discretionary matters, such as the proposal to adopt the Merger Agreement, the proposal to approve, on an advisory (non-binding) basis, the Compensation Proposal and the Adjournment Proposal, and, as a result, absent specific instructions from the beneficial owner of such shares of Arena common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Arena common stock on non-discretionary matters, which we refer to generally as “broker non-votes.” Because none of the proposals to be voted on at the Special Meeting are routine matters for which brokers may have discretionary authority to vote, Arena does not expect any broker non-votes at the Special Meeting.
|
Q:
|
What do I need to do now?
|
A:
|
You should carefully read and consider this entire proxy statement and the annexes to this proxy statement, including, but not limited to, the Merger Agreement, along with all of the documents that we refer to in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. Then sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope, or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card), so that your shares can be voted at the Special Meeting, unless you wish to seek appraisal pursuant to Section 262 of the DGCL. If you hold your shares in “street name,” please refer to the voting instruction forms provided by your bank, broker or other nominee to vote your shares.
|
Q:
|
May I exercise dissenters’ rights or rights of appraisal in connection with the Merger?
|
A:
|
Yes. In order to exercise your appraisal rights, you must follow the requirements set forth in Section 262 of the DGCL. Under Delaware law, stockholders of record who continuously hold shares of common stock through the Effective Time and do not vote in favor of adopting the Merger Agreement will have the right to seek appraisal of the “fair value” of their shares as determined by the Delaware Court of Chancery if the Merger is completed. Appraisal rights will only be available to stockholders who properly deliver, and do not properly withdraw, a written demand for an appraisal to Arena prior to the vote on the proposal to adopt the Merger Agreement at the Special Meeting and who comply with the procedures and requirements set forth in Section 262 of the DGCL, which are summarized in this proxy statement. The appraisal amount could be more than, the same as or less than the amount a stockholder would be entitled to receive under the terms of the Merger Agreement. A copy of Section 262 of the DGCL is included as Annex D to this proxy statement. For additional information, please see the section of this proxy statement captioned “The Merger—Appraisal Rights.”
|
Q:
|
Should I send in my stock certificates now?
|
A:
|
No. A letter of transmittal will be mailed to you promptly, and in any event within three (3) business days, after the Effective Time, describing how you should surrender your shares of common stock for the Merger Consideration. If your shares of Arena common stock are held in “street name” by your bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares of Arena common stock in exchange for the Merger Consideration. Please do NOT return your stock certificate(s) with your proxy.
|
Q:
|
What should I do if I have lost my stock certificate?
|
A:
|
If you have lost your stock certificate, please contact our transfer agent, Computershare Trust Company, N.A., at (800) 962-4284 or web.queries@computershare.com to obtain replacement certificates.
|
Q:
|
Should I surrender my book-entry shares now?
|
A:
|
No. After the Merger is completed, the payment agent will send each holder of record a letter of transmittal and written instructions that explain how to exchange shares of common stock represented by such holder’s book-entry shares for Merger Consideration.
|
Q:
|
What happens if I sell or otherwise transfer my shares of common stock after the Record Date but before the Special Meeting?
|
A:
|
The Record Date for the Special Meeting is earlier than the date of the Special Meeting and the date the Merger is expected to be completed. If you sell or transfer your shares of common stock after the Record Date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies Arena in writing of such special arrangements, you will transfer the right to receive the Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares, but you will retain your right to vote those shares at the Special Meeting. You will also lose the ability to exercise appraisal rights in connection with the Merger with respect to the transferred shares. Even if you sell or otherwise transfer your shares of common stock after the Record Date, we encourage you to sign, date and return the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card).
|
Q:
|
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
|
A:
|
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by Arena.
|
Q:
|
If my broker holds my shares in “street name,” will my broker vote my shares for me?
|
A:
|
No. Your bank, broker or other nominee is permitted to vote your shares on any proposal currently scheduled to be considered at the Special Meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote your shares. Without instructions, your shares will not be voted on such proposals, which will have the same effect as if you voted against adoption of the Merger Agreement, but will have no effect on the Compensation Proposal or Adjournment Proposal.
|
Q:
|
How may I vote?
|
A:
|
If you are a stockholder of record (that is, if your shares of common stock are registered in your name with Computershare Trust Company, N.A., our transfer agent), there are four (4) ways to vote:
|
•
|
by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;
|
•
|
by visiting the Internet at the address on your proxy card;
|
•
|
by calling toll-free (within the U.S. or Canada) at the phone number on your proxy card; or
|
•
|
by attending the Special Meeting virtually and voting in person.
|
Q:
|
May I change my vote after I have mailed my signed and dated proxy card?
|
A:
|
Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:
|
•
|
signing another proxy card with a later date and returning it to us prior to the Special Meeting;
|
•
|
submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
|
•
|
delivering a written notice of revocation to the Corporate Secretary of Arena; or
|
•
|
attending the Special Meeting and voting virtually.
|
Q:
|
What is a proxy?
|
A:
|
A proxy is your legal designation of another person to vote your shares of common stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of common stock is called a “proxy card.”
|
Q:
|
If a stockholder gives a proxy, how are the shares voted?
|
A:
|
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
|
Q:
|
What should I do if I receive more than one set of voting materials?
|
A:
|
Please sign, date and return (or grant your proxy electronically over the Internet or by telephone using the instructions provided in the enclosed proxy card) each proxy card and voting instruction card that you receive.
|
Q:
|
Where can I find the voting results of the Special Meeting?
|
A:
|
If available, Arena may announce preliminary voting results at the conclusion of the Special Meeting. Arena intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the Special Meeting. All reports that Arena files with the SEC are publicly available when filed. For more information, please see the section of this proxy statement captioned “Where You Can Find More Information.”
|
Q:
|
Who can help answer my questions?
|
A:
|
If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:
|
•
|
the risk that the proposed Merger may not be completed in a timely manner or at all;
|
•
|
the failure to satisfy the conditions to the consummation of the proposed Merger, including the adoption of the Merger Agreement by the stockholders and the receipt of certain governmental and regulatory approvals;
|
•
|
the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement,
|
•
|
the effect of the announcement or pendency of the proposed Merger on Arena’s business relationships, operating results, and business generally;
|
•
|
risks that the proposed Merger disrupts current plans and operations of Arena or Pfizer and potential difficulties in Arena employee retention as a result of the proposed Merger;
|
•
|
risks related to diverting management’s attention from Arena’s ongoing business operations; and
|
•
|
the outcome of any legal proceedings that may be instituted against Pfizer or against Arena related to the Merger Agreement or the proposed Merger.
|
(i)
|
“FOR” the adoption of the Merger Agreement; (ii) “FOR” the approval, on an advisory (non-binding) basis, of the Compensation Proposal; and (iii) “FOR” the approval of the Adjournment Proposal.
|
•
|
signing another proxy card with a later date and returning it to us prior to the Special Meeting;
|
•
|
submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
|
•
|
delivering a written notice of revocation to our Corporate Secretary at Arena Pharmaceuticals, Inc., 136 Heber Avenue, Suite 204, Park City, Utah 84060, by p.m. Eastern Time on , 2021; or
|
•
|
attending the Special Meeting and voting virtually.
|
(i)
|
the stockholders will not be entitled to, nor will they receive, any payment for their respective shares of common stock pursuant to the Merger Agreement;
|
(ii)
|
(A) Arena will remain an independent public company, (B) Arena’s common stock will continue to be listed and traded on Nasdaq and registered under the Exchange Act, and (C) Arena will continue to file periodic reports with the SEC;
|
(iii)
|
we anticipate that (A) management will operate the business in a manner similar to that in which it is being operated today and (B) stockholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including, but not limited to, risks and uncertainties with respect Arena’s business, prospects and results of operations, as such may be affected by, among other things, the highly competitive industry in which Arena operates and economic conditions;
|
(iv)
|
the price of our common stock may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement;
|
(v)
|
the Board of Directors will continue to evaluate and review Arena’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate (irrespective of these efforts, it is possible that no other transaction acceptable to the Board of Directors will be offered or that Arena’s business, prospects and results of operations will be adversely impacted); and
|
(vi)
|
under certain specified conditions, Arena will be required to pay Pfizer the Arena Termination Fee. For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Effect of Termination; Termination Fees.”
|
•
|
Compelling Premium: the fact that the Merger Consideration of $100.00 per share represented a compelling premium to historical market prices for the shares of Arena common stock, including that the Merger Consideration constituted a premium of:
|
○
|
approximately 100% to the closing price of common stock of $49.94 per share on December 10, 2021, the last full trading day prior to the announcement of the Merger;
|
○
|
approximately 76% to the 30-day trading period volume weighted average price (“VWAP”) of common stock;
|
○
|
approximately 71% to the 60-day trading period VWAP of common stock;
|
○
|
approximately 77% to the 90-day trading period VWAP of common stock; and
|
○
|
approximately 66% to the 180-day trading period VWAP of common stock;
|
•
|
Attractive Certainty of Value: in the judgment of the Board of Directors, the all-cash consideration of $100.00 per share of common stock, taking into account the business, operations, prospects, strategic and short and long term operating plans, assets, liabilities and financial condition of Arena, and the relative certainty and liquidity of the all-cash consideration, is more favorable to Arena’s stockholders than the risk-adjusted value expected from the alternative of Arena continuing to operate independently and pursuing its current business and financial plans on a standalone basis, taking into account near-term and longer term uncertainties associated with continued independence;
|
•
|
Favorable Valuation: the fact that the Merger Consideration of $100.00 per share represented a highly favorable valuation for Arena when compared to the projected valuation range associated with continuing as a standalone company;
|
•
|
Certainty of Value: the fact that an all-cash transaction would offer certainty of value to Arena stockholders, as compared to the risks and uncertainties of continuing as a standalone company as described below;
|
•
|
Active Negotiating Process: the belief that (i) as a result of an active negotiating process over the course of several weeks that resulted in an increase to the Merger Consideration from Pfizer’s initial offer (for more information, please see the section of this proxy statement captioned “The Merger—Background of the Merger”), Arena had obtained Pfizer’s best offer, (ii) there was substantial risk of losing Pfizer’s final offer of $100.00 per share if Arena continued to pursue a higher price and (iii) based on the conversations and negotiations with Pfizer and the strategic process described below, as of the date of the Merger Agreement, the offer of $100.00 per share represented the highest price reasonably obtainable by Arena under the circumstances;
|
•
|
No Alternative Proposals: the strategic transaction process conducted by Arena (for more information, please see the section of this proxy statement captioned “The Merger—Background of the Merger”), including the fact that multiple strategic acquirors were contacted or solicited in an effort to obtain the best value reasonably available to Arena stockholders, and that no such party was willing to move forward with Arena regarding a potential transaction;
|
•
|
High Degree of Certainty of Closing: the high degree of certainty that the closing would be achieved in a timely manner, under the terms of the Merger Agreement;
|
○
|
the financial strength of Pfizer and its ability to fund the Merger Consideration with cash on hand;
|
○
|
the absence of any financing condition in the Merger Agreement;
|
○
|
the business reputation and capabilities of Pfizer, including Pfizer’s track record of successfully completing merger and acquisition transactions and its ability to successfully commercialize drug candidates;
|
○
|
the conditions to the consummation of the Merger being specific and limited, including the requirement that the Merger Agreement be adopted by the Requisite Vote and the fact that the definition of “Material Adverse Effect” excludes, among other things, COVID-19 (and any evolutions or mutations thereof), the results of certain Arena clinical trials and Arena’s financial performance, providing a high degree of likelihood that the Merger will be consummated. For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Conditions to the Closing of the Merger”;
|
○
|
the commitment made by Pfizer to Arena to use reasonable best efforts to obtain regulatory clearances, including under the HSR Act, and the commitment by Pfizer not to enter into any contract to (i) obtain ownership in any entity if the principal indication of such entity’s lead product is the treatment of ulcerative colitis, Crohn’s disease or atopic dermatitis (or if the principal indication of such entity’s lead product candidate being investigated in Phase 2 or Phase 3 trials is treatment of ulcerative colitis, Crohn’s disease or atopic dermatitis) or (ii) acquire or license rights to develop a molecule for treatment of ulcerative colitis, Crohn’s disease or atopic dermatitis which is undergoing Phase 2 or Phase 3 trials for either such indication, in each case of (i) and (ii), if such acquisition or license, respectively, would be expected to prevent the consummation of the Merger by the Outside Date For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Efforts to Close the Merger”;
|
•
|
Opinion of Evercore: the oral opinion of Evercore, subsequently confirmed in writing, to the effect that the opinion of Evercore, dated December 12, 2021, to the Board of Directors to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the Merger Consideration to be received by the holders of common stock in the Merger was fair, from a financial point of view, to such holders, as more fully described below in the section titled “Opinion of Evercore Group L.L.C.” For more information, please see the section of this proxy statement captioned “The Merger–Opinion of Evercore Group L.L.C.,” which full text of the written opinion is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety;
|
•
|
Opinion of Guggenheim Securities: the oral opinion of Guggenheim Securities, subsequently confirmed in writing, to the effect that, the financial presentation and the opinion, each dated as of December 12, 2021, of Guggenheim Securities to the Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, of the Merger Consideration to holders of common stock, which opinion was based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken. For more information, please see the section of this proxy statement captioned “The Merger–Opinion of Guggenheim Securities, LLC,” which full text of the written opinion is attached as Annex C to this proxy statement and is incorporated by reference in this proxy statement in its entirety; and
|
•
|
Additional Transaction Terms: the additional terms of the Merger Agreement and the related agreements, including:
|
○
|
Arena’s right, subject to certain conditions, to respond to and negotiate unsolicited acquisition proposals that are made on or after December 12, 2021 and prior to the time the Merger is adopted by Arena’s stockholders, for more information, please see of the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Arena Adverse Recommendation Change”;
|
○
|
Arena’s ability to pursue non-equity financing from unaffiliated third parties in certain circumstances when needed to continue operating in the ordinary course;
|
○
|
Arena’s ability to terminate the Merger Agreement in order to accept a Superior Proposal, subject to certain conditions set forth in the Merger Agreement and paying Pfizer the Arena Termination Fee;
|
○
|
the fact that the Board of Directors believed that the Arena Termination Fee is reasonable, is consistent with the amount of such fees payable in comparable transactions on a relative basis, and is not preclusive of, or a substantial impediment to, a third party making an Acquisition Proposal (for more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Company Adverse Recommendation Change”);
|
○
|
the fact that, in the event the Merger Agreement is terminated prior to the consummation of the Merger in certain circumstances relating to the failure of antitrust clearances to be obtained, Pfizer will be required to pay Arena the Reverse Termination Fee;
|
○
|
Arena’s right to specific performance to prevent breaches of the Merger Agreement; and
|
○
|
the outside date of December 15, 2022, allowing for time that the Board of Directors believed to be sufficient to complete the Merger.
|
•
|
the fact that Arena’s lead product development candidate, etrasimod, has not yet been approved for marketing by the U.S. Food and Drug Administration or by any similar non-U.S. regulatory body, as well as the status and prospects for Arena’s current pipeline of other drug candidates, and the risks inherent in the research, development, regulatory review and potential future commercialization of these drug candidates;
|
•
|
the possible failure or delays of current or future preclinical studies or clinical trials;
|
•
|
the reliance on third parties or partners, to conduct clinical trials and the risks and costs of hiring additional personnel as Arena’s pre-commercial and clinical activities increase;
|
•
|
the uncertainty of the outcomes of ongoing and planned clinical trials and the potential to not obtain regulatory approval, including the potential identification of safety-related concerns associated with the use of a drug candidate;
|
•
|
the significant risks and challenges associated with commercializing etrasimod, including product development and pre-commercial operations, the costs associated with successfully scaling commercial operations globally and the risk that Arena is unable to generate adequate product revenue or achieve profitability;
|
•
|
the outcome, timing and costs of bringing etrasimod to market and risks if Arena is unable to maximize its potential across a range of immunology and inflammation indications;
|
•
|
the risks and costs of developing a commercial infrastructure in anticipation of obtaining marketing approval;
|
•
|
the risks inherent in obtaining regulatory approvals from regulatory authorities and adequate reimbursement from regulatory authorities and other third party payors to be able to sell etrasimod and Arena’s other product candidates;
|
•
|
risks and potential delays relating to the manufacturing and supply of Arena’s drug candidates and future drug candidates for clinical trials and in preparation for commercialization, the risk of reliance on suppliers, including due to the failure to comply with manufacturing regulations;
|
•
|
risks and uncertainties associated with the COVID-19 pandemic and related variants (including the omicron variant), and the potential impact of such risks and uncertainties on a standalone strategy and the trading price of common stock, including the uncertainty related to the spread of the COVID-19 pandemic and the potential consequences of the pandemic on the financial markets and Arena’s current and future business and operations, which could include delays of Arena’s ongoing and planned clinical trials; decreases and delays in supplier, vendor and collaboration partner interactions as a result of government and other restrictions; delays in interactions with and responses from governmental authorities; and disruptions in the operations of clinical research organizations and other third parties upon whom Arena relies;
|
•
|
the current state of the U.S. and global economies, including the recent downward trend in the biopharmaceutical financial markets, increased volatility resulting from escalating political and global trade tensions, and the current and potential impact in both the near term and long term on the biopharmaceutical industry and the future commercialization efforts required if any of Arena’s product candidates are approved for sale, including the numerous risks, costs and uncertainties associated with research, development and commercialization of Arena’s pipeline programs, all of which risks are enhanced by the COVID-19 pandemic and may remain present following the resolution of the COVID-19 pandemic;
|
•
|
the availability of appraisal rights under Section 262 of the DGCL to Arena’s stockholders who do not vote in favor of the adoption of the Merger Agreement and comply with all of the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have a Delaware court determine the fair value of their shares, which may be determined by the court to be more than, less than, or the same as the amount such stockholders would have received under the Merger Agreement; and
|
•
|
the likelihood of satisfying the conditions to complete the Merger and the likelihood that the Merger will be completed.
|
•
|
the fact that Arena would no longer exist as an independent, publicly traded company, and stockholders would no longer participate in any future earnings or growth and would not benefit from any potential future appreciation in value of Arena;
|
•
|
the risks and costs to Arena if the Merger does not close or is not completed in a timely manner, including the diversion of management and employee attention, and the potential effect on its ongoing clinical trials and preparation for potential regulatory approval and commercialization;
|
•
|
the requirement that Arena pay Pfizer the Arena Termination Fee under certain circumstances following termination of the Merger Agreement, including if the Board of Directors terminates the Merger Agreement in order to enter into an agreement with respect to a Superior Proposal (for more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—The Board of Directors’ Recommendation; Arena Adverse Recommendation Change”);
|
•
|
the restrictions on the conduct of Arena’s business prior to the consummation of the Merger, including the requirement that Arena conduct in all material respects its business in the ordinary course of business consistent with past practice, subject to specific limitations, which may delay or prevent Arena from undertaking business opportunities that may arise before the completion of the Merger and that, absent the Merger Agreement, Arena might have pursued;
|
•
|
the fact that an all-cash transaction would generally be taxable to Arena’s stockholders that are U.S. persons for U.S. federal income tax purposes;
|
•
|
the fact that the terms of the Merger Agreement prohibit Arena and its representatives from soliciting third party acquisition proposals until the earlier of the filing of the certificate of merger or the termination of the Merger;
|
•
|
the significant costs involved in connection with entering into the Merger Agreement and completing the Merger (many of which are payable whether or not the Merger is consummated) and the substantial time and effort of Arena management required to complete the Merger, which may disrupt its business operations and have a negative effect on its financial results;
|
•
|
the risk that the Merger might not be completed and the effect of the resulting public announcement of termination of the Merger Agreement on the trading price of Arena’s common stock;
|
•
|
the fact that the completion of the Merger will require certain antitrust clearance and consents, which clearances and consents could subject the Merger to unforeseen delays and risks;
|
•
|
the fact that Arena’s directors and officers may have interests in the Merger that may be different from, or in addition to, those of Arena’s stockholders (For more information, please see the section of this proxy statement captioned “—Interests of Arena’s Directors and Executive Officers in the Merger”); and
|
•
|
the possible loss of key management or other personnel of Arena during the pendency of the Merger.
|
(1)
|
EBIT calculated as total revenue minus total operating expenses and includes the impact of stock-based compensation.
|
(2)
|
Unlevered free cash flow calculated as EBIT less (i) taxes, less (ii) net working capital, less (iii) capital expenditures, plus (iv) depreciation and amortization. Unlevered free cash flow reflects a long-term tax rate of 25% and utilization of Arena’s estimated net operating losses of $1,541 million as of December 31, 2021. In calculating unlevered free cash flow, Evercore did not offset Arena’s taxes by net operating losses, resulting in a decrease to unlevered free cash flow of $90 million in 2027, $153 million in 2028, $246 million in 2029, $373 million in 2030 and $257 million in 2031. Evercore separately calculated the present value of the tax savings from Arena’s estimated usage of net operating losses and included the result in its determination of estimated implied equity values as discussed in the section entitled. For more information, please see the section of this proxy statement captioned “The Merger—Opinion of Evercore Group L.L.C.”.
|
(i)
|
reviewed certain publicly available business and financial information relating to Arena that Evercore deemed to be relevant;
|
(ii)
|
reviewed the Projections relating to Arena prepared and furnished to Evercore by management of Arena, as approved for Evercore’s use by Arena;
|
(iii)
|
discussed with management of Arena their assessment of the past and current operations of Arena, the current financial condition and prospects of Arena, and the Projections;
|
(iv)
|
reviewed the reported prices and the historical trading activity of the common stock;
|
(v)
|
compared the financial performance of Arena and its stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant;
|
(vi)
|
compared the financial performance of Arena and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that Evercore deemed relevant;
|
(vii)
|
reviewed the financial terms and conditions of the Merger Agreement; and
|
(viii)
|
performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate.
|
|
Month and Year Announced
|
| |
Acquiror
|
| |
Target
|
| |
T+5 Revenue Multiple
|
|
|
November 2021
|
| |
Novo Nordisk A/S
|
| |
Dicerna Pharmaceuticals, Inc.
|
| |
8.5x
|
|
|
March 2021
|
| |
Amgen Inc.
|
| |
Five Prime Therapeutics, Inc.
|
| |
4.2x
|
|
|
August 2020
|
| |
Sanofi S.A.
|
| |
Principia Biopharma
|
| |
6.7x
|
|
|
January 2020
|
| |
Eli Lilly and Company
|
| |
Dermira, Inc.
|
| |
2.1x
|
|
|
November 2019
|
| |
Novartis AG
|
| |
The Medicines Company
|
| |
5.6x
|
|
|
October 2018
|
| |
Novartis AG
|
| |
Endocyte Inc.
|
| |
3.3x
|
|
|
May 2018
|
| |
Eli Lilly and Company
|
| |
Armo Biosciences, Inc.
|
| |
4.3x
|
|
|
January 2018
|
| |
Celgene Corporation
|
| |
Juno Therapeutics, Inc.
|
| |
4.4x
|
|
|
July 2015
|
| |
Celgene Corporation
|
| |
Receptos Inc.
|
| |
7.1x
|
|
•
|
Biohaven Pharmaceuticals Holding Company Ltd.
|
•
|
Kodiak Sciences Inc.
|
•
|
Apellis Pharmaceuticals, Inc.
|
•
|
Allakos Inc.
|
•
|
Chemocentryx, Inc.
|
•
|
BioCryst Pharmaceuticals, Inc.
|
•
|
Global Blood Therapeutics, Inc.
|
•
|
Reata Pharmaceuticals Inc.
|
•
|
Kiniksa Pharmaceuticals, Ltd.
|
|
Forward Sales Multiples
|
| |
75th
Percentile
|
| |
25th
Percentile
|
| |
Mean
|
| |
Median
|
|
|
‘24E
|
| |
8.7x
|
| |
2.2x
|
| |
5.7x
|
| |
4.5x
|
|
|
‘25E
|
| |
5.5x
|
| |
2.0x
|
| |
3.5x
|
| |
3.0x
|
|
|
‘26E
|
| |
3.6x
|
| |
1.7x
|
| |
2.5x
|
| |
2.4x
|
|
|
|
| |
1-Day
Closing
Price
|
| |
30-Day
VWAP
|
| |
60-Day VWAP
|
|
|
25th Percentile
|
| |
45%
|
| |
49%
|
| |
57%
|
|
|
Median
|
| |
62%
|
| |
61%
|
| |
58%
|
|
|
Mean
|
| |
62%
|
| |
61%
|
| |
66%
|
|
|
75th Percentile
|
| |
78%
|
| |
73%
|
| |
74%
|
|
•
|
was provided to the Board of Directors (in its capacity as such) for its information and assistance in connection with its evaluation of the Merger Consideration;
|
•
|
did not constitute a recommendation to the Board of Directors with respect to the Merger;
|
•
|
does not constitute advice or a recommendation to any holder of common stock as to how to vote or act in connection with the Merger or otherwise;
|
•
|
did not address Arena’s underlying business or financial decision to pursue or effect the Merger, the relative merits of the Merger as compared to any alternative business or financial strategies that might exist for Arena or the effects of any other transaction in which Arena might engage;
|
•
|
addressed only the fairness, from a financial point of view and as of the date of such opinion, of the Merger Consideration to holders of common stock;
|
•
|
expressed no view or opinion as to (i) any other term, aspect or implication of (a) the Merger (including, without limitation, the form or structure of the Merger) or the Merger Agreement or (b) any other agreement, transaction document or instrument contemplated by the Merger Agreement or to be entered into or amended in connection with the Merger or (ii) the fairness, financial or otherwise, of the Merger to, or of any consideration to be paid to or received by, the holders of any class of securities (other than as expressly specified in its opinion), creditors or other constituencies of Arena; and
|
•
|
expressed no view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of Arena’s directors, officers or employees, or any class of such persons, in connection with the Merger relative to the Merger Consideration or otherwise.
|
•
|
reviewed the Merger Agreement;
|
•
|
reviewed certain publicly available business and financial information regarding Arena;
|
•
|
reviewed certain non-public business and financial information regarding Arena’s business and future prospects (including the Projections) and certain other estimates and other forward-looking information), all as prepared and approved for Guggenheim Securities’ use by Arena’s senior management (collectively, the “Arena-Provided Information”);
|
•
|
discussed with Arena’s senior management their strategic and financial rationale for the Merger as well as their views of Arena’s business, operations, historical and projected financial results and future prospects (including, without limitation, their assumptions as to the expected amounts, timing and pricing of future issuances of equity in Arena) and the commercial, competitive and regulatory dynamics in the biopharmaceutical sector;
|
•
|
performed financing-adjusted discounted cash flow analyses based on the Projections;
|
•
|
reviewed the valuation and financial metrics of certain mergers and acquisitions that Guggenheim Securities deemed relevant in evaluating the Merger;
|
•
|
reviewed the acquisition premia for certain mergers and acquisitions that Guggenheim Securities deemed relevant in evaluating the Merger;
|
•
|
reviewed the historical prices and trading activity of the common stock; and
|
•
|
conducted such other studies, analyses, inquiries and investigations as Guggenheim Securities deemed appropriate.
|
•
|
Guggenheim Securities relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information provided by or discussed with Arena (including, without limitation, the Arena-Provided Information) or obtained from public sources, data suppliers and other third parties.
|
•
|
Guggenheim Securities (i) did not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and Guggenheim Securities did not independently verify, any such information (including, without limitation, the Arena-Provided Information), (ii) expressed no view or opinion regarding the (a) reasonableness or achievability of the Projections, any other estimates and any other forward-looking information or the assumptions upon which any of the foregoing are based or (b) reasonableness of the probability adjustments reflected in the Projections and (iii) relied upon the assurances of Arena’s senior management that they were unaware of any facts or circumstances that would make the Arena-Provided Information incomplete, inaccurate or misleading.
|
•
|
Specifically, with respect to (i) the Projections utilized in Guggenheim Securities’ analyses, (a) Guggenheim Securities was advised by Arena’s senior management, and Guggenheim Securities assumed, that the Projections (including the probability adjustments reflected therein and the expected development and commercialization of Arena’s products and product candidates), had been reasonably prepared on bases reflecting the best then-currently available estimates and judgments of Arena’s senior management as to the expected future performance of Arena on a stand-alone basis and (b) Guggenheim Securities assumed that the Projections had been reviewed by the Board of Directors with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with rendering its opinion and (ii) any financial projections/forecasts, other estimates and/or other forward-looking information obtained by Guggenheim Securities from public sources, data suppliers and other third parties, Guggenheim Securities assumed that such information was reasonable and reliable.
|
•
|
During the course of its engagement, Guggenheim Securities was asked by the Board of Directors to solicit indications of interest from various potential strategic acquirors regarding a potential extraordinary corporate transaction with or involving Arena, and Guggenheim Securities considered the results of such solicitation process in rendering its opinion.
|
•
|
Guggenheim Securities did not perform or obtain any independent appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of Arena or any other entity or the solvency or fair value of Arena or any other entity, nor was Guggenheim Securities furnished with any such appraisals.
|
•
|
Guggenheim Securities’ professionals are not legal, regulatory, tax, consulting, accounting, appraisal or actuarial experts and nothing in Guggenheim Securities’ opinion should be construed as constituting advice with respect to such matters; accordingly, Guggenheim Securities relied on the assessments of Arena’s senior management and Arena’s other professional advisors with respect to such matters. Guggenheim Securities did not express any view or render any opinion regarding the tax consequences of the Merger to Arena or its securityholders.
|
•
|
Guggenheim Securities further assumed that:
|
•
|
In all respects meaningful to its analyses, (i) Arena and Pfizer will comply with all terms and provisions of the Merger Agreement and (ii) the representations and warranties of Arena and Pfizer contained in the Merger Agreement were true and correct and all conditions to the obligations of each party to the Merger Agreement to consummate the Merger would be satisfied without any waiver, amendment or modification thereof; and
|
•
|
The Merger will be consummated in a timely manner in accordance with the terms of the Merger Agreement and in compliance with all applicable legal and other requirements, without any delays, limitations, restrictions, conditions, waivers, amendments or modifications (regulatory, tax-related or otherwise) that would have an effect on Arena or the Merger in any way meaningful to Guggenheim Securities’ analyses and opinion.
|
•
|
Guggenheim Securities did not express any view or opinion as to the price or range of prices at which the common stock or other securities or financial instruments of or relating to Arena may trade or otherwise be transferable at any time, including subsequent to the announcement or consummation of the Merger.
|
•
|
based its financial analyses on various assumptions, including assumptions concerning general economic, business and capital markets conditions and industry-specific and company-specific factors, all of which are beyond the control of Arena, Pfizer and Guggenheim Securities;
|
•
|
did not form a view or opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support its opinion;
|
•
|
considered the results of all of its financial analyses and did not attribute any particular weight to any one analysis or factor; and
|
•
|
ultimately arrived at its opinion based on the results of all of its financial analyses assessed as a whole and believes that the totality of the factors considered and the various financial analyses performed by Guggenheim Securities in connection with its opinion operated collectively to support its determination as to the fairness, from a financial point of view and as of the date of such opinion, of the Merger Consideration to be received by holders of common stock pursuant to the Merger Agreement to the extent expressly specified in such opinion.
|
•
|
Such financial analyses, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses.
|
•
|
None of the selected precedent merger and acquisition transactions used in the selected precedent merger and acquisition transactions analysis described below is identical or directly comparable to the Merger; however, such transactions were selected by Guggenheim Securities, among other reasons, because they involved target companies which may be considered broadly similar, for purposes of Guggenheim Securities’ financial analyses, to Arena based on Guggenheim Securities’ professional judgment and experience with the biopharmaceutical sector.
|
•
|
In any event, selected precedent merger and acquisition transactions analysis is not purely mathematical; rather, such analyses involve complex considerations and judgments concerning the differences in business, operating, financial and capital markets-related characteristics and other factors regarding the selected precedent merger and acquisition transactions to which the Merger was compared.
|
•
|
Such financial analyses do not purport to be appraisals or to reflect the prices at which any securities may trade at the present time or at any time in the future.
|
•
|
Enterprise value: represents the relevant company’s equity value plus (i) the principal or face amount of total debt and non-convertible preferred stock plus (ii) the book value of any non-controlling/minority interests less (iii) cash, cash equivalents and short- and long-term marketable investments and (iv) the book value of any non-consolidated investments.
|
•
|
Equity value: represents for each relevant company (i) the product of (a) the number of outstanding common shares plus shares issuable upon the conversion or exercise of all in-the-money convertible securities, stock options and/or stock warrants and (b) the relevant company’s stock price less (ii) the cash proceeds from the assumed exercise of all in-the-money stock options and stock warrants.
|
•
|
T+5 Revenue: means risk-adjusted revenue forecast for the 12-month period ending five (5) years after December 13, 2021, using weighted average of revenues from fourth and fifth calendar year.
|
•
|
T+5 Revenue Multiple: means the relevant transaction enterprise value divided by the relevant T+5 Revenue.
|
Merger Consideration
|
| |
$100.00
|
|||
|
| |
|
| |
|
|
| |
Arena
Stock
Price
|
| |
|
Acquisition Premium Relative to Arena’s:
|
| |
|
| |
|
Closing Stock Price @ 12/10/21
|
| |
$49.94
|
| |
100%
|
Calendar Day VWAPs for periods ending 12/10/21:
|
| |
|
| |
|
30-Day
|
| |
$54.99
|
| |
82%
|
60-Day
|
| |
$57.73
|
| |
73%
|
90-Day
|
| |
$58.37
|
| |
71%
|
52 Week Intraday High (02/16/21) Stock Price
|
| |
$85.00
|
| |
18%
|
|
| |
|
| |
|
Implied T-5 Revenue Multiple (Risk-Adjusted)
|
| |
|
| |
6.4x
|
Merger Consideration
|
| |
$100.00
|
|||
|
| |
|
| |
|
|
| |
Reference Range for Arena
on a Change-of-Control Basis
|
|||
Financial Analyses
|
| |
Low
|
| |
High
|
Discounted Cash Flow Analysis (Risk-Adjusted)
|
| |
$86
|
| |
$107
|
|
| |
|
| |
|
Selected Precedent M&A Transactions Analysis
|
| |
$86
|
| |
$123
|
|
| |
|
| |
|
For Informational Reference Purposes
|
| |
|
| |
|
Arena’s Stock Price Range During 52-Week Trading Range
|
| |
$46
|
| |
$85
|
|
| |
|
| |
|
Wall Street Equity Research Stock Price Targets
|
| |
$71
|
| |
$120
|
|
| |
|
| |
|
1-Day Precedent Premia Paid (25-75th Percentile)
|
| |
|
| |
|
$2-$20B Transaction Size (57%-110%)
|
| |
$78
|
| |
$105
|
$5-$15B Transaction Size (49%-67%)
|
| |
$74
|
| |
$83
|
•
|
Guggenheim Securities based its financing-adjusted discounted cash flow analysis of Arena on the Projections.
|
•
|
Guggenheim Securities used a discount rate range of 8.00% – 9.75% based on its estimate of Arena’s weighted average cost of capital.
|
•
|
In estimating Arena’s terminal/continuing value, Guggenheim Securities used a perpetual growth rate of negative 70% (as provided and approved for Guggenheim Securities’ use by Arena’s senior management) applied to Arena’s terminal year normalized after-tax unlevered free cash flow.
|
(i)
|
Arena Option that is outstanding as of immediately prior to the Effective Time, whether or not then vested, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the product of (1) the excess, if any, of the Merger Consideration over the per-share exercise price of such Arena Option, multiplied by (2) the number of shares then subject to such Arena Option;
|
(ii)
|
Arena RSU, except as described in subclause (iii) below, subject to vesting conditions based solely on continued employment or service to Arena or any of its subsidiaries that is unvested and outstanding as of immediately prior to the Effective Time, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash in respect thereof equal to the Merger Consideration;
|
(iii)
|
2022 Arena RSU that is unvested and outstanding as of immediately prior to the Effective Time will be substituted automatically with an Adjusted RSU that is equal to the product of (1) the total number of shares subject to the 2022 Arena RSU immediately prior to the Effective Time multiplied by (2) the Arena RSU Exchange Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU will otherwise be subject to the same terms and conditions applicable to such 2022 Arena RSU immediately prior to the Effective Time (including vesting terms, and subject to accelerated vesting in connection with certain qualifying terminations of employment following the Effective Time), as described below under “Payments Upon Termination at or Following a Change in Control.”
|
(iv)
|
Arena PRSU that is unvested and outstanding as of immediately prior to the Effective Time will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the Merger Consideration (with all the performance-based vesting conditions associated with such Arena PRSU being deemed achieved at the greater of actual completed performance at the Effective Time or at target).
|
•
|
the Closing occurs on April 15, 2022 (which is the assumed date solely for purposes of this golden parachute compensation disclosure);
|
•
|
the number of unvested Arena equity awards held by the named executive officers is as of December 16, 2021, the latest practicable date to determine such amounts before the filing of this proxy statement, and excludes any additional grants that may occur following such date, other than the 2022 Arena RSUs expected to be granted on January 3, 2022 to each executive officer;
|
•
|
pursuant to applicable proxy disclosure rules, the value of the equity award acceleration below is calculated based on the number of shares covered by the applicable Arena Options, Arena RSUs (including 2022 Arena RSUs) and Arena PRSUs (assuming that the performance -based vesting conditions associated with such Arena PRSUs are achieved at target) that are accelerating multiplied by $100.00 per share (less the applicable exercise price per share in the case of Arena Options);
|
•
|
all Arena Options held by each named executive officer as of December 16, 2021 remain unexercised as of the Closing;
|
•
|
the number of 2022 Arena RSUs to be granted on January 3, 2022 was determined by dividing the approved grant date value for each 2022 Arena RSU by $90.00 (the estimated closing price of Arena common stock on January 3, 2022);
|
•
|
the employment of each named executive officer will be terminated immediately following the Closing in a manner entitling the named executive officer to receive the severance benefits described in the section of this proxy statement captioned “—Payments Upon Termination at or Following Change in Control”;
|
•
|
the named executive officer’s base salary rate and annual target bonus are as in effect as of the date of this filing; and
|
•
|
no named executive officer enters into a new agreement or is otherwise legally entitled to, before the Effective Time, additional compensation or benefits.
|
Name
|
| |
Cash ($)(2)
|
| |
Equity ($)(3)
|
| |
Perquisites/
Benefits ($)(4)
|
| |
Tax
Reimbursement(5)
|
| |
Total ($)
|
Amit D. Munshi
|
| |
$3,145,001
|
| |
$26,632,512
|
| |
$89,736
|
| |
$—
|
| |
$29,867,249
|
Laurie Stelzer
|
| |
$1,470,000
|
| |
$8,414,736
|
| |
$49,799
|
| |
$—
|
| |
$9,934,535
|
Vincent E. Aurentz
|
| |
$1,425,001
|
| |
$6,901,304
|
| |
$53,178
|
| |
$—
|
| |
$8,379,483
|
Robert Lisicki
|
| |
$1,425,001
|
| |
$8,623,615
|
| |
$49,799
|
| |
$—
|
| |
$10,098,415
|
Joan Schmidt, J.D.
|
| |
$1,386,001
|
| |
$7,928,453
|
| |
$37,583
|
| |
$—
|
| |
$9,352,037
|
(1)
|
Kevin R. Lind served as Arena’s Executive Vice President, Chief Financial Officer and Principal Financial Offer until March 2020. Mr. Lind’s separation of employment occurred prior to the execution of the Merger Agreement, and he is not receiving any compensatory payments in connection with the Merger.
|
(2)
|
The amounts listed in this column for each named executive officer represent the “double-trigger” cash severance payments to which each of these named executive officers may become entitled under the Severance Plan, as described in more detail in the section of this proxy statement captioned “—Payments Upon Termination at or Following Change in Control”. To be eligible for such “double-trigger” cash severance benefits, the employment of the named executive officer must terminate without “cause” or the executive officer must resign for “good reason” (other than on account of death or disability) upon the change in control or during the twenty-four (24) months following a “change in control” (as such terms are defined in the Severance Plan and as described in the section of this proxy statement captioned “—Payments Upon Termination at or Following Change in Control”) (for the purposes of the table above, a “Qualifying CIC Termination”).
|
(3)
|
For each named executive officer the amount listed in this column represents, in part, the estimated value (as shown in the table below in the “Equity Acceleration” column) of vesting acceleration to which he or she may become entitled at the Effective Time pursuant to the Merger Agreement (which are “single trigger” benefits) or, thereafter, under the terms of the Adjusted RSU, as described in more detail in the section of this proxy statement captioned “—Payments Upon Termination at or Following Change in Control” and “—Treatment of Arena Options, Arena RSUs and Arena PRSUs” (which are “double trigger” benefits). To be eligible for “double-trigger” benefits, the employment of the named executive officer must incur a Qualifying CIC Termination under the Severance Plan or must terminate without “cause” or, subject to applicable notice and cure provisions, the executive officer must resign as a result of a “relocation requirement” under the terms of the applicable Adjusted RSU. The grant date value of the 2022 Arena RSUs for Mr. Munshi is $8,000,000 and for each of the other named executive officers is $2,000,000. The amounts in the table below under “Double Trigger” assume that the number of Adjusted RSUs is determined by dividing these values by $90.00 (the estimated stock price on January 3, 2022) and then multiplying it by $100.00 per share.
|
(4)
|
The amounts listed in this column represent the cost of continued health and welfare coverage to each named executive officer who may become entitled under the Severance Plan and related eligibility notice, as described in more detail in the section of this proxy statement captioned “—Payments Upon Termination at or Following Change in Control”. To be eligible for such “double-trigger” health and welfare benefits continuation payments, the employment of the executive officer must terminate in a Qualifying CIC Termination. The full amount represents the cost of continuing health and welfare coverage for the entire severance period starting on May 1, 2022, assumes 10% rate increases effective each of January 1, 2023 and January 1, 2024 and assumes actual benefit elections made by each executive officer for the 2022 calendar year continue unchanged for the severance period.
|
(5)
|
Based on estimates as in effect on the date hereof no named executive officer would receive a 280G excise tax gross-up payment.
|
NAME
|
| |
AWARD CASH-OUT
PAYMENT ($)
|
| |
EQUITY
ACCELERATION ($)
|
| |
TOTAL ($)
|
|
| |
Single-Trigger
|
| |
Double-Trigger
|
| |
|
Amit D. Munshi
|
| |
$17,743,623
|
| |
$8,888,889
|
| |
$26,632,512
|
Laurie Stelzer
|
| |
$6,192,514
|
| |
$2,222,222
|
| |
$8,414,736
|
Vincent E. Aurentz
|
| |
$4,679,081
|
| |
$2,222,222
|
| |
$6,901,304
|
Robert Lisicki
|
| |
$6,401,393
|
| |
$2,222,222
|
| |
$8,623,615
|
Joan Schmidt, J.D.
|
| |
$5,706,231
|
| |
$2,222,222
|
| |
$7,928,453
|
Name
|
| |
Shares
#(1)
|
| |
Shares
$(2)
|
| |
Options
#(3)
|
| |
Options
$
|
| |
RSUs
#(4)
|
| |
RSUs
$
|
| |
PRSUs
Target(5)
|
| |
PRSUs
Target $
|
| |
Total
|
| |
Potential
Shares
Issuable
Upon
Exercise
of Arena
ESPP
Purchase
Rights
#(6)
|
| |
Consideration
Payable in
respect of
Shares
Issuable upon
Exercise of
Arena ESPP
Purchase
Rights
($)
|
Amit D. Munshi
|
| |
10,750
|
| |
$991,257
|
| |
1,228,000
|
| |
$71,629,335
|
| |
117,689
|
| |
$11,768,889
|
| |
21,000
|
| |
$2,100,000
|
| |
$86,489,481
|
| |
—
|
| |
—
|
Laurie Stelzer
|
| |
8,244
|
| |
$760,179
|
| |
170,850
|
| |
$9,178,332
|
| |
28,882
|
| |
$2,888,222
|
| |
7,600
|
| |
$760,000
|
| |
$13,586,733
|
| |
842
|
| |
$41,746
|
Vincent E. Aurentz
|
| |
27,000
|
| |
$2,489,670
|
| |
400,826
|
| |
$25,504,146
|
| |
28,882
|
| |
$2,888,222
|
| |
7,600
|
| |
$760,000
|
| |
$31,642,039
|
| |
842
|
| |
$41,746
|
Robert Lisicki
|
| |
9,441
|
| |
$870,555
|
| |
293,850
|
| |
$15,576,892
|
| |
28,882
|
| |
$2,888,222
|
| |
7,600
|
| |
$760,000
|
| |
$20,095,669
|
| |
—
|
| |
—
|
Joan Schmidt, J.D.
|
| |
7,941
|
| |
$732,240
|
| |
170,850
|
| |
$8,528,892
|
| |
28,882
|
| |
$2,888,222
|
| |
7,600
|
| |
$760,000
|
| |
$12,909,354
|
| |
—
|
| |
—
|
Kevin R. Lind(7)
|
| |
3,457
|
| |
$318,770
|
| |
219,796
|
| |
$13,614,758
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$13,933,528
|
| |
—
|
| |
—
|
Chris Cabell, M.D., M.H.S., FACC(8)
|
| |
1,401
|
| |
$129,186
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$129,186
|
| |
—
|
| |
—
|
Steven W. Spector,
J.D.(9)
|
| |
17,437
|
| |
$1,607,866
|
| |
161,607
|
| |
10,360,834
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$11,968,700
|
| |
—
|
| |
—
|
Preston Klassen, M.D., M.H.S.(10)
|
| |
3,991
|
| |
$368,010
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$368,010
|
| |
—
|
| |
—
|
Doug Manion, M.D., FRCP (C)
|
| |
—
|
| |
—
|
| |
90,000
|
| |
$4,669,200
|
| |
37,222
|
| |
$3,722,222
|
| |
7,600
|
| |
$760,000
|
| |
$9,151,422
|
| |
—
|
| |
—
|
Tina S. Nova, Ph.D.
|
| |
16,576
|
| |
$1,528,473
|
| |
42,002
|
| |
$2,288,602
|
| |
3,067
|
| |
$306,700
|
| |
—
|
| |
—
|
| |
$4,123,775
|
| |
—
|
| |
—
|
Jayson Dallas, M.D.
|
| |
4,085
|
| |
$376,678
|
| |
48,869
|
| |
$3,208,163
|
| |
3,067
|
| |
$306,700
|
| |
—
|
| |
—
|
| |
$3,891,541
|
| |
—
|
| |
—
|
Oliver Fetzer, Ph.D
|
| |
6,625
|
| |
$610,891
|
| |
48,869
|
| |
$3,208,163
|
| |
8,167
|
| |
$816,700
|
| |
—
|
| |
—
|
| |
$4,635,755
|
| |
—
|
| |
—
|
Kieran T. Gallahue
|
| |
9,844
|
| |
$907,715
|
| |
24,285
|
| |
$1,052,704
|
| |
8,167
|
| |
$816,700
|
| |
—
|
| |
—
|
| |
$2,777,119
|
| |
—
|
| |
—
|
Jennifer Jarrett
|
| |
8,150
|
| |
$751,511
|
| |
44,702
|
| |
$2,859,802
|
| |
5,513
|
| |
$551,300
|
| |
—
|
| |
—
|
| |
$4,162,613
|
| |
—
|
| |
—
|
Garry Neil, M.D.
|
| |
8,150
|
| |
$751,511
|
| |
48,869
|
| |
$3,208,163
|
| |
3,067
|
| |
$306,700
|
| |
—
|
| |
—
|
| |
$4,266,375
|
| |
—
|
| |
—
|
Manmeet S. Soni(11)
|
| |
5,902
|
| |
$544,223
|
| |
14,513
|
| |
$676,811
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,221,034
|
| |
—
|
| |
—
|
Katharine Knobil, M.D.
|
| |
2,939
|
| |
$270,974
|
| |
14,702
|
| |
$540,877
|
| |
3,882
|
| |
$388,200
|
| |
—
|
| |
—
|
| |
$1,200,051
|
| |
—
|
| |
—
|
Randall E. Woods(12)
|
| |
14,230
|
| |
$1,312,148
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,312,148
|
| |
—
|
| |
—
|
Nawal Ouzren
|
| |
893
|
| |
$82,313
|
| |
11,368
|
| |
$317,566
|
| |
3,665
|
| |
$366,500
|
| |
—
|
| |
—
|
| |
$766,379
|
| |
—
|
| |
—
|
Steven J. Schoch
|
| |
—
|
| |
—
|
| |
10,803
|
| |
$376,052
|
| |
4,600
|
| |
$460,000
|
| |
—
|
| |
—
|
| |
$836,052
|
| |
—
|
| |
—
|
(1)
|
This number includes shares of common stock beneficially owned, excluding shares of common stock issuable upon exercise of Arena Options or settlement of Arena RSUs and Arena PRSUs.
|
(2)
|
The value is determined using the closing price on December 16, 2021, ($92.21).
|
(3)
|
The number of shares of common stock subject to Arena Options includes both vested and unvested Arena Options. The estimated number of shares subject to the vested and unvested portions of the Arena Options as of the assumed Closing Date, April 15, 2022, and the value (determined as the aggregate number of underlying shares multiplied by the Merger Consideration minus the aggregate exercise price with respect to such shares) of those portions of the Arena Options are provided in the table below.
|
(4)
|
This number reflects the estimated number of shares of common stock subject to Arena RSUs (including 2022 Arena RSUs) as of the assumed Closing Date, April 15, 2022.
|
(5)
|
This number reflects the estimated number of shares of common stock subject to Arena PRSUs that are projected to be as of April 15, 2022 (assuming that the performance-based vesting conditions associated with such Arena PRSUs are achieved at target).
|
(6)
|
This number reflects, for each named executive officer who participates in the Arena ESPP, the number of estimated shares issuable upon exercise of Arena ESPP purchase rights assuming the named executive officers do not terminate participation in the Arena ESPP prior to the Closing, assuming each executive officer’s estimated accumulated payroll deductions as of April 15, 2022 are used to purchase shares of Arena common stock on the Arena ESPP purchase date at the estimated purchase price per share under the Arena ESPP ($50.42).
|
(7)
|
Mr. Lind is a former officer of Arena. These amounts reflect the latest estimates as of Mr. Lind’s departure.
|
(8)
|
Dr. Cabell is a former officer of Arena. These amounts reflect the latest estimates as of Dr. Cabell’s departure.
|
(9)
|
Mr. Spector is a former officer of Arena. These amounts reflect the latest estimates as of Mr. Spector’s departure.
|
(10)
|
Dr. Klassen is a former officer of Arena. These amounts reflect the latest estimates as of Dr. Klassen’s departure.
|
(11)
|
Mr. Soni is a former director of Arena. These amounts reflect the latest estimates as of Mr. Soni’s departure.
|
(12)
|
Mr. Woods is a former director of Arena. These amounts reflect the latest estimates as of Mr. Woods’ departure.
|
Name
|
| |
Vested Arena
Options #
|
| |
Vested Arena
Options $
|
| |
Unvested Arena
Options #
|
| |
Unvested Arena
Options $
|
Amit D. Munshi
|
| |
922,687
|
| |
$58,865,712
|
| |
305,313
|
| |
$12,736,623
|
Laurie Stelzer
|
| |
76,522
|
| |
$4,411,818
|
| |
94,328
|
| |
$4,766,514
|
Vincent E. Aurentz
|
| |
324,893
|
| |
$22,251,065
|
| |
75,933
|
| |
$3,253,081
|
Robert Lisicki
|
| |
188,750
|
| |
$10,601,499
|
| |
105,100
|
| |
$4,975,393
|
Joan Schmidt, J.D.
|
| |
79,272
|
| |
$4,248,661
|
| |
91,578
|
| |
$4,280,231
|
Kevin R. Lind
|
| |
219,796
|
| |
$13,614,758
|
| |
—
|
| |
—
|
Chris Cabell, M.D., M.H.S., FACC
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Steven W. Spector, J.D.
|
| |
161,607
|
| |
$10,360,834
|
| |
—
|
| |
—
|
Preston Klassen, M.D., M.H.S.
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Doug Manion, M.D., FRCP (C)
|
| |
—
|
| |
—
|
| |
90,000
|
| |
$4,669,200
|
Tina S. Nova, Ph.D.
|
| |
40,801
|
| |
$2,246,795
|
| |
1,201
|
| |
$41,807
|
Jayson Dallas, M.D.
|
| |
47,668
|
| |
$3,166,357
|
| |
1,201
|
| |
$41,807
|
Oliver Fetzer, Ph.D.
|
| |
47,688
|
| |
$3,166,357
|
| |
1,201
|
| |
$41,807
|
Kieran T. Gallahue
|
| |
23,084
|
| |
$1,010,897
|
| |
1,201
|
| |
$41,807
|
Jennifer Jarrett
|
| |
43,501
|
| |
$2,817,995
|
| |
1,201
|
| |
$41,807
|
Garry Neil, M.D.
|
| |
47,668
|
| |
$3,166,357
|
| |
1,201
|
| |
$41,807
|
Manmeet S. Soni
|
| |
14,513
|
| |
$676,811
|
| |
—
|
| |
—
|
Katharine Knobil, M.D.
|
| |
12,528
|
| |
$461,424
|
| |
2,174
|
| |
$79,452
|
Randall E. Woods
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Nawal Ouzren
|
| |
8,639
|
| |
$251,235
|
| |
2,729
|
| |
$66,331
|
Steven J. Schoch
|
| |
7,001
|
| |
$243,705
|
| |
3,802
|
| |
$132,348
|
•
|
deliver to Arena a written demand for appraisal of your shares of Arena common stock prior to the taking of the vote to adopt the Merger Agreement, which written demand must reasonably inform us of the identity of the stockholder and that the stockholder intends to demand appraisal of his, her or its shares. This written demand for appraisal must be in addition to and separate from any proxy or vote abstaining from or voting against the adoption of the Merger Agreement. Voting “AGAINST” or failing to vote “FOR” the adoption of the Merger Agreement by itself does not constitute a demand for appraisal within the meaning of Section 262 of the DGCL;
|
•
|
not vote, or abstain from voting, his, her or its shares in favor of the adoption of the Merger Agreement;
|
•
|
continuously hold of record the shares from the date on which the written demand for appraisal is made through the Effective Time of the Merger; and
|
•
|
comply with the procedures of Section 262 of the DGCL for perfecting appraisal rights thereafter, including filing of a petition in the Delaware Court of Chancery requesting a determination of the fair value of your shares of common stock within 120 days after the Effective Time of the Merger.
|
•
|
banks, mutual funds, insurance companies or other financial institutions;
|
•
|
tax-exempt organizations;
|
•
|
retirement or other tax deferred accounts;
|
•
|
S corporations, partnerships or any other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes (or other pass-through entities) or an investor in a partnership, S corporation (or other pass-through entity);
|
•
|
dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities;
|
•
|
regulated investment companies or real estate investment trusts;
|
•
|
entities subject to the U.S. anti-inversion rules;
|
•
|
certain former citizens or long-term residents of the United States;
|
•
|
except as noted below, stockholders that own or have owned (directly, indirectly or constructively) five percent (5%) or more of Arena’s common stock (by vote or value);
|
•
|
stockholders holding the shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction;
|
•
|
stockholders whose shares constitute qualified small business stock within the meaning of Section 1202 of the Code;
|
•
|
stockholders that received their shares of common stock in a compensatory transaction, through a tax qualified retirement plan or pursuant to the exercise of options or warrants;
|
•
|
stockholders who own an equity interest, actually or constructively, in Pfizer or the Surviving Corporation following the Merger;
|
•
|
U.S. Holders whose “functional currency” is not the U.S. dollar;
|
•
|
stockholders who hold their common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;
|
•
|
stockholders subject to the Medicare tax on net investment income or the alternative minimum tax;
|
•
|
stockholders subject to special tax accounting rules as a result of any item of gross income with respect to the shares of common stock being taken into account in an “applicable financial statement” (as defined in the Code);
|
•
|
stockholders who are controlled foreign corporations, passive foreign investment companies or corporations that accumulate earnings to avoid U.S. federal income tax; or
|
•
|
tax consequences to stockholders that do not vote in favor of the Merger and properly demand appraisal of their shares under Section 262 of the DGCL.
|
•
|
an individual who is (or is treated as) a citizen or resident of the United States;
|
•
|
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in Section 7701(a)(30) of the Code; or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
|
•
|
the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of thirty percent (30%) (or a lower rate under an applicable income tax treaty);
|
•
|
such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the Merger, and certain other requirements are met, in which case such gain will be subject to U.S. federal income tax at a rate of thirty percent (30%) (or a lower rate under an applicable income tax treaty), which gain may be offset by certain U.S. source capital losses of such Non-U.S. Holder if the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses; or
|
•
|
Arena is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code (“USRPHC”), at any time within the shorter of the five(5)-year period preceding the Merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of common stock (the “Relevant Period”) and, if shares of Arena’s common stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns directly or is deemed to own pursuant to attribution rules more than five percent (5%) of our common stock at any time during the Relevant Period, in which case such gain will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. Although there can be no assurances in this regard, we believe that we are not, and have not been, a USRPHC at any time during the five (5)-year period preceding the Merger.
|
(i)
|
Arena Option granted by Arena under the Arena Stock Plans that is outstanding as of immediately prior to the Effective Time, whether or not then vested, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash equal to the product of (1) the excess, if any, of the Merger Consideration over the per-share exercise price of such Arena Option, multiplied by (2) the number of shares of common stock then subject to such Arena Option;
|
(ii)
|
Arena RSU, except as described in subclause (iii) below, subject to vesting conditions based solely on continued employment or service to Arena or its subsidiaries Plan that is unvested and outstanding as of immediately prior to the Effective Time, will be cancelled and immediately cease to be outstanding and converted into the right to receive an amount in cash in respect thereof equal to the Merger Consideration;
|
(iii)
|
2022 Arena RSU that is unvested and outstanding as of immediately prior to the Effective Time will be substituted automatically with an Adjusted RSU that is equal to the product of (1) the total number of shares of common stock subject to the 2022 Arena RSU immediately prior to the Effective Time multiplied by (2) the Arena RSU Exchange Ratio, with any fractional shares rounded to the nearest whole share. Each Adjusted RSU will otherwise be subject to the same terms and conditions applicable to such 2022 Arena RSU immediately prior to the Effective Time (including vesting terms, and subject to accelerated vesting in connection with certain qualifying terminations of employment following the Effective Time); and
|
(iv)
|
Arena PRSU that is unvested and outstanding as of immediately prior to the Effective Time will be cancelled and immediately cease to be outstanding and concerted into the right to receive an amount in cash equal to the Merger Consideration (with all the performance-based vesting conditions associated with such Arena PRSU being deemed achieved at the greater of actual completed performance at the Effective Time or at target).
|
(i)
|
changes in general United States or global economic, regulatory or financial market conditions;
|
(ii)
|
changes in the economic, business and financial environment generally affecting the biotechnology industry;
|
(iii)
|
in and of itself, any change in Arena’s stock price or any failure by Arena to meet any revenue, earnings or other similar internal or analysts’ projections (it being understood that any effect, change, development or occurrence giving rise to or contributing to such change or failure may be deemed to constitute, or be taken into account in determining whether there has been, a Material Adverse Effect);
|
(iv)
|
an act of terrorism or an outbreak or escalation of hostilities or war (whether or not declared) or any natural disasters, health emergencies, including pandemics (including COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks or other outbreaks of diseases or quarantine restrictions) or epidemics, or other similar force majeure events, including any worsening of such conditions existing as of the date of the Merger Agreement;
|
(v)
|
any adoption, implementation, promulgation, repeal, modification, amendment or other changes in laws or GAAP;
|
(vi)
|
any event, occurrence, circumstance, change or effect arising from fluctuations in the value of any currency or interest rates;
|
(vii)
|
the public announcement or pendency of the Merger or the other transactions contemplated by the Merger Agreement (which for the avoidance of doubt will not apply to Arena’s representations and warranties relating to required filings and consents);
|
(viii)
|
any event, occurrence, circumstance, change or effect resulting or arising from the identity of Pfizer or Merger Sub as the acquiror of Arena;
|
(ix)
|
any results, outcomes, data, adverse events, side effects or safety observations arising from the efficacy or safety data reported in (1) the Elevate UC 12: Phase 3, Randomized, Double-Blind, Placebo-Controlled, 12-Week Study to Assess the Efficacy and Safety of Etrasimod (Etrasimod versus Placebo as Induction Therapy) in Subjects With Moderately to Severely Active Ulcerative Colitis (NCT03996369) or (2) the Elevate UC 52: Phase 3, Randomized, Double-Blind, Placebo-Controlled, 52-Week Study to Assess the Efficacy and Safety of Etrasimod in (Etrasimod versus Placebo for the Treatment of) Subjects With Moderately to Severely Active Ulcerative Colitis (NCT03945188);
|
(x)
|
the changes disclosed in the Arena disclosure schedule under the heading Annex I, “Company Material Adverse Effect”, to the Merger Agreement; or
|
(xi)
|
any statement in any documents required to be filed by Arena with the SEC since January 1, 2019, to the effect that Arena may cease to qualify as a “going concern”.
|
•
|
due organization, valid existence, good standing and authority and qualification to conduct business with respect to Arena and its subsidiaries;
|
•
|
the certificate of incorporation and bylaws of Arena and its subsidiaries;
|
•
|
ownership and capital structure of Arena and its subsidiaries;
|
•
|
the absence of any agreement relating to the issuance, sale, repurchase, redemption, transfer, voting, of or regarding any Shares;
|
•
|
Arena’s corporate power and authority to execute, deliver and perform its obligations under the Merger Agreement and the enforceability of the Merger Agreement against Arena;
|
•
|
required consents, approvals and regulatory filings in connection with the Merger Agreement;
|
•
|
the preparation of Arena’s financial statements, including Arena’s maintenance of internal controls with respect to financial reporting;
|
•
|
the preparation, compliance, accuracy and timely filing of or furnishing to the SEC all Arena SEC filings, including disclosure controls and procedures;
|
•
|
the absence of any action that has occurred that had a Material Adverse Effect, since January 1, 2021;
|
•
|
the operation in all material respects in the ordinary course of business consistent with past practice by Arena and its subsidiaries since January 1, 2021;
|
•
|
the absence of undisclosed liabilities;
|
•
|
litigation matters;
|
•
|
product liability matters;
|
•
|
possession of all permits necessary to enable Arena and its subsidiaries to conduct its business;
|
•
|
compliance with applicable laws;
|
•
|
employee benefit plans;
|
•
|
labor matters;
|
•
|
tax matters;
|
•
|
the existence and enforceability of specified categories of Arena’s material contracts;
|
•
|
intellectual property matters;
|
•
|
real and personal property;
|
•
|
environmental matters;
|
•
|
Arena’s largest suppliers during the twelve (12) months ended December 31, 2020;
|
•
|
anti-corruption laws and sanctions and similar rules and regulations;
|
•
|
FDA and related matters;
|
•
|
healthcare regulatory compliance;
|
•
|
data privacy and information security matters;
|
•
|
insurance matters;
|
•
|
the applicability of Section 203 of the DGCL and any other applicable takeover or anti-takeover laws;
|
•
|
payment of fees and expenses to any investment banker, broker, finder or other intermediary in connection with the Merger Agreement;
|
•
|
the rendering of Evercore and Guggenheim Securities’ opinions to Arena;
|
•
|
absence of any transaction or agreement between Arena or any of its subsidiaries, on the one hand, and any affiliate, stockholder that beneficially owns five percent (5%) of more of the outstanding shares of common stock, or current or former director or executive officer of Arena, on the other hand; and
|
•
|
the statements made in this proxy statement.
|
•
|
due organization, valid existence, good standing and authority and qualification to conduct business with respect to each of Pfizer and Merger Sub;
|
•
|
Pfizer’s and Merger Sub’s corporate power and authority to execute and deliver their obligations under the Merger Agreement and the enforceability of the Merger Agreement against Pfizer and Merger Sub;
|
•
|
required consents, approvals and regulatory filings in connection with the Merger Agreement;
|
•
|
litigation matters;
|
•
|
payment of fees to any investment banker, broker, finder or other intermediary in connection with the Merger Agreement;
|
•
|
sufficiency of funds;
|
•
|
capitalization of Merger Sub;
|
•
|
no interested stockholders; and
|
•
|
no other representations and warranties.
|
•
|
amend or change the certificate of incorporation, bylaws or other organizational documents of Arena or its subsidiaries;
|
•
|
adjust, split, reverse split, combine, subdivide, reclassify, redeem, purchase, repurchase or otherwise acquire, directly or indirectly, or amend Arena’s or its subsidiaries’ securities, other than in connection with withholding to satisfy the exercise price and/or tax obligations with respect to Arena Options, Arena RSUs or Arena PRSUs pursuant to the terms thereof (as in effect as of the date of the Merger Agreement);
|
•
|
issue, sell, pledge, modify, transfer, dispose of, encumber or grant, or authorize the same with respect to, directly or indirectly, any of Arena’s or any subsidiary of Arena’s securities, other than (i) the 2022 Arena RSUs and (ii) Arena may issue common stock upon the exercise of Arena Options or vesting and settlement of Arena RSUs or Arena PRSUs outstanding as of the close of business on December 10, 2021 (the “Capitalization Date”) in accordance with their respective terms or issuable to participants in Arena ESPP in accordance with the terms thereof;
|
•
|
declare, set aside, authorize, make or pay any dividend or other distribution payable in cash, stock, property or otherwise with respect to Arena’s or any subsidiary of Arena’s securities;
|
•
|
establish, adopt, enter into, amend, modify or terminate any benefit plan;
|
•
|
grant or pay any bonus, incentive, change in control, retention, severance, termination, tax gross-up or profit-sharing award or payment, or increase the base salary and/or cash bonus opportunity or other compensation of any current or former director, officer, employee, or individual service provider of Arena or its subsidiaries, except in each case, as required by law, or as required in accordance with a benefit plan in effect as of the date of the Merger Agreement, so long as such benefit plan has been disclosed on the Arena disclosure schedule to the Merger Agreement;
|
•
|
except as required by any benefit Plan in effect as of the date of the Merger Agreement, accelerate or take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any current or former director, officer, employee or individual service provider of Arena or its subsidiaries;
|
•
|
provide any broad-based written communication to Arena’s or its subsidiaries’ employees with respect to the compensation, benefits or other treatment they will receive following the Effective Time, unless such communication is approved by Pfizer in advance of such communication or is required by law;
|
•
|
materially change the manner in which contributions to broad-based benefit plans are made or the basis on which such contributions are determined, except as may be required by GAAP;
|
•
|
hire, engage, promote, or terminate (other than for cause) the employment or engagement of any employee or individual independent contractor with annual base compensation in excess of $275,000;
|
•
|
take any action that would constitute a “Mass Layoff” or “Plant Closing” within the meaning of the WARN Act or require notice to employees, or trigger any other obligations or liabilities, under the WARN Act or any similar state, local or foreign law;
|
•
|
make any loan or advance to (other than travel and similar advances to its employees in the ordinary course of business and consistent with past practice), or capital contribution to, or investment in, any person (other than a wholly-owned subsidiary of Arena) in excess of $150,000 in the aggregate;
|
•
|
forgive any loans or advances to any officers, employees, directors or other individual service providers of Arena, its subsidiaries or affiliates;
|
•
|
change its existing borrowing or lending arrangements for or on behalf of any person, except in the ordinary course of business in connection with relocation activities of any employees of Arena or its subsidiaries;
|
•
|
acquire any corporation, partnership, limited liability company, joint venture, other business organization, any equity interest in any of the foregoing, any real estate or all or any material portion of the assets, business or properties of any person;
|
•
|
sell, pledge, dispose of, transfer, abandon, lease, license, mortgage, incur any lien on or otherwise transfer or encumber any portion of the tangible or intangible assets, business, properties or rights of Arena or its subsidiaries, except in the ordinary course of business and consistent with past practice, subject to certain exceptions;
|
•
|
enter into any new line of business;
|
•
|
create any new subsidiary;
|
•
|
pay, discharge or satisfy any indebtedness that has a prepayment cost, “make whole” amount, prepayment penalty or similar obligation, other than indebtedness incurred or owed by Arena or its subsidiaries;
|
•
|
cancel any material indebtedness (individually or in the aggregate) or settle, waive or amend any claims or rights of substantial value;
|
•
|
incur, create, assume or otherwise become liable or responsible for any indebtedness, including by the issuance of any debt security, subject to certain exceptions;
|
•
|
assume, guarantee, endorse or otherwise become liable or responsible for any Indebtedness of any person;
|
•
|
issue or sell any debt securities of Arena or its subsidiaries, including options, warrants, calls or other rights to acquire any debt securities;
|
•
|
negotiate, amend, extend, renew, terminate or enter into, or agree to any amendment or modification of, or waive, release or assign any rights in accordance with, any material contract to which Arena or any of its subsidiaries is a party, subject to certain exceptions;
|
•
|
negotiate, amend, modify, extend, enter into or terminate any labor, collective bargaining, works council or similar agreement;
|
•
|
make any material change to Arena’s or its subsidiaries’ methods, policies and procedures of accounting, except as required by GAAP or Regulation S-X of the Exchange Act;
|
•
|
make or agree to make any capital expenditure exceeding $1,000,000 individually and $5,000,000 the aggregate during any fiscal quarter, subject to certain exceptions;
|
•
|
write up, write down or write off the book value of any material assets;
|
•
|
agree to, commence, release, compromise, assign, settle or resolve, in whole or in part, any threatened or pending proceeding or insurance claim, other than settlements that result solely in monetary obligations involving payment (without the admission of wrongdoing) by Arena or its subsidiaries of an amount not greater than $1,500,000 (net of insurance proceeds) in the aggregate;
|
•
|
fail to use commercially reasonable efforts to maintain in effect material insurance policies covering Arena and each of its subsidiaries and their respective properties, assets and businesses;
|
•
|
sell, transfer, assign, lease, license or otherwise dispose of to any person (including any Affiliate) any rights to any Arena intellectual property, other than licensing non-exclusive rights in the ordinary course of business consistent with past practice;
|
•
|
cancel, dedicate to the public, disclaim, forfeit, reissue, reexamine or abandon without filing a substantially identical counterpart in the same jurisdiction with the same priority or allow to lapse (except with respect to Patents expiring in accordance with their terms) any Arena intellectual property;
|
•
|
fail to make any filing, pay any fee, or take any other action necessary to prosecute and maintain in full force and effect any registered Arena intellectual property;
|
•
|
make any change in Arena’s intellectual property that does or would reasonably be expected to materially impair such intellectual property or Arena’s or its subsidiaries’ rights with respect thereto;
|
•
|
disclose to any person, other than representatives of Pfizer and Merger Sub, any trade secrets or know-how;
|
•
|
disclose to any person, other than representatives of Pfizer and Merger Sub, any confidential or proprietary information, except in the ordinary course of business to a person that is subject to confidentiality obligations;
|
•
|
fail to take or maintain reasonable measures to protect the confidentiality and value of Arena’s trade secrets;
|
•
|
make, adopt or change any material tax election or method of tax accounting;
|
•
|
file any material amended tax return;
|
•
|
settle or compromise any audit, assessment or other proceeding relating to a material amount of taxes;
|
•
|
agree to an extension or waiver of the statute of limitations with respect to federal income taxes or other material taxes;
|
•
|
enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of any law) with respect to any material tax;
|
•
|
surrender any right to claim a material tax refund;
|
•
|
merge or consolidate with any person;
|
•
|
adopt a plan of liquidation, dissolution, restructuring, recapitalization or other reorganization; or
|
•
|
enter into any agreement, contract, commitment or arrangement to do, or adopt any resolutions approving or authorizing, or announce an intention to do, any of the foregoing.
|
•
|
merger, consolidation, share exchange, business combination, recapitalization, reorganization, dissolution, liquidation, joint venture or similar transaction involving Arena or its subsidiaries, pursuant to which any person or group of related persons would beneficially own or control, directly or indirectly, twenty percent (20%) or more (on a non-diluted basis) of any class of equity or voting securities of Arena or its subsidiaries or any resulting parent company of Arena or its subsidiaries;
|
•
|
sale, lease, license or other disposition, directly or indirectly, of assets of Arena (including capital stock or other equity interests of any subsidiary of Arena) or any subsidiary of Arena representing twenty percent (20%) or more of the consolidated assets, net revenues or net income of Arena and each subsidiary of Arena, taken as a whole,
|
•
|
issuance or sale or other disposition of capital stock or other equity interests representing twenty percent (20%) or more (on a non-diluted basis) of any class of equity or voting securities of Arena;
|
•
|
tender offer, exchange offer or any other transaction or series of transactions that, if consummated, would result in any person or group of related persons, directly or indirectly, beneficially owning or having the right to acquire beneficial ownership of capital stock or other equity interests representing twenty percent (20%) or more (on a non-diluted basis) of any class of equity or voting securities of Arena; or
|
•
|
any combination of the foregoing.
|
•
|
initiate, solicit, knowingly encourage or facilitate the making of any offer or proposal which constitutes or is reasonably likely to lead to an Arena Acquisition Proposal;
|
•
|
enter into any agreement with respect to an Arena Acquisition Proposal; or
|
•
|
engage in negotiations or discussions with, or provide any non-public information or data to, any person (other than Pfizer or its affiliates or representatives) relating to any Arena Acquisition Proposal, grant any waiver or release under any restriction from making an Arena Acquisition Proposal, in each case, other than discussions solely to notify such person of the terms of the non-solicitation obligations or to clarify the terms and conditions of such proposal or offer.
|
•
|
withdrawing, amending, changing, modifying for qualifying, or otherwise proposing publicly to withdraw, amend, change, modify or qualify, in a manner adverse to Pfizer or Merger Sub, the recommendation of the Board of Directors to approve the adoption of the Merger Agreement and approve the Merger on the terms and subject to the conditions set forth therein (the “Arena Board Recommendation”);
|
•
|
failing to make the Arena Board Recommendation;
|
•
|
approving or recommending or declaring advisable, or otherwise proposing publicly to approve or recommend or declare advisable, any Arena Acquisition Proposal;
|
•
|
if an Arena Acquisition Proposal has been publicly disclosed, failing to publicly recommend against such Arena Acquisition Proposal within ten (10) business days of the request of Pfizer and fail to publicly reaffirm the Arena Board Recommendation within such ten (10) business day period upon such request, provided, that Pfizer may only make such request once with respect to any Arena Acquisition Proposal; or
|
•
|
failing to recommend against a tender or exchange offer related to an Arena Acquisition Proposal in any position taken in accordance with Rules 14d-9 and 14e-2 promulgated under the Exchange Act.
|
•
|
Arena has agreed not to terminate the Merger Agreement, and any purported termination in accordance with (B) above will be void and of no force or effect, unless in advance of or concurrently with such termination Arena (1) pays the Arena Termination Fee and (2) immediately following such termination enters into a binding definitive Alternative Acquisition Agreement for such Superior Proposal; and
|
•
|
the Board of Directors may not effect a change of its recommendation in accordance with (A) above or terminate the Merger Agreement in accordance with (B) above unless (I) no material breach of Arena’s obligations of the non-solicitation has occurred, (II) Arena has provided prior written notice to Pfizer, at least four (4) business days in advance (the “Notice Period”), of its intention to take such action with respect to such Superior Proposal, which notice will specify the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal) (a “Determination Notice”), and has contemporaneously provided a correct and complete copy of the proposed Alternative Acquisition Agreement with respect to such Superior Proposal, (III) prior to effecting such Arena Adverse Recommendation Change or terminating the Merger Agreement to entered into a definitive Alternative Acquisition Agreement with respect to such Superior Proposal, Arena has, and has caused its representatives to, during the Notice Period, negotiate with Pfizer in good faith (to the extent Pfizer requests to negotiate) to make such adjustments in the terms and conditions of the Merger Agreement so that such Arena Acquisition Proposal ceases to constitute a Superior Proposal and (IV) following any negotiation described in clause (III) above, the Board of Directors concludes in good faith, after consultation with its outside counsel and financial advisors, that such Arena Acquisition Proposal continues to constitute a Superior Proposal.
|
•
|
(1) as promptly as practicable, and in any event within fifteen (15) business days after the date of the Merger Agreement, unless otherwise agreed by the parties, file Notification and Report Forms with the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice if required by the HSR Act and (2) as promptly as practicable, and in any event within twenty-five (25) business days after the date of the Merger Agreement, unless otherwise agreed by the parties, commence the regulatory process by filing initial pre-notification submissions or briefing papers as required or advisable by or under the Antitrust Laws of any other applicable jurisdiction. Pfizer and Arena have each agreed to use reasonable best efforts to cause all documents that it is responsible to file with any governmental authority in accordance with the regulatory filings obligation of the Merger Agreement and to comply in all material respects with all laws and rules and regulations of any government authority;
|
•
|
promptly supply the other with any information which may be reasonably required in order to effectuate any filings and responses to information requests in accordance with the regulatory filings obligation of the Merger Agreement;
|
•
|
as promptly as practicable, cooperate in good faith and use their respective reasonable best efforts to take any and all actions necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and transactions contemplated by the Merger Agreement;
|
•
|
obtain any approvals, actions or non-actions, waivers, consents, orders, authorizations or clearances required under or in connection with the HSR Act and any other applicable antitrust laws, as promptly as practicable;
|
•
|
enable all waiting periods under the HSR Act and any other applicable antitrust laws to terminate or expire (the “Regulatory Approvals”), as promptly as practicable including: (A) promptly furnishing to the other such information and assistance as may reasonably be requested in order to prepare any notification, application, filing or request in connection with a Regulatory Approval, (B) consulting with, and considering in good faith, any suggestions or comments made by the other parties with respect to the Regulatory Approvals process, (C) providing or submitting on a timely basis, and as promptly as practicable, all documentation and information that is required or advisable and (D) cooperating in the preparation and submission of all applications, notices, filings, and submissions to government authorities;
|
•
|
promptly inform the other parties of, and provide copies of, any substantive communication received by that party in respect of obtaining or concluding the regulatory approvals;
|
•
|
use reasonable best efforts to respond promptly to any request or notice from any governmental authority requiring any party to supply additional information that is relevant to the review of the transactions contemplated by the Merger Agreement in respect of obtaining or concluding the regulatory approvals, including any Request for Additional Information and Documentary Material from the U.S. Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice;
|
•
|
permit the other parties to review in advance any proposed applications, notices, filings and submissions to governmental authorities (including responses to requests for information and inquiries from any governmental authority) in respect of obtaining or concluding regulatory approvals;
|
•
|
promptly provide the other parties with any filed copies of applications, notices, filings and submissions (including responses to requests for information and inquiries from any governmental authority), that were submitted to a governmental authority in respect of obtaining or concluding regulatory approvals;
|
•
|
whenever possible, not participate in any substantive meeting or discussion (whether in person, by telephone or otherwise) with governmental authorities in respect of obtaining or concluding regulatory approvals unless it consults with the other parties in advance and gives the other parties or their legal counsel the opportunity to attend and participate thereat, unless a governmental authority requests otherwise; and
|
•
|
keep the other parties promptly informed of the status of discussions relating to obtaining or concluding regulatory approvals.
|
•
|
the expiration or termination of the waiting period applicable to the consummation of the Merger under the HSR Act;
|
•
|
the expiration, termination or obtention of any approvals or clearances applicable to the Merger as disclosed in the Arena disclosure schedule, and any agreement not to consummate the Merger with any governmental authority (so long as entered into with the prior written consent of the other party);
|
•
|
the adoption of the Merger Agreement by Arena’s receipt of the approval of the Requisite Vote in accordance with applicable law, the certificate of incorporation and the bylaws at the Special Meeting;
|
•
|
no enactment, issuance, enforcement or promulgation of any statute, rule or regulation that remains in effect by any governmental authority which prohibits the consummation of the Merger; and
|
•
|
no order or injunction of a court of competent jurisdiction in effect prohibiting or making the consummation of the Merger illegal.
|
•
|
No pending suit, action or proceeding by a governmental authority in connection with the transaction contemplated by the Merger Agreement prohibiting the transaction or imposing material limitations on the transaction or on Pfizer, Arena or Merger Sub;
|
•
|
the representations and warranties of Arena set forth in the Merger Agreement, other than those relating to due organization, subsidiaries, dividends or distributions, compliance with Arena’s certificate of incorporation and bylaws, certain aspects of Arena’s capitalization, Arena’s authority, and finder’s and similar fees, being true and correct without giving effect to the words “materially” or “material” or to any qualification based on the defined term “Material Adverse Effect,” as of the date of the Merger Agreement and as of the Effective Time as if made as of such date (except for those representations and warranties which address matters only as of an earlier date which shall have been true and correct as of such earlier date), except where the failure to be so true and correct has not had, or would not reasonably be expected to have, a Material Adverse Effect;
|
•
|
the representations and warranties of Arena set forth in the Merger Agreement relating to due organization, subsidiaries, dividends or distributions, compliance with Arena’s certificate of incorporation and bylaws, certain aspects of Arena’s capitalization, authority, finder’s and similar fees being true and correct in all material respects, as of the date of the Merger Agreement and as of the Effective Time as if made as of such date (except for those representations and warranties which address matters only as of an earlier date which shall have been true and correct as of such earlier date);
|
•
|
the representations and warranties of Arena set forth in the Merger Agreement relating to certain aspects of Arena’s capitalization, specifically Arena’s capitalization as of the Capitalization Date, being true and correct subject only to de minimis variations, as of the date of the Merger Agreement and as of the Effective Time as if made as of such date (except for those representations and warranties which address matters only as of an earlier date which shall have been true and correct as of such earlier date);
|
•
|
Arena having performed and complied with, in all material respects, its agreements, obligations and covenants required to be performed by Arena under the Merger Agreement at or prior to the Effective Time;
|
•
|
the absence of any Material Adverse Effect having occurred since the date of the Merger Agreement that is continuing as of the Effective Time; and
|
•
|
the receipt by Pfizer and Merger Sub of an Arena certificate dated as of the date of the Closing signed on Arena’s behalf by its Chief Executive Officer or Chief Financial Officer, certifying that the conditions set forth in the preceding five (5) bullets have been satisfied.
|
•
|
the representations and warranties of Pfizer and Merger Sub set forth in the Merger Agreement relating to due organization and authority being true and correct in all material respects as of the date of the Merger Agreement and as of the Effective Time as if made as of such date (except for those representations and warranties which address matters only as of an earlier date which shall have been true and correct as of such earlier date);
|
•
|
the representations and warranties of Pfizer and Merger Sub set forth in the Merger Agreement being true and correct without giving effect to the words “materially” or “material” or to any qualification based on the defined term “Pfizer Material Adverse Effect” as of the date of the Merger Agreement and as of the Effective Time as if made as of such date (except for those representations and warranties which address matters only as of an earlier date which shall have been true and correct as of such earlier date);
|
•
|
Pfizer and Merger Sub having performed in all material respects the covenants and obligations required to be performed under the Merger Agreement prior to the Effective Time; and
|
•
|
the receipt by Arena of a certificate of Pfizer and Merger Sub, validly executed for and on behalf of Pfizer and Merger Sub and in their respective names by a duly authorized officer thereof, certifying that the conditions described in the preceding three (3) bullets have been satisfied.
|
•
|
by mutual written consent of Pfizer and Arena.
|
•
|
by either Pfizer or Arena:
|
○
|
if on or after the date of the Merger Agreement (A) a court of competent jurisdiction or other governmental authority has issued an order, decree or ruling or taken any other action, and such order, decree or ruling or other action has become final and non-appealable, or (B) there exists any statute, rule or regulation, in each case of the foregoing clauses (A) and (B), permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger (collectively, the “Restraints”). However, the right to terminate the Merger Agreement in accordance with the foregoing will not be available to any party whose action or failure to fulfill any obligation under the Merger Agreement has been the principal cause of such Restraint or the failure to remove such Restraint;
|
○
|
on or after December 15, 2022 (the “Outside Date”) if the Effective Time has not occurred prior to such date; however, the Outside Date may be extended by mutual consent in a written instrument duly executed by each of Arena and the Pfizer. The right to terminate the Merger Agreement in accordance with the foregoing will not be available to any party whose action or failure to fulfill any obligation under the Merger Agreement has been the principal cause of the failure of the Effective Time to occur by such date; or
|
○
|
if the Requisite Vote is not been obtained at the Special Meeting duly convened therefor or at any adjournment or postponement thereof. However, the right to terminate the Merger Agreement in accordance with the foregoing will not be available to any party whose material breach of the Merger Agreement has been the cause of, or resulted in, the failure to obtain the Requisite Vote.
|
•
|
by Pfizer or the Merger Sub if:
|
○
|
if there has been a breach by Arena of, or inaccuracy in, any representation, warranty, covenant or agreement of Arena set forth in the Merger Agreement such that a condition to the obligation of Pfizer and Merger Sub to effect the Merger relating to the representation and warranties of Arena or Arena’s performance obligations as set forth in the Merger Agreement would not be then satisfied measured as of the time Pfizer asserts a right of termination based on the foregoing (and any such breach has not been cured within twenty (20) days following notice by Pfizer thereof or such breach is not reasonably capable of being cured). However, Pfizer and Merger Sub may not terminate the Merger Agreement pursuant to the foregoing if Pfizer or Merger Sub is then in breach of any representation, warranty, covenant or agreement, which breach would result in a failure of certain conditions precedent to the obligation of an affected party to close; or
|
○
|
if at any time prior to the Special Meeting, (A) the Board of Directors has effected an Arena Adverse Recommendation Change or (B) Arena has materially breached its obligations under the non-solicitation obligations set forth in the Merger Agreement and has not cured such breach within five (5) business days of receipt of a notice of such breach from Pfizer.
|
•
|
by Arena:
|
○
|
if, prior to the Effective Time, there has been a breach by Pfizer or Merger Sub of, or any inaccuracy in, any representation, warranty, covenant or other agreement of Pfizer or Merger Sub set forth in the Merger Agreement such that a condition to the obligation of Arena to effect the Merger relating to Pfizer and Merger Sub’s representations and warranties or Pfizer and Merger Sub’s performance obligations as set forth in the Merger Agreement would not be then satisfied, measured as of the time Arena asserts a right of termination based on the foregoing (and such breach or inaccuracy has not been cured within twenty (20) days following notice by Arena thereof or such breach or inaccuracy is not reasonably capable of being cured). However, Arena may not terminate the Merger Agreement pursuant to the foregoing if Arena is then in breach of any representation, warranty, covenant or agreement, which breach would result in a failure of a condition precedent to the obligation of an affected party to close; or
|
○
|
at any time prior to the receipt of the Requisite Vote, in order to accept a Superior Proposal, so long as Arena (i) has not materially breached any of its obligations under the non-solicitation obligations set forth in the Merger Agreement and (ii) has paid the Arena Termination Fee.
|
•
|
the Merger Agreement is terminated by Pfizer or Arena due to the existence of Restraints and the applicable Restraint is in respect of, pursuant to or arises under the HSR Act or any Antitrust Law; or
|
•
|
the Merger Agreement is terminated by Pfizer or Arena,
|
○
|
(A) because the Effective Time has not occurred before the Outside Date,
|
○
|
(B) the Requisite Vote has been obtained, and
|
○
|
(C) certain other conditions set forth in the Merger Agreement relating to antitrust clearance, suits, actions or proceedings by a governmental authority have not been satisfied,
|
•
|
each person or group of affiliated persons, who we know to beneficially own more than five percent (5%) of our outstanding common stock, each of whom we refer to as a five percent (5%) owner;
|
•
|
each of our named executive officers, including certain former named executive officers;
|
•
|
each of our directors; and
|
•
|
all of our current executive officers and directors as a group.
|
|
| |
Shares of
Common Stock
Beneficially Owned
|
|||
Name of Beneficial Owner
|
| |
Number
|
| |
Percent
|
Greater than 5% Stockholders (other than directors and executive officers):
|
| |
|
| |
|
Wellington Management Company, LLP(1)
|
| |
8,353,075
|
| |
13.60%
|
The Vanguard Group(2)
|
| |
5,653,980
|
| |
9.20%
|
BlackRock, Inc.(3)
|
| |
5,300,243
|
| |
8.63%
|
Avoro Capital Advisors, LLC(4)
|
| |
3,425,000
|
| |
5.58%
|
Named Executive Officers and Directors:
|
| |
|
| |
|
Amit D. Munshi(5)
|
| |
864,812
|
| |
1.39%
|
Vincent E. Aurentz(6)
|
| |
335,329
|
| |
*
|
Kevin R. Lind(7)
|
| |
223,253
|
| |
*
|
Steven W. Spector, J.D.(8)
|
| |
179,044
|
| |
*
|
Robert Lisicki(9)
|
| |
174,335
|
| |
*
|
Laurie Stelzer(10)
|
| |
68,744
|
| |
*
|
Joan Schmidt, J.D.(11)
|
| |
68,441
|
| |
*
|
Tina S. Nova, Ph.D.(12)
|
| |
56,177
|
| |
*
|
Garry Neil, M.D.(13)
|
| |
54,618
|
| |
*
|
Oliver Fetzer, Ph.D.(14)
|
| |
53,093
|
| |
*
|
Jayson Dallas, M.D.(15)
|
| |
50,553
|
| |
*
|
Jennifer Jarrett(16)
|
| |
50,451
|
| |
*
|
Kieran T. Gallahue(17)
|
| |
31,728
|
| |
*
|
Katharine Knobil, M.D.(18)
|
| |
14,128
|
| |
*
|
Nawal Ouzren(19)
|
| |
8,193
|
| |
*
|
Steven J. Schoch(20)
|
| |
5,601
|
| |
*
|
Chris Cabell, M.D., MHS, FACC
|
| |
1,401
|
| |
*
|
All current directors and executive officers as a group (15 persons)(21)
|
| |
1,836,202
|
| |
2.91%
|
*
|
Less than one percent (1%)
|
(1)
|
Wellington Management Group LLP had sole voting power with respect to 0 shares, sole dispositive power with respect to 0 shares, shared voting power with respect to 7,336,371 shares and shared dispositive power with respect to 8,353,075 shares. The principal business office of Wellington Management Company LLP is 280 Congress Street, Boston, Massachusetts 02210.
|
(2)
|
The Vanguard Group had sole voting power with respect to 0 shares, sole dispositive power with respect to 5,541,358 shares, shared voting power with respect to 61,799 shares and shared dispositive power with respect to 112,622 shares. The principal business office of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
|
(3)
|
BlackRock, Inc., had sole voting power with respect to 5,166,270 shares, sole dispositive power with respect to 5,300,243 shares, shared voting power with respect to 0 shares and shared dispositive power with respect to 0 shares. The principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
|
(4)
|
Avoro Capital Advisors LLC had the sole voting power with respect to 3,425,000 shares and sole dispositive power with respect to 3,425,000 shares. The principal business office of Avoro Capital Advisors LLC is 110 Greene Street, Suite 800, New York, NY 10012.
|
(5)
|
Includes 854,062 shares issuable to Mr. Munshi upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(6)
|
Includes 308,329 shares issuable to Mr. Aurentz upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(7)
|
Includes 219,796 shares issuable to Mr. Lind upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(8)
|
Includes 161,607 shares issuable to Mr. Spector upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(9)
|
Includes 164,894 shares issuable to Mr. Lisicki upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(10)
|
Includes 60,500 shares issuable to Ms. Stelzer upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(11)
|
Includes 60,500 shares issuable to Ms. Schmidt upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(12)
|
Includes 39,601 shares issuable to Dr. Nova upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(13)
|
Includes 46,468 shares issuable to Dr. Neil upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(14)
|
Includes 46,468 shares issuable to Dr. Fetzer upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(15)
|
Includes 46,468 shares issuable to Dr. Dallas upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(16)
|
Includes 42,301 shares issuable to Ms. Jarrett upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(17)
|
Includes 21,884 shares issuable to Mr. Gallahue upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(18)
|
Includes 11,189 shares issuable to Dr. Knobil upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(19)
|
Includes 7,300 shares issuable to Ms. Ouzren upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(20)
|
Includes 5,601 shares issuable to Mr. Schoch upon the exercise of stock options that are exercisable within 60 days of December 16, 2021.
|
(21)
|
Includes 1,715,565 shares issuable upon the exercise of stock options held by our current directors and executive officers that are exercisable within 60 days of December 16, 2021.
|
•
|
Arena’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Annual Report”), filed with the SEC on February 23, 2021, including the information specifically incorporated by reference into the Annual Report on Form 10-K from Arena’s definitive proxy statement on Schedule 14A filed with the SEC on April 27, 2021;
|
•
|
Arena’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021, filed with the SEC on May 5, 2021;
|
•
|
Arena’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021, filed with the SEC on August 5, 2021;
|
•
|
Arena’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, filed with the SEC on November 4, 2021; and
|
•
|
Arena’s Current Reports on Form 8-K, filed with the SEC on January 11, 2021, February 16, 2021, February 23, 2021, March 2, 2021, May 5, 2021, June 17, 2021, August 5, 2021, November 4, 2021, and December 13, 2021.
|
|
| |
Page
Number
|
||||||
|
| |
|
||||||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
|
| |
Page
Number
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | |
|
| |
Page
Number
|
||||||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| |
|
||||||
| | ||||||||
|
| |
|
||||||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | | |||
|
| | | | | |
Annexes
|
| |
|
Annex I
|
| |
Definitions
|
Annex II
|
| |
Form of Certificate of Incorporation of the Surviving Corporation
|
|
| |
Section
|
|
| |
|
2021 Incentive Plan
|
| |
Annex I
|
2022 Company RSU
|
| |
2.4(c)
|
Adjusted RSU
|
| |
2.4(c)
|
Affiliate
|
| |
Annex I
|
Agreement
|
| |
Preamble
|
Alternative Acquisition Agreement
|
| |
5.2(c)
|
Anti-Corruption Laws
|
| |
3.19(a)
|
Antitrust Laws
|
| |
Annex I
|
Assignee
|
| |
9.5(a)
|
Benefit Plan
|
| |
3.11(a)
|
Book-Entry Share
|
| |
2.1(c)
|
business day
|
| |
Annex I
|
Bylaws
|
| |
3.1
|
Capitalization Date
|
| |
3.2(a)
|
CARES Act
|
| |
Annex I
|
Certificate
|
| |
2.1(c)
|
Certificate of Merger
|
| |
1.2
|
Certificate of Incorporation
|
| |
3.1
|
Closing
|
| |
1.3
|
Closing Date
|
| |
1.3
|
COBRA
|
| |
3.11(g)
|
Code
|
| |
2.5
|
Company
|
| |
Preamble
|
Company 401(k) Plan
|
| |
6.7
|
Company Acquisition Proposal
|
| |
Annex I
|
Company Adverse Recommendation Change
|
| |
Annex I
|
Company Board of Directors
|
| |
Recitals
|
Company Board Recommendation
|
| |
Recitals
|
Company Disclosure Letter
|
| |
Annex I
|
Company ESPP
|
| |
2.4(f)
|
Company Intellectual Property
|
| |
3.15(a)
|
Company Intervening Event
|
| |
Annex I
|
Company Leased Real Property
|
| |
3.16(b)
|
Company Material Adverse Effect
|
| |
Annex I
|
Company Material Contract
|
| |
3.14(a)
|
Company Option
|
| |
2.4(a)
|
Company Option Grant Date
|
| |
3.2(c)
|
Company Permits
|
| |
3.10(a)
|
Company Preferred Stock
|
| |
3.2(a)
|
Company Product
|
| |
Annex I
|
Company PRSU
|
| |
2.4(d)
|
Company Requisite Vote
|
| |
3.3(a)
|
Company RSU
|
| |
2.4(b)
|
Company SEC Documents
|
| |
3.5(a)
|
Company Stock Plans
|
| |
2.4(a)
|
Company Stock Plan Awards
|
| |
2.4(d)
|
|
| |
Section
|
Company Subsidiary
|
| |
Annex I
|
Company Systems
|
| |
3.15(r)
|
Computer Systems
|
| |
Annex I
|
Confidentiality Agreement
|
| |
Annex I
|
Consent
|
| |
3.4(b)
|
Continuing Employee
|
| |
6.8(a)
|
Contract
|
| |
Annex I
|
Control
|
| |
Annex I
|
Copyrights
|
| |
Annex I
|
COVID-19
|
| |
Annex I
|
Current D&O Insurance
|
| |
6.6(c)
|
Customs & International Trade Authorizations
|
| |
Annex I
|
Customs & International Trade Laws
|
| |
Annex I
|
Delisting Period
|
| |
6.1
|
DGCL
|
| |
Recitals
|
Disclosing Party
|
| |
6.4(c)
|
Dissenting Shares
|
| |
2.3(a)
|
EDGAR
|
| |
SECTION 3
|
Effective Time
|
| |
1.2
|
Environmental Laws
|
| |
Annex I
|
ERISA
|
| |
3.11(a)
|
ERISA Affiliate
|
| |
3.11(a)
|
Exchange Act
|
| |
3.4(b)
|
Exchange Fund
|
| |
2.2(a)
|
Excluded Benefits
|
| |
6.8(a)
|
FCPA
|
| |
Annex I
|
FDA
|
| |
3.20(a)
|
Fee Schedule
|
| |
3.15(c)
|
GAAP
|
| |
3.5(a)
|
Good Clinical Practices
|
| |
3.20(d)
|
Good Laboratory Practices
|
| |
3.20(d)
|
Good Manufacturing Practices
|
| |
3.20(e)
|
Government Official
|
| |
Annex I
|
Governmental Authority
|
| |
Annex I
|
Hazardous Materials
|
| |
Annex I
|
Healthcare Laws
|
| |
Annex I
|
HSR Act
|
| |
Annex I
|
ICH
|
| |
3.20(d)
|
IND
|
| |
3.20(b)
|
Indebtedness
|
| |
Annex I
|
Indemnified Party
|
| |
6.6(a)
|
Indemnified Parties
|
| |
6.6(a)
|
Indemnifying Parties
|
| |
6.6(b)
|
Intellectual Property
|
| |
Annex I
|
Intellectual Property Agreement
|
| |
Annex I
|
IT Systems
|
| |
Annex I
|
Knowledge of the Company
|
| |
Annex I
|
Labor Agreement
|
| |
3.12(a)
|
Law
|
| |
Annex I
|
Lease
|
| |
3.16(b)
|
|
| |
Section
|
Lien
|
| |
Annex I
|
Maximum Premium
|
| |
6.6(c)
|
Merger
|
| |
Recitals
|
Merger Consideration
|
| |
2.1(c)
|
Merger Sub
|
| |
Preamble
|
Merger Sub Common Stock
|
| |
2.1
|
Multiemployer Pension Plans
|
| |
3.11(a)
|
Nasdaq
|
| |
Annex I
|
Non-U.S. Benefit Plan
|
| |
Annex I
|
Notice Period
|
| |
5.2(d)
|
OFAC
|
| |
Annex I
|
Order
|
| |
Annex I
|
Outside Date
|
| |
8.1(b)(ii)
|
Owned Company Intellectual Property
|
| |
3.15(a)
|
Owned Registered Company Intellectual Property
|
| |
3.15(b)
|
Parent
|
| |
Preamble
|
Parent 401(k) Plan
|
| |
6.7
|
Parent Material Adverse Effect
|
| |
4.1
|
Parent Organizational Documents
|
| |
Annex I
|
Parent Share Price
|
| |
Annex I
|
Patents
|
| |
Annex I
|
Paying Agent
|
| |
2.2(a)
|
Pension Plans
|
| |
3.11(a)
|
Permitted Lien
|
| |
Annex I
|
Person
|
| |
Annex I
|
Personal Information
|
| |
Annex I
|
Post-Closing SEC Reports
|
| |
6.1
|
Prior Plan
|
| |
6.8(c)
|
Prior Stock Plans
|
| |
Annex I
|
Proceedings
|
| |
Annex I
|
Process
|
| |
Annex I
|
Processing
|
| |
Annex I
|
Proxy Statement
|
| |
3.28
|
Receiving Party
|
| |
6.4(c)
|
Registered Company Intellectual Property
|
| |
3.15(b)
|
Regulatory Approvals
|
| |
6.4(a)(iii)
|
Regulatory Authority
|
| |
Annex I
|
Reporting Tail Endorsement
|
| |
6.6(c)
|
Representative
|
| |
Annex I
|
Restraints
|
| |
8.1(b)(i)
|
Reverse Termination Fee
|
| |
8.2(c)
|
Sanctioned Country
|
| |
Annex I
|
Sanctioned Person
|
| |
Annex I
|
Sanctions
|
| |
Annex I
|
Security Breach
|
| |
Annex I
|
Sarbanes-Oxley Act
|
| |
3.5(a)
|
SEC
|
| |
SECTION 3
|
Securities Act
|
| |
3.4(b)
|
Shares
|
| |
2.1
|
Software
|
| |
Annex I
|
|
| |
Section
|
Specified Letter
|
| |
Annex I
|
Stockholders Meeting
|
| |
5.4
|
Subsidiary
|
| |
Annex I
|
Successor Plan
|
| |
Section 6.8(c).
|
Superior Proposal
|
| |
5.2(b)
|
Surviving Corporation
|
| |
1.1(a)
|
Tax
|
| |
Annex I
|
Tax Returns
|
| |
Annex I
|
Taxes
|
| |
Annex I
|
Termination Fee
|
| |
8.2(b)
|
Trade Secrets
|
| |
Annex I
|
Trademarks
|
| |
Annex I
|
Union
|
| |
3.12(a)
|
WARN Act
|
| |
3.12(b)
|
|
| |
ARENA PHARMACEUTICALS, INC.
|
|||
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Amit D. Munshi
|
|
| |
Name:
|
| |
Amit D. Munshi
|
|
| |
Title:
|
| |
President and Chief Executive Officer
|
|
| |
PFIZER INC.
|
|||
|
| |
|
|||
|
| |
By:
|
| |
/s/ Albert Bourla
|
|
| |
Name:
|
| |
Albert Bourla
|
|
| |
Title:
|
| |
Chairman and Chief Executive Officer
|
|
| |
ANTIOCH MERGER SUB, INC.
|
|||
|
| |
|
|||
|
| |
By:
|
| |
/s/ Deborah Baron
|
|
| |
Name:
|
| |
Deborah Baron
|
|
| |
Title:
|
| |
President and Treasurer
|
1.
|
The name of this corporation is: Arena Pharmaceuticals, Inc. (hereinafter, this “Corporation”).
|
2.
|
The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
|
3.
|
The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized in accordance with the General Corporation Law of the State of Delaware (the “DGCL”).
|
4.
|
The total number of shares of stock which this Corporation will have authority to issue is One Thousand (1,000) shares of Common Stock, $0.001 par value per share, amounting in the aggregate to One Dollar ($1.00). Except as otherwise provided by law, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Each share of the Common Stock shall have one vote and the Common Stock shall vote together as a single class.
|
5.
|
The business and affairs of this Corporation will be managed by or under the direction of the board of directors. Elections of directors need not be by written ballot unless the bylaws of this Corporation will provide.
|
6.
|
Any one or more directors may be removed, with or without cause, by the vote or written consent of the holders of a majority of the issued and outstanding shares of capital stock of the Corporation entitled to be voted in the election of directors.
|
7.
|
In furtherance and not in limitation of the powers conferred by the DGCL, the board of directors is expressly authorized to make, amend or repeal the bylaws or adopt new bylaws without any action on the part of the stockholders of this Corporation; provided, however, that any bylaw adopted or amended by the board of directors, and any powers thereby conferred, may be amended, altered or repealed by the stockholders of this Corporation.
|
8.
|
Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of this Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the bylaws of this Corporation.
|
9.
|
The Corporation shall, to the fullest extent permitted by Section 145 of the DGCL, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said Section. Such indemnification shall be mandatory and not discretionary.
|
10.
|
The Corporation shall to the fullest extent permitted by the DGCL advance all costs and expenses (including, without limitation, attorneys' fees and expenses) incurred by any director or officer within 15 days of the presentation of same to the Corporation, with respect to any one or more actions, suits or proceedings, whether civil, criminal, administrative or investigative, so long as the Corporation receives from the director or officer an unsecured undertaking to repay such expenses if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation under the DGCL. Such obligation to advance costs and expenses shall be mandatory, and not discretionary, and shall include, without limitation, costs and expenses incurred in asserting affirmative defenses, counterclaims and crossclaims. Such undertaking to repay may, if first requested in writing by the applicable director or officer, be on behalf of (rather than by) such director or officer, provided, that in such case the Corporation shall have the right to approve the party making such undertaking.
|
11.
|
The indemnification and advancement of expenses provided for herein shall not be deemed exclusive of any other rights to which those indemnified or entitled to advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his
|
12.
|
A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
|
13.
|
This Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
|
(i)
|
reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant;
|
(ii)
|
reviewed certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as approved for our use by the Company (the “Projections”);
|
(iii)
|
discussed with management of the Company their assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Projections;
|
(iv)
|
reviewed the reported prices and the historical trading activity of the Company Common Stock;
|
(v)
|
compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that we deemed relevant;
|
(vi)
|
compared the financial performance of the Company and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant;
|
(vii)
|
reviewed the financial terms and conditions of the Merger Agreement, dated December 12, 2021; and
|
(viii)
|
performed such other analyses and examinations and considered such other factors that we deemed appropriate.
|
|
| |
Very truly yours,
|
| |
|
|||
|
| |
|
| |
|
| |
|
|
| |
EVERCORE GROUP L.L.C.
|
| |
|
|||
|
| |
By:
|
| |
/s/ Bradley Wolff
|
| |
|
|
| |
|
| |
Bradley Wolff
|
| |
|
|
| |
Guggenheim Securities, LLC
330 Madison Avenue
New York, New York 10017
GuggenheimPartners.com
|
•
|
Reviewed the Agreement;
|
•
|
Reviewed certain publicly available business and financial information regarding Arena;
|
•
|
Reviewed certain non-public business and financial information regarding Arena’s business and future prospects (including certain probability-adjusted financial projections for Arena on a stand-alone basis for the years ending December 31, 2022 through December 31, 2040 (the “Arena-Provided Financial Projections”) and certain other estimates and other forward-looking information), all as prepared and approved for our use by Arena’s senior management (collectively, the “Arena-Provided Information”);
|
•
|
Discussed with Arena’s senior management their strategic and financial rationale for the Merger as well as their views of Arena’s business, operations, historical and projected financial results and future prospects (including, without limitation, their assumptions as to the expected amounts, timing and pricing of future issuances of equity in Arena) and the commercial, competitive and regulatory dynamics in the biopharmaceutical sector;
|
•
|
Performed financing-adjusted discounted cash flow analyses based on the Arena-Provided Financial Projections;
|
•
|
Reviewed the valuation and financial metrics of certain mergers and acquisitions that we deemed relevant in evaluating the Merger;
|
•
|
Reviewed the acquisition premia for certain mergers and acquisitions that we deemed relevant in evaluating the Merger;
|
•
|
Reviewed the historical prices and trading activity of the common shares of Arena; and
|
•
|
Conducted such other studies, analyses, inquiries and investigations as we deemed appropriate.
|
•
|
We have relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information provided by or discussed with Arena (including, without limitation, the Arena-Provided Information) or obtained from public sources, data suppliers and other third parties.
|
•
|
We (i) do not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and we have not independently verified, any such information (including, without limitation, the Arena-Provided Information), (ii) express no view or opinion regarding the (a) reasonableness or achievability of the Arena-Provided Financial Projections, any other estimates and any other forward-looking information provided by Arena or the assumptions upon which any of the foregoing are based or (b) reasonableness of the probability adjustments reflected in the Arena-Provided Financial Projections and (iii) have relied upon the assurances of Arena’s senior management that they are unaware of any facts or circumstances that would make the Arena-Provided Information incomplete, inaccurate or misleading.
|
•
|
Specifically, with respect to (i) the Arena-Provided Financial Projections utilized in our analyses, (a) we have been advised by Arena’s senior management, and we have assumed, that the Arena-Provided Financial Projections (including the probability adjustments reflected therein and the expected development and commercialization of Arena’s products and product candidates) have been reasonably prepared on bases reflecting the best currently available estimates and judgments of Arena’s senior management as to the expected future performance of Arena on a stand-alone basis and (b) we have assumed that the Arena-Provided Financial Projections have been reviewed by Arena’s Board of Directors with the understanding that such information will be used and relied upon by us in connection with rendering our opinion and (ii) any financial projections/forecasts, any other estimates and/or any other forward-looking information obtained by us from public sources, data suppliers and other third parties, we have assumed that such information is reasonable and reliable.
|
1 Year Arena Pharmaceuticals Chart |
1 Month Arena Pharmaceuticals Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions