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Item 1.01
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Entry into a Material Definitive Agreement
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On January 7,
2021, Chimerix, Inc., a Delaware corporation (the “Company”), Ocean Merger Sub, Inc., a Delaware corporation
and wholly owned subsidiary of the Company (“Merger Sub”), Oncoceutics, Inc., a Delaware corporation (“Oncoceutics”),
and Fortis Advisors, LLC solely in its capacity as representative of the securityholders of Oncoceutics (the “Securityholders’
Representative”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Concurrently with
the execution of the Merger Agreement, Merger Sub merged with and into Oncoceutics (the “Merger”) whereupon the separate
corporate existence of Merger Sub ceased, with Oncoceutics continuing as the surviving corporation of the Merger as a wholly owned
subsidiary of the Company.
As consideration
for the Merger, the Company (a) paid an upfront cash payment of approximately $25.0 million, (b) issued an aggregate
of 8,723,769 shares of the Company’s common stock (“Merger Shares”), (c) issued a promissory note to the
Securityholders’ Representative in the original principal amount of $14.0 million (the “Seller Note”), to be
paid in cash, subject to the terms and conditions of the Merger Agreement and the Seller Note, upon the one year anniversary of
the closing of the Merger, and (d) agreed to make contingent payments up to an aggregate of $360.0 million based
on the achievement of certain development, regulatory and commercialization events as set forth in the Merger Agreement, as well
as additional tiered payments based upon future net sales of ONC-201 and ONC-206 products, subject to certain reductions
as set forth in the Merger Agreement, and a contingent payment in the event the Company receives any proceeds from the sale of
a rare pediatric disease priority review voucher based on the Oncoceutics products. The Company will also pass through to
the Oncoceutics securityholders the upfront payment received from China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.
pursuant to a license agreement entered into with Oncoceutics prior to the Merger. The closing payment may be adjusted after the
closing, pursuant to procedures set forth in the Merger Agreement, in connection with
the finalization of the cash, transaction expenses, debt and working capital amounts at closing.
Each “in-the-money” stock option
of Oncoceutics (“Options”) that was outstanding and unexercised immediately prior to the effective time of the Merger
(the “Effective Time”) became fully vested and exercisable immediately prior to the Effective Time and such Options
were automatically “net exercised” immediately prior to the Effective Time with respect to payment of the applicable
exercise price and any applicable tax withholding.
The Merger Agreement
contains customary representations, warranties and covenants and indemnification provisions. The Company has certain diligence
obligations with respect to further development and commercialization of Oncoceutics’ product candidates.
The Merger Shares
are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered
pursuant to the exemption provided in Section 4(a)(2) under the Securities Act.
The foregoing
descriptions of the Merger Agreement and the Seller Note are qualified in their entirety by reference to the full text of the Merger
Agreement and Seller Note, copies of which are filed as Exhibit 2.1 and Exhibit 10.1 hereto and are incorporated herein
by reference.
The Merger Agreement
has been attached to provide investors and stockholders with information regarding its terms. It is not intended to provide any
other factual information about the Company, Oncoceutics or Merger Sub. In particular, the assertions embodied in the representations
and warranties contained in the Merger Agreement have been made solely for the benefit of the parties to the Merger Agreement and
are qualified by information in confidential disclosure schedules provided by Oncoceutics in connection with the signing of the
Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating
risk between the Company and Oncoceutics rather than establishing matters as facts. Accordingly, the representations and warranties
in the Merger Agreement should not be relied upon as characterizations of the actual state of facts about the Company or Oncoceutics.