Item 1.01.
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Entry
into a Material Definitive Agreement.
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On March 1, 2020, Gilead Sciences, Inc., a Delaware corporation
(“Parent” or “Gilead”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”), among Parent, Forty Seven, Inc., a Delaware corporation (“Forty Seven”), and Toro Merger
Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Purchaser”).
Pursuant to the Merger Agreement, and upon the terms and subject
to the conditions thereof, Purchaser will commence a tender offer (the “Offer”), to purchase all of the issued
and outstanding shares (the “Shares”) of common stock, par value $0.0001 per share, of Forty Seven other than
any Shares held immediately prior to the effective time of the Merger by Forty Seven (or held in Forty Seven’s treasury)
and any Shares held immediately prior to the effective time of the Merger by Parent, Purchaser or any other direct or indirect
wholly owned subsidiary of Parent at a price of $95.50 per Share (the “Offer Price”), net to the seller in cash,
without interest.
The Offer will initially remain open for a minimum of 20 business
days from the date of commencement of the Offer. If at the scheduled expiration time of the Offer any of the conditions to the
Offer have not been satisfied (unless such condition is waivable by Purchaser or Parent and has been waived), Purchaser will, and
Parent will cause Purchaser to, extend the Offer to permit the satisfaction of all Offer conditions.
The obligation of Purchaser to consummate the Offer is subject
to the satisfaction or waiver of customary conditions, including, among others, (i) there being validly tendered and not validly
withdrawn prior to the expiration of the Offer a number of Shares that, considered together with all other Shares (if any) owned
by Parent and its affiliates, comprise one more Share than 50% of the sum of the then-outstanding Shares plus Shares issuable upon
conversion of all vested and outstanding options at the expiration of the Offer, (ii) the expiration or termination of the
waiting period (or any extension thereof) applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the “HSR Act”), (iii) the absence of any law or order prohibiting the consummation of the Offer
or the Merger and other customary conditions set forth in Annex I to the Merger Agreement.
Following the consummation of the Offer and subject to the terms
and conditions of the Merger Agreement, Purchaser will merge with and into Forty Seven pursuant to Section 251(h) of the General
Corporation Law of the State of Delaware (the “DGCL”), with Forty Seven being the surviving corporation (the
“Merger”). At the effective time of the Merger, each Share, including any Shares subject to vesting or employment
based forfeiture conditions (other than (i) Shares held by Forty Seven (or held in Forty Seven’s treasury), (ii) Shares held
by Parent, Purchaser, or any other direct or indirect wholly owned subsidiary of Parent and (iii) Shares held by stockholders who
have properly exercised and perfected their demands for appraisal of such Shares in accordance with the DGCL and have neither withdrawn
nor lost such rights prior to the effective time) will be converted into the right to receive an amount in cash equal to the Offer
Price, without interest, without regard to any applicable vesting or employment based forfeiture conditions, and subject to any
required withholding of taxes.
The Merger Agreement includes customary representations, warranties
and covenants of Forty Seven, Parent and Purchaser.
Forty Seven has agreed to customary “no-shop” restrictions
on its ability to solicit alternative acquisition proposals from third parties and engage in discussions or negotiations with third
parties regarding alternative acquisition proposals. Notwithstanding these restrictions, Forty Seven may under certain circumstances
provide information to and participate in discussions or negotiations with third parties with respect to a bona fide written alternative
acquisition proposal that the board of directors of Forty Seven has determined constitutes or would reasonably be expected to result
in a Superior Offer (as defined in the Merger Agreement), if failing to do so would be inconsistent with the board’s fiduciary
duties under applicable law.
The Merger Agreement also provides that, in connection with
the termination of the Merger Agreement under specified circumstances, including termination by Forty Seven to accept and enter
into an agreement with respect to a Superior Offer (as defined in the Merger Agreement), Forty Seven will pay Parent a termination
fee of $160 million.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which
is filed as Exhibit 2.1 hereto and which is incorporated herein by reference. The Merger Agreement has been filed to provide information
to investors regarding its terms. It is not intended to provide any other factual information about Parent, Purchaser or Forty
Seven, their respective businesses, or the actual conduct of their respective businesses during the period prior to the consummation
of the Offer, the Merger or the other transactions contemplated by the Merger Agreement. The Merger Agreement and this summary
should not be relied upon as disclosure about Parent or Forty Seven. None of Forty Seven’s stockholders or any other third
parties should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual
state of facts or conditions of Parent, Purchaser, Forty Seven or any of their respective subsidiaries or affiliates. The Merger
Agreement contains representations and warranties that are the product of negotiations among the parties thereto and that the parties
made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and
warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important
part by confidential disclosure schedules delivered in connection with the Merger Agreement. The representations and warranties
may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing
these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those
applicable to investors.