Item 8.01. Other Events.
As previously disclosed, on May 14, 2020, Tetraphase Pharmaceuticals, Inc. (Tetraphase or the Company) received an unsolicited
proposal from Melinta Therapeutics, Inc. (Melinta) to acquire Tetraphase for $27.0 million in cash, plus an additional $12.5 million in cash potentially payable under contingent value rights to be issued in the transaction.
Also as previously disclosed, on May 21, 2020, the Company received a further proposal from Melinta, accompanied by a draft agreement and plan of merger, a draft form of contingent value rights agreement and a draft support agreement. Under
this proposal, Melinta would acquire Tetraphase for approximately $27.0 million in cash, plus an additional $12.5 million in cash potentially payable under contingent value rights to be issued in the transaction.
On May 27, 2020, the Company received a revised proposal from Melinta amending its May 21, 2020 proposal to acquire the Company (the Amended
Melinta Proposal). Under the Amended Melinta Proposal, Melinta would acquire Tetraphase for $34.0 million in cash, plus an additional $16.0 million in cash potentially payable under contingent value rights to be issued in the
transaction. Under the Amended Melinta Proposal, the upfront cash consideration would be as follows: (i) $1.52 per share of Tetraphase common stock (including common stock underlying restricted stock units, performance-based stock units and pre-funded warrants), (ii) $2.21 per share of Tetraphase common stock underlying the common stock warrants issued by the Company in 2019, and (iii) $2.21 per share of Tetraphase common stock underlying
the common stock warrants issued by the Company in 2020. In addition, the Amended Melinta Proposal does not provide for a downward adjustment based on the Companys closing net cash amount.
Previously, on May 27, 2020,Tetraphase had announced that it had entered into an Amendment to Agreement and Plan of Merger (the Amendment)
amending the merger agreement, dated as of March 15, 2020 by and among Tetraphase, AcelRx Pharmaceuticals, Inc. (AcelRx) and Consolidation Merger Sub, Inc. (the Original Merger Agreement, and as amended by the Amendment,
the AcelRx Merger Agreement with respect to the acquisition of Tetraphase by AcelRx, pursuant to which each outstanding share of Tetraphase common stock would be automatically converted into the right to receive, (1) $0.2434 in cash and
0.7217 of a share of AcelRx common stock, representing approximately $1.37 in upfront per share value, based on the closing price of AcelRxs common stock as of the close of trading on May 27, 2020, in each case subject to
downward adjustment in the event that the Companys closing net cash is less than $5.0 million, and (2) one contingent value right, which would entitle the holders to receive potential aggregate payments of up to $14.5
million in cash upon the achievement of certain future XERAVA net sales milestones starting in 2021. Based on the closing price of AcelRx common stock on May 27, 2020, the total
upfront consideration to be received by Tetraphase equityholders under the AcelRx Merger Agreement at closing is valued at approximately $30.6 million, with approximately $15.9 million of this amount allocated to the Companys
outstanding common stock warrants.
On May 27, 2020, the Company announced that its Board of Directors has determined that the Amended Melinta
Proposal to acquire the Company is a Superior Offer under the terms of the AcelRx Merger Agreement. In connection with this determination and in accordance with the terms of the AcelRx Merger Agreement, the Company has given notice to
AcelRx of such determination and of its intention to consider changing its recommendation of the AcelRx Merger Agreement or terminating the AcelRx Merger Agreement unless AcelRx proposes revisions to the terms of the AcelRx Merger Agreement or makes
another proposal on or prior to Monday, June 1, 2020 that, if accepted, would result in the Amended Melinta Proposal ceasing to be a Superior Offer. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by
reference.
At this time, the Tetraphase Board (1) continues to recommend the AcelRx Merger Agreement with AcelRx to its stockholders, (2) is
not modifying or withdrawing its recommendation with respect to the AcelRx Merger Agreement and the merger, or proposing to do so, and (3) is not making any recommendation with respect to the Amended Melinta Proposal.
Additional Information and Where to Find it
In
connection with the proposed transaction between Tetraphase and AcelRx Pharmaceuticals, Inc. (AcelRx), AcelRx filed with the Securities and Exchange Commission (the SEC) the Registration Statement containing a document
constituting a prospectus of AcelRx and a proxy statement of Tetraphase. The Registration Statement was declared effective by the SEC on April 24, 2020, and Tetraphase commenced mailing the definitive proxy