Item 1.01 Entry into a Material Definitive Agreement.
On December 18, 2017, Madrigal Pharmaceuticals, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC, as representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “Offering”) of 1,731,929 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), which includes 225,904 shares of the Common Stock purchased by the Underwriters pursuant to a 30-day option to purchase such additional shares granted therein, at a public offering price of $83.00 per share. Subject to the terms and conditions contained in the Underwriting Agreement, the Underwriters have agreed to purchase, and the Company has agreed to sell, the Shares at a price of $78.02 per share. The net proceeds to the Company from the Offering, after deducting the Underwriters’ discount and other estimated offering expenses payable by the Company, are expected to be approximately $135 million. The net proceeds from the Offering will be used for general corporate purposes, including, without limitation, research and development expenditures, clinical trial expenditures, manufacture and supply of drug substance and drug products, acquisitions of new technologies, capital expenditures and working capital.
The Offering is expected to close on or about December 21, 2017, subject to customary closing conditions.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
A copy of the form of Underwriting Agreement is attached to this Current Report on Form 8-K (“Current Report”) as Exhibit 1.1, and is incorporated herein by reference. The foregoing is only a brief description of the material terms of the Underwriting Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to Exhibit 1.1.
The Company offered and is selling the above-described securities pursuant to a prospectus dated October 16, 2015 and a prospectus supplement dated December 18, 2017, in connection with a takedown from the Company’s shelf registration statement on Form S-3 (File No. 333-206135), previously declared effective by the Securities and Exchange Commission.
The legal opinion of Stradling Yocca Carlson & Rauth, P.C. relating to the Offering is filed as Exhibit 5.1 to this Current Report on Form 8-K.