Item 1.01. Entry into a Material Definitive Agreement.
On May 24, 2022, Chinook Therapeutics, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with SVB Securities LLC, Cantor Fitzgerald & Co., and William Blair & Company, L.L.C. as the representatives of the several underwriters named in Schedule A thereto (the “Underwriters”), pursuant to which the Company agreed to issue and sell an aggregate of (a) 6,428,572 shares of its common stock (the “Shares”), and (b) pre-funded warrants to purchase 1,071,428 shares of its common stock (the “Pre-Funded Warrants”) to the Underwriters (the “Offering”). The Shares will be sold at the public offering price of $14.00 per share. The Pre-Funded Warrants will be sold at a public offering price of $13.9999 per Pre-Funded Warrant, which represents the per share public offering price for the common stock less a $0.0001 per share exercise price for each such warrant. Pursuant to the Underwriting Agreement, the Company has granted the Underwriters a 30-day option to purchase up to an additional 1,125,000 shares of its common stock at the same price. The Company estimates that net proceeds from the Offering will be approximately $98.3 million, after deducting underwriting discounts and commissions and estimated Offering expenses, and assuming no exercise of the Underwriters’ option to purchase additional shares.
The Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage, but not in excess of 19.99%, by providing at least 61 days’ prior notice to the Company.
The Company intends to use the net proceeds from the Offering to continue its phase 3 ALIGN and phase 2 AFFINITY trials of atrasentan, fund a phase 3 clinical trial of BION-1301, continue development of CHK-336, and prepare for the potential commercial launch of atrasentan. The remainder of the net proceeds, if any, will be used for general corporate purposes.
The Underwriting Agreement contains customary representations, warranties, and agreements by the Company, conditions to closing, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended. The Offering is being made pursuant to the shelf registration statement on Form S-3ASR (File No. 333-265168) that was filed by the Company with the Securities and Exchange Commission (“SEC”) on May 24, 2022 and automatically declared effective upon filing, and a related prospectus supplement.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement. A copy of the Underwriting Agreement is filed with this Current Report on Form 8-K as Exhibit 1.1 and is incorporated herein by reference. The form of Pre-Funded Warrant is filed as Exhibit 4.1 to this report and the foregoing description of the terms of the Pre-Funded Warrants is qualified in its entirety by reference to such exhibit.
A copy of the opinion of Fenwick & West LLP, relating to the validity of the Shares in connection with the Offering, is filed with this Current Report on Form 8-K as Exhibit 5.1.