UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Rule 14a-101)
Filed by the Registrant   ☒
Filed by a Party other than the Registrant   ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to § 240.14a-12
INHIBRX, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 
PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED FEBRUARY 29, 2024
[MISSING IMAGE: lg_inhibrx-pn.jpg]
INHIBRX, INC.
11025 N. TORREY PINES ROAD, SUITE 200
LA JOLLA, CALIFORNIA 92037
           , 2024
Dear Stockholders,
We cordially invite you to attend a special meeting of stockholders of Inhibrx, Inc., a Delaware corporation (which we refer to as the “Company”), to be held online in a virtual format on           , at           a.m., Pacific Time (which we refer to as the “Special Meeting”). You will be able to attend the Special Meeting virtually by registering at https://www.proxydocs.com/INBX and entering your control number included in the Important Notice Regarding Internet Availability of Materials for the Special Meeting or proxy card that you receive. You will not be able to attend the Special Meeting in person. For purposes of attendance at the Special Meeting, all references in this proxy statement to “present” or “in person” shall mean virtually present at the Special Meeting.
On January 22, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aventis Inc., a Pennsylvania corporation (“Parent”) and a wholly owned indirect subsidiary of Sanofi, and Art Acquisition Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Parent, pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent.
In connection with the Merger Agreement, the Company and Inhibrx Biosciences, Inc., a Delaware corporation and wholly owned subsidiary of the Company (which we refer to as “SpinCo”) entered into a Separation and Distribution Agreement, dated as of January 22, 2024 (which we refer to as the “Distribution Agreement”), pursuant to which: (i) no later than one day prior to the date of the Spin-Off (as defined below), the Company will effect a pre-closing reorganization (which we refer to as the “Pre-Closing Reorganization”), which will generally result in the Company owning, assuming or retaining all assets and liabilities primarily related to INBRX-101, an optimized, recombinant alpha-1 antitrypsin (“AAT”) augmentation therapy currently in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency (“AATD”) (which we refer to as the “101 Business”), and SpinCo owning, assuming or retaining those assets and liabilities of the Company that are not primarily related to the 101 Business (which we refer to as the “SpinCo Business”); and (ii) thereafter, immediately prior to the effective time of the Merger (which we refer to as the “Effective Time”) and as a condition to the closing of the Merger (which we refer to as the “Closing”), the Company will distribute to its stockholders as of the record date of the distribution (which we refer to as the “Distribution Record Date”), on a pro rata basis, 92% of the issued and outstanding shares of SpinCo common stock as of the time of the distribution (which we refer to as the “Spin-Off” or the “Distribution”), at a ratio of one share of SpinCo common stock, par value $0.0001 per share (which we refer to as “SpinCo common stock”) for every four shares of the Company’s issued and outstanding common stock, par value $0.0001 per share (which we refer to as “Company common stock”) held on the Distribution Record Date. Following the Spin-Off, SpinCo will be a separate public company and the Company will retain 8% of the issued and outstanding shares of SpinCo common stock as of the effective time of the Spin-Off.
In connection with the Merger Agreement, the Company entered into (i) the Agreements relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, each dated as of January 22, 2024 (which we refer to collectively as the “Private Placement Warrant Amendments”) to the outstanding warrants issued by the Company pursuant to that certain Securities Purchase Agreement,
 

 
dated as of August 28, 2023, by and between the Company and certain institutional and other accredited investors (the “Securities Purchase Agreement”) (such warrants, the “Private Placement Warrants”), clarifying the treatment of the Private Placement Warrants in connection with the Merger and Spin-Off such that holders of the Private Placement Warrants will receive the Merger Consideration and, pursuant to the terms of the Private Placement Warrants, receive warrants to purchase up to an aggregate of 1,678,661 shares of SpinCo common stock with terms, rights and obligations equivalent to the Private Placement Warrants (which we refer to as the “SpinCo Warrants”), in each case, subject to conditions specified in such amendment, and the Private Placement Warrants will be cancelled immediately following the Closing, and (ii) the Amendment to Warrants to Purchase Stock, dated as of January 22, 2024 (the “Oxford Warrants Amendment”) to the outstanding warrants issued by the Company pursuant to (x) the Loan and Security Agreement, dated as of July 15, 2020, by and among Oxford Finance, LLC, the Company, and the lenders party thereto, as amended (such warrants, the “2020 Warrants”); and (y) the Fourth Amendment to the Loan and Security Agreement, dated as of February 18, 2022 (such warrants, the “2022 Warrants,” and together with the 2020 Warrants, the “Oxford Warrants,” and together with the Private Placement Warrants, the “Company Warrants”), clarifying the treatment in connection with the Merger and Spin-Off of (A) the 2020 Warrants, such that the holders of the 2020 Warrants will receive the Merger Consideration and, pursuant to the terms of the 2020 Warrants, receive shares of SpinCo common stock, in each case subject to conditions specified in such amendment, and that all 2020 Warrants will be cancelled immediately following the Closing and (B) the 2022 Warrants, such that (1) if the exercise price of the 2022 Warrants is less than the closing price of a share of Company common stock on the business day before the Distribution Record Date, the 2022 Warrants will automatically be exercised on a cashless basis on the day before the Distribution Record Date, and, in such case, the holder of the 2022 Warrants would be a Company stockholder and receive shares of SpinCo common stock in the Distribution and (2) if the exercise price of the 2022 Warrants is greater than or equal to the closing price of a share of Company common stock on the business day before the Distribution Record Date, such warrants will terminate and expire immediately prior to the consummation of the Merger and the holder of such warrants will not be permitted to exercise them while the Merger Agreement remains in effect.
If the Merger is completed, you will be entitled to receive, for each share of Company common stock that you own immediately prior to the Effective Time, (i) $30.00 in cash, without interest, less any applicable withholding taxes (which we refer to as the “Closing Amount”) plus (ii) one contractual contingent value right (which we refer to as “CVR”) representing the right to receive a contingent payment of $5.00, without interest thereon, in cash (which we refer to as the “Milestone Payment”), conditional upon the achievement of the Milestone (as defined below) set forth in the CVR Agreement (as defined below) ((i) and (ii) collectively, the “Merger Consideration”). In addition to the Merger Consideration, you will be entitled to receive one share of SpinCo common stock for every four shares of Company common stock that you own as of the Distribution Record Date (which, together with the Merger Consideration, we refer to as the “Transaction Consideration”).
At or prior to the Effective Time, pursuant to the Merger Agreement, Parent will enter into a Contingent Value Rights Agreement between Parent and Continental Stock Transfer & Trust Company (the “Rights Agent”), in substantially the form attached to the Merger Agreement (the “CVR Agreement”). Each CVR will represent the right to receive a contingent payment of $5.00 in cash, without interest, payable to the Rights Agent for the benefit of the holders of CVRs, if the following milestone is achieved:

The final approval by the U.S. Food and Drug Administration (“FDA”), on or prior to June 30, 2027, of the new drug application or supplemental new drug application filed with the FDA pursuant to Section 351 of the Public Health Service Act and 21 CFR §§ 600 et seq. (for clarity, including accelerated approval) that is necessary for the commercial marketing and sale of the Company’s precisely engineered recombinant human AAT-Fc fusion protein, also known as INBRX-101 in the United States of America for the treatment of patients with AATD and clinical evidence of emphysema following the clinical trial with identifier INBRX101-01-201, entitled “A Phase 2, Double-Blind, Randomized, Active-Control, Parallel Group Study to Assess the Pharmacokinetics, Pharmacodynamics, Immunogenicity, and Safety of INBRX-101 Compared to Plasma Derived Alpha-1 Proteinase Inhibitor (A1PI) Augmentation Therapy in Adults with Alpha-1 Antitrypsin Deficiency Emphysema,” regardless of any obligation to conduct any post-marketing or confirmatory study (which we refer to as the “Milestone”).
 

 
By unanimous vote, the Board of Directors, at a meeting held on January 22, 2024, (i) determined that the Merger and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and the Company’s stockholders; (ii) approved and declared it advisable to enter into the Merger Agreement and the Distribution Agreement; (iii) directed that the adoption of the Merger Agreement and the Distribution Agreement be submitted to a vote of the Company’s stockholders at the Special Meeting; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Company’s stockholders approve the adoption of the Merger Agreement and the Distribution Agreement and approve the Merger and the Spin-Off on the terms and subject to the conditions set forth therein and the transactions contemplated thereby (which we refer to as the “Transaction Proposal”).
At the Special Meeting, stockholders will also be asked to vote on (i) a proposal to adjourn the Special Meeting, from time to time, if necessary or appropriate, to solicit additional votes for the approval of the proposal to adopt the Merger Agreement and the Distribution Agreement if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement and the Distribution Agreement (which we refer to as the “Adjournment Proposal”) and (ii) a non-binding, advisory proposal to approve compensation that may become payable to our named executive officers in connection with the Transactions (which we refer to as the “Non-Binding Merger-Related Compensation Proposal”).
Approval of the Transaction Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Company common stock entitled to vote on the proposal. Approval of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal each require the affirmative vote of holders of a majority of shares of Company common stock present in person or by proxy at the Special Meeting and entitled to vote on the proposal.
The Board of Directors of the Company unanimously recommends that you vote “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Your vote is very important.   Whether or not you plan to attend the Special Meeting, please complete, date, sign and return, as promptly as possible, the enclosed proxy card in the envelope provided, or submit your proxy by telephone or the Internet. If you attend the Special Meeting and vote via the virtual meeting website, your vote by ballot will revoke any proxy previously submitted.
If your shares of Company common stock are held in “street name” by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be unable to vote your shares of Company common stock at the Special Meeting without instructions from you. You should instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock in accordance with the procedures provided by your bank, brokerage firm or other nominee.
The accompanying proxy statement provides you with detailed information about the Special Meeting, the Merger Agreement, the Merger, the Distribution Agreement and the Spin-Off. A copy of the Merger Agreement is attached as Annex A to the proxy statement and a copy of the Distribution Agreement is attached as Annex B to the proxy statement. We encourage you to read the entire proxy statement and its annexes, including the Merger Agreement and the Distribution Agreement, carefully. You may also obtain additional information about the Company from documents we have filed with the SEC.
Stockholders or beneficial owners who continuously hold their shares of Company common stock through the effective date of the Merger, who do not vote in favor of the Transaction Proposal, who properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and who comply with, and do not validly withdraw their demands or otherwise lose their appraisal rights under, Section 262 of the Delaware General Corporation Law (“DGCL”) as in effect at the time of the parties’ entry into the Merger Agreement (“Section 262”), the provisions of which are summarized in the section entitled “Appraisal Rights” in the accompanying proxy statement and a copy of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262, will be entitled to appraisal rights to receive, in cash, the fair value of their shares of the Company as determined by the Delaware Court of Chancery, subject to the terms of Section 262.
 

 
If your shares are registered directly in your name through our Transfer Agent, or you have stock certificates registered in your name, and you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy tabulator by internet, by email or by phone:
By Internet: https://www.proxydocs.com/INBX
By Email: paper@investorelections.com
By Phone: 866-648-8133
If your shares are held in the name of a bank, broker, or other nominee, you will receive instructions from your bank, broker, or other nominee of record if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions.
Thank you in advance for your support and prompt consideration of this matter.
Sincerely,
Mark Lappe
Chairman of the Board and Chief Executive Officer
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER OR THE SPIN-OFF, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT, THE DISTRIBUTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND THE DISTRIBUTION AGREEMENT OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The accompanying proxy statement is dated           , 2024 and, together with the enclosed form of proxy card, is first being mailed on or about           , 2024.
 

 
INHIBRX, INC.
11025 N. TORREY PINES ROAD, SUITE 200
LA JOLLA, CALIFORNIA 92037
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on           , 2024
To the Stockholders of Inhibrx, Inc.:
Notice is hereby given that a special meeting of the stockholders (which we refer to as the “Special Meeting”) of Inhibrx, Inc., a Delaware corporation (which we refer to as the “Company”), will be held online in a virtual format, on           , at           a.m., Pacific Time. You will be able to attend the Special Meeting virtually by registering at https://www.proxydocs.com/INBX and entering your control number included in the Important Notice Regarding Internet Availability of Proxy Materials for the Special Meeting or proxy card that you receive. You will not be able to attend the Special Meeting in person. For purposes of attendance at the Special Meeting, all references in this proxy statement to “present” or “in person” shall mean virtually present at the Special Meeting. The Special Meeting will be held for the following purposes:
1.
To consider and vote on a proposal to adopt (i) the Agreement and Plan of Merger (the “Merger Agreement”) with Aventis Inc., a Pennsylvania corporation (“Parent”) and a wholly owned indirect subsidiary of Sanofi, and Art Acquisition Sub, Inc., a Delaware corporation (“Merger Sub”) and wholly owned subsidiary of Parent, pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent and (ii) the Separation and Distribution Agreement, dated as of January 22, 2024 (which we refer to as the “Distribution Agreement”), which provides for: (x) the Company effecting a pre-closing reorganization (which we refer to as the “Pre-Closing Reorganization”), which will generally result in the Company owning, assuming or retaining all assets and liabilities primarily related to INBRX-101, an optimized, recombinant alpha-1 antitrypsin (“AAT”) augmentation therapy currently in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency (“AATD”) (which we refer to as the “101 Business”), and SpinCo owning, assuming or retaining those assets and liabilities of the Company that are not primarily related to the 101 Business (which we refer to as the “SpinCo Business”); and (y) thereafter, but prior to and as a condition to closing of the Merger, the Company distributing, on a pro rata basis, 92% of the issued and outstanding shares of SpinCo common stock as of the time of the distribution (which we refer to as the “Spin-Off” or the “Distribution”), at a ratio of one share of SpinCo common stock, par value $0.0001 per share, (which we refer to as “SpinCo common stock”) for every four shares of the Company’s issued and outstanding common stock, par value $0.0001 per share (which we refer to as “Company common stock”) held on the record date for the Spin-Off. We refer to Proposal No. 1 as the “Transaction Proposal.”
A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement and a copy of the Distribution Agreement is attached as Annex B to the accompanying proxy statement.
2.
To consider and vote on a proposal to adjourn the Special Meeting, if necessary, desirable or appropriate, to solicit additional proxies if, at the time of the Special Meeting, there are an insufficient number of votes in favor of adopting the Merger Agreement and the Distribution Agreement. We refer to Proposal No. 2 as the “Adjournment Proposal.”
3.
To consider and vote on a non-binding, advisory proposal to approve compensation that may become payable to our named executive officers in connection with the Transactions. We refer to Proposal No. 3 as the “Non-Binding Merger-Related Compensation Proposal.”
The Merger Agreement, the Distribution Agreement, and the transactions contemplated by the Merger Agreement and the Distribution Agreement, including the Merger and the Spin-Off, are described more fully in the attached proxy statement, and we urge you to read it carefully and in its entirety.
 

 
By unanimous vote, the Board of Directors, at a meeting held on January 22, 2024, (i) determined that the Merger and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and the Company’s stockholders; (ii) approved and declared it advisable to enter into the Merger Agreement and the Distribution Agreement; (iii) directed that the adoption of the Merger Agreement and the Distribution Agreement be submitted to a vote of the Company’s stockholders at the Special Meeting; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Company’s stockholders approve the adoption of the Merger Agreement and the Distribution Agreement and approve the Merger and the Spin-Off on the terms and subject to the conditions set forth therein and the transactions contemplated thereby.
Approval of the Transaction Proposal requires the affirmative vote of holders of a majority of the outstanding shares of Company common stock entitled to vote on the proposal. Approval of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal each require the affirmative vote of holders of a majority of shares of Company common stock present in person or by proxy at the Special Meeting and entitled to vote on the proposal.
Your vote is very important, regardless of the number of shares of Company common stock you own.    The Merger cannot be completed unless the Merger Agreement and the Distribution Agreement are adopted by the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote on the proposal. Even if you plan to attend the Special Meeting, we request that you complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or submit your proxy by telephone or the Internet prior to the Special Meeting to ensure that your shares of Company common stock will be represented at the Special Meeting if you are unable to attend.
The Board of Directors of the Company has fixed the close of business on           , 2024 as the record date for determining the stockholders entitled to receive notice of, and to vote at, the Special Meeting and any adjournments or postponements thereof. Only stockholders of record at the close of business on the record date are entitled to receive notice of, and to vote at (in person or by proxy), the Special Meeting and at any adjournment or postponement thereof. You will be entitled to one vote for each share of Company common stock that you owned on the record date. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for a period of at least 10 days prior to the date of the Special Meeting for any purpose germane to the Special Meeting for inspection (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is included with the notice of the Special Meeting or (ii) at our principal operating offices during ordinary business hours of the Company. The list of our stockholders of record will also be available during the Special Meeting at the place of the Special Meeting for inspection by any stockholder present at the Special Meeting for any purpose germane to the Special Meeting.
Only stockholders of record, their duly authorized proxy holders, beneficial stockholders with proof of ownership and our guests may attend the Special Meeting. To gain admittance, please register in advance at https://www.proxydocs.com/INBX and enter your control number included in the Important Notice Regarding the Availability of Proxy Materials for the Special Meeting or proxy card that you receive.
Stockholders or beneficial owners who continuously hold their shares of Company common stock through the effective date of the Merger, who do not vote in favor of the Transaction Proposal, who properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and who comply with, and do not validly withdraw their demands or otherwise lose their appraisal rights under, Section 262 of the Delaware General Corporation Law (“DGCL”) as in effect both at the time of the parties’ entry into the Merger Agreement (“Section 262”), the provisions of which are summarized in the section entitled “Appraisal Rights” in the accompanying proxy statement and a copy of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262, will be entitled to appraisal rights to receive, in cash, the fair value of their shares of the Company as determined by the Delaware Court of Chancery, subject to the terms of Section 262.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY
 

 
TELEPHONE OR THE INTERNET. IF YOU WILL ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.
By Order of the Board of Directors,
Leah Pollema
VP, General Counsel and Corporate Secretary
La Jolla, California
Dated:           , 2024
 

 
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SUMMARY
The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to carefully read this entire proxy statement, its annexes and the documents referred to in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of that topic. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 129.
All references to “the Company,” “we,” “us” or “our” in this proxy statement refer to Inhibrx, Inc., a Delaware corporation; all references to “Parent” refer to Aventis Inc., a Pennsylvania corporation and a wholly owned indirect subsidiary of Sanofi; all references to “Merger Sub” refer to Art Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent; all references to “SpinCo” refer to Inhibrx Biosciences, Inc., a Delaware corporation and a wholly owned subsidiary of the Company; all references to “Company common stock” refer to the common stock, par value $0.0001 per share, of the Company; all references to the “Merger” refer to the acquisition by Parent of the Company, which will be accomplished by the merger of Merger Sub with and into the Company with the Company surviving the Merger as a wholly owned subsidiary of Parent; all references to the “Spin-Off” or the “Distribution” refer to the pro rata distribution of 92% of the issued and outstanding shares of common stock of SpinCo as of the time of the Distribution at a ratio of one share of common stock of SpinCo for every four shares of Company common stock held as of the record date of the Distribution (the “Distribution Record Date”); all references to “SpinCo common stock” refer to common stock, par value $0.0001 per share, of SpinCo; all references to the “Merger Agreement” refer to the Agreement and Plan of Merger, dated as of January 22, 2024, as may be amended from time to time, by and among the Company, Parent and Merger Sub, a copy of which is attached as Annex A to this proxy statement; all references to the “Distribution Agreement” refer to the Separation and Distribution Agreement, dated as of January 22, 2024, as may be amended from time to time, by and among the Company, SpinCo and Parent (solely for purposes of certain sections set forth therein), a copy of which is attached as Annex B to this proxy statement. The Company, following the completion of the Merger, is sometimes referred to in this proxy statement as the “Surviving Company.”
Parties to the Merger
INHIBRX, INC.
The Company, a Delaware corporation, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates in oncology and orphan diseases. Inhibrx utilizes diverse methods of protein engineering to address the specific requirements of complex target and disease biology, including its proprietary protein engineering platforms. The Company’s current clinical pipeline includes therapeutic candidates in the following categories:

INBRX-101 seeks to maintain the natural function of Alpha-1 antitrypsin (“AAT”) in a recombinant format, optimized for less frequent dosing and greater potential therapeutic activity as compared to plasma-derived AAT (“pdAAT”).

INBRX-106 is a hexavalent product candidate agonist of OX40. OX40 is a co-stimulatory receptor expressed on immune cells that is enriched in the tumor microenvironment. OX40 ligand is a trimeric protein that activates OX40 signaling through clustering.

INBRX-109 is a precision-engineered, tetravalent death receptor 5 (DR5) agonist antibody designed to exploit the tumor-biased cell death induced by DR5 activation.
The Company’s principal executive office is located at 11025 N. Torrey Pines Road, Suite 200, La Jolla, CA 92037. The Company’s telephone number is (858) 795-4220. The Company website address is www.inhibrx.com. The information provided on the Company’s website is not part of this proxy statement and is not incorporated in this proxy statement by reference here or by any other reference to its website provided in this proxy statement.
The Company common stock is listed and trades on the Nasdaq Global Market (which we refer to as “NASDAQ”) under the symbol “INBX.”
 
1

 
INHIBRX BIOSCIENCES, INC.
SpinCo is a Delaware corporation and a wholly owned subsidiary of the Company, and was formed on January 8, 2024 under the name Ibex SpinCo, Inc. and renamed on January 25, 2024 to Inhibrx Biosciences, Inc., for the purpose of engaging in the transactions contemplated by the Distribution Agreement. SpinCo has not engaged in any business activities other than in connection with the transactions contemplated by the Distribution Agreement. Pursuant to the terms of the Distribution Agreement, the Company will effect a pre-closing reorganization, such that the Company will own, assume or retain all assets and liabilities primarily related to INBRX-101, and SpinCo will own, assume or retain the assets and liabilities of the Company that are not primarily related to the 101 Business, and thereafter, but prior to and as a condition to the closing of the Merger (which we refer to as the “Closing”), the Company will distribute to its stockholders as of the Distribution Record Date, on a pro rata basis, 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held as of the Distribution Record Date.
After the Spin-Off is completed, SpinCo will be a separate, publicly held company that will own the assets and liabilities primarily related to INBRX-105, INBRX-106 and INBRX-109, including the discovery pipeline, and certain corporate infrastructure currently owned by the Company.
The principal executive office of SpinCo is located at 11025 N. Torrey Pines Road, Suite 140, La Jolla, CA 92037, and SpinCo’s telephone number is (858) 795-4220.
AVENTIS INC.
Parent is a Pennsylvania corporation and is a wholly owned indirect subsidiary of Sanofi, a leading global healthcare company, focused on patient needs and engaged in the research, development, manufacture and marketing of therapeutic solutions. Parent’s principal executive office is located at 55 Corporate Drive, Bridgewater, NJ 08807.
ART ACQUISITION SUB, INC.
Merger Sub was incorporated in Delaware on January 18, 2024, as a direct, wholly owned subsidiary of Parent, solely for the purpose of engaging in the Transactions (as defined below), including the Merger. Merger Sub has not carried on any activities on or prior to the date of this proxy statement, except for activities incidental to its formation and activities undertaken in connection with the Transactions, including the structuring and negotiation of the Transactions. Upon completion of the Merger, Merger Sub will merge with and into the Company and Merger Sub will cease to exist.
The Special Meeting
Date, Time and Place of the Special Meeting
The special meeting of the holders of Company common stock will be held online in a virtual format at           , on           , at           a.m., or at any postponement or adjournment thereof (which we refer to as the “Special Meeting”).
At the Special Meeting, stockholders of record as of the close of business on           (which we refer to as the “record date”) of Company common stock will be asked to consider and vote on:

a proposal to adopt the Merger Agreement and the Distribution Agreement (which we refer to as the “Transaction Proposal”);

a proposal to approve the proposal to adjourn the Special Meeting, if necessary, desirable or appropriate, to solicit additional proxies if, at the time of the Special Meeting, there are an insufficient number of votes in favor of adopting the Transaction Proposal (which we refer to as the “Adjournment Proposal”); and

a non-binding, advisory proposal to approve compensation that may become payable to the Company’s named executive officers in connection with the Transactions (which we refer to as the “Non-Binding Merger-Related Compensation Proposal”).
 
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We do not expect that any matters other than the proposals set forth above will be brought before the Special Meeting. Only matters specified in the notice of the meeting may be acted upon at the Special Meeting.
Record Date and Quorum
You are entitled to receive notice of, and to vote at, the Special Meeting if you owned Company common stock at the close of business on the record date. You will be entitled to one vote for each share of Company common stock that you owned on the record date. As of the record date, there were           shares of Company common stock outstanding and entitled to vote at the Special Meeting, held by           stockholders of record. Holders of at least a majority of the voting power of the shares of Company common stock outstanding and entitled to vote upon a question to be considered at the meeting constitute a quorum for the purposes of the Special Meeting. Abstentions (as described in “Questions and Answers about the Special Meeting, the Merger and the Spin-Off” beginning on page 14) are counted as present for the purpose of determining whether a quorum is present.
Vote Required
Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of outstanding Company common stock entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” approval of this proposal, and broker non-votes will be counted as abstentions.
Approval of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal each requires the affirmative vote of holders of a majority of the shares of outstanding Company common stock present at the Special Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” approval of these proposals, and broker non-votes will be counted as abstentions.
As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate,           shares of Company common stock (not including any shares of Company common stock deliverable upon exercise or conversion of any options or other equity-based awards), representing approximately           percent of the outstanding shares of Company common stock. The directors and executive officers of the Company have informed the Company that they currently intend to vote all such Company common stock “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Appraisal Rights
Stockholders or beneficial owners who continuously hold their shares of Company common stock through the effective date of the Merger, who do not vote in favor of the Transaction Proposal, who properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and who comply with, and do not validly withdraw their demands or otherwise lose their appraisal rights under, Section 262 of the Delaware General Corporation Law (“DGCL”) as in effect at the time of the parties’ entry into the Merger Agreement (“Section 262”), the provisions of which are summarized in the section entitled “Appraisal Rights” in the accompanying proxy statement and a copy of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262, will be entitled to appraisal rights to receive, in cash, the fair value of their shares of the Company as determined by the Delaware Court of Chancery, subject to the terms of Section 262.
Proxies and Revocation
Any stockholder of record entitled to vote at the Special Meeting may submit a proxy by telephone, over the Internet or by returning the enclosed proxy card in the accompanying prepaid reply envelope, or by attending the Special Meeting via the virtual meeting website and voting at the Special Meeting (your attendance at the Special Meeting will not, by itself, revoke your proxy; you must vote at the Special Meeting via the virtual meeting website). If your shares of Company common stock are held in “street name”
 
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through a bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of Company common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote via the virtual meeting website at the Special Meeting, or do not provide your bank, brokerage firm or other nominee with instructions, as applicable, your shares of Company common stock will not have an effect on the proposal to adopt the Transaction Proposal, the Adjournment Proposal or the Non-Binding Merger-Related Compensation Proposal.
You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a proxy at a later date through any of the methods available to you, by giving written notice of revocation to the Company’s Corporate Secretary, which must be filed with the Corporate Secretary by 5:00 p.m. Pacific Time on the business day immediately prior to the date of the Special Meeting, or by virtually attending the Special Meeting and by voting via the virtual meeting website. Virtually attending the Special Meeting alone, without voting at the Special Meeting, will not be sufficient to revoke your proxy. Written notice of revocation should be mailed to: Inhibrx, Inc., Attention: Corporate Secretary, 11025 N. Torrey Pines Road, Suite 200, La Jolla, California 92037.
The Transactions
On January 22, 2024, the Company, Parent, Merger Sub and SpinCo entered into certain agreements to effect the acquisition of the Company by Parent. The transactions contemplated by the agreements (which we refer to, collectively, as the “Transactions”) include the separation of certain assets of the Company between the Company and SpinCo through a series of restructuring transactions (which we refer to as the “Pre-Closing Reorganization”), the distribution to the Company’s stockholders of 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held as of the Distribution Record Date, and the subsequent Merger.
In order to effect the Transactions, the Company, Parent and Merger Sub entered into the Merger Agreement and the Company, Parent (solely for the purposes stated therein) and SpinCo entered into the Distribution Agreement. For a more complete discussion of the transaction agreements, see “The Merger Agreement” beginning on page 74 and “The Distribution Agreement” beginning on page 96.
The Pre-Closing Reorganization and the Distribution
In connection with the acquisition of the Company by Parent and pursuant to the Distribution Agreement, prior to the Spin-Off and the Merger, the Company and SpinCo will consummate (or cause to be consummated) the Pre-Closing Reorganization, which will generally result in the Company owning, assuming or retaining all assets and liabilities primarily related to INBRX-101, an optimized, recombinant AAT augmentation therapy currently in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency (“AATD”) (which we refer to as the “101 Business”), and SpinCo owning, assuming or retaining those assets and liabilities of the that are not primarily related to the 101 Business (which we refer to as the “SpinCo Business”).
As a condition to the Closing, the Company will consummate the Spin-Off, with the distribution to the Company’s stockholders as of the Distribution Record Date, on a pro rata basis, of 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held. Prior to the Spin-Off, the Company will consummate or cause to be consummated the Pre-Closing Reorganization. Prior to the date of the Spin-Off, the Company will also prepare and file a registration statement on Form 10 (which we refer to, together with any amendments, supplements, prospectuses or information statements thereto, as the “Spin-Off Registration Statement”) to register the shares of SpinCo common stock that will be distributed in the Spin-Off.
After the Pre-Closing Reorganization and Spin-Off are completed, SpinCo will be a separate, publicly held company that will own the assets and liabilities primarily related to INBRX-105, INBRX-106 and INBRX-109, including the discovery pipeline, and certain corporate infrastructure currently owned by the Company.
 
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The Distribution Agreement
Transfer of Assets and Assumption of Liabilities
The Distribution Agreement identifies the assets to be transferred to or retained by, and the liabilities to be assumed or retained by, each of the Company and SpinCo, and it provides for when and how these transfers, assumptions and assignments will occur. For more information, please see the section of this proxy statement captioned “The Distribution Agreement — Transfer of Assets and Assumption of Liabilities”.
Conditions to the Spin-Off
The Spin-Off is subject to the satisfaction or waiver by the Company and SpinCo of the following conditions:

satisfaction or waiver of the conditions precedent in the Merger Agreement to the consummation of the Merger, other than the completion of the Spin-Off and any conditions that can only be satisfied at the Closing (provided that such conditions are then capable of being satisfied) and confirmation in writing by Parent that it is prepared to consummate the Merger, subject only to the consummation of the Spin-Off;

continuing effectiveness of the Spin-Off Registration Statement, no stop order or proceedings to suspend its effectiveness, and mailing of the information statement to holders of shares of the Company common stock as of the record date;

acceptance for listing on a national securities exchange of shares of SpinCo common stock to be delivered in the Spin-Off;

no legal restraint against the Pre-Closing Reorganization of the Merger and the Spin-Off;

execution of the transition services agreement between the Company and SpinCo (which we refer to as the “Transition Services Agreement”); and

effectiveness in all material respects of the Pre-Closing Reorganization.
Financing of SpinCo
Prior to the effective time of the Spin-Off, Parent or an affiliate of Parent shall deposit into an escrow account an amount in cash equal to $200,000,000, minus (i) the sum of all marketable securities, cash and cash equivalents contained in any accounts held by SpinCo as of the close of business on the day prior to the effective time of the Spin-Off and (ii) the amount, if any, by which the Company’s payoff amount required under the Loan and Security Agreement, dated as of July 15, 2020, by and among Oxford Finance, LLC, the Company, and the lenders party thereto, as amended (which we refer to as the “Loan and Security Agreement”) exceeds the signing debt of $222,000,000. Immediately prior to the effective time of the Spin-Off, the Company will contribute the right to receive the cash held in such escrow account to SpinCo and designate SpinCo as the owner of such escrow account. No funds may be released from such escrow account until after the effective time of the Merger (which we refer to as the “Effective Time”). The Company’s liabilities under the Distribution Agreement include payment of certain transaction expenses payable at the closing of the Spin-Off and the Merger. Except as otherwise set forth in the Distribution Agreement or the Transition Services Agreement, the Company and SpinCo will each bear its own costs and expenses incurred after the Spin-Off. Following the deductions and adjustments described above, we anticipate that SpinCo will have approximately $200,000,000 in cash as of the Distribution date, notwithstanding any costs and expenses related to the Spin-Off not contemplated in the Distribution Agreement or Transition Services Agreement.
In connection with the Merger, Parent will satisfy and discharge the Company’s outstanding third-party indebtedness. We do not anticipate that SpinCo will have any outstanding third-party indebtedness at the time of the Spin-Off.
Expenses
Except as otherwise set forth in the Distribution Agreement or Transition Services Agreement, costs and expenses incurred on or prior to the date of the Distribution in connection with the Distribution
 
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Agreement, the Transition Services Agreement, the Spin-Off Registration Statement and the related information statement, and the transactions contemplated thereby, including the Distribution, will be paid by the Company and deemed to be liabilities of the Company, provided that any transaction expenses in excess of an aggregate cap of $68,000,000 will be borne by SpinCo. Each party will bear its own costs and expenses incurred after the date of the Distribution.
The Merger
The Merger Agreement provides that, following satisfaction or waiver of the closing conditions set forth in the Merger Agreement (including completion of the Pre-Closing Reorganization and Spin-Off), Merger Sub will merge with and into the Company. The Company will be the surviving company in the Merger (which we refer to as the “Surviving Company”). As a result of the Merger, the Company will cease to be a publicly traded company and will become a wholly owned subsidiary of Sanofi. You will not own any shares of the Surviving Company. Following the Spin-Off, which will be completed immediately prior to the Merger, you will own one share of SpinCo common stock for every four shares of Company common stock you hold as of the Distribution Record Date.
Merger Consideration
The Merger Agreement provides that, each share of Company common stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares (as defined below), will be converted into the right to receive (i) $30.00 in cash, without interest and less any applicable withholding taxes (which we refer to as the “Closing Amount”), plus (ii) one contractual contingent value right (which we refer to as “CVR”) representing the right to receive a contingent payment of $5.00, without interest thereon, in cash (which we refer to as the “Milestone Payment”), conditional upon the achievement of the regulatory milestone (which we refer to as the “Milestone”) set forth in the CVR Agreement (as defined below) ((i) and (ii) collectively, the “Merger Consideration”).
Excluded Shares shall refer to:

Company common stock owned by the Company as treasury shares;

Company common stock owned by Parent or Merger Sub; and

Company common stock owned by stockholders of the Company who have validly demanded and not withdrawn appraisal rights in accordance with the applicable provisions of Section 262 of the DGCL prior to the Effective Time. In this proxy statement, we refer to such stockholders as “dissenting stockholders.”
Reasons for the Merger; Recommendation of the Board of Directors
By unanimous vote, the Board of Directors, at a meeting held on January 22, 2024: (i) determined that the Merger and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and the Company’s stockholders; (ii) approved and declared it advisable to enter into the Merger Agreement and the Distribution Agreement; (iii) directed that the adoption of the Merger Agreement and the Distribution Agreement be submitted to a vote of the Company’s stockholders at the Special Meeting; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Company’s stockholders approve the adoption of the Merger Agreement and the Distribution Agreement and approve the Merger and the Spin-Off on the terms and subject to the conditions set forth therein and the transactions contemplated thereby.
The Board of Directors of the Company unanimously recommends that you vote “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal. For more information, please see the section of this proxy statement captioned “The Transactions — Reasons for the Merger and the Spin-Off; Recommendation of the Board of Directors.”
 
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The Merger Agreement
Treatment of Company Common Stock and Company Common Stock-Based Awards

In the Merger, each share of Company common stock outstanding immediately prior to the Effective Time (other than Excluded Shares) will be converted into the right to receive the Merger Consideration, without interest and less any applicable withholding taxes.

Each option to purchase shares of Company common stock granted by the Company under the Company’s Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan (which we refer to as a “Company Option”) that is outstanding as of immediately prior to the Effective Time (after giving effect to the Spin-Off and the provisions of the Distribution Agreement), whether vested or unvested, having an exercise price per share of Company common stock that is less than the Closing Amount (each such Company Option, we refer to as an “In-the-Money Option”) will be cancelled and converted into the right to receive (A) an amount in cash, without interest and less any applicable withholding taxes, equal to the product of (x) the total number of shares of Company common stock subject to such Company Option immediately prior to the Effective Time, multiplied by (y) the excess of (I) the Closing Amount over (II) the exercise price payable per share of Company common stock under such Company Option (such amount, the “Closing Option Payment”), and (B) one (1) CVR for each share of Company common stock subject to such Company Option;

Each Company Option that is outstanding as of immediately prior to the Effective Time (after giving effect to the Spin-Off and the provisions of the Distribution Agreement), whether vested or unvested, having an exercise price per share of Company common stock that is equal to or greater than the Closing Amount but less than the sum of the Closing Amount and the Milestone Payment (each such Company Option, we refer to as a “Closing Date Underwater Option”) will be cancelled and converted into the right to receive the contingent payment described in the following sentence. If the Milestone is achieved, the cash amount to be paid in respect of each such Closing Date Underwater Option will be equal to (x) $35.00 (representing the sum of the Closing Amount of $30.00 and the Milestone Payment of $5.00) minus (y) the option exercise price per share (in this case, between $30.00 and $35.00 per share strike price), subject to applicable tax withholding; and

Each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested) having an exercise price per share of Company common stock that is equal to or greater than the Merger Consideration will be cancelled without any consideration being payable in respect thereof, and have no further force or effect.
No Solicitation; Other Offers
The Company has agreed that it will not, and will direct its affiliates and its and their respective officers, directors, managers, partners, employees, accountants, counsel, financial advisors, consultants and other advisors, agents or representatives not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate the making of any offer or proposal which constitutes or is reasonably likely to lead to a company acquisition proposal, (ii) enter into any agreement with respect to an acquisition proposal or (iii) engage in negotiations or discussions with, or provide any non-public information or data to, any person (other than Parent or any of its affiliates or representatives) to approve and/or adopt other matters submitted to it in connection with the Merger Agreement and the Distribution Agreement.
Notwithstanding these restrictions, under certain circumstances, the Company may, prior to the time the Merger Agreement is adopted by our stockholders, furnish non-public information concerning the Company’s business, properties or assets to any person in accordance with an acceptable confidentiality agreement, with respect to certain unsolicited written Company acquisition proposals or engage in discussions or negotiations with a person with respect to certain unsolicited written Company acquisition proposals.
At any time before the time the Merger Agreement is adopted by the Company stockholders, to the extent that the Board of Directors determines in good faith that failure to take such action would reasonably be likely to be inconsistent with its fiduciary duties under applicable law, the Company may terminate the Merger Agreement to enter into a letter of intent, memorandum of understanding, agreement in principle,
 
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acquisition agreement, merger agreement or similar agreement (which we refer to as an “Alternative Acquisition Agreement”) with respect to an acquisition proposal that the Board of Directors has determined in good faith constitutes a superior proposal, or make a change of recommendation in respect of a superior proposal, so long as the Company has first complied with certain terms of the Merger Agreement, including (i) notifying Parent of the Company’s intent with respect to a superior proposal, and negotiating with Parent in good faith regarding adjustments proposed by Parent to the terms of the Merger Agreement for a period of four business days, subject to additional two-business-day negotiation periods if the terms of the superior proposal materially change during such negotiation period and (ii) where applicable, paying the Termination Fee.
In addition, the Board of Directors may change its recommendation with respect to the Merger in response to a material event, fact, circumstance, development, occurrence or change (other than an acquisition proposal) not known to or reasonably foreseeable by the Board of Directors at the time the Board of Directors initially resolved to make the recommendation, subject to the requirements described in the section of this proxy statement entitled “The Merger Agreement — Solicitation of Acquisition Proposals; Board Recommendation Change — No Change in Recommendation or Alternative Acquisition Agreement” beginning on page 86.
Conditions to the Merger
The respective obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the completion of the Spin-Off and the satisfaction or waiver of certain customary conditions, including the absence of any legal prohibitions, the adoption of the Merger Agreement by stockholders of the Company, receipt of regulatory approval under the HSR Act and other applicable antitrust laws, the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the Merger Agreement.
Termination
The Company and Parent may, by mutual written consent, terminate the Merger Agreement and abandon the transactions contemplated in the Merger Agreement at any time prior to the Effective Time, whether before or after the adoption of the Merger Agreement by the Company’s stockholders.
The Merger Agreement may also be terminated and the transactions contemplated by the Merger Agreement abandoned upon delivery of written notice to the other party as follows:

At any time prior to the Effective Time, by either Parent or the Company, if any of an End Date Termination Event or a Regulatory Termination Event or a Special Meeting Termination Event (each, as defined in the section of this proxy statement entitled “The Merger Agreement — Termination” beginning on page 92) has occurred;

At any time prior to the time the Merger Agreement is adopted by our stockholders, by Parent, if a Change of Recommendation Termination Event or a Company Breach Termination Event (each, as defined in the section of this proxy statement entitled “The Merger Agreement — Termination” beginning on page 92) has occurred;

At any time prior to the Effective Time by Parent, if a Company Breach Termination Event (as defined in the section of this proxy statement entitled “The Merger Agreement — Termination” beginning on page 92) has occurred; or

At any time prior to the time the Merger Agreement is adopted by our stockholders, by the Company, if an Alternative Acquisition Agreement Termination Event (as defined in the section of this proxy statement entitled “The Merger Agreement — Termination” beginning on page 92) has occurred; or

At any time prior to the Effective Time, by the Company, if a Parent Breach Termination Event (as defined in the section of this proxy statement entitled “The Merger Agreement — Termination” beginning on page 92) has occurred.
 
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Termination Fee
In certain circumstances, the Company may be required to pay to Parent a termination fee of $54,500,000 (which we refer to as the “Termination Fee”) if the Merger Agreement is terminated. The Termination Fee would be payable to Parent in the following circumstances:

if the Merger Agreement is terminated by Parent due to the Change of Recommendation Termination Event;

if the Merger Agreement is terminated by the Company due to the Alternative Acquisition Agreement Termination Event; or

if the Merger Agreement is terminated due to (i) the End Date Termination Event, the Special Meeting Termination Event, or the Company Breach Termination Event (in the case of the Company Breach Termination Event, solely as a result of a breach or inaccuracy that, other than as a result of the non-solicitation provisions in the Merger Agreement, first occurred following the making of an acquisition proposal as described in the following clause (ii)), (ii) prior to any such termination, an acquisition proposal has been made or publicly announced and not subsequently withdrawn and (iii) within 12 months after the date on which the Merger Agreement is terminated the Company either enters into a definitive agreement with respect to an acquisition proposal or an acquisition proposal is consummated (substituting 50% for 20% in the definition of “acquisition proposal”) (which circumstance we refer to, collectively, as the “Tail Period Event”).
Reverse Termination Fee
In certain circumstances, Parent may be required to pay to the Company a termination fee of $92,125,000 (which we refer to as the “Reverse Termination Fee”) if the Merger Agreement is terminated. The Reverse Termination Fee would be payable to the Company if the Merger is not consummated due to the failure of certain conditions to be satisfied as a result of failure to obtain antitrust clearance.
Expenses
Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, the Merger Agreement and the other transactions contemplated thereunder will be paid by the party incurring such expense. However, if any party fails to promptly pay to the other party the Termination Fee or Reverse Termination Fee, as applicable, if and when it is actually due pursuant to its obligations under the Merger Agreement, the defaulting party will indemnify the non-defaulting party for the fees and expenses (including attorneys’ fees and expenses) such non-defaulting party incurs in connection with pursuing such payment, and the defaulting party will pay interest on the amount of the payment at the prime rate of Bank of America (or its successors or assigns) in effect on the date the payment was payable. Upon payment of the Termination Fee or the Reverse Termination Fee (as applicable), the party obligated to make the applicable payment (and its affiliates) will not have any further liability or obligation arising out of or relating to the Merger Agreement or the transactions contemplated thereby.
Opinion of Centerview Partners LLC
The Company retained Centerview Partners LLC, which is referred to in this proxy statement as “Centerview,” as financial advisor to the Board of Directors in connection with the proposed Merger and the Spin-Off and the other transactions contemplated by the Merger Agreement, the Distribution Agreement and the CVR Agreement, which are collectively referred to as the “Transactions” throughout this section and the summary of Centerview’s opinion below under the caption “Opinion of Centerview Partners LLC”. In connection with this engagement, the Board of Directors requested that Centerview evaluate the fairness, from a financial point of view, to the holders of Company common stock (other than (i) any shares of Company common stock held by dissenting stockholders, (ii) any shares of Company common stock that are owned by the Company as treasury shares or (iii) any shares of Company common stock owned by Parent or Merger Sub (the shares referred to in clauses (i) – (iii), together with any shares of Company common stock held by any affiliate of the Company or Parent, are collectively referred to as “Excluded Shares” throughout this section and the summary of Centerview’s opinion below under the caption “Opinion of Centerview Partners LLC”)) of the Transaction Consideration proposed to be paid to such holders
 
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pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement. On January 22, 2024, Centerview rendered to the Board of Directors its oral opinion, which was subsequently confirmed by delivery of a written opinion, dated January 22, 2024, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Transaction Consideration proposed to be paid to the holders of shares of Company common stock (other than Excluded Shares) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement was fair, from a financial point of view, to such holders.
The full text of Centerview’s written opinion, dated January 22, 2024, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex C and is incorporated herein by reference. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transactions and Centerview’s opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of shares of Company common stock (other than Excluded Shares) of the Transaction Consideration to be paid to such holders pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement. Centerview’s opinion did not address any other term or aspect of the Merger Agreement, the Distribution Agreement, the CVR Agreement or the Transactions and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Transactions or any other matter.
The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.
Interests of Certain Persons in the Merger and the Spin-Off
In considering the recommendation of the Board of Directors with respect to the proposed Merger, the Spin-Off and the Non-Binding Merger-Related Compensation Proposal, you should be aware that executive officers and directors of the Company have certain interests in the Merger and the Spin-Off that are different from, or in addition to, the interests of the Company’s stockholders generally. The Board of Directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Distribution Agreement, and in recommending that the Transaction Proposal and the Non-Binding Merger-Related Compensation Proposal, be adopted by the stockholders of the Company. These interests include, but are not limited to, the following:

payment in respect of cancelled Company equity awards (including options to purchase shares of Company common stock) based on the Merger Consideration in accordance with the terms of the Merger Agreement;

the potential to receive certain payments and benefits under certain executive officers’ individual employment agreements and offer letters upon a qualifying termination of employment;

the entitlement to indemnification benefits in favor of directors and officers of the Company;

the potential for our executive officers to enter into new compensatory arrangements with SpinCo; and

the fact that our directors and officers of the Company will continue as directors and officers of SpinCo following the Spin-Off and the Merger.
For further information with respect to the arrangements between the Company and its directors and executive officers, see the information included under “The Transactions — Interests of Certain Persons in the Merger and the Spin-Off” beginning on page 59.
Material U.S. Federal Income Tax Consequences of the Spin-Off and Merger
Under U.S. federal income tax laws, a U.S. holder (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off and Merger”) must include in its gross income the gross amount of any
 
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dividend paid by the Company to the extent of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). The Company has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, U.S. holders should expect to treat the Distribution as a taxable dividend. The Company or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Distribution payable to Non-U.S. holders (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off and Merger”) of the shares of SpinCo common stock, and any such withholding would be satisfied by the Company or such agent by withholding and selling a portion of the shares of SpinCo common stock that otherwise would be distributable to Non-U.S. holders or by withholding from other property held in the Non-U.S. holder’s account with the withholding agent.
The receipt of cash and CVRs by a U.S. holder pursuant to the Merger will be a taxable transaction to U.S. holders. The amount of gain or loss a U.S. holder will recognize, and the timing of such gain or loss, depend on the U.S. federal income tax treatment of the CVRs, with respect to which there is a significant amount of uncertainty.
Non-U.S. holders generally will not be subject to U.S. federal income tax with respect to the receipt of cash and CVRs in the Merger unless such Non-U.S. holder has certain connections to the United States, but may be subject to the backup withholding rules described above unless the Non-U.S. holder complies with certain certification procedures or otherwise establishes a valid exemption from backup withholding.
Please carefully review the information under “The Transactions — Material U.S. Federal Income Tax Consequences of the Spin-Off and the Merger” beginning on page 63 for a more detailed discussion of the U.S. federal income tax consequences of the Spin-Off and the Merger.
Regulatory Approvals
Under the terms of the Merger Agreement, the Company and Parent will use reasonable best efforts to obtain antitrust approvals, subject to certain limitations. The Merger cannot be completed until the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the “HSR Act”), applicable to the Merger or the transactions contemplated by the Merger Agreement has expired or been terminated. The Merger Agreement also provides that if, prior to the Merger, a merger control inquiry is initiated by the UK Competition & Markets Authority or the European Commission, then approval in that jurisdiction or confirmation that the inquiry has ended will be a condition to the Merger.
On February 9, 2024, the Company and Parent filed notification of the proposed Merger with the Federal Trade Commission (which we refer to as the “FTC”) and the Department of Justice (which we refer to as the “DOJ”) under the HSR Act. The applicable waiting period under the HSR Act expires at 11:59 p.m., Eastern Time, on March 11, 2024.
Contingent Value Rights Agreement
At or prior to the Effective Time, pursuant to the Merger Agreement, Parent will enter into a Contingent Value Rights Agreement between Parent and Continental Stock Transfer & Trust Company (which we refer to as the “Rights Agent”), in substantially the form attached to the Merger Agreement (which we refer to as the “CVR Agreement”). Each CVR will represent the right to receive a contingent payment of $5.00 in cash, without interest, payable to the Rights Agent for the benefit of the holders of CVRs, if the following milestone is achieved:

The final approval by the U.S. Food and Drug Administration (“FDA”), on or prior to June 30, 2027, of the new drug application or supplemental new drug application filed with the FDA pursuant to Section 351 of the Public Health Service Act and 21 CFR §§ 600 et seq. (for clarity, including accelerated approval) that is necessary for the commercial marketing and sale of the Company’s precisely engineered recombinant human AAT-Fc fusion protein, also known as INBRX-101 in the United States of America for the treatment of patients with AATD and clinical evidence of emphysema following the clinical trial with identifier INBRX101-01-201, entitled “A Phase 2, Double-Blind, Randomized, Active-Control, Parallel Group Study to Assess the Pharmacokinetics,
 
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Pharmacodynamics, Immunogenicity, and Safety of INBRX-101 Compared to Plasma Derived Alpha-1 Proteinase Inhibitor (A1PI) Augmentation Therapy in Adults with Alpha-1 Antitrypsin Deficiency Emphysema,” regardless of any obligation to conduct any post-marketing or confirmatory study.
The right to the contingent consideration as evidenced by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement. If the regulatory milestone described above is not achieved by June 30, 2027, the CVRs will expire without value.
Warrant Amendments
Amendment to the Private Placement Warrants to Purchase Common Stock
In connection with the Merger, the Company and each holder of the Private Placement Warrants entered into an Agreement relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, dated as of January 22, 2024 (which we refer to collectively as the “Private Placement Warrant Amendments”), each of which specifies that (i) in connection with the Spin-Off, each holder of outstanding warrants issued by the Company pursuant to that certain Securities Purchase Agreement, dated as of August 28, 2023, by and between the Company and certain institutional and other accredited investors (which we refer to as the “Securities Purchase Agreement”) (such warrants, the “Private Placement Warrants”), will receive a SpinCo warrant with terms, rights and obligations equivalent to the Private Placement Warrants (which we refer to as the “SpinCo Warrants”) and will not otherwise receive shares of SpinCo common stock on account of the Private Placement Warrants and (ii) upon consummation of the Merger, each holder of Private Placement Warrants will receive only the Merger Consideration to which it would be entitled as a result of the Merger if it held the number of shares of Company common stock for which the Private Placement Warrant is exercisable immediately prior to the Merger, assuming full exercise of the Private Placement Warrant on a cashless basis without regard to the beneficial ownership limitation contained in such Private Placement Warrant. The Private Placement Warrants will be cancelled immediately following the Closing. The Private Placement Warrant Amendments also provides that SpinCo will enter into a registration rights agreement with each holder of the SpinCo Warrants containing substantially equivalent registration rights provisions as those set forth in Article 6 of the Securities Purchase Agreement, relating to shares of SpinCo common stock held by each holder of SpinCo Warrants or issuable to such holder pursuant to the exercise of its SpinCo Warrant. SpinCo will effectuate the registration of such securities following the Spin-Off as set forth in the Private Placement Warrant Amendments.
Amendment to Oxford Warrants to Purchase Common Stock
In connection with the Merger, the Company and Oxford Finance LLC entered into the Amendment to Warrants to Purchase Stock, dated as of January 22, 2024 (the “Oxford Warrants Amendment”). The Oxford Warrants Amendment provides that, in connection with the consummation of the Distribution and the Merger, the holder of each 2020 Warrant in effect at 4:00 p.m. EST on the business day prior to the Distribution Record Date (the “Determination Time”) will have the right to receive (A) cash in an amount equal to the product of (1) the total number of shares of Company common stock subject to such 2020 Warrant immediately prior to the Effective Time, multiplied by (2) the difference between (x) the Closing Amount and (y) $17.00, (B) a number of CVRs equal to the total number of shares of Company common stock underlying such 2020 Warrant as of immediately prior to the Effective Time and (C) the number of shares of SpinCo common stock that the holder of such 2020 Warrant would have been entitled to receive in the Distribution had such 2020 Warrant been fully exercised on a cash basis as of the Determination Time. The Oxford Warrants Amendment also provides that if the exercise price of the 2022 Warrants is less than the closing price of a share of Company common stock on the business day before the Distribution Record Date, the 2022 Warrants will automatically be exercised on a cashless basis on the day before the Distribution Record Date. In such case, the holder of the 2022 Warrants would be a Company stockholder as of the Distribution Record Date and receive shares of SpinCo common stock in the Distribution. If, however, the exercise price of the 2022 Warrants is greater than or equal to the closing price of a share of Company common stock on the business day before the Distribution Record Date, such warrants will terminate and expire immediately prior to the consummation of the Merger and the holder of such warrants
 
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will not be permitted to exercise them while the Merger Agreement remains in effect. The 2020 Warrants will be cancelled immediately following the Closing.
Appraisal Rights
If the Merger is consummated and certain conditions are met, the Company’s stockholders or beneficial owners who continuously hold their shares of Company common stock through the Effective Date, who do not vote in favor of the Transaction Proposal, who properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and who comply with, and do not validly withdraw their demands or otherwise lose their appraisal rights under, the applicable provisions of Delaware law will be entitled to appraisal rights to receive, in cash, the fair value of their shares as determined by the Delaware Court of Chancery under Section 262 of the Delaware General Corporation Law (the “DGCL”) as in effect at the time of the parties’ entry into the Merger Agreement (“Section 262”). This means that the Company’s stockholders or beneficial owners may be entitled to have their shares of Company common stock appraised by the Delaware Court of Chancery, and to receive payment in cash of the “fair value” of their shares of Company common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid on the amount determined to be “fair value” ​(or in certain circumstances described in further detail in the section of this proxy statement captioned “Appraisal Rights,” on the difference between the amount determined to be the “fair value” and the amount paid by the Surviving Company in the Merger to each Company stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, the Company’s stockholders or beneficial owners who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.
The Company’s stockholders or beneficial owners considering seeking appraisal should be aware that the “fair value” of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the Merger Consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of Company common stock.
To exercise appraisal rights, the Company’s stockholders must: (i) deliver a written demand for appraisal to the Company before the vote is taken on the Transaction Proposal; (ii) not submit a proxy or otherwise vote in favor of the Transaction Proposal; (iii) continue to hold shares of Company common stock of record through the Effective Date; and (iv) comply with all other procedures for exercising and perfecting appraisal rights under the DGCL. Failure to follow the procedures specified under the DGCL will result in the loss of appraisal rights. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings as to all persons who otherwise would be entitled to appraisal rights unless certain stock ownership conditions are satisfied by the Company’s stockholders who properly and timely demand appraisal in accordance with Section 262 of the DGCL. The DGCL requirements for exercising and perfecting appraisal rights are described in further detail in this proxy statement, which is qualified in its entirety by Section 262 of the DGCL. The relevant section of the DGCL regarding appraisal rights, as in effect at the time of the parties’ entry into the Merger Agreement, may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262.
If you hold your shares of Company common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you may make a written demand for appraisal in your own name, but you must satisfy the conditions set forth above and your written demand must also reasonably identify the holder of record of the shares for which demand is made, be accompanied by documentary evidence of your beneficial ownership of stock (such as a brokerage or securities account statement containing such information or a letter from a broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which you consent to receive notices given by the Surviving Company under Section 262 of the DGCL and to be set forth on the verified listed required by Section 262(f) of the DGCL. For more information, please see the section of this proxy statement captioned “Appraisal Rights.”
Delisting and Deregistration of Company Common Stock
If the Merger is completed, Company common stock will be delisted from NASDAQ and deregistered under the Exchange Act, and the Company will no longer file periodic reports with the SEC on account of Company common stock.
 
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING,
THE MERGER AND THE SPIN-OFF
The following questions and answers are intended to address briefly some commonly asked questions regarding the Merger Agreement, the Distribution Agreement, the Merger, the Spin-Off and the Special Meeting. These questions and answers may not address all questions that may be important to you as a stockholder of the Company. Please refer to the “Summary” beginning on page 1 and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 129.
Q.
Why am I receiving this proxy statement and proxy card or voting instruction form?
A.
You are receiving this proxy statement and proxy card or voting instruction form in connection with the solicitation of proxies by the Board of Directors for use at the Special Meeting because you have been identified as a holder of Company common stock as of the close of business on           , the record date for the Special Meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of Company common stock with respect to such matters.
Q.
When and where is the Special Meeting?
A.
The Special Meeting of stockholders of the Company will be held online in a virtual format at       , on           , at           a.m., Pacific Time.
Q.
What am I being asked to vote on at the Special Meeting?
A.
You are being asked to consider and vote on:

a proposal to adopt the Transaction Proposal;

a proposal to adopt the Adjournment Proposal; and

a non-binding, advisory vote, to adopt the Non-Binding Merger-Related Compensation Proposal.
Q.
What is the proposed transaction and what effects will it have on the Company?
A.
The proposed transaction is the acquisition of the Company by Parent following the separation of certain assets and liabilities of the Company into the Company and SpinCo through the Pre-Closing Reorganization, the distribution of SpinCo common stock to holders of Company common stock and the Merger of Merger Sub with and into the Company, with the Company continuing as the Surviving Company and becoming a wholly owned subsidiary of Parent. The Merger Agreement, which governs the terms and conditions of the Merger, a copy of which is attached as Annex A to this proxy statement. The Distribution Agreement, which governs the Spin-Off, a copy of which is attached as Annex B to this proxy statement. Your vote is required in connection with the Transactions.
If the Transaction Proposal is approved by Company stockholders and the other closing conditions under the Merger Agreement and the Distribution Agreement are satisfied or waived, upon closing (i) you will own one share of SpinCo common stock for every four shares of Company common stock you hold as of the Distribution Record Date, and (ii) the Company will become a wholly owned subsidiary of Parent and will no longer be a publicly held company, and you, as a current holder of Company common stock, will no longer have any interest in the future earnings or growth of the Company. In addition, following the Transactions, (x) Company common stock will be delisted from NASDAQ and deregistered under the Exchange Act, and the Company will no longer file periodic reports with the SEC on account of Company common stock, and (y) SpinCo will be a separate, publicly held company that will own the assets and liabilities primarily related to INBRX-105, INBRX-106 and INBRX-109, including the discovery pipeline, and certain corporate infrastructure currently owned by the Company.
 
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Q.
What will holders of Company common stock receive if the Merger and the Spin-Off are completed?
A.
Upon completion of the Merger, for each share of Company common stock that you own, you will be entitled to receive (i) $30.00 in cash, without interest and less any applicable withholding taxes (which we refer to as the “Closing Amount”), plus (ii) one CVR representing the right to receive a contingent payment of $5.00, without interest thereon, in cash, conditional upon the achievement of the Milestone. For example, if you own 100 shares of Company common stock, you will receive $3,000.00 in cash consideration and 100 CVRs representing the right to receive a total contingent payment of $500.00.
The Merger Consideration received pursuant to the Merger Agreement will be in addition to the SpinCo common stock that Company stockholders of record as of the Distribution Record Date will be entitled to receive in connection with the Spin-Off. Immediately after the Spin-Off, Company stockholders as of the Distribution Record Date will own 92% of the issued and outstanding SpinCo common stock as of the time of the Distribution.
Q.
What will holders of the Company’s equity awards receive if the Merger is completed?
A.
At the Effective Time:

Each In-the-Money Option will be cancelled and immediately cease to be outstanding, and converted into the right to receive (A) the Closing Option Payment and (B) one (1) CVR for each share of Company common stock subject to such Company Option;

Each Closing Date Underwater Option will be cancelled and converted into the right to receive the contingent payment described in the following sentence. If the Milestone is achieved, the cash amount to be paid in respect of each such Closing Date Underwater Option will be equal to (x) $35.00 (representing the sum of the Closing Amount of $30.00 and the Milestone Payment of $5.00) minus (y) the option exercise price per share (in this case, between $30.00 and $35.00 per share strike price), subject to applicable tax withholding; and

Each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested) having an exercise price per share of Company common stock that is equal to or greater than the Merger Consideration will be cancelled without any consideration being payable in respect thereof, and have no further force or effect.
Q.
How does the Board of Directors recommend that I vote?
A.
The Board of Directors of the Company unanimously recommends that you vote “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Q.
When do you expect the Merger to be completed?
A.
We are working towards completing the Merger as soon as possible. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including approval by our stockholders of the Transaction Proposal, we anticipate that the Merger will be completed in the second quarter of 2024.
Q.
What happens if the Merger is not completed?
A.
If the Merger Agreement is not adopted by the stockholders of the Company or if the Merger is not completed for any other reason, the stockholders of the Company will not receive any payment for their shares of Company common stock in connection with the Merger. The Spin-Off will also not be consummated, and stockholders of the Company will not receive any SpinCo common stock. Instead, the Company will remain an independent public company and Company common stock will continue to be listed and traded on NASDAQ.
Under specified circumstances in the Merger Agreement, the Company may be required to disburse or pay a termination fee with respect to the termination of the Merger Agreement, as described under “The Merger Agreement — Termination Fee” beginning on page 93.
 
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Q.
What conditions must be satisfied to complete the Merger?
A.
Consummation of the Merger is subject to the completion of the Spin-Off and satisfaction or waiver of certain customary conditions, including: (i) the adoption of the Merger Agreement and Distribution Agreement by stockholders of the Company; (ii) receipt of regulatory approval under the HSR Act and other applicable antitrust laws; (iii) the absence of any legal prohibitions; (iv) effectiveness of the Spin-Off Registration Statement; (v) the accuracy of representations and warranties of the parties and the performance in all material respects by the parties with their respective obligations under the Merger Agreement; (vi) the completion of the Spin-Off; and (vii) the absence of any Company Material Adverse Effect that is continuing (as defined in the Merger Agreement). See “The Merger Agreement — Conditions to the Merger” beginning on page 90.
Q.
What will happen in the Pre-Closing Reorganization?
A.
In connection with the acquisition of the Company by Parent, prior to the Spin-Off and the Merger, the Company and SpinCo will consummate (or cause to be consummated) the Pre-Closing Reorganization, which will generally result in (i) the Company owning, assuming or retaining assets and liabilities primarily related to INBRX-101 and (ii) SpinCo owning, assuming or retaining assets and liabilities of the Company that are not primarily related to INBRX-101. See “The Transactions — Overview” beginning on page 33 and “The Distribution Agreement” beginning on page 96 for more information.
Q.
What will happen in the Spin-Off?
A.
Following the Pre-Closing Reorganization, but prior to and as a condition to the Closing, the Company will distribute to its stockholders as of the Distribution Record Date, on a pro rata basis, 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, on a pro rata basis, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held by the Company’s stockholders as of the Distribution Record Date, for no consideration, and 8% of the issued and outstanding shares of SpinCo common stock will be retained by the Company as of the time of the Distribution. See “The Transactions” beginning on page 33.
Q.
Why is the Spin-Off important and why is the consummation of the Spin-Off a condition to the Closing?
A.
The Pre-Closing Reorganization of the SpinCo Business is an important step in the Transactions agreed to by the Company and Parent. Accordingly, in connection with the Merger, the SpinCo Business will be separated from the Company and transferred to SpinCo and the consummation of the Spin-Off is a condition to the Closing.
For additional information regarding the Spin-Off, please see SpinCo’s Form 10 filed with the SEC (File No.         ).
Q:
What conditions must be satisfied to complete the Spin-Off?
A.
The Spin-Off is subject to the satisfaction or waiver by the Company and SpinCo of the following conditions:

satisfaction or waiver of the conditions precedent in the Merger Agreement to the consummation of the Merger, other than the completion of the Spin-Off and any conditions that can only be satisfied at the Closing (provided that such conditions are then capable of being satisfied) and confirmation in writing by Parent that it is prepared to consummate the Merger, subject only to the consummation of the Spin-Off;

continuing effectiveness of the Spin-Off Registration Statement, no stop order or proceedings to suspend its effectiveness, and mailing of the information statement to holders of shares of the Company common stock as of the record date;

acceptance for listing on a national securities exchange of shares of SpinCo common stock to be delivered in the Spin-Off;
 
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no legal restraint against the Pre-Closing Reorganization of the Merger and the Spin-Off;

execution of the Transition Services Agreement; and

effectiveness in all material respects of the Pre-Closing Reorganization.
Q.
How will SpinCo be financed?
A.
Prior to the effective time of the Spin-Off, Parent or an affiliate of Parent shall deposit into an escrow account an amount in cash equal to $200,000,000, minus (i) the sum of all marketable securities, cash, and cash equivalents contained in any accounts held by SpinCo as of the close of business on the day prior to the effective time of the Spin-Off, and (ii) the amount, if any, by which the Company’s payoff amount required under the Loan and Security Agreement exceeds the signing debt of $222,000,000. Immediately prior to the effective time of the Spin-Off, the Company will contribute the right to receive the cash held in such escrow account to SpinCo and following the Effective Time such funds shall be released to SpinCo. Except as otherwise set forth in the Distribution Agreement or the Transition Services Agreement, the Company and SpinCo will each bear its own costs and expenses incurred after the Spin-Off. Following the deductions and adjustments described above, we anticipate that SpinCo will have approximately $200,000,000 in cash following the Effective Time, notwithstanding any costs and expenses related to the Spin-Off.
In connection with the Merger, the Parent will satisfy and discharge the Company’s outstanding third-party indebtedness. We do not anticipate that SpinCo will have any outstanding third-party indebtedness at the time of the Distribution.
Q.
What are the material U.S. federal income tax consequences of the Merger?
A.
Under U.S. federal income tax laws, a U.S. holder (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off and the Merger”) must include in its gross income the gross amount of any dividend paid by the Company to the extent of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). The Company has not calculated earnings and profits in accordance with U.S. federal income tax principles. Accordingly, U.S. holders should expect to treat the Distribution as a taxable dividend. The Company or other applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the Distribution payable to Non-U.S. holders (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off and the Merger”) of the shares of SpinCo common stock, and any such withholding would be satisfied by the Company or such agent by withholding and selling a portion of the shares of SpinCo common stock that otherwise would be distributable to Non-U.S. holders or by withholding from other property held in the Non-U.S. holder’s account with the withholding agent.
The receipt of cash and CVRs by a U.S. holder pursuant to the Merger will be a taxable transaction to U.S. holders. The amount of gain or loss a U.S. holder will recognize, and the timing of such gain or loss, depends on the U.S. federal income tax treatment of the CVRs, with respect to which there is a significant amount of uncertainty.
Non-U.S. holders generally will not be subject to U.S. federal income tax with respect to the receipt of cash and CVRs in the Merger unless such Non-U.S. holder has certain connections to the United States, but may be subject to the backup withholding rules described above unless the Non-U.S. holder complies with certain certification procedures or otherwise establishes a valid exemption from backup withholding.
Please carefully review the information under “The Transactions — Material U.S. Federal Income Tax Consequences of the Spin-Off and the Merger” beginning on page 63 for a more detailed discussion of the U.S. federal income tax consequences of the Spin-Off and the Merger
Q.
Do any of the Company’s directors or officers have interests in the Merger that may differ from or be in addition to my interests as a stockholder?
A.
In considering the recommendation of the Board of Directors with respect to the Transaction Proposal,
 
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you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally. The Board of Directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, and in recommending that the Merger Agreement be adopted by the stockholders of the Company. See “The Transactions — Interests of Certain Persons in the Merger and the Spin-Off” beginning on page 60.
Q.
Why am I being asked to consider and vote on the Non-Binding Merger-Related Compensation Proposal?
A.
Under SEC rules, the Company is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to our named executive officers that is based on, or otherwise relates to, the Merger, commonly referred to as “golden parachute” compensation. This vote is separate from the vote to approve the Merger Agreement.
Q.
What vote is required for the Company’s stockholders to approve the Transaction Proposal?
A.
The adoption of the Transaction Proposal requires the affirmative vote of holders of a majority of the shares of Company common stock outstanding entitled to vote on the proposal.
Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve the Transaction Proposal. If you fail to submit a proxy or to vote via the virtual meeting website at the Special Meeting or if your shares of Company common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock, your shares of Company common stock will be treated as abstentions.
Q.
What vote of our stockholders is required to approve the Adjournment Proposal?
A.
Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of Company common stock present at the Special Meeting and entitled to vote on the proposal.
Abstaining will have the same effect as a vote “AGAINST” approval of the Adjournment Proposal. If you fail to submit a proxy or to vote via the virtual meeting website at the Special Meeting or if your shares of Company common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock, your shares of Company common stock will be treated as abstentions.
Q.
What vote of our stockholders is required to approve the Non-Binding Merger-Related Compensation Proposal?
A.
Approval by means of a non-binding, advisory vote, of the Non-Binding Merger-Related Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of Company common stock present at the Special Meeting and entitled to vote on the proposal.
Abstaining will have the same effect as a vote “AGAINST” approval of the Non-Binding Merger-Related Compensation Proposal. If you fail to submit a proxy or to vote via the virtual meeting website at the Special Meeting or if your shares of Company common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock, your shares of Company common stock will be treated as abstentions.
Q.
If my broker holds my shares in “street name,” will my broker vote my shares for me?
A.
Under the rules of NASDAQ, banks, brokerage firms or other nominees who hold shares in “street name” for customers have the authority to vote on “discretionary” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-discretionary matters, such as
 
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the Transaction Proposal and the Adjournment Proposal, and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-discretionary matters, which we refer to generally as “broker non-votes.” Because none of the proposals to be voted on at the Special Meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the Special Meeting.
Q.
What is the difference between holding Company common stock as a stockholder of record and as a beneficial owner?
A.
If on the record date, your shares of Company common stock were registered directly in your name with our transfer agent, then you are a stockholder “of record.” If you are a stockholder of record, you may vote via the virtual meeting website at the Special Meeting, by mail or over the Internet. Whether or not you plan to attend the Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Special Meeting and vote via the virtual meeting website if you have already voted by proxy. Voting via the virtual meeting website at the Special Meeting will revoke your proxy.
If on the record date, your shares of Company common stock were held not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then your shares of Company common stock are held in “street name” and you are the beneficial owner of the shares of Company common stock. If you are a beneficial owner of shares of Company common stock registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Please complete and mail that proxy card to ensure that your vote is counted. Alternatively, you may vote over the Internet, as instructed by your broker or bank. To vote via the virtual meeting website at the Special Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request such a proxy form.
Q.
If my shares of Company common stock are held in “street name” by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee vote my shares of Company common stock for me?
A.
No. Your bank, brokerage firm or other nominee will only be permitted to vote your shares of Company common stock if you instruct your bank, brokerage firm or other nominee how to vote. You should follow the procedures provided by your bank, brokerage firm or other nominee regarding the voting of your shares of Company common stock. Banks, brokerage firms or other nominees who hold shares in street name for customers have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the proposals to be considered at the Special Meeting, and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-routine matters. If you do not instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock, your shares of Company common stock will not be voted (which we refer to generally as “broker non-votes”), and any such broker non-votes will be counted as abstentions, which will have the same effect as a vote “AGAINST” approval of each of the Transaction Proposal, the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal.
Q.
Who can vote at the Special Meeting?
A.
Only stockholders of record at the close of business on                , 2024, the record date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement of the meeting. On the record date,           shares of Company common stock were outstanding and entitled to vote upon each of the matters to be presented at the meeting.
If you are a beneficial owner of shares of Company common stock registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these
 
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proxy materials from that organization rather than from us. Please complete and mail that proxy card to ensure that your vote is counted. Alternatively, you may vote over the Internet, as instructed by your broker or bank. To vote via the virtual meeting website at the Special Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request such a proxy form.
Q.
How many votes do I have?
A.
Each holder of Company common stock is entitled to cast one vote on each matter properly brought before the Special Meeting for each share of Company common stock that such holder owned as of the record date of           . As of the close of business on the record date, there were a total of           shares of Company common stock outstanding and entitled to vote at the Special Meeting, held by           holders of record.
Q.
What is the quorum requirement?
A.
Under the Amended and Restated Bylaws of the Company (the “Bylaws”), a quorum is present at a meeting of stockholders if there are present in person or by proxy at least a majority of the voting power of the shares outstanding and entitled to vote at the meeting.
Q.
How do I vote?
A.
Stockholder of Record.   If you are a stockholder of record, you may have your shares of Company common stock voted on matters presented at the Special Meeting in any of the following ways:

Virtually via the Virtual Meeting Website.   You may attend the Special Meeting virtually and cast your vote there.

Via Our Internet Voting Site at www.proxypush.com/INBX. If you received printed proxy materials, follow the instructions for submitting your proxy via the Internet printed on your proxy card.

By Telephone.   Call toll-free at 1-866-509-2152. You can also submit your proxy by telephone by following the instructions provided on the Internet voting site or, if you received printed proxy materials, by following the instructions provided on your proxy card.

In Writing.   You can submit your proxy by completing, signing, dating and returning the proxy card in the enclosed postage-paid envelope.
The Internet and telephone voting facilities for the submission of proxies for stockholders of record will close at              , Pacific Time on              , 2024.
Beneficial Owner.   If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote via the virtual meeting website at the Special Meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the Special Meeting. To gain admittance, please register in advance at https://www.proxydocs.com/INBX and enter your control number included in the Important Notice Regarding the Availability of Proxy Materials for the Special Meeting or proxy card that you receive.
Q.
How can I change or revoke my proxy?
A.
If you own shares of Company common stock in your own name, you may revoke any prior proxy or voting instructions, regardless of how your proxy or voting instructions were originally submitted, by:

sending a written statement to that effect to our Corporate Secretary, which must be received by us by 5:00 p.m., Pacific Time on the business day immediately prior to the date of the Special Meeting;

submitting a properly signed proxy card or voting instruction form dated a later date;

submitting a later dated proxy or providing new voting instructions via the Internet or by telephone; or
 
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attending the Special Meeting and voting your shares of Company common stock via the virtual meeting website.
If you hold shares of Company common stock in street name, you should contact the intermediary for instructions on how to change your voting instruction.
Q.
What is a proxy?
A.
A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of Company common stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of Company common stock is called a “proxy card.”
Q.
If a stockholder gives a proxy, how are the shares of Company common stock voted?
A.
Regardless of the method you choose to submit your proxy, the individuals named on the enclosed proxy card will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Company common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
If you own shares of Company common stock that are registered in your own name and return a signed proxy card or grant a proxy via the Internet or by telephone, but do not indicate how you wish your shares of Company common stock to be voted, the shares of Company common stock represented by your properly signed proxy will be voted “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Q.
How are votes counted?
A.
For the Transaction Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as if you voted “AGAINST” approval of the proposal, and broker non-votes will be counted as abstentions.
For the Adjournment Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as if you voted “AGAINST” approval of the proposal, and broker non-votes will be counted as abstentions.
For the Non-Binding Merger-Related Compensation Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as if you voted “AGAINST” approval of the proposal, and broker non-votes will be counted as abstentions.
Q.
What do I do if I receive more than one proxy or set of voting instructions?
A.
If you received more than one proxy card, your shares of Company common stock are likely registered in different names or with different addresses or are in more than one account. You must separately vote the shares of Company common stock shown on each proxy card that you receive in order for all of your shares of Company common stock to be voted at the meeting.
Q.
What happens if I sell my shares of Company common stock before the Special Meeting?
A.
The record date for stockholders entitled to vote at the Special Meeting is earlier than both the date of the Special Meeting and the consummation of the Merger. If you transfer your shares of Company common stock after the record date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your shares of Company common stock and each of you notifies the Company in writing of such special arrangements, you will retain your right to vote such shares of Company common stock at the Special Meeting but will transfer the right to receive the Transaction Consideration to the person to whom you transfer your shares of Company common stock.
 
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Q.
What happens if I sell my shares of Company common stock before the Distribution Record Date?
A.
The Distribution Record Date for stockholders entitled to receive shares of SpinCo common stock in the Spin-Off is later than the date of the Special Meeting but earlier than the date of the consummation of the Merger. If you transfer your shares of Company common stock before the Distribution Record Date, you will transfer the right to receive the shares of SpinCo common stock to the person to whom you transfer your shares of Company common stock.
Q.
What happens if I sell my Company common stock after the Special Meeting but before the Effective Time?
A.
If you transfer your shares of Company common stock after the Special Meeting but before the Effective Time, you will have transferred the Merger Consideration to the person to whom you transfer your shares of Company common stock. In order to receive the Merger Consideration, you must hold your shares of Company common stock through the completion of the Merger.
If you transfer your shares of Company common stock after the Distribution Record Date but before the Effective Time, you will have transferred your right to receive the Merger Consideration to the person to whom you transfer your shares of Company common stock; however, you will retain the right to receive shares of SpinCo common stock in the Spin-Off. In order to receive shares of SpinCo common stock, you must hold your shares of Company common stock through the Distribution Record Date.
Q.
Who is paying for this proxy solicitation?
A.
The Company has engaged BetaNXT, Inc. and its platform, Mediant (which we refer to as “Mediant”) to assist in the distribution and tabulation of proxies for the Special Meeting. The Company estimates that it will pay Mediant a fee of approximately $17,500 and postage expenses. The Company has agreed to reimburse Mediant for certain fees and expenses and will also indemnify Mediant, its affiliates and their respective officers, directors, employees and agents against certain losses, claims, damages, costs, charges, counsel fees and expenses, payments, expenses and liability. The Company may also reimburse banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of shares of Company common stock. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person, but they will not be paid any additional amounts for soliciting proxies.
Q.
What do I need to do now?
A.
Even if you plan to attend the Special Meeting, after carefully reading and considering the information contained in this proxy statement, please promptly submit your proxy to ensure that your shares of Company common stock are represented at the Special Meeting. If you hold your shares of Company common stock in your own name as the stockholder of record, you may submit a proxy to have your shares of Company common stock voted at the Special Meeting in one of three ways: (i) using the Internet in accordance with the instructions set forth on the enclosed proxy card, (ii) calling toll-free at 866-648-8133 or (iii) completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope. If you decide to attend the Special Meeting and vote via the virtual meeting website, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you.
Q.
Should I surrender my shares now?
A.
No. Any holder of book-entry shares will not be required to deliver a certificate or an executed letter of transmittal to the paying agent to receive the Merger Consideration. See “The Merger Agreement — Surrender and Payment Procedures” beginning on page 76.
 
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Q.
Am I entitled to exercise dissenters’ rights or rights of appraisal instead of receiving the Merger Consideration for my shares of Company common stock?
A.
Yes. In order to exercise your appraisal rights, you must follow the requirements set forth in Section 262 of the DGCL. Under Delaware law, if the Merger is consummated and certain conditions are met, Company stockholders or beneficial owners who continuously hold their shares of Company common stock through the Effective Date, do not vote in favor of the Transaction Proposal, properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and otherwise comply with, and do not validly withdraw or otherwise lose their appraisal rights under, the applicable provisions of Delaware law will be entitled to appraisal rights to receive, in cash, the “fair value” of their shares as determined by the Delaware Court of Chancery in accordance with Section 262 of the DGCL, the provisions of which are summarized in this proxy statement. If the Merger is consummated and certain conditions are met, Company stockholders and beneficial owners who properly exercise their appraisal rights in compliance with Section 262 of the DGCL will be entitled to have the Delaware Court of Chancery determine, and to be paid, the “fair value” of their shares, exclusive of any element or value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the “fair value.” The appraisal amount could be more than, the same as or less than the amount a Company stockholder would be entitled to receive under the terms of the Merger Agreement. For additional information, see the section entitled “Appraisal Rights.” The relevant section of the DGCL regarding appraisal rights, as in effect both at the time of the parties’ entry into the Merger Agreement, may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. See “Dissenters’ Rights” beginning on page 31.
Q.
Who can help answer any other questions I might have?
A.
If your shares are registered directly in your name through our Transfer Agent, or you have stock certificates registered in your name, and you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy tabulator by internet, by email or by phone:
By Internet: https://www.proxydocs.com/INBX
By Email: paper@investorelections.com
By Phone: 866-648-8133
If your shares are held in the name of a bank, broker, or other nominee, you will receive instructions from your bank, broker, or other nominee of record if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions.
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements about Parent’s proposed acquisition of the Company and the Company’s related spin-off of the assets and liabilities of the Company that are not primarily related to INBRX-101, which involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. All statements other than statements of historical facts contained in this proxy statement are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “design,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. The risks and uncertainties include, among other things, risks related to the satisfaction or waiver of the conditions to closing the proposed acquisition (including the failure to obtain necessary regulatory approvals and failure to obtain the requisite vote by the Company’s stockholders) in the anticipated timeframe or at all, including the possibility that the proposed acquisition does not close; the possibility that competing offers may be made; risks related to the ability to realize the anticipated benefits of the proposed acquisition, including the possibility that the expected benefits from the acquisition will not be realized or will not be realized within the expected time period; the risk that the integration of the Company and Parent will be more difficult, time consuming or costly than expected; risks and costs relating to the separation of the assets and liabilities of the Company that are not primarily related to INBRX-101 and the consummation of the Spin-Off in the anticipated timeframe or at all; changes to the configuration of the non- INBRX-101 businesses included in the separation if implemented; disruption from the transaction making it more difficult to maintain business and operational relationships; risks related to diverting management’s attention from the Company’s ongoing business operation; negative effects of this announcement or the consummation of the proposed transaction on the market price of the Company’s shares of common stock and/or operating results; significant transaction costs; risks associated with the discovery of unknown liabilities prior to or after the closing of the proposed transactions; the risk of litigation and/or regulatory actions related to the proposed transactions or the Company’s business; other business effects and uncertainties, including the effects of industry, market, business, economic, political or regulatory conditions; the conflicts in the Ukraine and the Middle East; future exchange and interest rates; changes in tax and other laws, regulations, rates and policies; and future business combinations or disposals. Important factors, risks and uncertainties that could cause actual results to differ materially from such forward looking statements also include but are not limited to the initiation, timing, progress and results of the Company’s research and development programs as well as the Company’s preclinical studies and clinical trials; the Company’s ability to advance therapeutic candidates into, and successfully complete, clinical trials; the Company’s interpretation of initial, interim or preliminary data from the Company’s clinical trials, including interpretations regarding disease control and disease response; the timing or likelihood of regulatory filings and approvals, including whether any product candidate, receives approval from the FDA, or similar regulatory authority, for an accelerated approval process; the commercialization of the Company’s therapeutic candidates, if approved; the pricing, coverage and reimbursement of the Company’s therapeutic candidates, if approved; the Company’s ability to utilize the Company’s technology platform to generate and advance additional therapeutic candidates; the implementation of the Company’s business model and strategic plans for the Company’s business and therapeutic candidates; the Company’s ability to successfully manufacture the Company’s therapeutic candidates for clinical trials and commercial use, if approved; the Company’s ability to contract with third-party suppliers and manufacturers and their ability to perform adequately; the scope of protection the Company is able to establish and maintain for intellectual property rights covering the Company’s therapeutic candidates; the Company’s ability to enter into strategic partnerships and the potential benefits of such partnerships; the Company’s estimates regarding expenses, capital requirements and needs for additional financing; the ability to raise funds needed to satisfy the Company’s capital requirements, which may depend on financial, economic and market conditions and other factors, over which the Company may have no or limited control; the Company’s financial performance; the Company’s and the Company’s third party partners’ and service providers’ ability to continue operations and advance the Company’s therapeutic candidates through clinical trials and the ability of the Company’s third party manufacturers to provide the required raw materials, antibodies and other biologics for the Company’s preclinical research and clinical trials in light of current market conditions or any pandemics, regional conflicts, sanctions, labor conditions, geopolitical events, natural disasters or extreme weather events; the
 
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ability to retain the continued service of the Company’s key professionals and to identify, hire and retain additional qualified professionals; and developments relating to the Company’s competitors and the Company’s industry.
You should carefully consider the foregoing factors and the other risks and uncertainties that affect the Company’s business described in the “Risk Factors” and “Special Note Regarding Forward-Looking Statements” sections of its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the U.S. Securities and Exchange Commission (the “SEC”), all of which are available at www.sec.gov. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. We operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company undertakes no obligation to, and does not intend to, update publicly or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. The Company does not give any assurance that it will achieve its expectations.
You should read this proxy statement and the documents that we file with the SEC with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.
 
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PARTIES TO THE MERGER
Inhibrx, Inc.
The Company, a Delaware corporation, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates in oncology and orphan diseases. Inhibrx utilizes diverse methods of protein engineering to address the specific requirements of complex target and disease biology, including its proprietary protein engineering platforms. The Company’s current clinical pipeline includes therapeutic candidates in the following categories:

INBRX-101 seeks to maintain the natural function of Alpha-1 antitrypsin (“AAT”) in a recombinant format, optimized for less frequent dosing and greater potential therapeutic activity as compared to plasma-derived AAT (“pdAAT”).

INBRX-106 is a hexavalent product candidate agonist of OX40. OX40 is a co-stimulatory receptor expressed on immune cells that is enriched in the tumor microenvironment. OX40 ligand is a trimeric protein that activates OX40 signaling through clustering.

INBRX-109 is a precision-engineered, tetravalent death receptor 5 (DR5) agonist antibody designed to exploit the tumor-biased cell death induced by DR5 activation.
The Company’s principal executive office is located at 11025 N. Torrey Pines Road, Suite 200, La Jolla, CA 92037. The Company’s telephone number is (858) 795-4220. The Company website address is www.inhibrx.com. The information provided on the Company’s website is not part of this proxy statement and is not incorporated in this proxy statement by reference here or by any other reference to its website provided in this proxy statement.
The Company common stock is listed and trades on NASDAQ under the symbol “INBX.”
Inhibrx Biosciences, Inc.
SpinCo is a Delaware corporation and a wholly owned subsidiary of the Company, and was formed on January 8, 2024 under the name Ibex SpinCo, Inc. and renamed on January 25, 2024 to Inhibrx Biosciences, Inc., for the purpose of engaging in the transactions contemplated by the Distribution Agreement. SpinCo has not engaged in any business activities other than in connection with the transactions contemplated by the Distribution Agreement. Pursuant to the terms of the Distribution Agreement, the Company will effect the Pre-Closing Reorganization, such that the Company will own, assume or retain all assets and liabilities primarily related to INBRX-101, and SpinCo will own, assume or retain all other assets and liabilities of the Company and its subsidiaries, and thereafter, but prior to and as a condition to Closing, the Company will distribute to its stockholders as of the Distribution Record Date, on a pro rata basis, 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held as of the Distribution Record Date.
After the Spin-Off is completed, SpinCo will be a separate, publicly held company that will own certain assets and liabilities of the Company that are not primarily related to the 101 Business.
The principal executive office of SpinCo is located at 11025 N. Torrey Pines Road, Suite 140, La Jolla, CA 92037, and SpinCo’s telephone number is (858) 795-4220.
Aventis Inc.
Parent is a Pennsylvania corporation and is a wholly owned indirect subsidiary of Sanofi, a leading global healthcare company, focused on patient needs and engaged in the research, development, manufacture and marketing of therapeutic solutions. Parent’s principal executive office is located at 55 Corporate Drive, Bridgewater, NJ 08807.
Art Acquisition Sub, Inc.
Merger Sub was incorporated in Delaware on January 18, 2024, as a direct, wholly owned subsidiary of Parent, solely for the purpose of engaging in the Transactions (as defined below), including the Merger.
 
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Merger Sub has not carried on any activities on or prior to the date of this proxy statement, except for activities incidental to its formation and activities undertaken in connection with the Transactions, including the structuring and negotiation of the Transactions. Upon completion of the Merger, Merger Sub will merge with and into the Company and Merger Sub will cease to exist.
 
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THE SPECIAL MEETING
This proxy statement is being provided to the stockholders of the Company as part of a solicitation of proxies by the Board for use at the special meeting to be held at the time specified below, and at any properly convened meeting following an adjournment or postponement thereof. This proxy statement provides stockholders of the Company with the information they need to know to be able to vote or instruct their vote to be cast at the Special Meeting or any adjournment or postponement thereof.
Date, Time and Place of the Special Meeting
This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board of Directors for use at the Special Meeting to be held online in a virtual format on           , at           a.m., Pacific Time, or at any postponement or adjournment thereof. Stockholders of the Company will be able to attend the Special Meeting by registering at https://www.proxydocs.com/INBX.
Purpose of the Special Meeting
At the Special Meeting, holders of record as of the close of business on           , 2024 (which we refer to as the “record date”) of Company common stock will be asked to consider and vote on:

a proposal to adopt the Transaction Proposal;

a proposal to adopt the Adjournment Proposal; and

a non-binding, advisory vote, to adopt the Non-Binding Merger-Related Compensation Proposal.
We do not expect that any matters other than the proposals set forth above will be brought before the Special Meeting, and only matters specified in the notice of the meeting may be acted upon at the Special Meeting.
The Board of Directors unanimously recommends that you vote “FOR” each of the above proposals.
Our stockholders must approve the Transaction Proposal in order for the Merger to occur. If our stockholders fail to approve the Transaction Proposal, the Merger and the Spin-Off will not occur. A copy of the Merger Agreement is attached as Annex A to this proxy statement and a copy of the Distribution Agreement is attached as Annex B to this proxy statement. We encourage you to read the Merger Agreement and the Distribution Agreement carefully and in their entirety.
Record Date and Quorum
We have fixed the close of business on           , 2024, as the record date for the Special Meeting, and only holders of record of shares of Company common stock on the record date are entitled to notice of, and to vote at (in person by proxy), the Special Meeting.
You are entitled to receive notice of, and to vote at, the Special Meeting if you owned Company common stock at the close of business on the record date. You will be entitled to one vote for each share of Company common stock that you owned on the record date. As of the close of business on the record date, there were           shares of Company common stock outstanding and entitled to vote at the Special Meeting, held by           holders of record. You will be entitled to one vote on all matters properly coming before the Special Meeting for each share of Company common stock that you owned on the record date.
Holders of a majority of the voting power of the shares outstanding and entitled to vote upon a question to be considered at the meeting constitute a quorum for the purposes of the Special Meeting. Shares of Company common stock represented at the Special Meeting but not voted, including shares of Company common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the Special Meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. In the event that a quorum is not present at the Special Meeting, the Special Meeting may be adjourned or postponed to solicit additional proxies. Pursuant to the Bylaws, approval of the adjournment of the Special Meeting in a situation in which a quorum is not present or represented at the Special Meeting requires the affirmative vote of holders of a majority of the shares of
 
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Company common stock present at the Special Meeting and entitled to vote on the proposal. Approval of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal each require the affirmative vote of the holders of a majority of the shares of Company common stock present at the Special Meeting and entitled to vote on the proposal.
Attendance
Only stockholders of record as of the record date, their duly authorized proxy holders, beneficial stockholders with proof of ownership and our guests may attend the Special Meeting. To gain admittance, please register in advance at https://www.proxydocs.com/INBX and enter your control number included in the Important Notice Regarding the Availability of Proxy Materials for the Special Meeting or proxy card that you receive.
Vote Required
Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of Company common stock entitled to vote on the proposal, voting as a single class. For the Transaction Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will not be counted as votes cast in favor of the Transaction Proposal, but will count for the purpose of determining whether a quorum is present.
If your shares of Company common stock are registered directly in your name with our transfer agent, you are considered, with respect to those shares of Company common stock, the “stockholder of record.” This proxy statement and proxy card have been sent directly to you by the Company.
If your shares of Company common stock are held through a bank, brokerage firm or other nominee, you are considered the “beneficial owner” of shares of Company common stock held in street name. In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of Company common stock, the stockholder of record. As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares of Company common stock by following their instructions for voting.
Banks, brokerage firms or other nominees who hold shares in street name for customers generally have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters such as the Transaction Proposal and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-routine matters. These broker non-votes will be counted for purposes of determining a quorum assuming attendance at the Special Meeting, and if there are broker non-votes with respect to your shares of Company common stock on the issue, as applicable, these broker non-votes will be counted as abstentions and will have the same effect as if you voted “AGAINST” approval of the Transaction Proposal.
The Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal each require the affirmative vote of holders of a majority of shares of Company common stock present in person or by proxy at the Special Meeting and entitled to vote on the proposal. For each of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” For purposes of each of the Adjournment Proposal and the Non-Binding Merger-Related Compensation Proposal, if you attend the Special Meeting and abstain on such proposal, or if you have submitted a proxy and abstained on such proposal, this will have the same effect as if you voted “AGAINST” approval of such proposal.
If you are a stockholder of record, you may have your shares of Company common stock voted on matters presented at the Special Meeting in any of the following ways:

by proxy — stockholders of record have a choice of voting by proxy by telephone or over the Internet, by accessing the telephone number or website specified on the enclosed proxy card. The control number provided on your proxy card is designed to verify your identity when voting by
 
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telephone or by Internet. Please be aware that if you vote by telephone or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible;

by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope; or

by virtually attending via the virtual meeting website — you may attend the Special Meeting and cast your vote there.
If you are a beneficial owner, you should receive instructions from your bank, brokerage firm or other nominee that you must follow in order to have your shares of Company common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares of Company common stock voted. Please note that if you are a beneficial owner and wish to vote via the virtual meeting website at the Special Meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the Special Meeting.
Please refer to the instructions on your proxy or voting instruction card to determine the deadlines for submitting your proxy over the Internet or by telephone. If you choose to submit a proxy by mailing a proxy card, your proxy card should be mailed in the accompanying prepaid reply envelope, and your proxy card must be filed with our Corporate Secretary by the time the Special Meeting begins.
If you submit a proxy, regardless of the method you choose to submit such proxy, the individuals named on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Company common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares of Company common stock represented by your properly signed proxy will be voted “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
IT IS IMPORTANT THAT YOU VOTE YOUR SHARES OF COMPANY COMMON STOCK AT THE MEETING PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.
As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate,           shares of Company common stock (not including any Company common stock deliverable upon exercise or conversion of any options, stock appreciation rights, restricted shares or phantom awards), representing approximately    % of the shares of outstanding Company common stock. The directors and officers have informed the Company that they currently intend to vote all such shares of Company common stock “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Proxies and Revocation
Any stockholder of record entitled to vote at the Special Meeting may submit a proxy by telephone, over the Internet or by returning the enclosed proxy card in the envelope provided, or may vote via the virtual meeting website by attending the Special Meeting. If you are a beneficial owner of Company common stock registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Please complete and mail that proxy card to ensure that your vote is counted. Alternatively, you may vote over the Internet, as instructed by your broker or bank. If you fail to submit a proxy or to vote via the virtual meeting website at the Special Meeting, or do not provide your bank, brokerage firm or other nominee with
 
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instructions, as applicable, your shares of Company common stock will not be voted on the proposal to adopt the Transaction Proposal, and your shares of Company common stock will not have an effect on the proposal to adopt the Transaction Proposal, the Adjournment Proposal or the Non-Binding Merger-Related Compensation Proposal.
You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by voting again at a later date through any of the methods available to you, by giving written notice of revocation to the Company’s Corporate Secretary, which must be filed with the Corporate Secretary by 5:00 p.m. Pacific Time on the business day immediately prior to the date of the Special Meeting, or by virtually attending the Special Meeting and voting via the virtual meeting website. Written notice of revocation should be mailed to: Inhibrx, Inc., Attention: Corporate Secretary, 11025 N. Torrey Pines Road, Suite 200, La Jolla, California 92037.
Adjournments
Although not currently expected, the Special Meeting may be adjourned, if necessary, desirable or appropriate, to solicit additional proxies if, at the time of the Special Meeting, there are an insufficient number of votes in favor of adopting the Transaction Proposal. Pursuant to the Bylaws, approval of the adjournment of the Special Meeting in a situation in which a quorum is not present or represented at the Special Meeting requires the affirmative vote of the holders of a majority of Company common stock present at the Special Meeting and entitled to vote on the proposal. Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of Company common stock present at the Special Meeting and entitled to vote on the proposal. Any adjournment of the Special Meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned.
Anticipated Date of Completion of the Merger
We are working towards completing the Merger as soon as possible. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including approval by our stockholders of the Transaction Proposal, we anticipate that the Merger will be completed in the second quarter of 2024. If our stockholders vote to approve the Transaction Proposal, the Merger will become effective as soon as practicable following the satisfaction or waiver of the other conditions to the Merger, including the effectiveness of the Spin-Off, subject to the terms of the Merger Agreement. See “The Merger Agreement — Closing and Effective Time of the Merger” beginning on page 74.
Dissenters’ Rights
If the Merger is consummated and certain conditions are met, the Company’s stockholders or beneficial owners who continuously hold their shares of Company common stock through the Effective Date, who do not vote in favor of the Merger, who properly demand in writing an appraisal of their shares delivered to the Company prior to the taking of the vote on the Transaction Proposal and who comply with, and do not validly withdraw their demands or otherwise lose their appraisal rights under, the applicable provisions of Delaware law will be entitled to appraisal rights to receive, in cash, the fair value of their shares as determined by the Delaware Court of Chancery under Section 262 of the Delaware General Corporation Law (the “DGCL”) as in effect at the time of the parties’ entry into the Merger Agreement (“Section 262”). This means that the Company’s stockholders or beneficial owners may be entitled to have their shares of Company common stock appraised by the Delaware Court of Chancery, and to receive payment in cash of the “fair value” of their shares of Company common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid on the amount determined to be “fair value” ​(or in certain circumstances described in further detail in the section of this proxy statement captioned “Appraisal Rights,” on the difference between the amount determined to be the “fair value” and the amount paid by the Surviving Company in the Merger to each Company stockholder entitled to appraisal prior to the entry of judgment in any appraisal proceeding). Due to the complexity of the appraisal process, the Company’s stockholders or beneficial owners who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights.
 
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The Company’s stockholders or beneficial owners considering seeking appraisal should be aware that the “fair value” of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as, or less than the value of the Merger Consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of Company common stock.
To exercise appraisal rights, the Company’s stockholders must: (i) deliver a written demand for appraisal to the Company before the vote is taken on the Transaction Proposal; (ii) not submit a proxy or otherwise vote in favor of the Transaction Proposal; (iii) continue to hold shares of Company common stock of record through the Effective Date; and (iv) comply with all other procedures for exercising and perfecting appraisal rights under the DGCL. Failure to follow the procedures specified under the DGCL will result in the loss of appraisal rights. In addition, the Delaware Court of Chancery will dismiss appraisal proceedings as to all persons who otherwise would be entitled to appraisal rights unless certain stock ownership conditions are satisfied by the Company’s stockholders who properly and timely demand appraisal in accordance with Section 262 of the DGCL. The DGCL requirements for exercising and perfecting appraisal rights are described in further detail in this proxy statement, which is qualified in its entirety by Section 262 of the DGCL. The relevant section of the DGCL regarding appraisal rights, as in effect at the time of the parties’ entry into the Merger Agreement, may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262.
If you hold your shares of Company common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you may make a written demand for appraisal in your own name, but you must satisfy the conditions set forth above and your written demand must also reasonably identify the holder of record of the shares for which demand is made, be accompanied by documentary evidence of your beneficial ownership of stock (such as a brokerage or securities account statement containing such information or a letter from a broker or other record holder of such shares confirming such information) and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which you consent to receive notices given by the Surviving Company under Section 262 of the DGCL and to be set forth on the verified listed required by Section 262(f) of the DGCL. For more information, please see the section of this proxy statement captioned “Appraisal Rights.”
Solicitation of Proxies; Payment of Solicitation Expenses
The Company has engaged Mediant (which we refer to as “Mediant”) to assist in the solicitation of proxies for the Special Meeting. The Company estimates that it will pay Mediant a fee of approximately $17,500 and postage expenses. The Company has agreed to reimburse Mediant for certain fees and expenses and will also indemnify Mediant, its affiliates and their respective officers, directors, employees and agents against certain losses, claims, damages, costs, charges, counsel fees and expenses, payments, expenses and liability. The Company may also reimburse banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of shares of Company common stock. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person, but they will not be paid any additional amounts for soliciting proxies.
Questions and Additional Information
If your shares are registered directly in your name through our Transfer Agent, or you have stock certificates registered in your name, and you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy tabulator by internet, by email or by phone:
By Internet: https://www.proxydocs.com/INBX
By Email: paper@investorelections.com
By Phone: 866-648-8133
If your shares are held in the name of a bank, broker, or other nominee, you will receive instructions from your bank, broker, or other nominee of record if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions.
 
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THE TRANSACTIONS (PROPOSAL NO. 1)
This discussion of the Transactions is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and the Distribution Agreement, which is attached to this proxy statement as Annex B. You should read the entire Merger Agreement and the Distribution Agreement carefully, as these are the legal documents that govern the transaction.
Overview
On January 22, 2024, the Company and Parent entered into certain agreements to effect the acquisition of the Company by Parent. The transactions contemplated by the agreements (which we refer to, collectively, as the “Transactions”) include the separation of certain assets of the Company between the Company and SpinCo through a series of restructuring transactions (which we refer to as the “Pre-Closing Reorganization”), the distribution of 92% of the issued and outstanding shares of SpinCo common stock as of the time of the Distribution, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held as of the Distribution Record Date, and the subsequent Merger. In order to effect the Transactions, the Company, Parent and Merger Sub entered into the Merger Agreement and the Company and SpinCo entered into the Distribution Agreement.
The Pre-Closing Reorganization; The Spin-Off; The Merger
In connection with the acquisition of the Company by Parent, prior to the Spin-Off and the Merger, the Company and SpinCo will consummate (or cause to be consummated) the Pre-Closing Reorganization, which will generally result in the Company owning, assuming or retaining all assets and liabilities primarily related to the 101 Business, and SpinCo owning, assuming or retaining those assets and liabilities primarily related to the SpinCo Business.
As a condition to the Merger, the Company will consummate the Spin-Off, with the distribution of 92% of the issued and outstanding shares of SpinCo common stock as of the Distribution Record Date, at a ratio of one share of SpinCo common stock for every four shares of Company common stock held as of the Distribution Record Date. Prior to the Spin-Off, the Company will consummate or cause to be consummated the Pre-Closing Reorganization. Prior to the date of the Spin-Off, the Company will also prepare and file the Spin-Off Registration Statement to register the shares of SpinCo common stock that will be distributed in the Spin-Off.
After the Pre-Closing Reorganization and Spin-Off are completed, SpinCo will be a separate, publicly held company that will own the assets and liabilities primarily related to INBRX-105, INBRX-106 and INBRX-109, including the discovery pipeline, and certain corporate infrastructure currently owned by the Company.
Following the Spin-Off, Merger Sub will merge with and into the Company, whereby the separate existence of Merger Sub will cease and the Company will continue as the Surviving Company and as a wholly owned subsidiary of Parent in accordance with the Merger Agreement.
Effects of the Merger
The Merger Agreement provides that each share of Company common stock that is issued and outstanding immediately prior to the Effective Time, other than Excluded Shares (as defined below) will be converted into the right to receive (i) $30.00 in cash, without interest and less any applicable withholding taxes (which we refer to as the “Closing Amount”), plus (ii) one CVR representing the right to receive a contingent payment of $5.00, without interest thereon, in cash, conditional upon the achievement of the Milestone.
Excluded Shares consist of:

Company common stock owned by the Company as treasury shares;

Company common stock owned by Parent or Merger Sub; and
 
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Shares owned by stockholders of the Company who have validly demanded and not withdrawn appraisal rights in accordance with the applicable provisions of Section 262 of the DGCL prior to the Effective Time. In this proxy statement, we refer to such stockholders as “dissenting stockholders.”
In addition, at the Effective Time:

Each In-the-Money Option will be cancelled and immediately cease to be outstanding and converted into the right to receive (A) the Closing Option Payment and (B) one (1) CVR for each share of Company common stock subject to such Company Option;

Each Closing Date Underwater Option will be cancelled and converted into the right to receive the contingent payment described in the following sentence. If the Milestone is achieved, the cash amount to be paid in respect of each such Closing Date Underwater Option will be equal to (x) $35.00 (representing the sum of the Closing Amount of $30.00 and the Milestone Payment of $5.00) minus (y) the option exercise price per share (in this case, between $30.00 and $35.00 per share strike price), subject to applicable tax withholding; and

Each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested) having an exercise price per share of Company common stock that is equal to or greater than the Merger Consideration will be cancelled without any consideration being payable in respect thereof, and will have no further force or effect.
Effect on the Company If the Merger and the Spin-Off Are Not Completed
If the Transaction Proposal is not approved by the Company’s stockholders or if the Merger and the Spin-Off are not completed for any other reason, the Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the Merger or the Spin-Off. Instead, the Company will remain an independent public company and the Company common stock will continue to be listed and traded on NASDAQ. In addition, if the Merger and the Spin-Off are not completed, the Company’s stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the industry in which the Company operates, the servicing of the Company’s debt, market volatility and adverse economic conditions.
Furthermore, if the Merger and the Spin-Off are not completed, and depending on the circumstances that would have caused the Merger not to be completed, the price of Company common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of Company common stock would return to the price at which it trades as of the date of this proxy statement.
Accordingly, if the Merger and the Spin-Off are not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Company common stock. If the Transaction Proposal is not approved by the Company’s stockholders or if the Merger and the Spin-Off are not completed for any other reason, there can be no assurance that any other transaction acceptable to the Company will be offered or that the Company’s business, prospects or results of operation will not be adversely impacted.
In addition, the Merger Agreement provides that, upon termination of the Merger Agreement under certain circumstances, the Company may be required to pay to Parent the Termination Fee of $54,500,000. In certain circumstances, the Parent may be required to pay to Company the Reverse Termination Fee of $92,125,000. See the sections entitled “The Merger Agreement — Termination Fee” and “The Merger Agreement — Reverse Termination Fee” beginning on page 93 of this proxy statement for a discussion of the circumstances under which the Termination Fee may be required to be paid.
Background of the Merger and the Spin-Off
The Board of Directors and representatives of Company management meet and consider, on an ongoing basis, the Company’s long-term strategy and the range of strategic opportunities available to the Company to strengthen its business and to enhance stockholder value, including financing opportunities, development of its products and product candidates, investments in potential new growth opportunities, acquisitions, licensing arrangements, joint ventures, research and development collaborations and partnerships and other strategic transactions.
 
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Starting in mid-2022, and with the authorization of the Board of Directors, representatives of the Company had preliminary discussions with 21 potential strategic counterparties, including Sanofi, regarding such parties’ interest in a potential acquisition of the Company or other strategic collaboration or licensing transaction with respect to the 101 Business. As part of that process, the Company entered into nine confidential nondisclosure agreements, including with Sanofi, none of which contained any standstill provisions. Discussions with the counterparties, other than Sanofi, Party A and Party B, as set forth below, did not result in any indications of interest or offers. Several potential counterparties cited, among other things, (i) the lack of synergies with their existing pipelines, (ii) regulatory risk with respect to obtaining FDA approval for INBRX-101, (iii) considerations regarding an option issued by the Company to Chiesi Farmaceutici S.p.A (“Chiesi”) to exclusively license, develop and commercialize INBRX-101 outside of the United States and Canada, and (iv) execution risk, as reasons for their decision not to pursue a potential transaction. Representatives of Company management regularly updated the Board of Directors on its discussions with potential strategic counterparties and the Board of Directors reviewed and provided direction thereon.
On July 25, 2022, the Company entered into a confidentiality agreement (the “CDA”) with Sanofi with respect to the mutual sharing of confidential information between the parties for purposes of exploring a potential business transaction. The CDA did not contain any standstill restrictions on either party. Thereafter, from time to time, Company representatives continued to have discussions with Sanofi and other parties regarding a potential transaction involving the 101 Business.
On April 24, 2023, a representative of Sanofi submitted a written non-binding indication of interest to acquire the 101 Business for (i) upfront cash consideration of $750 million, (ii) up to $550 million in cash upon receipt of certain future regulatory approvals needed for the commercialization of the 101 Business, and (iii) up to $700 million in cash based upon the achievement of certain future sales milestones, for a total approximate deal value of up to $2.0 billion (on a non-risk adjusted and non-present value adjusted basis)1 (the “April 24th Proposal”).
On April 25, 2023, on the basis of prior discussions with the Board of Directors with respect to the potential value and associated risks of the 101 Business (and taking into account the risk and present value adjustments that would need to be applied to the approximate deal value given that neither the regulatory approvals nor the sales milestones contained in the April 24th Proposal would be obtained for multiple years, if ever), the Company made a counteroffer to Sanofi for a licensing deal instead of the asset acquisition proposed in the April 24th Proposal. The counteroffer provided for (i) upfront cash consideration of $1 billion, (ii) $1 billion in cash upon receipt of regulatory approvals needed for the commercialization of the 101 Business, and (iii) a 20% royalty payment based on product sales (the “Company’s April 25th Proposal”).
On April 27, 2023, a representative of the Company discussed the April 24th Proposal and the Company’s April 25th Proposal with a representative of Sanofi, resulting in the parties agreeing that there was no alignment regarding the terms of a potential transaction at that time.
On May 15, 2023, a representative of Party A made a verbal non-binding indication of interest to license the 101 Business for (i) upfront cash consideration of approximately $100 million, (ii) $350 million of cash upon the achievement of certain FDA approvals, and (iii) a “double-digit” royalty payment based on product sales. Based on previous discussions held with the Board of Directors with respect to the potential value and associated risks of the asset, the Company verbally indicated to Party A that the indication of interest was significantly too low and did not engage in further substantive conversations with Party A regarding a potential transaction.
In July 2023, following informal discussions that began in February 2022, the Company engaged Centerview Partners LLC (“Centerview”), the formal engagement of which was agreed on January 19, 2024, as a financial advisor with respect to the Company’s ongoing review, including the Company’s consideration of a potential sale or collaboration and licensing arrangements with one or more parties. The Company engaged Centerview for these initiatives based on, among other matters, Centerview’s familiarity
1
All approximate deal values included in this “— Background of the Merger and the Spin-Off” section of this proxy statement, are presented on a risk adjusted and present-value basis.
 
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with the Company, their reputation as an internationally recognized investment banking firm and their substantial experience with transactions involving clinical and early commercial stage biotech companies similar to those being explored by the Company.
On July 18, 2023, a representative of Party B made a verbal non-binding indication of interest to license the 101 Business for upfront cash consideration of approximately $100 million and cash payments for certain other future milestones which were not provided with specificity. Based on previous discussions held with the Board of Directors with respect to the potential value and associated risks of the asset, the Company did not respond to this verbal indication of interest.
Effective July 24, 2023, the Company and Sanofi extended the expiration of the CDA until July 24, 2024, on the same terms as the existing CDA.
On September 14, 2023, following various positive high-level and non-specific conversations between representatives of Sanofi and representatives of the Company, representatives of Sanofi were provided with access to a virtual data room containing preliminary due diligence materials with respect to the 101 Business in order to facilitate Sanofi’s evaluation of a potential transaction.
On September 19, 2023, the Company announced that it had retained full global rights to INBRX-101 as a result of Chiesi declining to exercise its option for the ex-North American rights to develop and commercialize INBRX-101 for the treatment of patients with emphysema due to Alpha-1 Antitrypsin Deficiency. Following receipt of such notice from Chiesi, the Company had further discussions with four potential strategic counterparties (not including Sanofi), including Party A, regarding a potential transaction with respect to the 101 Business, none of which resulted in any additional indications of interest or offers.
As discussions with Party A developed, Party A expressed that it would be unlikely to provide any significant upfront cash consideration, reflecting, among other things, its view of the perceived regulatory risks inherent in the 101 Business. Party A instead expressed openness to exploring a transaction structure wherein Party A would (i) cover certain development costs associated with the 101 Business and (ii) make future payments contingent upon achieving specific late-stage milestones. The Company determined that the lack of upfront consideration and the overall value to be realized by stockholders of the Company in such a transaction were inadequate based on prior discussions with the Board of Directors regarding the potential value of the 101 Business. After being provided with access to a virtual data room containing preliminary due diligence materials with respect to the 101 Business, Party A verbally communicated to the Company that it had determined not to pursue a potential transaction.
On December 18, 2023, the Company received a written non-binding indication of interest from Sanofi to acquire the 101 Business, including the following material terms: (i) upfront cash consideration of $1.3 billion, (ii) the settlement of the Company’s outstanding third-party debt at closing estimated by Sanofi to be approximately $205.7 million and (iii) allowing the Company’s shareholders to retain 100% ownership of the SpinCo Business, as well as the Company’s balance sheet cash at closing. Based on the Company’s estimated cash as of December 31, 2023 of approximately $257 million, these terms implied a total approximate deal value of $1.8 billion, excluding the potential additional value of the Company’s shareholders retaining 100% ownership of all programs other than the 101 Business (collectively, the “December 18th Proposal”). The December 18th Proposal was not contingent on Sanofi obtaining financing but did require completion of customary due diligence. Additionally, Sanofi indicated in the December 18th Proposal that, as discussed between Sanofi and the Company’s advisors, it was open to structuring the transaction in a similar manner to the Biohaven-Pfizer transaction (as described below).
On December 19, 2023, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul Weiss”), the Company’s M&A counsel in attendance. At the meeting, representatives of Company management, at the direction of the Board of Directors, (i) described the December 18th Proposal to the Board of Directors (including noting that the Company’s estimated cash position could deplete by approximately $200 million between December 31, 2023 and a potential estimated transaction close in mid-2024, which would imply lower aggregate value retained by Company shareholders at closing, (ii) described the potential transaction structure referred to as a “Biohaven-like structure” in which the Company would spin off its assets unrelated to the 101 Business into a newly created publicly-traded biopharmaceutical
 
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company, with the shares of SpinCo common stock to be distributed to the Company’s stockholders via a SEC-registered distribution of publicly listed shares, following which Sanofi would acquire the Company, which would hold only the 101 Business at the time of the acquisition, (iii) provided an overview and reminder of the other discussions that they had undertaken with other potential strategic counterparties over the past eighteen months at the direction of the Board of Directors, which included a discussion of the universe of potential counterparties and (iv) presented a preliminary version of Company management’s projections for the Company and SpinCo which were substantially similar to the Forecasts and similar to the SpinCo Forecasts, each of which management noted would need to be revised to reflect, among other things, the specific allocation of assets between the Company and SpinCo in the transaction and which, in the case of the SpinCo Forecasts, differed from such projections due to changes to the near-term budget and overhead expenses and general cost structure at SpinCo, which was being determined alongside the consideration of the potential transaction. At the meeting, the Board of Directors asked questions of, and engaged further in discussions with, the representatives of Company management and the Company’s advisors regarding the December 18th Proposal and Company management’s projections, including a detailed discussion of the key substantive changes in the projections from the Historical Product Projections (as defined in the section of this proxy statement captioned “— Certain Financial Projections”) related to INBRX-101 and INBRX-109 discussed with the Board of Directors in 2022, including (i) a decreased probability of success ascribed to INBRX-101 for the treatment of AATD (which decreased from 90% to 60%), reflecting a less advantageous regulatory environment, including potential difficulty in obtaining FDA approval and enhanced data on the probability of success for similar products; (ii) a decreased probability of success ascribed to INBRX-101 for the treatment of GvHD (which decreased from 60% to 10%), as a result of limited clinical data with success in that indication and no internal movement on future clinical trials in GvHD due to competing priorities; (iii)  an increase in the cost of capital; (iv) a decreased compound annual growth rate for AATD, from 7% to 4%, reflecting lower market growth rates for similar products; (v) a decrease in gross revenue due to (a) a reduction in the expected population afflicted with AATD and a decrease in the Company’s market share of that population, and (b) a delay in market launch due to a longer clinical trial period; and (vi) an increase in operating expenses to reflect a larger sales force than originally anticipated and a higher cost of goods on the manufacturing of AATD due to inflation. As part of their review of the projections provided at the meeting, the Board of Directors noted that the Company, given its cash burn rate, could require up to $1.5 billion in funding over the next four years, and that, if a transaction was not undertaken in the coming months, the Company would likely need to pivot to one or more capital raises in the near term. The Board of Directors further noted that such a capital raise may be challenging given high interest rates, the downturn in general market sentiment towards biopharmaceutical companies and the risks associated with raising capital in an election year, and that such a fundraising would significantly limit the time that Company management would have to devote to continuing to operate the business and evaluate potential strategic transactions until such fundraising had been completed. Representatives of Paul Weiss also discussed with the Board of Directors their fiduciary duties in the context of the proposed transaction. The Board of Directors agreed to reconvene later in the week to further discuss the December 18th Proposal.
On December 21, 2023, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul Weiss in attendance. At the meeting, representatives of Company management and/or the Company’s advisors, as applicable and at the direction of the Board of Directors, (i) reviewed the terms of the December 18th Proposal with the Board of Directors, (ii) presented the same preliminary version of Company management’s projections for the Company and SpinCo as presented at the December 19, 2023 meeting which were substantially similar to the Forecasts and similar to the SpinCo Forecasts, which management noted would need to be revised to reflect, among other things, the specific allocation of assets between the Company and SpinCo in the transaction and which, in the case of the SpinCo Forecasts, differed from such projections due to changes to near-term budget and overhead expenses and general cost structure at SpinCo which was being determined alongside the consideration of the potential transaction and (iii) provided Centerview’s preliminary financial analysis of the December 18th Proposal. At the meeting, the Board of Directors asked questions of, and engaged further in discussions with, the representatives of Company management and the Company’s advisors regarding the December 18th Proposal. Representatives of Centerview, at the direction of the Board of Directors, provided a preliminary financial analysis of the December 18th Proposal, noting that the upfront cash consideration of $1.3 billion implied a per share value of $24.00 and the total estimated consideration implied an approximate per share
 
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value of $34.90 – $37.95, reflecting certain assumptions regarding the initial value of SpinCo and the Company’s estimated cash balance as of December 31, 2023. The Board of Directors noted that while the upfront cash offer was below the Company’s then-current trading price of $29.99 per share (as of the close of business on December 19, 2023), the upfront cash component was not meant to represent the full value of the Company, but rather the 101 Business only. The Board of Directors also noted that the total consideration of the December 18th Proposal was above the current trading price and that the stock price had significantly accreted starting in early November without any improvement in the fundamentals of the business and was then trading at a 52-week high. The Board of Directors also engaged further in discussions with the representatives of Company management and the Company’s advisors regarding the projections provided at the meeting. Representatives of Company management, with input from representatives of Centerview, described the current dynamics in the public market for biotech companies, analysts’ position on the Company and how Company management’s views on the Company might differ from the perceived market view with respect to the potential value of the SpinCo Business. Following its review of the December 18th Proposal, the projections provided at the meeting and advice of its advisors, the Board of Directors instructed representatives of Company management and representatives of Centerview to respond to the December 18th Proposal with a counterproposal of a “Biohaven-like structure” with (i) cash consideration of $32.00 per share (implying a fully diluted equity value of approximately $1.8 billion, which was an increase of $8.00 per share compared to the December 18th Proposal), (ii) the settlement of the Company’s outstanding third-party debt as of closing and all transaction expenses, (iii) funding of SpinCo equal to the cash held by the Company as of signing and reimbursement of any costs related to the 101 Business spent between signing and closing and (iv) a contingent value right to $5.00 per share in cash, payable upon FDA approval of INBRX-101 for Alpha-I Antitrypsin Deficiency, for a total approximate deal value of up to $2.3 billion plus the potential value to the Company’s shareholders of retaining 100% ownership of SpinCo, including cash held by the Company as of closing (collectively, the “Company’s December 21st Counter Proposal”). The Board of Directors noted that the Company’s December 21st Counter Proposal would represent more than a 54% increase from the December 18th Proposal including both the upfront cash consideration and contingent value right, a 23% premium to the Company’s trading price as of the close of business on December 19, 2023, which was a 52-week high, and a 53% premium to the Company’s 30 calendar day VWAP.
Subsequent to this, representatives of Company management and Centerview, at the direction of the Board of Directors, provided Sanofi with the Company’s December 21st Counter Proposal in writing on the terms approved by the Board of Directors.
On December 28, 2023, the Company received a revised written non-binding indication of interest from Sanofi to acquire the 101 Business in a “Biohaven-like structure,” including the following material terms: (i) upfront cash consideration of $30.00 per share (implying a fully diluted equity value of approximately $1.7 billion, which the Company calculated to be an increase of $6.00 per share compared to the December 18th Proposal and a decrease of $2.00 per share compared to the Company’s December 21st Counter Proposal), (ii) settlement of the Company’s third-party debt at closing estimated by Sanofi to be approximately $205.7 million, (iii) the greater of the Company cash balance at closing and $100 million of capital to fund the spin-off business, (iv) the retention of 6% to 8% equity ownership in SpinCo by Sanofi (through its ownership of the Company), and (v) a contingent value right to $5.00 per share in cash, payable upon FDA approval of INBRX-101 for Alpha-I Antitrypsin Deficiency no later than June 30th, 2027, for a total approximate deal value of up to $2.2 billion plus the potential value to the Company’s shareholders of retaining 92% to 94% ownership of SpinCo, including the greater of the Company cash balance at closing and $100 million (collectively, the “December 27th Proposal”).
On December 29, 2023, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul Weiss in attendance. At the meeting, representatives of Company management and/or the Company’s advisors, as applicable and at the direction of the Board of Directors, (i) described the December 27th Proposal, (ii) presented the same preliminary version of Company management’s projections for the Company and SpinCo as presented at the December 19, 2023 meeting which were substantially similar to the Forecasts and similar to the SpinCo Forecasts, which management noted would need to be revised to reflect, among other things, the specific allocation of assets between the Company and SpinCo in the transaction and which, in the case of the SpinCo Forecasts, differed from such projections due to changes to near-term budget and overhead expenses and general cost structure
 
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at SpinCo, which was being determined alongside the consideration of the potential transaction and (iii) provided Centerview’s preliminary financial analysis of the December 27th Proposal, the Company and SpinCo, including various reference points, such as the Company’s current and historical trading prices, the preliminary discounted cash flow valuation analyses of the Company and potential SpinCo value. The Board of Directors noted, among other things, that the December 27th Proposal represented an approximate 46% increase in total upfront and contingent value right consideration compared to the December 18th Proposal, in addition to noting the potential value to the Company’s shareholders of retaining 92% to 94% ownership of SpinCo. The Board of Directors asked questions of, and engaged further in discussions with, the representatives of Company management and the Company’s advisors regarding the December 27th Proposal. The Board of Directors reviewed the projections provided at the meeting, noting that based on the projected burn rate of SpinCo, $200 million would be sufficient capitalization for SpinCo. The Board of Directors asked questions of, and engaged in detailed discussions with, the representatives of Company management and the Company’s advisors regarding the upfront cash consideration in light of the current stock price. The Board of Directors noted that while the upfront per share consideration was less than the Company’s current trading price, the upfront cash consideration was not meant to represent the full value of the Company, but rather the 101 Business only. Furthermore, the Board of Directors considered that the total preliminary estimated value of the December 27th Proposal represented a premium to the current trading price, the level of which depended on the range of potential values ascribed to the contingent value right and to SpinCo. The Board of Directors again noted the stock had significantly accreted starting in early November without any improvement in the fundamentals of the business or additional information regarding the Company in the market. Following its review of the December 27th Proposal, the projections provided at the meeting and advice of its advisors, the Board of Directors instructed representatives of Company management and representatives of Centerview to respond to the December 27th Proposal with a counterproposal of (i) upfront cash consideration of $30.00 per share (implying a fully diluted equity value of approximately $1.7 billion), (ii) the settlement of the Company’s outstanding third-party debt as of closing and all transaction expenses, (iii) funding of SpinCo equal to at least $200 million, (iv) the retention of no equity ownership in SpinCo by Sanofi and (v) a contingent value right to $5.00 per share in cash, payable upon FDA approval of INBRX-101 for Alpha-I Antitrypsin Deficiency, for a total approximate deal value of up to $2.2 billion plus the potential value to the Company’s shareholders of retaining 100% ownership of SpinCo, including cash of at least $200 million (collectively, the “Company’s December 29th Counter Proposal”).
Subsequent to this, representatives of Company management and Centerview, at the direction of the Board of Directors, provided Sanofi with the Company’s December 29th Counter Proposal orally on the terms approved by the Board of Directors.
On January 3, 2024, the Company received a revised written non-binding indication of interest in writing from Sanofi to acquire the 101 Business through a reverse triangular merger following the spin-off of product candidates and assets unrelated to the 101 Business, including the following material terms: (i) upfront cash consideration of $30.00 per share (implying a fully diluted equity value of approximately $1.7 billion), (ii) settlement of the Company’s third-party debt at closing estimated by Sanofi to be approximately $205.7 million, (iii) $200 million of capital to fund SpinCo, (iv) the retention of up to 8% equity ownership in SpinCo by Sanofi (through its ownership of the Company), and (v) a contingent value right to $5.00 per share in cash, payable upon FDA approval of INBRX-101 for Alpha-I Antitrypsin Deficiency by no later than June 30, 2027, for a total approximate deal value of up to $2.2 billion plus the potential value to the Company’s shareholders of retaining up to 92% ownership of SpinCo, including cash of $200 million (collectively, the “January 3rd Proposal”). The January 3rd Proposal also included a proposal for a two-week exclusivity period in which to negotiate definitive documents. Sanofi presented the January 3rd Proposal as its “best and final.”
On January 3, 2024, the Board of Directors held a meeting with the representatives of Company management and representatives of Centerview and Paul Weiss in attendance. At the meeting, the Board of Directors asked questions of, and engaged in further discussions with, representatives of Company management and the Company’s advisors regarding the January 3rd Proposal. Representatives of Centerview, at the direction of the Board of Directors, provided a preliminary financial analysis of the January 3rd Proposal. The Board of Directors and representatives of Company management also discussed the importance of having $200 million of SpinCo funding at closing given that owning an aggregate 92% of the shares of
 
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SpinCo common stock formed part of the Transaction Consideration in addition to the approximate deal value of up to $2.2 billion. The Board of Directors discussed whether granting exclusivity ahead of the upcoming JP Morgan healthcare conference would deprive the Company of an opportunity to engage with other potential counterparties and determined, given the number of potential counterparties contacted regarding a potential transaction with respect to the 101 Business in the preceding 18 months, that there was no expectation of any meaningful discussions regarding a strategic transaction at the JP Morgan healthcare conference and that the short time period of the exclusivity, coupled with the post-signing window to evaluate any unsolicited offers if a transaction agreement was signed, presented sufficient opportunity for a competing bidder to emerge. Following careful review and discussion, the Board of Directors determined that the Company should enter into a two-week period of exclusivity and proceed to negotiate a transaction with Sanofi on the terms set forth in the January 3rd Proposal.
On January 4, 2024, the Company provided representatives of Sanofi, including Weil, Gotshal & Manges LLP, legal counsel to Sanofi (“Weil”), and Lazard Ltd., financial advisor to Sanofi (“Lazard”), with access to a virtual data room containing certain financial, regulatory and legal, among other, materials of the Company. From January 5, 2024 through to the signing of the Merger Agreement on January 22, 2024, Sanofi and various of its representatives conducted due diligence on the 101 Business including through reviewing the virtual data room materials, submitting supplemental requests for additional information and documents, to which the Company provided responses, and through a number of discussions with representatives of the Company in various functions.
On January 5, 2024, representatives of the Company, Centerview and Paul Weiss, at the direction of the Board of Directors, met with representatives of Sanofi, Lazard and Weil to discuss the transaction structure and anticipated timeline.
Also on January 5, 2024, on behalf of the Company, representatives of Paul Weiss shared an initial draft of the Merger Agreement with representatives of Weil which provided for, among other things: (i) obligations for both Sanofi and the Company to use reasonable best efforts to obtain required regulatory approvals including the proffer and agreement to divest assets up to a material adverse effect on the Company and responding promptly to requests or notices from governmental authorities; (ii) a 8.5% reverse termination fee payable by Sanofi to the Company if the agreement terminated because of failure to obtain required regulatory approvals by a certain date; (iii) a termination fee of 2.5% payable by the Company to Sanofi in certain circumstances and (iv) standard public company representations with various “Material Adverse Effect”, materiality and knowledge qualifiers.
Also on January 5, 2024, on behalf of the Company, representatives of Paul Weiss shared an initial draft of the Distribution Agreement with representatives of Weil, which provided for, among other things, the Company retaining certain assets and liabilities exclusively related to the 101 Business, and SpinCo assuming all other assets and liabilities, including those associated with the SpinCo Business.
On January 6, 2024, in accordance with the Board of Directors’ instruction, the Company entered into an agreement that granted Sanofi exclusivity until 11:59 PM on January 19, 2024.
On January 11, 2024, on behalf of the Company, representatives of Paul Weiss shared an initial draft of the CVR Agreement with representatives of Weil.
On January 12, 2024, representatives of Weil shared a revised draft of the Merger Agreement with representatives of Paul Weiss, which provided for, among other things: (i) a 4.75% reverse termination fee payable by Sanofi to the Company if the agreement terminates because of failure to obtain regulatory approval by a certain date; (ii) a termination fee of 4% payable by the Company to Sanofi in certain circumstances and (iii) expanded representations with lower materiality thresholds and fewer knowledge qualifiers.
On January 15, 2024, representatives of Weil shared a revised draft of the Distribution Agreement with representatives of Paul Weiss, which provided (i) that the Company, following consummation of the Distribution, would retain certain assets and liabilities of the Company and its subsidiaries related to the 101 Business, (ii) that SpinCo would own and assume only those assets and liabilities exclusively related to the SpinCo Business and (iii) an indemnity from SpinCo to the Company for any taxes caused by the Distribution without taking into account any deductions attributable to transaction expenses.
 
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On January 16 and 18, 2024, the compensation committee of the Board of Directors held meetings with representatives of Company management and representatives of Paul Weiss in attendance. At each meeting, the Board of Directors asked questions of, and engaged in further discussions with, representatives of Company management and the Company’s advisors, regarding, among other things, the status of the Transactions, the treatment of employee equity awards in the transaction and compensation of certain executives and key employees in connection with the transaction.
On January 19, 2024, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul Weiss in attendance to discuss the remaining open negotiation points in the transaction documents. At the meeting, the Board of Directors asked questions of, and engaged in further discussions with, representatives of Company management and the Company’s advisors regarding the status of the negotiations and various transaction documents.
From January 16, 2024 to January 21, 2024, the Company, Sanofi and their respective legal counsel negotiated the terms of the Merger Agreement, the Distribution Agreement and the CVR Agreement, in which the parties agreed to (i) a 5.5% reverse termination fee payable by Parent to the Company if the agreement terminates because of failure to obtain regulatory approval by a certain date, (ii) a termination fee of 3.25% payable by the Company to Parent in certain circumstances, (iii) a significant reduction in the scope of the representations with higher materiality thresholds and more knowledge qualifiers, (iv) the Company retaining certain assets and liabilities primarily related to the 101 Business, and SpinCo assuming assets and liabilities primarily related to the SpinCo Business, (v) certain tax indemnities from SpinCo to the Company and (vi) certain tax indemnities from the Company to SpinCo. Certain matters remained open, including, those relating to employee compensation matters, intellectual property matters and the standard of effort to be exercised by Parent to achieve the regulatory milestone specified under the CVR Agreement.
On January 21, 2024, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul Weiss in attendance. At the meeting, the Board of Directors asked questions of, and engaged further in discussions with, representatives of Company management and the Company’s advisors regarding the status of the negotiations and the various transaction documents.
Between January 21, 2024 and January 22, 2024, representatives of Weil and representatives of Paul Weiss continued to exchange further drafts of the Merger Agreement, the Distribution Agreement and the CVR Agreement, the changes in which primarily related to certain employee compensation matters, intellectual property matters and the standard of effort to be exercised by Parent to achieve the regulatory milestone specified under the CVR Agreement.
On January 22, 2024, the compensation committee of the Board of Directors held a meeting with representatives of Company management and representatives of Paul Weiss in attendance. At the meeting, the Board of Directors asked questions of, and engaged further in discussions with, representatives of Company management and the Company’s advisors, regarding, among other things, the treatment of employee equity awards and compensation of certain executives and key employees. After carefully considering the proposed terms of the Transactions, and taking into consideration the matters discussed during the meeting and prior meetings of the compensation committee of the Board of Directors, the compensation committee approved of the treatment of employee equity awards in the Transactions and compensation of certain executives and key employees in connection with the Transactions.
On January 22, 2024, the Board of Directors held a meeting with representatives of Company management and representatives of Centerview and Paul Weiss in attendance. At the meeting, representatives of Company management presented the Forecasts and SpinCo Forecasts (which included changes to near-term budget and overhead expenses and general cost structure at SpinCo and the final terms of the Transactions) and representatives of Centerview, at the direction of the Board of Directors, reviewed with the Board of Directors Centerview’s financial analysis of the Transaction Consideration (which took into account, at the direction of the Board of Directors, the final Forecasts and SpinCo Forecasts from Company management), and rendered to the Board of Directors an oral opinion, which was subsequently confirmed by delivery of a written opinion dated such date that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion, the Transaction Consideration to be paid to the holders
 
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of shares of Company common stock (other than as specified in such opinion) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement was fair, from a financial point of view, to such holders. For a detailed discussion of the opinion provided by Centerview, please see the section of this proxy statement captioned “— Opinion of Centerview Partners LLC”.
Representatives of Paul Weiss, at the direction of the Board of Directors, then reviewed with the Board of Directors the information that had previously been provided by Centerview with respect to any material relationships with either the Company, Sanofi or the Company’s largest stockholder (which information provided by Centerview is described in further detail in the section of this proxy statement captioned “— Opinion of Centerview Partners LLC”). Representatives of Paul Weiss, at the direction of the Board of Directors, reviewed with the Board of Directors their fiduciary duties in the context of the transaction and provided an update on the final terms of the Merger Agreement and the Distribution Agreement. Representatives of Paul Weiss, at the direction of the Board of Directors, then summarized the resolutions proposed to be adopted by the Board of Directors to approve the Transactions. After carefully considering the proposed terms of the Transactions, and taking into consideration the matters discussed during the meeting and prior meetings of the Board of Directors (for additional detail, see the section of this proxy statement captioned “— Reasons for the Merger and the Spin-Off”), the Board of Directors unanimously adopted resolutions, among other things, (i) declaring the Merger Agreement, Distribution Agreement, and the transactions contemplated thereby, including the consummation of the Merger and the Spin-Off, advisable and fair to, and in the best interests of, the Company and the stockholders of the Company, (ii) approving the execution, delivery and performance by the Company of the Merger Agreement, Distribution Agreement, and the transactions contemplated thereby, including the consummation of the Merger and the Spin-Off, (iii) determining to recommend that the stockholders of the Company approve the adoption of the Merger Agreement and the Distribution Agreement and approve the Merger and the Spin-Off on the terms and subject to the conditions set forth therein and the transactions contemplated thereby, (iv) approving the execution and filing with the SEC under the Exchange Act with respect to a proxy statement and a registration statement on Form 10 (together with any amendments, supplements, prospectuses or information statements in connection therewith) to the extent required by Rule 14A of the Exchange Act and any other applicable law and (v) waiving the applicability of Section 203 of the DGCL to the Transactions.
That evening, the Company, Parent, and Merger Sub executed and delivered the Merger Agreement. Also, that evening, the Company, SpinCo, and Parent executed and delivered the Distribution Agreement.
On the evening of January 22, 2024, the Company and Sanofi each issued a press release announcing the execution of the Merger Agreement and the Distribution Agreement.
Reasons for the Merger and the Spin-Off; Recommendation of the Board of Directors
Recommendation of the Board of Directors
By unanimous vote, the Board of Directors, at a meeting held on January 22, 2024, (i) determined that the Merger and the transactions contemplated thereby are advisable, fair to and in the best interests of the Company and the Company’s stockholders; (ii) approved and declared it advisable to enter into the Merger Agreement and the Distribution Agreement; (iii) directed that the adoption of the Merger Agreement and the Distribution Agreement be submitted to a vote of the Company’s stockholders at the Special Meeting; and (iv) subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Company’s stockholders approve the adoption of the Merger Agreement and the Distribution Agreement and approve the Merger and the Spin-Off on the terms and subject to the conditions set forth therein and the transactions contemplated thereby.
The Board of Directors of the Company unanimously recommends that you vote “FOR” approval of the Transaction Proposal, “FOR” approval of the Adjournment Proposal and “FOR” approval of the Non-Binding Merger-Related Compensation Proposal.
Reasons for the Merger and the Spin-Off
In (i) authorizing, approving, confirming and adopting in all respects the Merger Agreement, the Distribution Agreement and the other transaction agreements contemplated thereby, including the Merger
 
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and the Spin-Off; (ii) determining and declaring that the Merger Agreement, the Distribution Agreement and the other transaction agreements and the consummation of the Merger and the Spin-Off, were advisable and in the best interests of the Company and the Company stockholders, (iii) directing that the adoption of the Merger Agreement, the Distribution Agreement and the other Proposals be submitted to Company stockholders for their consideration and approval at the Special Meeting and (iv) recommending that Company stockholders vote to approve each of the proposals set forth above, the Board of Directors consulted with representatives of Company management, its outside legal counsel and its financial advisor, and considered a number of factors, including the following non-exhaustive list of material reasons (which are not listed in order of relative importance) that the Board of Directors believes support its unanimous determination and recommendation. The Board of Directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Board of Directors viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors. This explanation of the Board of Directors’ reasons for the Merger and Spin-Off and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Note Regarding Forward-Looking Statements”:

Transaction Consideration.   The Board of Directors considered that the Transaction Consideration consists of: (i) $30.00 per share that will be payable in cash at the closing of the Merger, which provides the Company’s stockholders with immediate liquidity and certainty of value; (ii) one CVR that may result in a future payment of $5.00 per share upon receipt of FDA approval for INBRX-101, thereby allowing the Company’s stockholders to potentially receive additional value from the development of the 101 Business; and (iii) one share of SpinCo common stock for every four shares of Company common stock that each holder of Company common stock owns as of the Distribution Record Date, as described in further detail in the section of this proxy statement captioned “The Distribution Agreement — The Spin-Off”.

Certainty of Value.   The Board of Directors considered the fact that the upfront cash consideration (representing a substantial portion of the overall Merger Consideration) will provide our stockholders with immediate liquidity and certainty of value. The Board of Directors believed this certainty of value was compelling, especially when viewed against the risks and uncertainties associated with the Company’s stand-alone strategy and the potential impact of such risks and uncertainties on the trading price of the Company common stock, including those described above and the other risks and uncertainties discussed in the Company’s public filings with the SEC (including the risk factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and current reports on Form 8-K). The Board of Directors considered that, in addition to the Merger Consideration from the sale of the 101 Business, stockholders of the Company would also receive shares of SpinCo common stock in the Transactions, allowing stockholders of the Company to continue to recognize value from the SpinCo Business, and considered the additional value of the SpinCo common stock to the overall Transaction Consideration.

CVR Consideration; Opportunity to Realize Additional Value.   The Board of Directors considered the fact that, in addition to the Closing Amount, the Company’s stockholders will receive one CVR for each Company common stock owned as of the Distribution Record Date, which provides the Company’s stockholders an opportunity to realize additional value of $5.00 per share in cash, to the extent that the Milestone set forth in the CVR Agreement is achieved within the time period described therein. The Board of Directors also took into consideration its belief that the Milestone is reasonably achievable, taking into account the obligations of Parent to use “Reasonable Best Efforts” to achieve the Milestone, as set forth in the CVR Agreement, and the extensive experience and resources of Parent. Given the business reputation and global capabilities of Parent, and the Board of Directors’ perception that Parent is willing to devote the resources necessary to continue developing the 101 Business, there is a greater chance of the Milestone being met.

Financial Condition and Prospects of the Company.   The Board of Directors considered the Company’s current and historical financial condition, results of operations, business, competitive position, properties, assets and prospects, as well as the long-range plan of the Company and the execution risks associated with the research, development, manufacture and commercialization of the
 
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Company’s therapeutic candidate portfolio. The Board of Directors further considered the significant capital investment and cash flows required for the Company to remain an independent company and fund the commercialization of INBRX-101, including the fact that, while the Company may seek additional funding through future debt or equity financing or additional collaborations or strategic partnerships, any such fundraising would likely be highly dilutive for the Company’s existing stockholders, might only be available on unfavorable terms, or might not be available at all given the downturn in general market sentiment towards biopharmaceutical companies and the risks associated with raising capital in an election year. The Board of Directors believed that a sale of the 101 Business to Parent for the Transaction Consideration was more favorable to the Company’s stockholders than the alternative of remaining an independent company and continuing to own the 101 Business and other Company assets and liabilities, including those related to INBRX-105, INBRX-106 and INBRX-109.

Implied Premium.   The Board of Directors considered the current and historical market prices, volatility and trading information with respect to shares of Company common stock, including the fact that the $30.00 upfront cash consideration represented (1) a premium of approximately 8% over the volume-weighted average closing share price of the preceding (and including January 22, 2024) 90-calendar day period and (2) a premium of approximately 55% over the $19.35 price per share of our most recent private placement financing that closed on August 29, 2023. In addition to the upfront cash consideration, the Board of Directors considered that the overall Transaction Consideration, which includes SpinCo common stock to be issued and the CVR, assuming the Milestone is achieved within the time period described in the CVR Agreement, would represent an even higher premium to recent trading prices.

Post-Spin-Off Activities.   The Board of Directors recognized the value in the assets to be transferred to SpinCo and that the Spin-Off allows the Company to focus on these assets with its current resources and cash on hand, leading to the potential future profitability of SpinCo’s therapeutic candidates. The Board of Directors assumed each share of SpinCo common stock to be distributed to each holder of Company common stock as of the Distribution Record Date to have a value of $5.85 – $7.95, reflecting $3.40 per share in cash based on a capitalization of $200 million.

Product Development and Regulatory Risks.   The Board of Directors considered the risks inherent in the research, development, manufacture and commercialization of INBRX-101, the risks related to conducting and compiling data from clinical trials, the risks related to seeking approval for marketing from the FDA and other regulatory authorities such as the European Medicines Agency and the Pharmaceuticals and Medical Devices Agency (including any potential conditions or contingencies of such approvals) and other factors affecting the revenues and profitability of biopharmaceutical products generally.

Negotiation Process.   The Board of Directors considered the extensive, arm’s-length discussions the Company had with Parent and the enhancements to the Transactions that the Company and its advisors were able to obtain as a result of these negotiations, including the increase in the total transaction value proposed by Parent from the time of its initial proposal (after giving effect to certain adjustments as to Parent’s capitalization assumptions) to the end of the negotiations and the addition of the CVR and SpinCo funding in Parent’s later proposals. The Board of Directors also considered that these negotiations resulted, in its view, in Parent’s best and final offer and the highest per share consideration reasonably obtainable.

Potentially Interested Counterparties.   With the assistance of Centerview and representatives of Company management, the Board of Directors engaged with multiple capable alternative counterparties (including multinational biopharmaceutical companies) regarding a strategic collaboration with the Company and considered on numerous occasions whether such parties or other capable alternative counterparties were likely to offer to acquire the Company, and determined that, in its considered view, (i) there was unlikely to be an alternative counterparty to Parent, particularly in a transaction involving aggregate transaction consideration of up to approximately $2.2 billion, along with a distribution of SpinCo common stock to each holder of Company common stock as of the Distribution Record Date, (ii) there was unlikely to be an alternative counterparty to Parent that could move as quickly as Parent, given that (a) Parent had a deep understanding of the
 
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business of the Company as a result of the significant time and effort Parent spent on due diligence and (b) the acquisition would be complex even for buyers with significant M&A experience, (iii) there was unlikely to be an alternative counterparty to Parent that had as extensive of a respiratory footprint to be as successful in the commercialization of the 101 Business, (iv) no alternative counterparty had recently expressed interest in an acquisition at the same level as Parent, despite the Company being a well-known publicly traded corporation in the biopharmaceutical industry and (v) should any such potential counterparty be interested in pursuing a transaction on terms more favorable to the Company and its stockholders than the Merger, such counterparty would be able to pursue such an offer under the terms of the Merger Agreement, and the Board of Directors would be able to respond to and accept such an offer if the offer was a superior proposal.

Strategic Alternatives.   The Board of Directors considered, after discussions with representatives of Company management and Centerview, possible alternatives to the Transactions, in addition to the Forecasts of the Company as a standalone entity owning both the 101 Business and SpinCo Business (as described in further detail in the section of this proxy statement captioned “— Certain Financial Projections”), and the risks associated with these alternatives, each of which the Board of Directors determined not to pursue in light of its belief that the Transactions were more favorable to the Company’s stockholders than such alternatives. The Board of Directors also considered its belief that the value offered to holders of Company common stock in the Transactions was more favorable to holders of Company common stock than the current risk-adjusted value of remaining an independent public company.

Centerview’s Fairness Opinion and Related Analyses.   The Board of Directors considered the oral opinion of Centerview rendered to the Board of Directors on January 22, 2024, which was subsequently confirmed by delivery of a written opinion dated such date that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Transaction Consideration to be paid to the holders of Company common stock (other than as specified in such opinion) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement was fair, from a financial point of view, to such holders, as described in further detail in the section of this proxy statement captioned “Opinion of Centerview Partners LLC.

Likelihood of Completion.   The Board of Directors considered the likelihood that the Merger and the Spin-Off would be completed based on, among other things (not necessarily in any order of relative importance):

the fact that there is no financing or due diligence condition to the completion of the Merger or Spin-Off in the Merger Agreement or the Distribution Agreement;

the fact that approval of the Spin-Off by the Company’s stockholders and completion of the Spin-Off are conditions to the closing of the Merger;

the fact that the conditions to the closing of the Merger and the Spin-Off are specific and limited in scope;

the business reputation and global capabilities of Parent, and the Board of Directors’ perception that Parent is willing to devote the resources necessary to close the Merger and the Spin-Off in an expeditious manner;

Parent’s financial condition, including that Parent has sufficient cash on hand to fund the Transactions without the need for any third-party financing, and discussions in respect thereof between the Board of Directors and the Company’s advisors; and

the Company’s ability, under certain circumstances pursuant to the Merger Agreement and the Distribution Agreement, to seek specific performance to prevent breaches of the Merger Agreement and the Distribution Agreement by Parent and/or Merger Sub and to enforce specifically the terms of the Merger Agreement and the Distribution Agreement.

Other Terms of the Merger Agreement.   The Board of Directors considered other terms of the Merger Agreement, which are more fully described in “The Merger Agreement”. Certain provisions of the Merger Agreement that the Board of Directors considered important included:
 
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the Company’s ability to provide information to, and engage with or participate in discussions and negotiations with, any person who has made a written Company acquisition proposal and to authorize, adopt, approve, recommend and otherwise declare advisable such an acquisition proposal subject to a number of conditions, in order to maximize stockholder value;

the Company’s ability to terminate the Merger Agreement and to enter into an alternative acquisition agreement with respect to a superior proposal, subject to payment of the Termination Fee (as described in further detail in the section of this proxy statement captioned “The Merger Agreement — Solicitation of Acquisition Proposals; Board Recommendation Changes” and “The Merger Agreement — Termination”), in order to maximize stockholder value;

the ability of the Board of Directors to change its recommendation in connection with a superior proposal or intervening event where failure to do so would reasonably be likely to be inconsistent with its fiduciary duties, subject to Parent and Merger Sub’s right to terminate the Merger Agreement in the event of such change of recommendation, and the Company’s obligation to pay the Termination Fee in the event of such termination;

the possibility of the occurrence of a Company Material Adverse Effect (as defined in the Merger Agreement) on the Company, the non-occurrence of which is a condition to Parent’s obligation to consummate the Merger;

the outside date of September 22, 2024 (subject to two consecutive automatic extensions each for ninety (90) days if the sole cause of the delay is a result of failure to obtain antitrust clearance, and further subject to an additional extension by mutual consent of the Company and Parent), after which either party, subject to certain exceptions, can terminate the Merger Agreement if the Merger has not been consummated as of such date, and the Board of Director’s determination that this outside date allows for sufficient time to consummate the Merger, while minimizing the length of time during which the Company would be required to operate subject to the restrictions on interim operations set forth in the Merger Agreement;

that Parent would be required to pay the Company the Reverse Termination Fee if the Merger Agreement is terminated due to the failure of certain conditions to be satisfied as a result of failure to obtain antitrust clearance;

the requirement in the Merger Agreement that each of Parent, Merger Sub and the Company use their reasonable best efforts to consummate the Merger, and agreed actions with respect to Parent’s and Merger Sub’s obligations under the Merger Agreement to obtain requisite approvals to consummate the Merger;

the right of the Company’s stockholders to exercise appraisal rights in respect of their Company common stock and to receive payment of the “fair value” of such Company common stock pursuant to Section 262 of the DGCL in lieu of the Transaction Consideration if they comply in all respects with Section 262 of the DGCL, and the lack of closing conditions related to the exercise of dissent rights by the Company’s stockholders in the Merger Agreement; and

that the Merger Agreement and the Distribution Agreement are subject to approval by the Company’s stockholders.

Other Terms of the Distribution Agreement.   The Board of Directors considered other terms of the Distribution Agreement, which are more fully described in “The Distribution Agreement”. Certain provisions of the Distribution Agreement that the Board of Directors considered important included:

the allocation of certain assets and liabilities of the Company and its subsidiaries related to the SpinCo Business, including the “INHIBRX” name and marks;

the retention of 8% of SpinCo common stock by the Company, which will become a wholly owned subsidiary of Parent;

the tax treatment of the Spin-Off, including that the Spin-Off is intended to be a taxable distribution to the Company’s stockholders and that the Company and SpinCo generally will not provide a tax indemnity to each other with the exception of certain taxes for which SpinCo
 
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will indemnify the Company, including any taxes arising in respect of the Pre-Closing Reorganization, any taxes arising in respect of the Spin-Off, deferred payroll taxes and transfer taxes;

the fact that, prior to the effective time of the Spin-Off, Parent or an affiliate thereof would deposit into an escrow account an amount equal to the remainder of $200 million, minus the sum of the amount of marketable securities and cash and cash equivalents contained in any accounts held by SpinCo as of the close of business on the day prior to the date of the Spin-Off, minus the amount, if any, by which the Company’s closing debt exceeds the Company’s signing debt (which we refer to as the “SpinCo Funding Amount”), subject to certain adjustments to the SpinCo Funding Amount, including the SpinCo Funding Adjustments described in the section of this proxy statement captioned “The Distribution Agreement — Financing of SpinCo,” beginning on page 100, and the Company will contribute such SpinCo Funding Amount to SpinCo; and

the guaranty by Parent of the performance by the Company of its obligations under the Distribution Agreement following the effective time of the Merger.
The Board of Directors also considered a variety of risks and uncertainties regarding the Merger and the Spin-Off in its deliberations concerning the Merger Agreement, the Distribution Agreement, the Merger and the Spin-Off, including the following (not necessarily in any order of relative importance):

No Participation in Future Gains.   The Board of Directors considered the fact that the Company will no longer exist as an independent public company that owns both the 101 Business and SpinCo Business, and stockholders will forgo any future increase in the Company’s value that might result from earnings or possible growth of the 101 Business after the Spin-Off. While the Board of Directors was optimistic about the Company’s prospects on a standalone basis, it concluded that the value reflected in the Transaction Consideration was fair compensation for the potential loss of future stockholder benefit that could reasonably be expected to be realized by the Company on a risk-adjusted basis, particularly given the expectation that the Company would run out of cash in 2024 and would need to pivot to one or more capital raises in the near term. Additionally, the Board of Directors noted that the Distribution and the CVR would provide future potential increases in value to the Company’s stockholders.

Inability to Solicit Other Takeover Proposals.   The Board of Directors considered the fact that the Merger Agreement precludes the Company from soliciting alternative acquisition proposals (although the Company is able to provide information in response to unsolicited written Company acquisition proposals, as described above) and provides Parent with customary “matching” rights prior to the Company terminating the Merger Agreement to accept a superior proposal.

Possibility of More Attractive Alternative Proposals.   The Board of Directors considered that because the Company, after December 1, 2023, did not engage in outreach to third parties regarding a potential acquisition after determining that it was unlikely to find a more attractive proposal following its engagement with multiple alternative counterparties, it is possible that other parties could have become interested in a potential transaction with the Company on more attractive terms than the Merger (although the Board of Directors considered the limited number of companies in its industry that could transact around the current proposal value, and concluded that the Merger Agreement adequately allows for consideration of superior proposals under appropriate circumstances), and considered that the Company would be able to consider unsolicited written Company acquisition proposals from third parties pursuant to the Merger Agreement.

Termination Fee.   The Board of Directors considered the fact that the Company may be required to pay the Termination Fee if the Merger Agreement is terminated under certain circumstances, including by the Company in order to accept a superior proposal. The Board of Directors considered that the amount of the Termination Fee is comparable to termination fees in transactions of a similar size, and was unlikely to deter competing bids. The Board of Directors also recognized that the provisions in the Merger Agreement relating to the Termination Fee were insisted upon by Parent as a condition to entering into the Merger Agreement.
 
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Effect of Announcement and Pendency of the Transactions.   The Board of Directors considered the effect of the public announcement of the Transactions on the Company’s operations, the price of the Company’s common stock, and employees, as well as its ability to attract and retain key personnel while the Transactions are pending and the possibility of any suit, action or proceeding in respect of the Merger Agreement, the Distribution Agreement or the Transactions.

Interim Operating Covenants.   The Board of Directors considered that the Merger Agreement imposes restrictions on the conduct of the Company’s business prior to the consummation of the Merger that may limit the Company from taking specified actions without Parent’s written consent, subject to specific limitations, which may delay or prevent the Company from undertaking business opportunities that may arise pending consummation of the Merger.

Risks Relating to the Spin-Off.   The Board of Directors considered risks relating to the separation of the SpinCo Business from the Company through the Spin-Off and the operation of SpinCo following the completion of the Spin-Off and the Merger, including the costs of the Spin-Off and the risk of not realizing the anticipated benefits of the Spin-Off.

Risks the Merger May Not Be Completed.   The Board of Directors considered the fact that, although the Company expects that the Spin-Off and Merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to consummate the Spin-Off and Merger will be satisfied, and considered the risks and costs to the Company if the Spin-Off and Merger are not consummated, including transaction costs, the diversion of management and employee attention, potential employee attrition, the potential effect on vendors, distributors, partners, licensees and others that do business with the Company and the potential effect on the trading price of Company common stock.

Litigation.   The Board of Directors considered the potential for litigation by stockholders in connection with the Merger and the Spin-Off, which, even where lacking in merit, could nonetheless result in distraction and expense.

Potential Conflicts of Interest.   The Board of Directors considered the potential conflicts of interest created by the fact that the Company’s executive officers and directors have financial interests in the Transactions that may be different from or in addition to those of other stockholders, as more fully described in “Interests of Certain Persons in the Merger and the Spin-Off.”

Regulatory Approval.   The Board of Directors considered the risks associated with the potential need to make antitrust filings, and obtain antitrust consents and approvals, in the United States and certain foreign jurisdictions, including the risk that regulatory agencies would not approve the Transactions or would impose terms and conditions on their approvals that would, if accepted, either materially impair the business operations of the Company or adversely impact the ability of the Company to realize the synergies that are expected to occur in connection with the Transactions.

Tax Treatment.   The Board of Directors considered the fact that receipt of the Transaction Consideration generally would be taxable to the Company’s stockholders that are U.S. holders for U.S. federal income tax purposes.
The foregoing discussion of the information and reasons considered by the Board of Directors is not intended to be exhaustive, but includes the material reasons considered by the Board of Directors. In view of the variety of reasons considered in connection with its evaluation of the Merger and the Spin-Off, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific reasons considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different reasons. The Board of Directors did not undertake to make any specific determination as to whether any reason, or any particular aspect of any reason, supported or did not support its ultimate determination. The Board of Directors based its recommendation on the totality of the information presented. After considering these reasons, the Board of Directors concluded that the positive reasons related to the Merger Agreement, the Distribution Agreement and the transactions contemplated thereby substantially outweighed the potential negative reasons.
Portions of this explanation of the reasons for the Merger and the Spin-Off and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
 
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Opinion of Centerview Partners LLC
On January 22, 2024, Centerview rendered to the Board of Directors its oral opinion, subsequently confirmed in a written opinion dated such date, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Transaction Consideration to be paid to the holders of shares of Company common stock (other than Excluded Shares) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement was fair, from a financial point of view, to such holders.
The full text of Centerview’s written opinion, dated January 22, 2024, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex C and is incorporated herein by reference. The summary of the written opinion of Centerview set forth below is qualified in its entirety to the full text of Centerview’s written opinion attached as Annex C. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transactions and Centerview’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of shares of Company common stock (other than Excluded Shares) of the Transaction Consideration to be paid to such holders pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement. Centerview’s opinion did not address any other term or aspect of the Merger Agreement, the Distribution Agreement, the CVR Agreement or the Transactions and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Transactions or any other matter.
The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.
In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

a draft of the Merger Agreement, dated January 21, 2024, a draft of the Distribution Agreement, dated January 21, 2024, and a draft of the form of the CVR Agreement attached to the Merger Agreement, referred to in this summary of Centerview’s opinion as the “Draft Agreements”;

Annual Reports on Form 10-K of the Company for the years ended December 31, 2022, December 31, 2021 and December 31, 2020;

certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company;

certain publicly available research analyst reports for the Company;

certain other communications from the Company to its stockholders; and

certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company and SpinCo, including certain financial forecasts, analyses and projections relating to the Company and SpinCo and the probability of realizing the Milestone under the CVR Agreement prepared by management of the Company and furnished to Centerview by the Company for purposes of Centerview’s analysis on January 22, 2024, which are referred to in this summary of Centerview’s opinion as the “Management Forecasts,” and which are collectively referred to in this summary of Centerview’s opinion as the “Internal Data.”
Centerview also participated in discussions with members of the senior management and representatives of the Company regarding their assessment of the Internal Data. In addition, Centerview conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.
Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with the Company’s consent, Centerview
 
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relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the Company’s direction, that the Internal Data (including, without limitation, the Management Forecasts) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby and Centerview relied, at the Company’s direction, on the Internal Data for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the Internal Data or the assumptions on which it was based. In addition, at the Company’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company or SpinCo, nor was Centerview furnished with any such evaluation or appraisal, and was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. Centerview assumed, at the Company’s direction, that the final executed Merger Agreement, Distribution Agreement and CVR Agreement would not differ in any respect material to Centerview’s analysis or opinion from the Draft Agreements reviewed by Centerview. Centerview also assumed, at the Company’s direction, that the Transactions will be consummated on the terms set forth in the Merger Agreement, the Distribution Agreement and the CVR Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transactions, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of the Company or SpinCo, or the ability of the Company or SpinCo to pay its obligations when they come due, or as to the impact of the Transactions on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.
Centerview’s opinion expressed no view as to, and did not address, the Company’s underlying business decision to proceed with or effect the Transactions, or the relative merits of the Transactions as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of the shares of Company common stock (other than Excluded Shares) of the Transaction Consideration to be paid to such holders pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the Merger Agreement, the Distribution Agreement, the CVR Agreement or the Transactions, including, without limitation, the structure or form of the Transactions, including the Merger and the Spin-Off, the form or terms of the CVR with respect to transferability, illiquidity or otherwise or any other agreements or arrangements contemplated by the Merger Agreement, the Distribution Agreement or the CVR Agreement or entered into in connection with or otherwise contemplated by the Transactions, including, without limitation, the fairness of the Transactions or any other term or aspect of the Transactions to, or any consideration to be received in connection therewith by, or the impact of the Transactions on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in connection with the Transactions, whether relative to the Transaction Consideration to be paid to the holders of the shares of Company common stock (other than Excluded Shares) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement or otherwise. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion does not in any manner address the prices at which the shares of SpinCo common stock will trade following the consummation of the Transactions or at any time and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the
 
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Transactions or any other matter. Centerview’s financial advisory services and its written opinion were provided for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transactions. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.
Summary of Centerview Financial Analysis
The following is a summary of the material financial analyses prepared and reviewed with the Board of Directors in connection with Centerview’s opinion, dated January 22, 2024. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of the Company. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company or any other parties to the Transactions. None of the Company, Parent, Merger Sub or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of the Company do not purport to be appraisals or reflect the prices at which the Company may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before January 22, 2024 (the last trading day before the public announcement of the Transactions) and is not necessarily indicative of current market conditions.
Analysis of Consideration
Centerview conducted an analysis of the Transaction Consideration to be paid to the holders of shares of Company common stock (other than Excluded Shares) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement. Such Transaction Consideration is comprised of, on a per share of Company common stock basis, (i) $30.00 upon the closing of the Merger in cash, without interest, pursuant to the terms of the Merger Agreement, (ii) one CVR representing the right to receive a contingent payment in cash of $5.00, without interest, upon the achievement of the Milestone set forth in the CVR Agreement, as described more fully in the section captioned “— Contingent Value Rights Agreement” and (iii) 0.25 of a share of SpinCo common stock to be received in the Spin-Off pursuant to the terms of the Distribution Agreement, all together and not separately. Each 0.25 of a share of SpinCo common stock was assumed to have a value between $3.40 and $7.95 based on 92% ownership of SpinCo, a capitalization of $200 million and no debt as of June 30, 2024 and, except for the value of $3.40 (which assumed no future cash flows of SpinCo), a risk adjusted net present value of future cash flows of SpinCo based upon the Management Forecasts.
SpinCo Discounted Cash Flow Analysis
Centerview performed a discounted cash flow analysis of SpinCo based on the Management Forecasts. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.
For purposes of the analysis of the net present value of the future cash flows of SpinCo, Centerview calculated a range of equity values for 0.25 of a share of SpinCo common stock by (a) discounting to present value as of June 30, 2024 using discount rates ranging from 14.0% to 16.0% (reflecting Centerview’s
 
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analysis of SpinCo’s expected weighted average cost of capital) and using a mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free cash flows of SpinCo over the period beginning on June 30, 2024 and ending on December 31, 2043, utilized by Centerview based on the Management Forecasts, (ii) an implied terminal value of SpinCo, calculated by Centerview by assuming that unlevered free cash flows would decline in perpetuity after December 31, 2043 at a rate of free cash flow decline of 60% year over year (with the exception of platform cash flows for which a 0% perpetuity growth rate was assumed), and (iii) tax savings from usage of SpinCo’s federal net operating losses from SpinCo’s estimated future losses, as set forth in the Management Forecasts, and (b) adding to the foregoing results SpinCo’s estimated net cash of $200 million, assuming SpinCo is capitalized with $200 million in cash and no debt, as of June 30, 2024, and the net present value of the estimated costs of an assumed $150 million equity raise in 2025 and $300 million equity raise in each of 2026 and 2027, as set forth in the Internal Data. Centerview divided the result of the foregoing calculations by the number of fully diluted outstanding shares of estimated SpinCo common stock (determined using the treasury stock method and taking into account the dilutive impact of warrants on the then-existing terms and 8% of shares of SpinCo common stock to be retained by the Company, and assuming no exercise of Company options receiving SpinCo common stock, as instructed by Company management) as of January 18, 2024, based on the Internal Data, resulting in a range of implied equity values per 0.25 of a share of SpinCo common stock of $5.85 to $7.95 rounded to the nearest $0.05.
Contingent Value Right Analysis
For analytical purposes, assuming a 60% probability CVR holders receive an aggregate payment of $5.00 per CVR upon the achievement of the Milestone based on the probability of success as estimated by Company management in, and the estimated timing of achievement of the Milestone under the CVR Agreement implied by, the Management Forecasts, as described under the section entitled, “The Transactions — Certain Financial Projections” and further assuming a discount rate of 13.5%, the midpoint of a range of discount rates from 12.5% to 14.5%, based on Centerview’s analysis of the Company’s weighted average cost of capital, Centerview calculated an illustrative net present value for one (1) CVR of $2.05.
Solely for purposes of the financial analyses summarized below, the term “Implied Consideration Value” refers to an aggregate assumed implied per share of Company common stock value of $35.45 to $40.00 per share of Company common stock, equal, on a per share of Company common stock basis, to (i) $30.00 consideration upon the closing of the Merger plus (ii) the illustrative net present value of the CVR of $2.05, based on the midpoint of the range of discount rates, as set forth above, and (iii) a value between $3.40 and $7.95 per 0.25 of a share of SpinCo common stock, based on the capitalization, cash and other assumptions, as set forth above under “Analysis of Consideration.” However, there is no guarantee that any of the conditions for the Milestone Payment pursuant to the CVR Agreement will be satisfied, and if satisfied, when such conditions will be satisfied. There is also no guarantee of the prices at which the shares of SpinCo common stock will trade following consummation of the Transactions or at any time.
Company Discounted Cash Flow Analysis
Centerview performed a discounted cash flow analysis of the Company based on the Management Forecasts.
In performing this analysis, Centerview calculated a range of per share of Company common stock equity values by (a) discounting to present value as of June 30, 2024 using discount rates ranging from 12.5% to 14.5% (reflecting Centerview’s analysis of the Company’s weighted average cost of capital) and using a mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free cash flows of the Company over the period beginning on June 30, 2024 and ending on December 31, 2043, utilized by Centerview based on the Management Forecasts, (ii) an implied terminal value of the Company, calculated by Centerview by assuming that unlevered free cash flows would decline in perpetuity after December 31, 2043 at a rate of free cash flow decline of 60% year over year (with the exception of platform cash flows for which a 0% perpetuity growth rate was assumed), and (iii) tax savings from usage of the Company’s estimated federal net operating losses of $300 million as of December 31, 2023 and the Company’s estimated future losses, as set forth in the Management Forecasts, (b) subtracting from the foregoing results the Company’s estimated net debt of $125 million as of June 30, 2024, and (c) adding the net present value of
 
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the estimated costs of an assumed $500 million equity raise in 2024, $250 million equity raise in 2025, $500 million equity raise in 2026 and $250 million equity raise in 2027, as set forth in the Internal Data. Centerview divided the result of the foregoing calculations by the number of fully diluted outstanding shares of Company common stock (determined using the treasury stock method and taking into account the dilutive impact of outstanding in-the-money options and warrants) as of January 18, 2024, based on the Internal Data, resulting in a range of implied equity values per share of Company common stock of $27.45 to $35.70 rounded to the nearest $0.05.
Centerview then compared this range to the Implied Consideration Value of $35.45 to $40.00 per share of Company common stock to be paid to the holders of shares of Company common stock (other than Excluded Shares) pursuant to the Merger Agreement, the Distribution Agreement and the CVR Agreement.
Other Factors
Centerview noted for the Board of Directors certain additional factors solely for informational purposes, including, among other things, the following:

Historical Stock Price Trading Analysis.   Centerview reviewed historical closing trading prices of the shares during the 52-week period ended January 22, 2024 (the last trading day before the public announcement of the Transactions), which reflected low and high stock closing prices for the Company during such period of approximately $14.50 to $38.25 per share of Company common stock.

Analyst Price Target Analysis.   Centerview reviewed stock price targets for the shares of Company common stock in recently published, publicly available Wall Street research analyst reports as of January 22, 2024 (the last trading day before the public announcement of the Transactions), which indicated low and high stock price targets for the Company ranging from $27.00 to $60.00 per share of Company common stock.
General
The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.
Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the Board of Directors in its evaluation of the Transactions. Consequently, the analyses described above should not be viewed as determinative of the views of the Board of Directors or management of the Company with respect to the Transaction Consideration or as to whether the Board of Directors would have been willing to determine that a different consideration was fair. The consideration for the Transactions was determined through arm’s-length negotiations between the Company and Parent and was approved by the Board of Directors. Centerview provided advice to the Company during these negotiations. Centerview did not, however recommend any specific amount of consideration to the Company or the Board of Directors or that any specific amount of consideration constituted the only appropriate consideration for the Transactions.
Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to the date of its written opinion, except for its current engagement, Centerview had not been engaged to provide financial advisory or other services to the Company, and Centerview did not receive any compensation from the Company during such period. In the two years prior to the date of its written opinion, Centerview had been engaged to provide financial advisory services unrelated to the Company to Sanofi, the parent company of Parent, including in connection with Sanofi’s acquisition of Kadmon Holdings, Inc. in 2021 and other strategic matters, and Centerview received between $5 million and $10 million in compensation from Sanofi for such services during such period. Centerview may provide financial advisory and other services to or with respect to the Company, Sanofi or Parent or their respective affiliates in the future, for which Centerview may receive compensation. Certain (i) of Centerview and its affiliates’ directors, officers, members and
 
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employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, the Company, Sanofi, Parent, or any of their respective affiliates, or any other party that may be involved in the Transactions.
The Board of Directors selected Centerview as its financial advisor in connection with the Transactions based on Centerview’s familiarity with the Company, their reputation as an internationally recognized investment banking firm and their substantial experience in similar transactions. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transactions.
In connection with Centerview’s services as the financial advisor to the Board of Directors, the Company has agreed to pay Centerview an aggregate fee of $47 million, $1 million of which was payable upon the rendering of Centerview’s opinion and $46 million of which is payable contingent upon consummation of the Transactions. In addition, the Company has agreed to reimburse certain of Centerview’s expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview’s engagement.
Certain Financial Projections
The Company does not, as a matter of course, publicly disclose financial projections or internal projections as to future revenues or other financial results of its operations due to, among other reasons, the uncertainty, unpredictability, and subjectivity of the underlying assumptions and estimates. However, the Company’s management has historically prepared and periodically updated financial projections for use in discussions and reviews with the Board of Directors of the Company’s strategic plans and the Board of Directors’ evaluation of strategic alternatives.
The Forecasts (as defined below) were provided to the Board of Directors in considering, analyzing and evaluating the Transactions. In addition, the Forecasts were provided to Centerview, the Company’s financial advisor, for purposes of its financial analysis and the opinion that Centerview rendered in connection with the Transactions. The Company directed Centerview to use and rely on the Forecasts, which the Board of Directors viewed to be reasonably prepared on bases reflecting the best then-currently available estimates and judgments of the Company’s senior management as to the expected future performance of the Company on a standalone basis, in performing its financial analyses relating to the rendering of its fairness opinion to the Board of Directors as described in “— Opinion of Centerview Partners LLC” and such use and reliance was approved by the Board of Directors.
The Historical Product Projections (as defined below) were not approved by the Company or the Board of Directors for use and reliance by Centerview in performing its financial analyses relating to the rendering of its fairness opinion, and the Forecasts and the SpinCo Forecasts (as defined below) were the only financial projections with respect to the Company used by Centerview in performing such financial analyses. The Company provided a truncated and preliminary version of Company management’s projections for the Company to Parent for the first half of 2024 only as a means to explain the projected cash burn from signing to closing.
Historical Product Projections
Company management prepared and reviewed with the Board of Directors projections (referred to in this proxy statement as the “Historical Product Projections”) at the Board of Directors’ December 13, 2022 meeting. The discounted cash flow analysis based on the Historical Product Projections was prepared by the Company management team based on their view of the prospects for the Company’s clinical pipeline products INBRX-101 and INBRX-109, assuming the assets were commercialized and revenue-generating in the future. The Historical Product Projections showed that at an illustrative weighted average cost of capital (WACC) range of 8% to 12%, the net present value (“NPV”) of INBRX-101 would be approximately $5 billion to $7.5 billion and the NPV of INBRX-109 would be approximately $1 billion to $2 billion. These prospective Historical Product Projections were based on numerous internal asset-specific assumptions
 
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to be refined further, including cost of capital, assumptions regarding the market size for the Company’s products (including the total addressable market), the market share the Company’s products would likely be able to achieve, the probability of success of bringing the Company’s products to market (including probability of regulatory approvals), the timing of market launch, pricing, operating expenses, patent exclusivity and other barriers of entry, as well as other relevant factors relating to the commercialization of the Company’s pipeline products and product candidates, and they did not consider important factors related to the broader Company including, among others, other current and potential future pipeline assets, related expenses and overhead, and potential future capital needs.
Forecasts
Throughout the course of 2023, Company management prepared revised projections for the Company, and such projections were further revised during December 2023 and January 2024 to reflect updates to the Company’s near-term budget and to reflect the final terms of the Transactions, and were presented in finalized form to the Board of Directors at the Board of Director’s January 22, 2024 meeting as described in “— Background of the Merger” ​(as so finalized, the “Forecasts” and, together with the Historical Product Projections and the SpinCo Forecasts (as defined below), the “Projections”) that had the following changes, among others, from the Historical Product Projections (i) a decreased probability of success ascribed to INBRX-101 for the treatment of AATD (which decreased from 90% to 60%), reflecting a less advantageous regulatory environment, including potential difficulty in obtaining FDA approval, and enhanced data on the probability of success for similar products; (ii) a decreased probability of success ascribed to INBRX-101 for the treatment of GvHD (which decreased from 60% to 10%), as a result of limited clinical data with success in that indication and no internal movement on future clinical trials in GvHD due to competing priorities; (iii)  an increase in the cost of capital, (iv) a decreased compound annual growth rate for the overall AATD market, from 7% to 4%, reflecting lower market growth rates for similar products; (v) a decrease in gross revenue due to (a) a reduction in the expected population afflicted with AATD and a decrease in the Company’s market share of that population, and (b) a delay in market launch due to a longer clinical trial period; and (vi) an increase in operating expenses to reflect a larger sales force than originally anticipated and a higher cost of goods on the manufacturing of AATD due to inflation. The Forecasts were otherwise materially the same as the Historical Product Projections with respect to INBRX-101 and INBRX-109. The Board of Directors reviewed preliminary versions of the Forecasts at the Board of Director’s December 19, 2023, December 21, 2023 and December 29, 2023 meetings as described in “— Background of the Merger” along with a consolidated view of the Company’s entire pipeline, including its immuno-oncology assets as well as its preclinical pipeline.
SpinCo Forecasts
The Forecasts included projections for SpinCo for the fiscal years 2024 through 2043 (referred to in this proxy statement as the “SpinCo Forecasts”). The SpinCo Forecasts were prepared by the Company management team over the course of December 2023 and January 2024 and were further revised to reflect the final terms of the Transactions based on Company management’s view of the prospects for the Company’s clinical pipeline products INBRX-105, INBRX-106 and INBRX-109 and the Company’s discovery pipeline, to near-term budget, overhead expenses and general cost structure, which was being determined alongside the consideration of the potential transaction, required to pursue these programs and presented in finalized form to the Board of Directors at the Board of Director’s January 22, 2024 meeting as described in “— Background of the Merger”. The revenue projections contained in the SpinCo Forecasts are the same as those contained in the Forecasts, but the SpinCo Forecasts excluded INBRX-101 and included differences in overhead expenses and general cost structure, including due to being a newly created public company following the Distribution. The Board of Directors reviewed preliminary versions of the SpinCo Forecasts at the Board of Director’s December 19, 2023, December 21, 2023 and December 29, 2023 meetings as described in “— Background of the Merger” along with a consolidated view of the Company’s entire pipeline, including its immuno-oncology assets as well as its preclinical pipeline.
Cautionary Note About the Projections
As described above, the Projections were based upon certain financial, operating, and commercial assumptions developed solely using the information available to Company management at the time the
 
55

 
applicable Projections were created. The foregoing is a summary of certain key assumptions and estimates relating to the Projections and does not purport to be a comprehensive overview of all assumptions and estimates reflected in the Projections. The Projections were provided to the Board of Directors and, for informational purposes, Centerview, as the Company’s financial advisor.
The Projections included in this document have been prepared by, and are the responsibility of, Company management. The Projections were not prepared with a view toward public disclosure or with a view toward complying with generally accepted accounting principles in the United States (“GAAP”), the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of prospective financial information. Neither BDO USA, P.C. (“BDO”), the Company’s independent registered public accounting firm, nor any other independent registered accounting firm, has audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the Projections and, accordingly, neither BDO nor any other independent registered accounting firm has or does express an opinion or any other form of assurance with respect thereto.
Modeling and forecasting the future commercialization of clinical and preclinical stage drug candidates is a highly speculative endeavor. In addition to the various limitations described above, there can also be no assurance that the Company will obtain and maintain any of the regulatory approvals necessary for the continued commercialization of any of its product candidates, or that the Company’s competitors will not commercialize products that are safer, more effective, or more successfully marketed and sold than any product that the Company may commercialize. Since the Projections cover a long period of time, the Projections by their nature are unlikely to anticipate each circumstance that will have an effect on the commercial value of the Company’s products and product candidates.
The figures and inputs for EBIT and unlevered free cash flows contained in the Projections set forth below are “non-GAAP financial measures,” which are financial performance measures that are not calculated in accordance with GAAP. These non-GAAP financial measures are not intended to be considered in isolation from, or as a substitute for, financial information prepared and presented in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. Furthermore, there are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP.
The Projections reflect estimates and assumptions made by Company management with respect to general business, economic, competitive, regulatory and other market and financial conditions and other future events, all of which are difficult to predict and many of which are beyond the Company’s control. In particular, the Projections, while presented with numerical specificity, were based on numerous variables, assumptions, and estimates that are inherently uncertain and subject to a wide variety of business, economic, competitive, and regulatory risks that could cause actual results to differ materially from those contained in the Projections, such that the Projections are subjective in many respects and thus subject to interpretation. Because the Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year and are unlikely to anticipate each and every circumstance that could have an effect on Company’s business and its results of operations. The Projections were developed solely using the information available to Company management at the time they were created and reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results or that may result in the Projections not being achieved include, but are not limited to, risks and uncertainties relating to events, competitive dynamics, industry change, and other factors beyond Company’s control and depend on regulatory approvals and macroeconomic and other environmental circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Many of these risks are described in greater detail in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023.
The Projections are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The inclusion of the Projections should not be regarded as an indication that the Company or anyone who received the Projections then considered, or now considers, the Projections to be necessarily predictive of actual future events, and this information should not be relied
 
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upon as such. Company management views the Projections as being subject to inherent risks and uncertainties associated with such long-range projections.
In light of the foregoing factors and the uncertainties inherent in the Projections, Company stockholders are cautioned not to place undue, if any, reliance on the Projections. The Projections were not prepared with a view toward public disclosure. The inclusion of the Projections in this proxy statement should not be regarded as an indication that the Company or any of its affiliates, advisors or representatives considered or consider the Projections to be predictive of actual future events, and the Projections should not be relied upon as such or construed as financial guidance.
None of the Company, Parent or any of their respective affiliates, advisors or other representatives makes any representation to any stockholder regarding the validity, reasonableness, accuracy or completeness of the Projections or the performance of the Company relative to the Projections. The inclusion of the Projections in this proxy statement does not constitute an admission or representation of the Company that the Projections or the information contained therein is material. Except as required by applicable law, neither the Company nor any of its affiliates intends to, and each of them disclaims any obligation to, update, correct or otherwise revise the Projections if any or all of them have changed or change or otherwise have become, are or become inappropriate (even in the short term). These considerations should be taken into account if evaluating the Projections, which were prepared as of an earlier date. The Company does not intend to update or otherwise revise the Projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Projections are no longer appropriate.
The Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company in its public filings with the SEC. The Projections were developed by Company management on a standalone basis and, other than the SpinCo Forecasts, were prepared without giving effect to the Merger and the other transactions contemplated by the Merger Agreement, and therefore the Projections do not give effect to the proposed Merger or any changes to the Company’s operations or strategy that may be implemented after the consummation of the Merger. Furthermore, the Projections do not take into account the effect of any failure of the proposed Merger to be completed and should not be viewed as accurate or continuing in that context.
A summary of the Projections is presented below, with all figures presented in millions and rounded to the nearest million. While the inclusion of such Projections in this proxy statement is intended to give Company stockholders access to the information that was made available to the Board of Directors and Centerview, as the Company’s financial advisor, to the extent described above, such Projections are not included in this proxy statement in order to influence any stockholder’s decision to vote with respect to the adoption of the Merger Agreement or for any other purpose.
Historical Product Projections1
The Historical Product Projections include long-term, risk-adjusted projections from fiscal year 2023 through fiscal year 2042 for the Company’s clinical pipeline products, INBRX-101 and INBRX-109. The Historical Product Projections, summarized below, do not include the Company’s other clinical pipeline candidates INBRX-105 or INBRX-106 or its discovery pipeline and other unallocated expenses (all Dollar values are in millions):
Illustrative INBRX-101 Asset Projections
2023E
2024E
2025E
2026E
2027E
Total Net Revenue
$ 0 $ 0 $ 0 $ 485 $ 1,068
Gross Profit
$ 0 $ 0 $ 0 $ 364 $ 801
R&D Expense
$ (47) $ (61) $ (25) $ (20) $ (10)
SG&A Expense
$ (12) $ (23) $ (28) $ (51) $ (53)
EBIT
$ (59) $ (84) $ (53) $ 292 $ 739
1
Figures have been rounded to the nearest million.
 
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2028E
2029E
2030E
2031E
2032E – 2042E
Total Net Revenue
$ 1,696 $ 1,966 $ 2,134 $ 2,330 $ 37,874
Gross Profit
$ 1,272 $ 1,475 $ 1,601 $ 1,747 $ 28,405
R&D Expense
$ (10) $ (10) $ (10) $ (10) $ (20)
SG&A Expense
$ (54) $ (55) $ (56) $ (57) $ (680)
EBIT
$ 1,208 $ 1,410 $ 1,535 $ 1,680 $ 27,705
Illustrative INBRX-109 Asset Projections
2023E
2024E
2025E
2026E
2027E
Total Net Revenue
$ 0 $ 0 $ 135 $ 310 $ 584
Gross Profit
$ 0 $ 0 $ 101 $ 232 $ 438
R&D Expense
$ (32) $ (12) $ (3) $ 0 $ 0
SG&A Expense
$ (13) $ (26) $ (26) $ (27) $ (27)
EBIT
$ (44) $ (39) $ 71 $ 206 $ 411
2028E
2029E
2030E
2031E
2032E – 2042E
Total Net Revenue
$ 605 $ 626 $ 647 $ 668 $ 8,871
Gross Profit
$ 454 $ 469 $ 485 $ 501 $ 6,653
R&D Expense
$ 0 $ 0 $ 0 $ 0 $ 0
SG&A Expense
$ (27) $ (27) $ (27) $ (28) $ (312)
EBIT
$ 427 $ 442 $ 458 $ 473 $ 6,341
Forecasts1
The Forecasts include long-term, risk-adjusted Projections from fiscal year 2024 through fiscal year 2043 for the Company’s clinical pipeline products, INBRX-101, INBRX-105, INBRX-106 and INBRX-109, and the Company’s discovery pipeline. The Forecasts were updated to reflect the changes described above and also include the entire Company portfolio at the time. The Forecasts are summarized below:
2024E
2025E
2026E
2027E
2028E
2029E
Total Net Revenue
$ 68 $ 12 $ 157 $ 410 $ 721
Gross Profit
$ 68 $ 10 $ 112 $ 299 $ 524
R&D Expense
$ (303) $ (215) $ (232) $ (114) $ (96) $ (94)
S&M Expense
$ (16) $ (13) $ (34) $ (62) $ (82) $ (107)
G&A Expense
$ (48) $ (59) $ (69) $ (67) $ (56) $ (53)
EBIT
$ (367) $ (219) $ (325) $ (131) $ 65 $ 271
Unlevered Free Cash Flow
2H’24: $(156)
$ (367) $ (219) $ (326) $ (146) $ 24 $ 171
2030E
2031E
2032E
2033E
2034E
2035E
2036E
Total Net Revenue
$ 1,151 $ 1,549 $ 1,801 $ 1,863 $ 2,011 $ 2,077 $ 2,189
Gross Profit
$ 858 $ 1,150 $ 1,357 $ 1,392 $ 1,516 $ 1,564 $ 1,663
R&D Expense
$ (57) $ (50) $ (51) $ (38) $ (39) $ (40) $ (41)
S&M Expense
$ (130) $ (143) $ (147) $ (152) $ (156) $ (161) $ (166)
G&A Expense
$ (57) $ (56) $ (55) $ (55) $ (56) $ (57) $ (58)
EBIT
$ 614 $ 900 $ 1,104 $ 1,148 $ 1,266 $ 1,307 $ 1,397
Unlevered Free Cash Flow
$ 423 $ 634 $ 808 $ 848 $ 938 $ 971 $ 1,040
2037E
2038E
2039E
2040E
2041E
2042E
2043E
Total Net Revenue
$ 2,139 $ 2,136 $ 1,728 $ 1,630 $ 1,084 $ 785 $ 542
Gross Profit
$ 1,634 $ 1,633 $ 1,326 $ 1,267 $ 846 $ 625 $ 432
R&D Expense
$ (41) $ (42) $ (37) $ (38) $ (19) $ (13) $ (9)
1
Figures have been rounded to the nearest million.
 
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2037E
2038E
2039E
2040E
2041E
2042E
2043E
S&M Expense
$ (149) $ (145) $ (97) $ (78) $ (49) $ (32) $ (22)
G&A Expense
$ (61) $ (64) $ (69) $ (74) $ (77) $ (80) $ (83)
EBIT
$ 1,382 $ 1,382 $ 1,124 $ 1,076 $ 701 $ 500 $ 319
Unlevered Free Cash Flow
$ 1,043 $ 1,036 $ 881 $ 820 $ 576 $ 407 $ 260
SpinCo Forecasts1
The SpinCo Forecasts include long-term, risk-adjusted Projections from fiscal year 2024 through fiscal year 2043 for the Company’s clinical pipeline products, INBRX-105, INBRX-106 and INBRX-109, and the Company’s discovery pipeline. The SpinCo Forecasts were updated to reflect the changes described above and exclude the projections for INBRX-101. The SpinCo Forecasts are summarized below:
SpinCo Forecasts
2024E
2025E
2026E
2027E
2028E
2029E
Total Net Revenue
$ 38 $ 12 $ 14 $ 100 $ 221
Gross Profit
$ 38 $ 10 $ 11 $ 78 $ 166
R&D Expense
$ (170) $ (144) $ (147) $ (77) $ (65) $ (65)
S&M Expense
$ (5) $ (3) $ (5) $ (16) $ (45) $ (68)
G&A Expense
$ (34) $ (29) $ (47) $ (40) $ (36) $ (30)
EBIT
$ (208) $ (139) $ (190) $ (123) $ (68) $ 2
Unlevered Free Cash Flow
2H’24: $(94)
$ (208) $ (139) $ (190) $ (124) $ (75) $ (11)
2030E
2031E
2032E
2033E
2034E
2035E
2036E
Total Net Revenue
$ 398 $ 561 $ 730 $ 776 $ 873 $ 895 $ 968
Gross Profit
$ 302 $ 421 $ 555 $ 583 $ 664 $ 674 $ 738
R&D Expense
$ (27) $ (28) $ (29) $ (27) $ (27) $ (28) $ (29)
S&M Expense
$ (89) $ (101) $ (104) $ (107) $ (110) $ (114) $ (117)
G&A Expense
$ (34) $ (27) $ (20) $ (21) $ (21) $ (22) $ (22)
EBIT
$ 152 $ 265 $ 402 $ 429 $ 505 $ 511 $ 570
Unlevered Free Cash Flow
$ 98 $ 181 $ 288 $ 315 $ 372 $ 378 $ 424
2037E
2038E
2039E
2040E
2041E
2042E
2043E
Total Net Revenue
$ 837 $ 847 $ 403 $ 269 $ 117 $ 98 $ 53
Gross Profit
$ 633 $ 648 $ 309 $ 217 $ 96 $ 89 $ 49
R&D Expense
$ (28) $ (29) $ (17) $ (17) $ (10) $ (6) $ (4)
S&M Expense
$ (99) $ (93) $ (44) $ (23) $ (10) $ (4) $ (2)
G&A Expense
$ (22) $ (22) $ (17) $ (15) $ (14) $ (13) $ (13)
EBIT
$ 484 $ 503 $ 231 $ 161 $ 63 $ 66 $ 30
Unlevered Free Cash Flow
$ 373 $ 380 $ 215 $ 137 $ 60 $ 54 $ 25
Financial Information of SpinCo
Audited Financial Information
Pursuant to the requirements of Schedule 14A, we are including herein the audited consolidated financial statements of SpinCo and the corresponding notes thereto. The Pre-Closing Reorganization and the Distribution is being treated as a reverse spin-off for financial accounting and reporting purposes in accordance with ASC 505-60, Spinoffs and Reverse Spinoffs, and SpinCo is the accounting successor to the Company. As a result, the audited consolidated financial statements of SpinCo and the corresponding notes thereto are the same as the audited consolidated financial statements of the Company and the corresponding notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024, and incorporated by reference herein.
1
Figures have been rounded to the nearest million.
 
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Interests of Certain Persons in the Merger and the Spin-Off
In considering the recommendation of the Board of Directors with respect to the Transaction Proposal, you should be aware that executive officers and directors of the Company have certain interests in the Merger that are different from, or in addition to, the interests of the Company’s stockholders generally. The directors of the Company were aware of these interests and considered them at the time they evaluated and negotiated the Merger Agreement and the Merger, and in recommending that the Merger Agreement be adopted by the stockholders of the Company. These interests are described below.
Treatment of Company Stock Options
Treatment of Company Stock Options in Connection with the Spin-Off and Merger
In connection with and effective as of the Spin-Off, each outstanding Company Stock Option will be adjusted to remain an outstanding option to purchase shares of Company common stock. Company Stock Option holders are not entitled to any shares of SpinCo common stock in respect of their Company Stock Options in the Spin-Off.
As described further in the section entitled “The Merger Agreement — Treatment of Company Common Stock and Share-Based Awards — Company Stock Options” beginning on page 75, the Merger Agreement provides that, at or immediately prior to the Effective Time, outstanding Company Options (including those held by the Company’s executive officers and directors) will be treated as follows:

each In-the-Money Option will be cancelled and immediately cease to be outstanding and converted into the right to receive (A) an amount in cash, without interest and less applicable tax withholdings, equal to the product of (x) the total number of shares of Company common stock subject to such Company Option immediately prior to the Effective Time, multiplied by (y) the excess of (I) the Closing Amount over (II) the exercise price payable per share of Company common stock under such Company Option, and (B) one (1) CVR for each share of Company common stock subject to such Company Option;

each Closing Date Underwater Option will be cancelled and converted into the right to receive the contingent payment described in the following sentence. If the Milestone is achieved, the cash amount to be paid in respect of each such Closing Date U