| Item 1.01 |
Entry into a Material Definitive Agreement |
Underwriting Agreement
On May 31, 2023, Lexicon Pharmaceuticals, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc. (“Citigroup”), Jefferies LLC (“Jefferies”) and Piper Sandler & Co. (“Piper Sandler”), as representatives of the several underwriters named therein (the “Underwriters”), relating to a public offering (the “Public Offering”) of 23,924,705 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”).
The price offered to the public for the Shares was $2.60 per Share (the “Public Offering Price”). Pursuant to the terms of the Underwriting Agreement, the Company also granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 3,588,705 shares of Common Stock (the “Option Shares”) on the same terms as their purchase of the Shares. On June 1, 2023, the Underwriters exercised in full their option to purchase the Option Shares. The net proceeds to the Company from the Public Offering are expected to be approximately $66.9 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing, obligations of the parties and termination provisions. Additionally, the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company has also agreed with the Underwriters not to offer or sell any shares of its Common Stock (or securities convertible into or exchangeable for Common Stock), subject to certain exceptions, for a period of 60 days after the date of the Underwriting Agreement without the prior written consent of Citigroup, Jefferies and Piper Sandler.
The Public Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-258564) (the “Registration Statement”), declared effective by the Securities and Exchange Commission on September 14, 2021, and a related prospectus included in the Registration Statement, as supplemented by a preliminary prospectus supplement dated May 31, 2023 and a final prospectus supplement dated May 31, 2023.
The foregoing summary of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, which is attached to this Current Report on Form 8-K (this “Current Report”) as Exhibit 1.1, and which is incorporated herein by reference. Vinson & Elkins L.L.P., counsel to the Company, delivered an opinion as to the legality of the issuance and sale of the Shares in the Public Offering, a copy of which is attached hereto as Exhibit 5.1 and is incorporated herein by reference.
Purchase Agreement
On May 31, 2023, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Artal International S.C.A., Artal Group S.A., Artal International Management S.A., Invus Advisors, L.L.C., Invus Public Equities, L.P., Invus, L.P. (“Invus”), Mr. Amaury Wittouck, Stichting Administratiekantoor Westend and Westend S.A (collectively, the “Invus Entities”).
Pursuant to the Purchase Agreement, an affiliate of Invus (the “Private Placement Purchaser”) has agreed to purchase, and the Company has agreed to issue to the Private Placement Purchaser on the closing date of the Public Offering, 24,152,218 shares of Common Stock at a price per share equal to Public Offering Price (the “Concurrent Private Placement” and, together with the Public Offering, the “Offering”). Pursuant to the Purchase Agreement, the Private Placement Purchaser was granted the option to purchase up to an additional 3,622,832 shares of Common Stock (the “Private Option Shares”) at the same price per share as the Public Offering Price. On June 1, 2023, the Private Placement Purchaser exercised its full option to purchase the Private Option Shares. The total purchase price of the Common Stock (including the Private Option Shares) offered to the Private Placement Purchaser is expected to be approximately $72.2 million.
The Purchase Agreement incorporates the representations and warranties and covenants made by the Company in the Underwriting Agreement for the benefit of the Private Placement Purchaser and certain of its affiliates. The Purchase Agreement also contains customary conditions to closing, obligations of the parties and termination provisions and serves to waive certain preemptive rights held by the Invus Entities with respect to the Public Offering.
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