Transaction will result in OmniAb becoming an
independent publicly traded company
Ligand’s shareholders to receive 100% of
Ligand’s shares in OmniAb through a tax-free distribution
immediately prior to the merger
Ligand Pharmaceuticals Incorporated (Ligand) (NASDAQ: LGND)
today announced the signing of a definitive merger agreement with
Avista Public Acquisition Corp. II (APAC) (NASDAQ: AHPA), a
publicly traded special purpose acquisition company (SPAC),
providing for the spin-off of OmniAb, Inc. (OmniAb), Ligand’s
antibody discovery business, immediately followed by a merger with
a newly formed subsidiary of APAC. The combined company will be led
by Ligand’s President, Matt Foehr, and will be renamed “OmniAb,
Inc.”
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Upon the closing of the transaction, Avista Capital Partners
(Avista), APAC’s sponsor and a leading private equity firm focused
on the healthcare industry, has agreed to invest up to $115 million
in the combined company, and Ligand will contribute $15 million.
The combined company will have an initial pre-money equity
valuation of $850 million. Immediately prior to the transaction
close, Ligand intends to distribute 100% of its ownership of OmniAb
to Ligand shareholders in a tax-free distribution. The transaction
is expected to close in the second half of 2022.
Ligand’s OmniAb antibody discovery platform provides
pharmaceutical industry partners with access to diverse antibody
repertoires and high-throughput screening technologies to enable
discovery of next-generation therapeutics. At the heart of the
OmniAb platform is the Biological Intelligence™ (BI) of its
proprietary transgenic animals including OmniRat, OmniChicken and
OmniMouse, which have been genetically modified to generate
antibodies with human sequences to facilitate the development of
human therapeutic candidates. Over 55 partners currently have
access to OmniAb-derived antibodies and more than 250 programs are
being actively developed or commercialized. In 2021, nine
antibodies derived from the OmniAb platform entered clinical
testing and two royalty-bearing antibodies received regulatory
approvals.
“In late 2021, Ligand’s Board of Directors decided to separate
Ligand into two public companies given the growth prospects and
needs of our various proprietary technology platforms, and to
unlock value to Ligand’s shareholders,” said John Higgins, CEO of
Ligand. “We considered multiple ways to pursue a separation with
the goals of ensuring a smooth transition of operations, a healthy
balance sheet for both OmniAb and Ligand, and strong market
sponsorship. As we were preparing for a first-half 2022 direct
spin-off of OmniAb to Ligand’s shareholders, as discussed on our
recent earnings call, we received an offer from Avista to merge
OmniAb with their SPAC. The Avista team is comprised of
high-quality healthcare operators and investors with an excellent
track record. They have done extensive due diligence and see the
potential and value of OmniAb, a highly competitive, leading
platform with strong momentum given recent major clinical and
regulatory successes. We are very pleased to partner with APAC and
its shareholders to take OmniAb to the next level.”
“The OmniAb business is positioned for continued growth and
success as we provide partners with access to diverse antibody
repertoires and cutting-edge high-throughput screening technologies
that enable the discovery of next-generation therapeutics,” said
Mr. Foehr. “Two OmniAb-derived antibodies recently received
regulatory approvals in China and a third approval is expected in
the United States later this year. Our growing roster of partners
and new programs illustrates the value our technology offers. We
are excited to join forces with Avista to further build and expand
our differentiated capabilities with applicability to a variety of
modalities, and to leverage our technical strengths to become the
industry’s partner of choice.”
David Burgstahler, CEO of APAC, added, “OmniAb’s merger with
APAC and its subsequent status as a standalone public company will
help propel the company toward a new phase of growth and value
creation. The merger will empower OmniAb with access to the capital
markets, strong cash reserves, the agility to drive innovation and
a superb leadership team. We look forward to partnering with Matt
and the entire organization as they continue to differentiate
OmniAb as a critical partner in advancing drug discovery and
development.”
Matt Foehr will lead OmniAb as CEO and will resign from his role
as Ligand’s President and COO at closing. Kurt Gustafson has joined
the OmniAb management team as CFO, bringing over 25 years of
diverse experience in corporate finance and senior management roles
in growth-oriented publicly traded biopharmaceutical companies,
most recently as CFO of Spectrum Pharmaceuticals. Mr. Gustafson
previously served as CFO of Halozyme Therapeutics and held senior
finance roles at Amgen.
Transaction Details
The combination of OmniAb and AHPA is structured to guarantee a
minimum of $130 million in gross cash to the combined company at
the time of closing, and up to $266 million in the event of no
redemptions by APAC shareholders. APAC’s shareholders will be
eligible to participate in the transaction or to elect redemption
of their shares. Avista has agreed to guarantee that Avista and
AHPA will provide at least $115 million of gross cash to the
combined company through a $15 million PIPE investment and a $100
million facility to backstop potential redemptions. Ligand’s $15
million contribution to OmniAb will be made irrespective of the
number of redemptions or the Avista contributions.
Ligand intends to distribute 100% of the equity in OmniAb to
Ligand shareholders immediately prior to the business combination
with APAC. The transaction will be effected through a “Reverse
Morris Trust” transaction pursuant to which OmniAb will be spun-off
to Ligand’s shareholders and simultaneously merged as a subsidiary
of APAC. The transaction is expected to be tax-free to Ligand and
its shareholders for U.S. federal income tax purposes, except for
cash received in lieu of fractional shares. Upon the closing of the
transaction, Ligand shareholders are expected to own approximately
75% to 84% of the combined company, depending on redemptions, which
will be listed on the Nasdaq Global Markets under the ticker symbol
“OABI”.
The Boards of Directors of both APAC and Ligand have unanimously
approved the proposed transaction, which is subject to customary
closing conditions, including receipt of required regulatory
approvals and receipt of approval from APAC’s shareholders.
Credit Suisse is acting as lead capital markets and financial
advisor to OmniAb, Cowen, Stifel, SVB Leerink and Truist Securities
are also acting as capital markets and financial advisors to
OmniAb, and CJS Securities, Craig-Hallum Capital Group LLC, H.C.
Wainwright & Co. and Roth Capital Partners are acting as
advisors to OmniAb. Weil, Gotshal & Manges LLP is legal advisor
to APAC. Latham & Watkins LLP is legal advisor to Ligand.
Additional information about the transaction will be provided in
a Current Report on Form 8-K to be filed by APAC with the
Securities and Exchange Commission (SEC) and will be available on
the SEC’s website at www.sec.gov.
Technologies
Following the completion of this transaction, OmniAb will
consist of the OmniAb discovery platform featuring transgenic
animals that have been genetically modified to generate antibodies
with human sequences to facilitate development of human therapeutic
candidates, as well as the Icagen ion channel technology. Ligand
Pharmaceuticals’ platform technologies will consist of the
Captisol® technology, a patent-protected, chemically modified
cyclodextrin with a structure designed to optimize the solubility
and stability of drugs, and the Pelican Expression Technology®, a
robust, validated, cost-effective and scalable platform for
recombinant protein production that is especially well-suited for
complex, large-scale protein production.
About OmniAb®
The OmniAb discovery platform provides pharmaceutical industry
partners with access to diverse antibody repertoires and
high-throughput screening technologies to enable discovery of
next-generation therapeutics. At the heart of the OmniAb platform
is the Biological Intelligence (BI) of our proprietary transgenic
animals, including OmniRat, OmniChicken and OmniMouse, which have
been genetically modified to generate antibodies with human
sequences to facilitate development of human therapeutic
candidates. OmniFlic (transgenic rat) and OmniClic (transgenic
chicken) address industry needs for bispecific antibody
applications though a common light chain approach, and OmniTaur
features unique structural attributes of cow antibodies for complex
targets. OmniAb animals comprise the most diverse host systems
available in the industry and they are optimally leveraged through
computational antigen design and immunization methods, paired with
high-throughput microfluidic-based single B cell screening and deep
computational analysis of next-generation sequencing datasets to
identify fully human antibodies with superior performance and
developability characteristics. An established core competency
focused on ion channels and transporters further differentiates our
technology and creates opportunities to further leverage across
modalities, including antibody-drug conjugates and others. The
OmniAb suite of technologies and differentiating computational
capabilities and BI features are combined to offer a highly
efficient and customizable end-to-end solution for the growing
discovery needs of the global pharmaceutical industry. For more
information, please visit www.omniab.com.
About Avista Public Acquisition Corp. II
APAC is a special purpose acquisition company that completed its
initial public offering in August 2021. APAC was formed for the
purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or business combination
with one or more businesses. APAC is sponsored by Avista
Acquisition LP II, which was formed for the express purpose of
acting as the sponsor for APAC. Avista Acquisition Corp. is an
affiliate of Avista Capital Holdings, L.P. For more information,
please visit www.avistapac.com/ahpac.
About Ligand
Ligand is a biopharmaceutical company focused on developing or
acquiring technologies that help pharmaceutical companies discover
and develop medicines. Our business model creates value for
shareholders by providing a diversified portfolio of biotech and
pharmaceutical product revenue streams that are supported by an
efficient and low corporate cost structure. Our goal is to offer
investors an opportunity to participate in the promise of the
biotech industry in a profitable, diversified and lower-risk
business than a typical biotech company. Our business model is
based on doing what we do best: drug discovery, early-stage drug
development, product reformulation and partnering. We partner with
other pharmaceutical companies to leverage what they do best
(late-stage development, regulatory management and
commercialization) ultimately to generate our revenue. Ligand’s
OmniAb® technology platform is a patent-protected transgenic animal
platform used in the discovery of fully human monoclonal and
bispecific therapeutic antibodies. The Captisol® platform
technology is a patent-protected, chemically modified cyclodextrin
with a structure designed to optimize the solubility and stability
of drugs. Ligand’s Pelican Expression Technology® is a robust,
validated, cost-effective and scalable platform for recombinant
protein production that is especially well-suited for complex,
large-scale protein production where traditional systems are not.
Ligand has established multiple alliances, licenses and other
business relationships with the world’s leading pharmaceutical
companies including Amgen, Merck, Pfizer, Sanofi, Janssen, Takeda,
Servier, Gilead Sciences and Baxter International. For more
information, please visit www.ligand.com.
Forward-Looking Statements
This news release contains forward-looking statements. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “should,” “would” and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking. All
statements other than statements of historical facts contained in
this news release, including statements regarding the expected
timing and structure of the proposed transaction, the ability of
the parties to complete the proposed transaction, the expected
benefits of the proposed transaction, the tax consequences of the
proposed transaction, the amount of gross proceeds expected to be
available to OmniAb after the closing and giving effect to any
redemptions by APAC shareholders, OmniAb’s future results of
operations and financial position, business strategy and its
expectations regarding the application of, and the rate and degree
of market acceptance of, the OmniAb technology platform and other
technologies, OmniAb’s expectations regarding the addressable
markets for our technologies, including the growth rate of the
markets in which it operates, the potential for and timing of
receipt of milestones and royalties under OmniAb’s license
agreements with partners, are forward-looking statements. These
forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the control of Ligand, OmniAb
and APAC, that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or
outcomes include, but are not limited to: the risk that the
transactions may not be completed in a timely manner or at all,
which may adversely affect the price of Ligand’s or APAC’s
securities; the risk that APAC shareholder approval of the proposed
transactions is not obtained; the inability to recognize the
anticipated benefits of the proposed transactions, which may be
affected by, among other things, the amount of funds available in
APAC’s trust account following any redemptions by APAC’s
shareholders; the failure to receive certain governmental and
regulatory approvals; the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement; changes in general economic conditions, including as a
result of the COVID-19 pandemic or the conflict between Russia and
Ukraine; the outcome of litigation related to or arising out of the
proposed transactions, or any adverse developments therein or
delays or costs resulting therefrom; the effect of the announcement
or pendency of the transactions on Ligand’s, OmniAb’s or APAC’s
business relationships, operating results, and businesses
generally; the ability to continue to meet Nasdaq’s listing
standards following the consummation of the proposed transactions;
costs related to the proposed transactions; that the price of
APAC’s or Ligand’s securities may be volatile due to a variety of
factors, including Ligand’s, APAC’s or OmniAb’s inability to
implement their business plans or meet or exceed their financial
projections and changes in the combined capital structure; the
ability to implement business plans, forecasts, and other
expectations after the completion of the proposed transactions, and
identify and realize additional opportunities; and the ability of
OmniAb to implement its strategic initiatives.
The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and
uncertainties described in the “Risk Factors” section of APAC’s
registration statement on Form S-1 (File No. 333-257177), the
registration statement on Form S-4, the registration statement on
Form 10, the proxy/information statement/prospectus and certain
other documents filed or that may be filed by APAC, Ligand or
OmniAb from time to time with the SEC following the date hereof.
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.
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 Ligand, OmniAb and APAC assume no obligation and do
not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise. Neither Ligand, OmniAb, or APAC gives any assurance that
Ligand, OmniAb or APAC will achieve their expectations. This
caution is made under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Additional Information
In connection with the proposed transaction, OmniAb will file a
registration statement on Form 10 registering shares of OmniAb
common stock and APAC will file with the SEC a registration
statement on Form S-4 registering shares of APAC common stock,
warrants and certain equity awards. The Form S-4 to be filed by
APAC will include a proxy statement/prospectus in connection with
the APAC shareholder vote required in connection with the proposed
transaction. The Form 10 to be filed by OmniAb will include the
Form S-4 registration statement filed by APAC which will serve as
an information statement/prospectus in connection with the spin-off
of OmniAb. This communication does not contain all the information
that should be considered concerning the business combination. This
communication is not a substitute for the registration statements
that OmniAb and APAC will file with the SEC or any other documents
that APAC or OmniAb may file with the SEC or that APAC, Ligand or
OmniAb may send to shareholders in connection with the business
combination. It is not intended to form the basis of any investment
decision or any other decision in respect to the business
combination. APAC's shareholders and Ligand’s shareholders and
other interested persons are advised to read, when available, the
preliminary and definitive registration statements, and documents
incorporated by reference therein, as these materials will contain
important information about APAC, OmniAb and the business
combination. The proxy statement/prospectus contained in APAC’s
registration statement will be mailed to APAC's shareholders as of
a record date to be established for voting on the business
combination.
The registration statements, proxy statement/prospectus and
other documents (when they are available) will also be available
free of charge, at the SEC's website at www.sec.gov, or by
directing a request to: Avista Public Acquisition Corp. II, 65 East
55th Street, 18th Floor, New York, NY 10022.
Participants in the Solicitation
APAC, Ligand and OmniAb and each of their respective directors,
executive officers and other members of their management and
employees may be deemed to be participants in the solicitation of
proxies from APAC’s shareholders in connection with the business
combination. Shareholders are urged to carefully read the proxy
statement/prospectus regarding the business combination when it
becomes available, because it will contain important information.
Information regarding the persons who may, under the rules of the
SEC, be deemed participants in the solicitation of APAC’s
shareholders in connection with the business combination will be
set forth in the registration statement when it is filed with the
SEC. Information about APAC's executive officers and directors and
OmniAb's management and directors also will be set forth in the
registration statement relating to the business combination when it
becomes available.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20220323005896/en/
Ligand Pharmaceuticals Incorporated Simon Latimer
investors@ligand.com (858) 550-7766
LHA Investor Relations Bruce Voss bvoss@lhai.com (310)
691-7100
Avista Public Acquisition Corp. II Amanda Heravi
heravi@avistacap.com and Daniel Yunger / Hallie Wolff Kekst CNC
daniel.yunger@kekstcnc.com / hallie.wolff@kekstcnc.com
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