UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14D-9
SOLICITATION/RECOMMENDATION
STATEMENT
PURSUANT
TO SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
RAIN
ONCOLOGY INC.
(Name
of Subject Company)
RAIN
ONCOLOGY INC.
(Name
of Person(s) Filing Statement)
Common
Stock, $0.001 par value per share
(Title
of Class of Securities)
75082Q105
(CUSIP
Number of Common Stock)
Avanish
Vellanki
Chief
Executive Officer
Rain
Oncology Inc.
8000
Jarvis Avenue, Suite 204
Newark,
CA 94560
(510)
953-5559
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement)
With
a copy to:
Ryan
A. Murr
Branden
C. Berns
Robert W. Phillips
Gibson,
Dunn & Crutcher LLP
555
Mission Street
San
Francisco, CA 94105-0921
(415)
393-8373
☒ |
Check
the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
This
Schedule 14D-9 consists of the following document related solely to preliminary communications made before the commencement of a planned
tender offer by WK Merger Sub, Inc., a Delaware corporation (“Merger Sub”), a wholly owned subsidiary of Pathos AI, Inc.,
a Delaware corporation (“Parent”), for all of the outstanding common stock of Rain Oncology Inc. (the “Company”
or “Rain”), to be commenced pursuant to the terms of the Agreement and Plan of Merger, dated as of December 13, 2023, among
the Company, Parent and Merger Sub (the “Merger Agreement”):
| 1. | Press
release, dated December 13, 2023, issued by the Company, a copy of which is attached hereto
as Exhibit 99.1 and incorporated herein by reference, announcing the Merger Agreement. |
The
item listed above was first used or made available on December 13, 2023.
Cautionary
Note Regarding Forward-Looking Statements
This
communication contains forward-looking statements related to Rain Oncology Inc. (the “Company”) and the acquisition of the
Company by Pathos AI, Inc. (“Parent”), including express or implied forward-looking statements about the Company’s
products and the future operations and performance of the Company and Parent. These forward-looking statements are within the meaning
of U.S. federal securities laws, including, without limitation, statements regarding the anticipated timing of and closing of the proposed
Offer, Merger and related transactions contemplated by the Merger Agreement (collectively referred to as the “transactions”).
The words “estimates,” “expects,” “continues,” “intends,” “plans,” “anticipates,”
“targets,” “may,” “will,” “would,” “could,” “should,” “potential,”
“goal,” and “effort” and similar expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. These statements are based on current plans, estimates and projections.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. The Company cautions
that a number of important factors, including those described in this communication, could cause actual results to differ materially
from those contemplated in any forward-looking statements. Any forward-looking statements in this communication are based on management’s
current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events
or results to differ materially from those expressed or implied by any forward-looking statements contained in this communication, including,
without limitation, the impact of actions of other parties with respect to the transactions; the possibility that competing offers
will be made; the outcome of any legal proceedings that have been or could be instituted against the Company or its directors; the
risk that the transactions may not be completed in a timely manner, or at all, which may adversely affect the Company’s business
and the price of its common stock; the failure to satisfy all of the closing conditions of the transactions contemplated by the
Merger Agreement; the occurrence of the events or achievement of the milestones giving rise to payments under the CVR Agreement;
the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the effect
of the announcement or pendency of the transactions on the Company’s business, and operating results; risks that the transactions
may disrupt the Company’s current plans and business operations; risks related to the diverting of management’s attention
from the Company’s ongoing business operations; general economic and market conditions and the other risks identified in the
Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including its most recent Annual Report
on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 9, 2023 and subsequent filings with the SEC. Should any
risks and uncertainties develop into actual events, these developments could have a material adverse effect on the transactions and/or
the Company and the Company’s ability to successfully complete the transactions and, with respect to any CVR payment amounts, the
consideration ultimately paid to Company stockholders (including whether any payments will be payable at all). In addition, unlisted
factors may present significant additional obstacles to the realization of forward-looking statements. The Company cautions investors
not to place undue reliance on any forward-looking statements. Any forward-looking statements contained in this communication represent
the Company’s views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.
The Company disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events,
conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ
from those set forth in the forward-looking statements.
Additional
Information and Where to Find It
The
tender offer for the outstanding shares of the Company referenced in this communication has not yet commenced. This communication is
for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute
for the tender offer materials that Parent and its subsidiary will file with the SEC. At the time the tender offer is commenced, Parent
and its subsidiary will file tender offer materials on Schedule TO, and, thereafter, the Company will file a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC with respect to the tender offer.
THE
TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND
THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK ARE
URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK SHOULD CONSIDER BEFORE MAKING ANY
DECISION REGARDING TENDERING THEIR SHARES.
The
Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation
Statement, will be made available to all holders of shares of the Company’s common stock at no expense to them. The tender offer
materials and the Solicitation/Recommendation Statement will be made available for free at the SEC’s website at www.sec.gov or
by accessing the Investor Relations section of the Company’s website at https://investors.rainoncology.com/.
Rain Oncology Inc SC 14D9
Exhibit
99.1
Rain
Oncology Enters into Agreement to be Acquired by Pathos AI for $1.16 in Cash per Share Plus Contingent Value Rights
NEWARK,
Calif., December 13, 2023 (GLOBE NEWSWIRE) -- Rain Oncology Inc. (Nasdaq: RAIN) (“Rain”), today announced
it has entered into a definitive merger agreement whereby Pathos AI, Inc. (“Pathos”) will acquire Rain for $1.16 in cash
per share plus a non-tradeable contingent value right (a “CVR”) for potential cash payments of up to approximately $0.17
per share.
The
Rain Board of Directors voted unanimously to approve the proposed Offer, Merger and related transactions contemplated by the Merger Agreement
(collectively, the “Transaction”). The upfront cash consideration represents a 17% premium over Rain’s unaffected stock
price as of October 13, 2023. The Rain Board reached this determination following a comprehensive review of the proposal, along with
the outcome of an extensive process to review strategic alternatives with the assistance of its independent financial and legal advisors.
“After
a thorough assessment, the Rain Board determined that this Transaction is in the best interests of our stockholders, as it leverages
Rain’s strong cash position to provide a confirmed cash takeout for our stockholders and retains some future potential upside due
to Pathos’ continued interest in further developing milademetan for cancer patients using their proprietary PathOS Platform,”
said Avanish Vellanki, co-founder and chief executive officer of Rain.
Pursuant
and subject to the terms of the merger agreement, a subsidiary of Pathos will commence a tender offer to acquire all outstanding shares
of Rain for $1.16 in cash per share plus a CVR representing a contractual right to receive two potential contingent aggregate cash payments
as follows:
| ● | Cash
CVR Payment: an aggregate amount equal to $5.0 million (up to approximately $0.14 per share),
minus (A) certain expenses incurred related to pending or future litigation involving
Rain and its directors or officers, minus (B) any shortfall in a target level of net
cash, plus (C) any cash at closing in excess of the target net cash. |
| ● | Development
CVR Payment: either (i) $1.0 million (approximately $0.03 per share) upon the first patient
dosed in a clinical stage study conducted by Pathos using milademetan within five years of
the closing of the merger or (ii) 80% of the net proceeds from any license or disposition
of milademetan effected within two years of the closing of the merger. |
The
closing of the tender offer is subject to certain conditions, including the tender of Rain shares representing at least one share more
than 50% of the total number of outstanding shares of common stock as of immediately prior to consummation of the tender offer; the availability
of at least $49.6 million of cash and cash equivalents, net certain liabilities at closing; and other customary conditions. In connection
with the execution of the merger agreement, stockholders holding approximately 44% of the outstanding shares of Rain common stock have
entered into support agreements with Pathos pursuant to which they have agreed to tender their shares in the tender offer.
Pathos
has established a separate, wholly-owned subsidiary to complete the Transaction. Following the tender offer closing, this subsidiary
will be merged into Rain with Rain as the surviving entity of the merger, which will then operate as a separate, wholly-owned subsidiary
of Pathos. If the tender offer is successful, the Transaction is expected to close in January 2024.
Advisors
Leerink
Partners is acting as exclusive financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal counsel to Rain. Goodwin Procter
LLP is acting as legal counsel to Pathos.
About
Rain Oncology Inc.
Rain
Oncology Inc. is a precision oncology company developing therapies that target oncogenic drivers to genetically select patients it believes
will most likely benefit. Rain’s product candidate, milademetan, is a small molecule, oral inhibitor of the p53-MDM2 complex that
reactivates p53.
About
Pathos AI, Inc.
Pathos
AI, Inc. is a clinical stage biotechnology company focused on re-engineering drug development. By leveraging the power of AI technologies,
multimodal real-world data, and patient-derived biological models, Pathos brings precision medicines to market through partnership with
biopharmaceutical companies. Additional information can be found at www.pathos.com.
For
further information, please contact:
LifeSci
Advisors
Daniel
Ferry
+1.617.430.7576
daniel@lifesciadvisors.com
Important
Notices
Cautionary
Note Regarding Forward-Looking Statements
This
communication contains forward-looking statements related to Rain Oncology Inc. (the “Company”) and the acquisition of the
Company by Pathos AI, Inc. (“Parent”), including express or implied forward-looking statements about the Company’s
products and the future operations and performance of the Company and Parent. These forward-looking statements are within the meaning
of U.S. federal securities laws, including, without limitation, statements regarding the anticipated timing of and closing of the proposed
Offer, Merger and related transactions contemplated by the Merger Agreement (collectively referred to as the “transactions”).
The words “estimates,” “expects,” “continues,” “intends,” “plans,” “anticipates,”
“targets,” “may,” “will,” “would,” “could,” “should,” “potential,”
“goal,” and “effort” and similar expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. These statements are based on current plans, estimates and projections.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific. The Company cautions
that a number of important factors, including those described in this communication, could cause actual results to differ materially
from those contemplated in any forward-looking statements. Any forward-looking statements in this communication are based on management’s
current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events
or results to differ materially from those expressed or implied by any forward-looking statements contained in this communication, including,
without limitation, the impact of actions of other parties with respect to the transactions; the possibility that competing offers
will be made; the outcome of any legal proceedings that have been or could be instituted against the Company or its directors; the
risk that the transactions may not be completed in a timely manner, or at all, which may adversely affect the Company’s business
and the price of its common stock; the failure to satisfy all of the closing conditions of the transactions contemplated by the
Merger Agreement; the occurrence of the events or achievement of the milestones giving rise to payments under the CVR Agreement;
the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the effect
of the announcement or pendency of the transactions on the Company’s business, and operating results; risks that the transactions
may disrupt the Company’s current plans and business operations; risks related to the diverting of management’s attention
from the Company’s ongoing business operations; general economic and market conditions and the other risks identified in the
Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including its most recent Annual Report
on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 9, 2023 and subsequent filings with the SEC. Should any
risks and uncertainties develop into actual events, these developments could have a material adverse effect on the transactions and/or
the Company and the Company’s ability to successfully complete the transactions and, with respect to any CVR payment amounts, the
consideration ultimately paid to Company stockholders (and whether any payments will be payable at all). In addition, unlisted factors
may present significant additional obstacles to the realization of forward-looking statements. The Company cautions investors not to
place undue reliance on any forward-looking statements. Any forward-looking statements contained in this communication represent the
Company’s views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date. The
Company disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events,
conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ
from those set forth in the forward-looking statements.
Additional
Information and Where to Find It
The
tender offer for the outstanding shares of the Company referenced in this communication has not yet commenced. This communication is
for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute
for the tender offer materials that Parent and its subsidiary will file with the SEC. At the time the tender offer is commenced, Parent
and its subsidiary will file tender offer materials on Schedule TO, and, thereafter, the Company will file a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC with respect to the tender offer.
THE
TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND
THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK ARE
URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF THE COMPANY’S COMMON STOCK SHOULD CONSIDER BEFORE MAKING ANY
DECISION REGARDING TENDERING THEIR SHARES.
The
Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation
Statement, will be made available to all holders of shares of the Company’s common stock at no expense to them. The tender offer
materials and the Solicitation/Recommendation Statement will be made available for free at the SEC’s website at www.sec.gov
or by accessing the Investor Relations section of the Company’s website at investors.rainoncology.com.
Rain Oncology (NASDAQ:RAIN)
Historical Stock Chart
From Apr 2024 to May 2024
Rain Oncology (NASDAQ:RAIN)
Historical Stock Chart
From May 2023 to May 2024