FLEXION THERAPEUTICS, INC. Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
Pursuant to the Merger Agreement, upon the terms and subject to the conditions
thereof, as promptly as practicable (but in no event more than 10 business days
after the date of the Merger Agreement), Purchaser will commence a cash tender
offer (the "Offer"), to acquire all of the outstanding shares of common stock of
the Company,
The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the conditions set forth in the Merger Agreement, including, but not limited to, that the (i) number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not been "received", as defined by Section 251(h)(6)(f) of the Delaware General Corporation Law (the "DGCL")), when considered together with all other Shares owned by Purchaser and its affiliates, would represent at least one Share more than 50% of the total number of Shares at the time of the expiration of the Offer and (ii) waiting period (or any extension thereof) applicable to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder having expired or been terminated.
Following the completion of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Purchaser will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"). Purchaser will effect the Merger after consummation of the Offer pursuant to Section 251(h) of the DGCL. At the effective time of the Merger (the "Effective Time"), the Shares then outstanding (other than Shares held (i) by the Company or its subsidiaries (including Shares held in the Company's treasury), (ii) by Parent, Purchaser, any other direct or indirect wholly owned subsidiary of Parent, or (iii) by stockholders of the Company who have properly exercised and perfected their statutory rights of appraisal under the DGCL) will each be converted into the right to receive the Offer Price.
The Merger Agreement provides that each option to purchase shares of common stock of the Company (a "Company Option") that is outstanding as of immediately prior to the Effective Time shall automatically accelerate and become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective Time. As of the Effective Time:
(i) Each Company Option with an exercise price less than the Cash Amount (an
"In-the-Money Option") that is then outstanding and unexercised shall be
cancelled and converted into the right to receive (a) cash in an amount equal
to the productof (x) the total number of Shares subject to such In-the-Money
Option multiplied by (y) the excess, if any, of the Cash Amount over the
exercise price payable per Share under such In-the-Money Option, and (b) one
CVR for each Share subject to such In-the-Money Option, net of applicable
withholding taxes.
(ii) Each Company Option with an exercise price equal to, or greater than,
and less than the closing price per Share on the Nasdaq Global Market on the
trading day immediately prior to the Effective Time (the "Option Reference
Price", and such Company Option, an "Out-of-the-Money Option") that is then
outstanding and unexercised shall be cancelled and converted into the right
to receive from time to time upon the occurrence of any Milestone Payment
Date (as defined in the CVR Agreement), a cash payment, if any, equal to (A)
the product of (1) the total number of Shares subject to such
Out-of-the-Money Option multiplied by (2) the amount, if any, by which
(x) the Cash Amount plus the applicable Milestone Payment plus any Milestone
Payments previously earned exceeds (y) the exercise price payable per Share
under such Out-of-the-Money Option minus (B) the gross amount previously
paid with respect to such Out-of-the-Money Option, net of applicable
withholding taxes.
(iii) Each Company Option (including any Out-of-the-Money Option) with an
exercise price equal to, or greater than, the Option Reference Price that
is then outstanding and unexercised shall be cancelled at the Effective
Time without any consideration payable in respect of such cancelled Company
Option.
The Merger Agreement also provides that each restricted stock unit award issued by the Company (a "Company RSU") that is outstanding as of immediately prior to the Effective Time shall automatically accelerate and become fully vested immediately prior to, and contingent upon, the Effective Time. As of the Effective Time, each Company RSU that is then outstanding shall be cancelled and converted into the right to receive (a) cash in an amount equal to the product of (x) the total number of Shares issuable in settlement of such Company RSU multiplied by (y) the Cash Amount, and (b) one CVR for each Share issuable in settlement of such Company RSU.
The Merger Agreement includes representations, warranties and covenants of the parties customary for a transaction of this nature. From the date of the Merger Agreement until the earlier of the Effective Time and the termination of the Merger Agreement, the Company has agreed, subject to certain exceptions, to conduct in all material respects its business and operations in the ordinary course and has agreed to certain other customary operating covenants, as set forth more fully in the Merger Agreement. The Company has also agreed not to (i) directly or indirectly solicit, initiate or knowingly facilitate or encourage (including by way of furnishing non-public information) any inquiries regarding, or the making of any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal (as defined in the Merger Agreement), (ii) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any information in connection with, or for the purpose of knowingly encouraging, or facilitating, . . .
Item 2.02 Results of Operations and Financial Condition.
Also in the Press Release, the Company provided an estimate of ZILRETTA net
sales for the third quarter ended
The information in this Item 2.02 and the portion of Exhibit 99.1 hereto
regarding the Company's estimated net sales of ZILRETTA for the third quarter
ended
Item 8.01 Other Events.
In connection with the announcement of the Merger Agreement, the Company is also
informing investors that
Forward-Looking Statements
This report contains forward-looking statements. Forward-looking statements are
generally identified by the words "expects", "anticipates", "believes",
"intends", "estimates", "plans", "will be", "would be", "may", "could" and
similar expressions. These forward-looking statements include, without
limitation, statements related to the anticipated consummation of the
acquisition of Flexion and the timing and benefits thereof, Parent's strategy,
plans, objectives, expectations (financial or otherwise) and intentions, future
financial results and growth potential, anticipated product portfolio,
development programs, patent terms and other statements that are not historical
facts. These forward-looking statements are based on Parent's and Flexion's
current expectations and inherently involve significant risks and uncertainties.
Actual results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to Parent's
ability to complete the transaction on the proposed terms and schedule or at
all; whether the tender offer conditions will be satisfied; whether sufficient
stockholders of Flexion tender their shares in the transaction; the outcome of
legal proceedings that may be instituted against Flexion and/or others relating
to the transaction; the failure (or delay) to receive the required regulatory
approvals relating to the transaction; the possibility that competing offers
will be made; risks associated with acquisitions, such as the risk that the
businesses will not be integrated successfully, that such integration may be
more difficult, time-consuming or costly than expected or that the expected
benefits of the transaction will not occur; risks related to future
opportunities and plans for Flexion and its products, including uncertainty of
the expected financial performance of Flexion and its products, including
whether the Milestones will ever be achieved; disruption from the proposed
transaction, making it more difficult to conduct business as usual or maintain
relationships with customers, employees or suppliers; and the occurrence of any
event, change or other circumstance that could give rise to the termination of
the acquisition agreement, as well as other risks related to Parent's and
Flexion's businesses detailed from time-to-time under the caption "Risk Factors"
and elsewhere in Parent's and Flexion's respective
Additional Information about the Transaction and Where to Find It
The Offer described in this report has not yet commenced, and this report is
neither a recommendation, nor an offer to purchase nor a solicitation of an
offer to sell any shares of the common stock of Flexion or any other securities.
On the commencement date of the Offer, a tender offer statement on Schedule TO,
including an offer to purchase, a letter of transmittal and related documents,
will be filed with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as ofOctober 11, 2021 , by and amongFlexion Therapeutics, Inc. , Pacira BioSciences, Inc. andOyster Acquisition Company Inc. 10.1 Form of Tender and Support Agreement, dated as ofOctober 11, 2021 . 99.1 Joint Press Release of Pacira BioSciences, Inc. andFlexion Therapeutics, Inc. , dated as ofOctober 11, 2021 . 104 Cover Page Interactive Date File (embedded within the Inline XBRL document) * Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.The Company agrees to furnish supplementally to theSEC a copy of any omitted exhibits or schedules upon request; provided that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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