REG - Jounce Therapeutics Redx Pharma plc - Statement re Merger Agreement

Redx PharmaAnnouncement

27/03/2023 14:00

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RNS Number : 2874U  Jounce Therapeutics, Inc.  27 March 2023

 

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Jounce Therapeutics Enters Into Agreement to Be Acquired by Concentra
Biosciences for $1.85 in Cash per Share Plus Contingent Value Rights

 

CAMBRIDGE, Mass., March 27, 2023 - Jounce Therapeutics, Inc. (NASDAQ: JNCE)
("Jounce" or the "Company"), a clinical-stage company focused on the discovery
and development of novel cancer immunotherapies and predictive biomarkers,
today announced it has entered into a definitive merger agreement whereby
Concentra Biosciences, LLC ("Concentra") will acquire Jounce for $1.85 in cash
per share plus a non-tradeable contingent value right (the "CVR").

 

The $1.85 per share upfront consideration represents a premium of
approximately 75% to Jounce's closing share price immediately prior to the
March 14, 2023 public disclosure of Concentra's acquisition proposal.

 

Following a thorough review process conducted with the assistance of its legal
and financial advisors, Jounce's Board of Directors has determined that the
acquisition by Concentra - of which Tang Capital Partners, LP is the
controlling shareholder - is in the best interests of all Jounce shareholders,
and has unanimously approved the merger agreement.

 

Jounce's Board of Directors is no longer recommending the proposed all-share
merger transaction (the "Redx Business Combination") with Redx Pharma Plc
(AIM:REDX) ("Redx"). The Jounce Board of Directors has notified Redx of the
withdrawal of its recommendation in favor of the Redx Business Combination and
termination of the co-operation agreement dated February 23, 2023 between
Jounce and Redx.

 

In conjunction with the merger agreement, Jounce is implementing a workforce
reduction of approximately 84% of its employees. This reduction is expected to
be completed within the next month and Jounce will incur restructuring costs
totaling approximately $6.5 million 1 . The remaining Jounce employees will
work to complete the sale of the Company, conduct activities to maximize the
value of the CVR, work to ensure that patients on the SELECT and INNATE trials
have the opportunity to continue receiving therapy with vopratelimab, JTX-8064
and pimivalimab and to otherwise ensure a smooth transition to Concentra.

 

Pursuant and subject to the terms of the merger agreement, a subsidiary of
Concentra will commence a tender offer by April 7, 2023 to acquire all
outstanding shares of Jounce for $1.85 in cash per share at closing plus a
non-tradeable CVR representing the right to receive 80% of the net proceeds
payable for a period of ten years post-closing from any license or disposition
of Jounce's programs effected within two years of closing and 100% of the
potential aggregate value of certain specified potential cost savings.

 

Closing of the tender offer is subject to certain conditions, including the
tender of Jounce shares representing at least a majority of the total number
of outstanding shares as of immediately following the consummation of the
offer; the availability of at least $110 million of cash and cash equivalents,
net of any tail and closing costs, at closing, and other customary conditions.
The acquisition is expected to close in the second quarter of 2023.

 

About Jounce Therapeutics

Jounce Therapeutics, Inc. is a clinical-stage immunotherapy company dedicated
to transforming the treatment of cancer by developing therapies that enable
the immune system to attack tumors and provide long-lasting benefits to
patients through a biomarker-driven approach. Jounce currently has multiple
development stage programs ongoing while simultaneously advancing additional
early-stage assets from its robust discovery engine based on its Translational
Science Platform. For more information, please visit www.jouncetx.com.

 

For further information, please contact:

 

Jounce Therapeutics, Inc.

Kim Drapkin

ir@jouncetx.com (mailto:ir@jouncetx.com)
 
T: +1-857-259-3840

 
 

Cowen (Financial Adviser to Jounce)
        T: +1-646-562-1010

Tanya Joseph / Erik Schuchard / Giles Roshier
 T: +44 (0)203 011 0460

 
 

Stern Investor Relations (Adviser to Jounce)

Julie Seidel
                                 T: +1-212-362-1200

 

Longacre Square Partners (Adviser to
Jounce)

Dan Zacchei / Rebecca Kral

Jounce@longacresquare.com (mailto:Jounce@longacresquare.com)

 

Important notices

 

Cowen Execution Services Limited ("Cowen"), which is authorised and regulated
in the United Kingdom by the FCA, is acting exclusively as financial adviser
to Jounce and no one else in connection with the Redx Business Combination
and/or the proposed transaction with Concentra and will not be responsible to
anyone other than Jounce for providing the protections afforded to clients of
Cowen nor for providing advice in relation to the Redx Business Combination,
the proposed transaction with Concentra , the contents of this press release
or any other matters referred to in this press release. Neither Cowen nor any
of its affiliates, nor any of Cowen's and such affiliates' respective members,
directors, officers, controlling persons or employees owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Cowen in connection with the Redx Business
Combination, the proposed transaction with Concentra , this press release, any
statement contained herein or otherwise.

 

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
U.S. federal securities laws, including, without limitation, statements
regarding the anticipated timing of the Company's reduction in force,
including associated restructuring costs, the impact on ongoing clinical
trials and the timing and closing of the proposed transaction. 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. Any forward-looking statements in this press release 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 press release, including, without
limitation, risks related to the Company's ability to execute on and realize
the expected benefits of the reduction in force; actions of Redx in response
to the proposed transaction with Concentra;  the impact of actions of other
parties with respect to the proposed transaction with Concentra; the
possibility that competing offers will be made; the outcome of any legal
proceedings that could be instituted against Jounce or its directors ; the
risk that the transactions contemplated by the merger agreement may not be
completed in a timely manner, or at all, which may adversely affect Jounce'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
with Concentra; the occurrence of any event, change or other circumstance
that could give rise to the termination of the merger agreement with
Concentra; the effect of the announcement or pendency of the transactions
contemplated by the merger agreement on Jounce's business, and operating
results; risks that the transactions contemplated by the merger agreement may
disrupt Jounce's current plans and business operations; risks related to the
diverting of management's attention from Jounce'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 10, 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 proposed transaction and/or Jounce and Jounce's ability to successfully
complete the proposed transaction. Jounce cautions investors not to place
undue reliance on any forward-looking statements, which speak only as of the
date they are made. Jounce 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. Any forward-looking statements contained in
this press release represent Jounce's views only as of the date hereof and
should not be relied upon as representing its views as of any subsequent date.

 

Additional Information and Where to Find It

The tender offer for the outstanding shares of the Company referenced in this
press release has not yet commenced. This press release 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 Concentra and its subsidiary will file with the SEC. At the time the
tender offer is commenced, Concentra 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 JOUNCE 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 JOUNCE 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 (http://www.sec.gov) or by accessing the Investor
Relations section of the Company's website at https://www.jouncetx.com
(https://www.jouncetx.com) .

 

Publication on website

A copy of this Announcement shall be made available subject to certain
restrictions relating to persons resident in Restricted Jurisdictions on
Jounce's website at https://jouncetx.com/recommended-offer/ by no later than
12 noon (London time) on the Business Day following the date of this press
release. For the avoidance of doubt, the contents of the website are not
incorporated into and do not form part of this press release.

 

 1  This amount is preliminary and subject to change upon completion of the
Company's 10-Q review for the period ended March 31, 2023.

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