Shopping Cart

Dynamics Special Purpose Corp.

Dynamics Special Purpose Corp.

May 7, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Senti Biosciences, Inc.

ENTERPRISE VALUE: $276 million
ANTICIPATED SYMBOL: tbd

Dynamics Special Purpose Corp. proposes to combine with Senti Biosciences, Inc.

Senti Bio uses its Gene Circuit platform to program cell and gene therapies with potentially enhanced capabilities. Gene Circuits, which are created via synthetic biology and encoded as novel and proprietary combinations of DNA sequences, enable cells to sense inputs, compute decisions with biological logic, and respond to disease environments.

Senti Bio Pipeline and Collaborations

Senti Bio’s internal therapeutic pipeline is focused on allogeneic chimeric antigen receptor natural killer (CAR-NK) cell therapies for cancer. The Company’s lead development candidates include SENTI-202 for acute myeloid leukemia (AML) and SENTI-301 for hepatocellular carcinoma (HCC); Senti Bio anticipates filing Investigational New Drug (IND) applications in 2023 for both candidates.

  • SENTI-202 is designed to prevent the killing of healthy cells by leveraging a NOT logic gate, while concurrently targeting two tumor-associated antigens for enhanced AML killing by leveraging an OR logic gate, thus overcoming the limitations of other cell therapy approaches to treating AML
  • SENTI-301 is designed to target an HCC-specific antigen while leveraging multi-armed, controlled cytokine release for enhanced anti-cancer activity, thus overcoming the limitations of other cell therapy approaches to treating HCC

Senti Bio has established collaborations with biopharmaceutical companies that demonstrate the broad potential of Gene Circuits in other therapeutic areas and treatment modalities.

  • Spark Therapeutics, a member of the Roche Group (SIX: RO, ROG; OTCQX: RHHBY), and Senti Bio are developing next-generation gene therapies with Gene Circuits that have the potential to improve precise targeting of the central nervous system, eye, and/or liver.
  • BlueRock Therapeutics, a wholly-owned and independently operated subsidiary of Bayer AG, and Senti Bio are developing Gene Circuit-engineered cell therapies for a potentially broad array of therapeutic areas within the field of regenerative medicine.

SUBSEQUENT EVENT – 2/15/22 – 8-K LINK

  • On February 12, 2022, the Company entered into amendments (the “Senti Support Agreement Amendments”).
  • Pursuant to the Senti Support Agreement Amendments, the shares of Class A Common Stock of the Senti Supporting Stockholders may not be transferred for three years following the Closing. 
  • Unlike the General Lock-Up, the Extended Lock-Up does not terminate early based on the share price performance of Class A Common Stock.
  • All other shares of Senti which the Senti Supporting Stockholder held on the date the Senti Support Agreement Amendment was executed or thereafter acquires are subject to the General Lock-Up.

TRANSACTION

  • The transaction values the combined company at a pro forma equity value of $601 million, assuming a $10.00 per share price and no shareholder redemptions.
  • As a result of the transaction, the combined company is expected to have more than $296 million in gross proceeds from a combination of approximately $230.0 million in cash held in Dynamics’ trust account and more than $66 million, at $10.00 per share, from a fully committed PIPE.
    • The PIPE includes participation from healthcare and technology investors, including 8VC, Amgen Ventures, funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management), Invus, LifeForce Capital, NEA, Parker Institute for Cancer Immunotherapy, funds and accounts advised by T. Rowe Price Associates, Inc., and others.
  • Existing Dynamics shareholders, including funds managed by ARK Investment Management LLC, funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management), Invus, funds and accounts advised by T. Rowe Price Associates, Inc., have, in the aggregate, committed not to redeem over $86 million of Dynamics’ publicly traded shares in exchange for receiving approximately 965,000 newly issued shares of common stock, attributable to an equal number of shares currently owned by Dynamics Sponsor LLC, the sponsor of Dynamics, that will be contemporaneously surrendered to the combined company.
  • The $153 million of which is fully committed in a common stock Private Investment in Public Equity (“PIPE”) financing and from non-redemption agreements fulfill the Companies Available Closing Cash Condition.

senti bio

PIPE

  • Investors have subscribed to purchase an aggregate of 6,680,000 shares of Class A Common Stock for a purchase price of $10.00 per share, or an aggregate purchase price of $66,800,000, which shares are to be issued at the Closing; provided that the Subscription Agreement permits the Company to accept additional Subscriptions for a purchase price of $10.00 per share to be issued at the Closing, following the execution of the Business Combination Agreement.
    • The PIPE includes participation from healthcare and technology investors, including 8VC, Amgen Ventures, funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management), Invus, LifeForce Capital, NEA, Parker Institute for Cancer Immunotherapy, funds and accounts advised by T. Rowe Price Associates, Inc., and others.

EARNOUT

  • Senti stockholders will have the right to receive:
    • (i) an aggregate of 1,000,000 shares of Class A Common Stock if, after Closing, the volume-weighted average price of the Class A Common Stock is greater than or equal to $15.00 over any 20 trading days within any consecutive 30 trading day period, in the period that ends on the second anniversary of the Closing
    • (ii) an additional 1,000,000 shares of Class A Common Stock in the aggregate if, after Closing, the VWAP of Class A Common Stock on is greater than or equal to $20.00 over any 20 trading days within any consecutive 30 trading day period, in the period that ends on the third anniversary of the Closing.

NON-REDEMPTION AGREEMENT

  • In connection with the execution of the Business Combination Agreement, the Sponsor, as the holder of 5,750,000 shares of the Company’s Class B common stock, the Company and each of Morgan Stanley Investment Management Inc., T. Rowe Price Group, Inc., The Invus Group, LLC and ARK Investment Management LLC entered into a Non-Redemption Agreement.
  • Each Investor agreed for the benefit of the Company:
    • (a) to not redeem the shares of Class A Common Stock beneficially owned by it, or any other shares, capital stock, or other equity interests, as applicable, of the Company, which it holds on the date of the Non-Redemption Agreement representing 8,691,655 shares of Class A Common Stock, in the aggregate
    • (b) to not, among other things, sell, encumber or otherwise transfer the Investor Shares other than in connection with non-discretionary ETF or mutual fund pro rata rebalancing transfers.
  • In connection with these commitments from the Investor, the Sponsor has agreed to forfeit 965,728 Sponsor Shares and the Company has agreed to cancel such Sponsor Shares and concurrently issue to the Investors an equivalent number of shares of Class A Common Stock, in each case, at or promptly following the consummation of the Merger.

LOCK-UP

  • Senti
    • Subsequent Event – On February 12, 2022, the Company entered into amendments (the “Senti Support Agreement Amendments”). Pursuant to the Senti Support Agreement Amendments, the shares of Class A Common Stock of the Senti Supporting Stockholders may not be transferred for three years following the Closing. Unlike the General Lock-Up, the Extended Lock-Up does not terminate early based on the share price performance of Class A Common Stock. All other shares of Senti which the Senti Supporting Stockholder held on the date the Senti Support Agreement Amendment was executed or thereafter acquires are subject to the General Lock-Up.
    • (i) Senti Supporting Stockholders from transferring their shares of Class A Common Stock for up to 18 months following the Closing, which may be reduced to 12 months upon the meeting of certain criteria
    • (ii) Certain other Senti Support Agreements prohibit the applicable Senti Supporting Stockholders from transferring their shares of Class A Common Stock subject to certain permitted transfers, for 12 months following the Closing provided that,
      • (a) with respect to the Extended Lock-Up, if the last reported sale price of the Class A Common Stock is greater than or equal to $12.00 per share over any 20 trading days within any consecutive 30 trading day period following the Closing Date, then, commencing at least 330 days after the Closing Date, the Lock-Up Period shall be deemed to have expired with respect to each stockholder’s Class A Common Stock subject to the Lock-Up Period and
      • (b) with respect to the General Lock-Up, if the last reported sale price of the Class A Common Stock is greater than or equal to $12.00 per share over any 20 trading days within any consecutive 30 trading day period following the Closing Date, then, commencing at least 150 days after the Closing Date, the Lock-Up Period shall be deemed to have expired with respect to each stockholder’s Class A Common Stock subject to the Lock-Up Period.
  • Sponsor
    • Subject to certain permitted transfers, for a period of one year following the Closing Date
    • if the last reported sale price of the Class A Common Stock is greater than or equal to $12.00 per share over any 20 trading days within any consecutive 30 trading day period following the Closing Date, then, commencing at least 150 days after the Closing Date, the Lock-Up Period shall be deemed to have expired with respect to each stockholder’s Class A Common Stock subject to the Lock-Up Period.

NOTABLE CONDITIONS TO CLOSING

  • Senti’s obligations to consummate the Merger is subject to the condition that the Closing Available Cash shall be greater than or equal to $150,000,000

NOTABLE CONDITIONS TO TERMINATION

  • By the Company or Senti, if the Closing has not occurred by six months from signing (except that such date shall be extended to 9 months from signing in the event the conditions to the Merger have generally been satisfied other than the S-4 Registration Statement becoming effective and such other conditions that by their nature are to be satisfied at the Closing)

ADVISORS

  • J.P. Morgan is acting as lead capital markets advisor to Dynamics and co-placement agent for the PIPE.
  • Morgan Stanley & Co. LLC is acting as financial advisor to Dynamics and co-placement agent to Dynamics for the PIPE.
  • BofA Securities is acting as exclusive financial advisor to Senti Bio and as co-placement agent for the PIPE.
  • Davis Polk & Wardwell LLP is serving as legal advisor to Dynamics.
  • Goodwin Procter LLP is serving as legal advisor to Senti Bio
  • Latham & Watkins LLP is serving as legal advisor to J.P. Morgan
  • Morgan Stanley & Co. LLC and BofA Securities in their role as placement agents.

MANAGEMENT & BOARD

Executive Officers

Omid Farokhzad, 52
Executive Chair; Director

Dr. Farokhzad is a physician-scientist, serial entrepreneur, company founder, company builder, executive and director – across multiple companies and technology platforms. He founded Seer, Inc. (Nasdaq: SEER) in 2017, where he is Founder/CEO/Chair, advancing a transformative proteomics platform. He previously co-founded BIND Therapeutics (acquired by Pfizer), Selecta Biosciences, Inc. (Nasdaq: SELB), which is developing a novel antigen-specific tolerance platform for biologics and gene therapy, and Tarveda Therapeutics, Inc., a privately held oncology biotherapeutics company. From September 2004 to February 2018, he was a Professor at Harvard Medical School and directed the Center for Nanomedicine at Brigham and Women’s Hospital. He has authored over 180 papers and is an inventor on over 200 issued or pending patents. He is a Fellow of the National Academy of Inventors. He is also a recipient of the 2016 Ellis Island Medal of Honor; the 2014 Golden Door Award from the International Institute of New England, for his scientific, societal and economic contributions to America as an immigrant; The Worldview 100 by Scientific American in 2015, which recognized visionaries who shaped biotechnology around the world; the 2013 RUSNANOPRIZE, one of the largest international nanotechnology prizes, for his work on nanomaterial surface modification; and the 2012 Ernst & Young New England Entrepreneur of the Year Award. Dr. Farokhzad holds an MA and MD from Boston University and an MBA from MIT Sloan School of Management.

Mostafa Ronaghi, 52
Chief Executive Officer; Director

Dr. Ronaghi is a scientist-entrepreneur, inventor, investor, company-founder, executive and director. Most recently, he was Chief Technology Officer, Senior Vice President and member of the Executive Leadership Team at Illumina (Nasdaq: ILMN) from 2008 to 2021. While at Illumina, in 2016, Dr. Ronaghi co-founded GRAIL, a next-gen liquid biopsy platform for cancer detection. He also started Illumina’s Research & Technology Development group, and co-founded the Illumina Accelerator Program in 2014, one of the most successful accelerator programs in the industry, which coached and invested in more than 50 start-ups, achieving one of the highest success rates for securing external institutional funding. Prior to Illumina, Dr. Ronaghi was Principal Investigator at the Stanford Genome Technology Center from 1999 to 2008. Throughout his prolific career, Dr. Ronaghi co-founded several other companies, including Pyrosequencing AB (founded in 1997; IPO in 2000 in Stockholm), focused on sequencing-by-synthesis technology (which was the first next-gen sequencing technology, and laid the groundwork for the leading technology developed by Illumina). He then co-founded ParAllele Biosciences in 2001, which was acquired by Affymetrix in 2005, which developed a first-of-its-kind technology for highly multiplex genotyping (used by the international Hapmap project to identify genetic variations across different population and diseases). He co-founded NextBio in 2004 (acquired by Illumina in 2013), where he developed a software platform to analyze molecular biological data. He also co-founded Avantome in 2008 (acquired by Illumina in 2008), as a low-cost DNA sequencer to democratize sequencing. He has advised and invested in more than 70 companies and is an inventor on over 30 issued and pending patents, as well as authored more than 80 scientific publications. He is also a recipient of the 2015 Ellis Island Medal of Honor. He currently serves as a Board member at GRAIL, Seer (Nasdaq: SEER), 1Health, Clearlabs, and three other private companies. Dr. Ronaghi holds a PhD in Biotechnology from Royal Institute of Technology, Stockholm, and B.Sc in Biomedical Chemistry, University of Kalmar, Sweden.

Mark Afrasiabi, 45
Chief Financial Officer

Mr. Afrasiabi was most recently a Partner and Co-Head of the Investment Committee at Silver Rock Financial LP, an investment management firm with approximately $3 billion in assets under management, where he was responsible for the healthcare portfolio. Mr. Afrasiabi was at Silver Rock from inception in 2010 to 2021. Previously, from 2006 to 2010, he was a High-Yield Research Analyst (covering healthcare) and Portfolio Manager at PIMCO. Throughout his career, he has invested across the capital structure in all subsectors of healthcare, including pharma, biotech, life sciences tools, facilities, services, payers, health IT, and medical devices, among other subsectors. Prior to his 15-year investment management career, he worked in investment banking at Lehman Brothers, and was an Attorney at Irell & Manella LLP. He also served as a Law Clerk on the United States Court of Appeals for the Ninth Circuit (Hon. Richard R. Clifton). Mr. Afrasiabi holds a JD from Harvard Law School and BA in Economics from UCLA, and is a CFA Charterholder.

Rowan Chapman, 50
Chief Business Officer

Dr. Chapman is an executive business development leader from start up to Fortune 50, company founder, equity investor and director. She currently serves as an independent director at Evidation Health and Natera, Inc. (Nasdaq: NTRA). She has led the execution of more than 80 partnerships and investments across healthcare verticals including life sciences tools, therapeutics, diagnostics, medical devices, vaccines and digital health. Dr. Chapman served as head of Johnson & Johnson Innovation (NYSE: JNJ), Western North America. Australia and New Zealand, from January 2017 to August 2019. Prior to that, she held various roles with General Electric Company (NYSE: GE) from 2012 to 2016, including as Head of Healthcare Investing at GE Ventures where she led the team responsible for the investment portfolio with a particular focus on digital health, data analytics and precision medicine. During that time, she led the creation of three healthcare startups including Evidation Health and Vineti. Dr. Chapman also served as Head of Precision Diagnostics at GE Healthcare, where she was responsible for strategy development to integrate lab services, products, data, informatics and software. Prior to that, she held operational roles in early and growth-stage startups and was a partner at Mohr Davidow Ventures for over 11 years, from 2001 to 2012, gaining extensive experience as an investor, board member or board advisor for a wide variety of technology and data-enabled companies including Adamas (IPO: ADMS), HealthTap, Pacific Biosciences (IPO: PACB), ParAllele Biosciences (acquired: AFFX), Personalis (IPO: PSNL), Sequenta (acquired: ADPT) and Verinata (acquired: ILMN). She was also an early employee at Rosetta Inpharmatics (went public and then acquired by Merck) and Incyte Genomics (Nasdaq: INCY). She is also a co-founder of Initiate Studios, a life sciences incubator founded in 2020, where she partners with entrepreneurs to launch new healthcare companies. Dr. Chapman holds a PhD in Biochemistry and Molecular Biology and BA in Biochemistry from the University of Cambridge, United Kingdom, and carried out post-doctoral research at UCSF.

Board of Directors

David Epstein, 59
Director

Mr. Epstein is executive partner at Flagship Pioneering and Chairman of Axcella Health, Inc. (Nasdaq: AXLA), Rubius Therapeutics, Inc. (Nasdaq: RUBY) and Evelo Biosciences, Inc. (Nasdaq: EVLO). Mr. Epstein is also a board member at three privately held biotherapeutics companies (Tarus Therapeutics, Valo Health and Woolsey Pharma). From 2010 to mid-2016 he served as CEO of Novartis Pharmaceuticals, a division of Novartis AG. Previously, he started and led Novartis’ Oncology and Molecular Diagnostic units. Under his leadership the company’s oncology business grew to the second largest in the world. David has more than 25 years of extensive drug development, deal making, commercialization and leadership experience on a global scale. Over the course of his career, he led the development and commercialization of over 30 new molecular entities, including major breakthroughs such as Glivec®, Tasigna®, Gilenya®, Cosentyx® and Entresto®. His teams developed three Prix Galien award winners, and he has mentored several CEOs into their roles. He was named by FierceBiotech as one of the “25 most influential people in biopharma” in 2015. Early in his career, he was an associate in the strategy practice of consulting firm Booz, Allen and Hamilton. Mr. Epstein holds a BS in pharmacy from Rutgers University College of Pharmacy and an MBA in finance and marketing from the Columbia University Graduate School of Business.

Jay Flatley, 68
Director

Mr. Flatley led Illumina (Nasdaq: ILMN) as CEO from 1999 until 2016, as Executive Chairman through 2019 and served as Chairman of the Board until March 2021. During his tenure as CEO, he took the company from $1.3 million in sales in 2000 to $2.2 billion in 2015, representing a compound annual growth rate of 64 percent. Prior to joining Illumina, Mr. Flatley was co-founder, President, CEO, and a director of Molecular Dynamics, Inc., a Nasdaq-listed life sciences Company focused on genetic discovery and analysis, from 1994 until its sale to Amersham Pharmacia Biotech Inc. in 1998. He served in various other positions of increasing responsibility with Molecular Dynamics from 1987 to 1994. From 1985 to 1987, Mr. Flatley was Vice President of Engineering and Vice President of Strategic Planning at Plexus Computers, a UNIX computer Company. Mr. Flatley also serves as Chairman of Zymergen (Nasdaq: ZY), Chairman of Iridia, Inc. (privately held) and a director of Coherent, Inc. (Nasdaq: COHR); Denali Therapeutics, Inc. (Nasdaq: DNLI); and Helix Holdings I, LLC. He is also on the Board of Trustees at the Salk Institute, and is Chair of Wellcome Leap, a US-based non-profit organization founded by the Wellcome Trust to accelerate innovations that benefit global health. Mr. Flatley holds a BA in economics from Claremont McKenna College and a BS and MS in industrial engineering from Stanford University.

Deep Nishar, 52
Director

Mr. Nishar is currently Senior Managing Partner of the Softbank Vision Fund, which he joined in 2015. He has over 20 years of experience helping build and grow internet and software businesses. From January 2009 to October 2014, Mr. Nishar served in various roles with LinkedIn Corporation, most recently as Senior Vice President, Products and User Experience. From August 2003 to January 2009, Mr. Nishar served in various roles with Google Inc. (Nasdaq: GOOGL), most recently as the Senior Director of Products for the Asia-Pacific region. Previously he was the Founder of enterprise software company Patkai Networks. He is an inventor on 14 patents, and is a recipient of the Google Founders Award, which is given to employees who made extraordinary contributions to the company. Mr. Nishar currently serves on the board of directors of Seer (Nasdaq: SEER), Relay Therapeutics (Nasdaq: RLAY), Vir Biotechnology, Inc. (Nasdaq: VIR) and Zymergen (Nasdaq: ZY), and previously served on the board of directors of Guardant Health (Nasdaq: GH), Tripadvisor (Nasdaq: TRIP), and OPower. Mr. Nishar received his MBA with highest honors (Baker Scholar) from Harvard Business School, his M.SEE from the University of Illinois, Urbana- Champaign, and his B.Tech with honors from the Indian Institute of Technology.

 

ByAnthony Sozzi