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Health Sciences Acquisition Corporation 2 *

Health Sciences Acquisition Corporation 2 *

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Orchestra BioMed Holdings, Inc.

ENTERPRISE VALUE: $158.15 million
ANTICIPATED SYMBOL: OBIO

Orchestra BioMed is a biomedical company with a business model designed to accelerate high-impact technologies to patients through risk-reward sharing partnerships. Orchestra BioMed’s partnership-enabled business model focuses on forging strategic collaborations with leading medical device companies to drive successful global commercialization of products it develops. Orchestra BioMed’s flagship product candidates include BackBeat Cardiac Neuromodulation Therapy™ for the treatment of hypertension, the leading risk factor for death worldwide, and Virtue® Sirolimus AngioInfusion™ Balloon (SAB) for the treatment of certain forms of artery disease, the leading cause of mortality worldwide. Orchestra BioMed has a strategic collaboration with Medtronic, one of the largest medical device companies in the world, for development and commercialization of BackBeat CNT for the treatment of hypertension in pacemaker-indicated patients, and a strategic partnership with Terumo Corporation, a global leader in medical technology, for development and commercialization of Virtue SAB for the treatment of artery disease. Orchestra BioMed has additional product candidates and plans to potentially expand its product pipeline through acquisitions, strategic collaborations, licensing, and organic development.

EXTENSION – 11/16/22 – LINK

  • Health Sciences Acquisitions Corporation 2 held an extraordinary general meeting of its shareholders at which the shareholders approved a special resolution to extend from August 6, 2022 (the “Original Termination Date”) to November 6, 2022.
  • On November 15, 2022, the Directors of the Company elected to extend the deadline until January 6, 2023.

SUBSEQUENT EVENT – 10/21/22 – LINK

  • On October 21, 2022, the parties amended both the Backstop Agreement and the Forward Purchase Agreement to provide that:
    • (1) the per share purchase price under each of the Backstop Agreement and the Forward Purchase Agreement will not exceed the redemption price available to HSAC2 shareholders exercising redemption rights at the shareholder meeting held to approve the Business Combination
    • (2) any shares purchased pursuant to the Backstop Agreement or the Forward Purchase Agreement, or otherwise acquired by the RTW Funds outside of the existing redemption offer, will not be voted in favor of approving the Business Combination
    • (3) the RTW Funds will waive redemption rights with respect to such purchases in the vote to approve the Business Combination.

EXTENSION – 7/26/22 – LINK

  • The SPAC approved to extend from August 6, 2022 (the “Original Termination Date’) to November 6, 2022 (the “Extended Date”),
    • The Company, without another shareholder vote, may elect to extend the date to consummate a business combination on a monthly basis for up to three times by an additional one month each time after the Extended Date, upon five days’ advance notice prior to the applicable deadlines, until February 6, 2023, or a total of up to six months after the Original Termination Date, unless the closing of the Company’s initial business combination shall have occurred.

SUBSEQUENT EVENT – 7/26/22 – LINK

  • Ahead of the shareholder vote, HSAC2 has received requests for redemption from shareholders with respect to 9,237,883 HSAC2 ordinary shares.
    • On July 22, 2022, certain investment funds (the “RTW Funds”) managed by RTW Investments, LP, an affiliate of the sponsor of HSAC2, purchased 1,000,000 HSAC2 ordinary shares at a price of $10.01/share
    • The RTW Funds purchased such shares in order to:
      • (i) fulfill their obligations under the Forward Purchase Agreement, dated as of July 4, 2022, by and among HSAC2, Orchestra BioMed, Inc. (“Orchestra”) and the RTW Funds, entered into in connection with the proposed business combination between HSAC2 and Orchestra (the “Business Combination”), and
      • (ii) ensure that such shares purchased were not redeemed and the amounts that would have been paid by HSAC2 to Seller if such shares were redeemed remain in the Company’s trust account at the closing of the Business Combination.
      • This purchase increases the likelihood that the Business Combination ultimately closes.

TRANSACTION

  • The Business Combination agreement includes $20 million in total forward purchase agreements from Medtronic and RTW (an affiliate of HSAC2’s sponsor and a leading life sciences investment firm), as well as an up to $50 million trust backstop agreement with RTW.
  • The combined company is expected to have a fully diluted pro forma market cap of $407 million assuming no redemptions and $317 million assuming the minimum gross cash condition is met.
  • The combined company’s pro forma fully diluted enterprise value is expected to be $158 million.

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FORWARD PURCHASE AGREEMENT

  • RTW Investments, LP and Covidien Group S.à.r.l., an affiliate of Medtronic agreed to purchase $10 million of HSAC2 ordinary shares, for a total of $20 million ($10.00/Share)

BACKSTOP

  • HSAC2, Orchestra, and the RTW Funds entered into a Backstop Agreement to purchase such number of HSAC2 ordinary shares at a price of $10.00/Share to the extent that the amount of Parent Closing Cash as of immediately prior to the closing of the Merger is less than $60 million (inclusive of the $10 million commitment by the RTW Funds pursuant to the Forward Purchase Agreement)

SPONSOR FORFEITURE

  • The Sponsor has agreed that 1,000,000 shares of its New Orchestra Common Stock received in the Domestication will be forfeited to New Orchestra on the first business day following the fifth anniversary of the Closing unless:
    • The VWAP is greater than $15.00 and $20.00.
    • 500k shares will be released after each threshold is hit.
  • Further, the Sponsor and HSAC2’s other initial shareholders prior to its initial public offering have agreed to subject the 4,000,000 shares of New Orchestra Common Stock to be received in the Domestication in exchange for the 4,000,000 HSAC2 ordinary shares issued to HSAC2’s initial shareholders prior to its initial public offering and 450,000 shares of New Orchestra Common Stock to be received in the Domestication in exchange for 450,000 HSAC2 ordinary shares purchased in a private placement simultaneously with the HSAC2 initial public offering, to a lock-up for up to 12 months and, subject to the Closing, the Sponsor has agreed to forfeit 50% of its HSAC2 warrants, comprising 750,000 warrants, for no consideration.

EARNOUT

  • Orchestra security holders will also have the option to receive a portion of additional contingent consideration of up to 8,000,000 shares of New Orchestra Common Stock
    • 4,000,000 shares when the VWAP of the New Orchestra Common Stock is greater than or equal to $15.00/Share
    • 4,000,000 shares when the VWAP of the New Orchestra Common Stock is greater than or equal to $20.00/Share
  • Upon the first Change in Control to occur during the Earnout Period, if the corresponding valuation of New Orchestra is equal to or greater than $15.00 per share, the Initial Milestone Event is deemed to have occurred and if equal to or greater than $20.00 per share, the Final Milestone Event is deemed to have occurred, in each case immediately prior to such Change in Control.

LOCK-UP

Sponsor

  • 12 months from the Closing Date

Company

  • 6 months from the Closing Date

NOTABLE CONDITIONS TO CLOSING

  • The Parent Closing Cash being at least equal to $60 million, inclusive of the Sponsor Commitment, and (x) completion of the transactions contemplated by the Sponsor Commitment.

NOTABLE CONDITIONS TO TERMINATION

  • By either HSAC2 or Orchestra if: the Merger and related transactions are not consummated on or before February 6, 2023 (the “Outside Closing Date”)
  • By Orchestra if the Extension Proposal is not approved

ADVISORS

  • Jefferies LLC and Piper Sandler & Co. acted as Joint Lead Placement Agents for the Series D Financing
  • Aegis Capital acted as Selling Agent.
  • Jefferies LLC is acting as lead financial advisor and a capital markets advisor to Orchestra BioMed.
  • Piper Sandler & Co. is acting as strategic advisor to Orchestra BioMed
  • Piper Sandler & Co. is acting as a capital markets advisor to Orchestra BioMed.
  • Chardan Capital Markets LLC is serving as financial and capital markets advisor to HSAC2
  • Barclays Capital Inc. is serving as financial and capital markets advisor to HSAC2.
  • Paul Hastings LLP is serving as legal counsel for Orchestra BioMed. Loeb & Loeb LLP is serving as legal counsel for HSAC2.

MANAGEMENT & BOARD

Executive Officers

Roderick Wong, MD, 43
President, Chief Executive Officer & Chairman

Dr. Wong has more than 16 years of healthcare investing experience. Since 2009, he has served as Managing Partner and Chief Investment Officer of RTW, a healthcare-focused investment firm managing $4.4 billion in regulatory assets under management. Prior to forming RTW, Dr. Wong was a Managing Director and sole Portfolio Manager for the Davidson Kempner Healthcare Funds. Prior to joining Davidson Kempner, Dr. Wong held various healthcare investment and research roles at Sigma Capital Partners and Cowen & Company. Dr. Wong served as Chairman of the board of directors of Health Sciences Acquisitions Corporation (“HSAC”) and its Chief Executive Officer from January 2019 until December 2019. Other current and previous directorships include: Rocket Pharmaceuticals, Inc., where he serves as Chairman, a position he has held since Rocket’s inception in July 2015; Attune Pharmaceuticals, a portfolio company of RTW, where he has served as a director since June 2018; Athira Pharma and C4 Therapeutics, portfolio companies of RTW, where he serves as an observer to the board of directors. Since 2019, Dr. Wong also has served as a director on the boards of Avidity Biosciences and Landos Biopharma. Dr. Wong previously served on the board of directors of Penwest Pharmaceuticals in 2010. He simultaneously received an MD from the University of Pennsylvania Medical School and an MBA from Harvard Business School, and graduated Phi Beta Kappa with a BS in Economics from Duke University.

Naveen Yalamanchi, MD, 43
Executive Vice President, Chief Financial Officer & Director

Dr. Yalamanchi has more than 15 years of healthcare investment and research experience. Since 2015, Dr. Yalamanchi has been a Partner and Portfolio Manager at RTW. Prior to joining RTW, Dr. Yalamanchi was Vice President and Co-Portfolio Manager at Calamos Arista Partners, a subsidiary of Calamos Investments, a position he held from 2012 to 2015. Prior to joining Calamos Arista Partners, Dr. Yalamanchi held various healthcare investment roles at Millennium Management and Davidson Kempner Capital Management, where he worked with Dr. Wong. Dr. Yalamanchi graduated Phi Beta Kappa with a BS in Biology from the Massachusetts Institute of Technology and received an MD from the Stanford University School of Medicine. He completed his surgical internship at UCLA Medical Center. Dr. Yalamanchi served as Vice President and Chief Financial Officer of HSAC from January 2019 until December 2019. Other prior and current directorships include HSAC, where Dr. Yalamanchi served as a director from January 2019 until December 2019, Rocket Pharmaceuticals, Inc., where he served as a director since Rocket’s inception in July 2015, and Ancora Heart, and Magnolia Medical Technologies, portfolio companies of RTW, where Dr. Yalamanchi serves as an observer to the board of directors.

Alice Lee, JD, 50
Vice President of Operations, Secretary & Treasurer

Ms. Lee has served as RTW’s Senior Counsel since October 2017 and Chief Compliance Officer since February 2019 and has more than a decade of experience advising life sciences companies in corporate and transactional matters. Prior to joining RTW, she most recently served as a senior associate in the Life Sciences practice at Ropes & Gray LLP from 2015 to 2017. Prior to that, she worked in the Intellectual Property Transactions and Technology practice at Sullivan & Cromwell LLP from 2010 to 2015, and she began her legal career in the Mergers & Acquisitions practice at Cravath, Swaine & Moore LLP. Ms. Lee served as Vice President of Operations of HSAC from January 2019 until December 2019. Ms. Lee received her law degree from Columbia Law School, where she served as a Senior Editor of Columbia Law Review and was a Harlan Fiske Stone Scholar. She earned an MS from Stanford University in Computer Science (with an emphasis in Bioinformatics), completed two years of pre-clinical coursework at the Stanford University School of Medicine, where she was an MD candidate, and graduated Phi Beta Kappa and summa cum laude with a BA in Philosophy from Columbia University. Prior to law school, Ms. Lee worked as a computational biologist at the H. Lee Moffitt Cancer Center & Research Institute at the University of South Florida and co-authored “The promise of gene signatures in cancer diagnosis and prognosis” included in the Encyclopedia of Genetics, Genomics, Proteomics and Bioinformatics and “Fundamentals of Cancer Genomics and Proteomics” included in Surgery: Basic Science and Clinical Evidence. She also worked as a software development engineer intern at Amazon.com.

Stephanie A. Sirota, 45
Vice President of Corporate Strategy and Corporate Communications

Ms. Sirota has served as RTW’s Chief Business Officer since 2012 and as a Partner since 2014. Ms. Sirota is responsible for strategy and oversight of RTW’s business development and strategic partnerships with counterparties including limited partners, banks and academic institutions. She is also responsible for shaping the firm’s governance policies underscoring impact and sustainability. Ms. Sirota has more than a decade of deal experience in financial services. Prior to joining RTW, from 2006 to 2010, she served as a director at Valhalla Capital Advisors, a macro and commodity investment manager. From 2000 to 2003, Ms. Sirota worked in the New York and London offices of Lehman Brothers, where she advised on various mergers & acquisitions, IPOs, and capital market financing transactions with a focus on cross-border transactions for the firm’s global corporate clients. She began her career on the Fixed Income trading desk at Lehman Brothers, structuring derivatives for municipal issuers from 1997 to 1999. Ms. Sirota served as Vice President of Corporate Strategy of HSAC from January 2019 until December 2019. Other current directorships include RTW Venture Fund Limited (LSE: “RTW”), where Ms. Sirota has served as a director since October 2019. Ms. Sirota graduated with honors from Columbia University and also received an MS from the Columbia Graduate School of Journalism. She has contributed to Fortune Magazine and ABCNews.com. Ms. Sirota is a supporter of the arts, science, and children’s initiatives. She serves as Co-Chairman of the Council of the Phil at the New York Philharmonic. She also serves as President of RTW Charitable Foundation.

 

Board of Directors

Pedro Granadillo, 73
Director

Mr. Granadillo has nearly 50 years of biopharmaceutical industry experience with expertise in human resources, manufacturing, quality control, and corporate governance. From 1970 until his retirement in 2004, Mr. Granadillo held multiple leadership roles at Eli Lilly and Company, including Senior Vice President of Global Manufacturing and Human Resources and a member of the Executive Committee. Mr. Granadillo currently serves on the board of directors of Rocket Pharmaceuticals, Inc., a position he has held since January 2018. Mr. Granadillo has previously served on the boards of directors at Haemonetics Corporation from 2004 to 2019, Dendreon Corporation, Nile Therapeutics and Noven Pharmaceuticals, as well as NPS Pharmaceuticals, which was sold to Shire for $5.2 billion in 2015. Mr. Granadillo is also a co-founder and board member of Neumentum Pharmaceuticals, a private non opioid pain company. Mr. Granadillo graduated from Purdue University with a Bachelor of Science in Industrial Engineering.

Carsten Boess, 54
Director

Mr. Boess currently serves and has served as a director for Rocket Pharmaceuticals, Inc. since January 2016, Avidity Biosciences since April 2020, and Achilles Therapeutics since April 2020. Previously, Mr. Boess was the Executive Vice President of Corporate Affairs at Kiniksa Pharmaceuticals, Ltd. from August 2015 until February 2020. Before Kiniksa, Mr. Boess was the Chief Financial Officer at Alexion Pharmaceuticals from 2004 to 2005 and the Senior Vice President and Chief Financial Officer at Synageva BioPharma Corp. from 2011 until the company’s acquisition by Alexion Pharmaceuticals in 2015. Previously, Mr. Boess served in multiple roles with increasing responsibility at Insulet Corporation, including Chief Financial Officer from 2006 to 2009 and Vice President of International Operations from 2009 to 2011. Prior to that, Mr. Boess served as Executive Vice President of Finance at Serono Inc. from 2005 to 2006. In addition, he was a member of the Geneva-based World Wide Executive Finance Management Team while at Serono. Mr. Boess also held several financial executive roles at Novozymes of North America and Novo Nordisk in France, Switzerland and China. During his tenure at Novo Nordisk, he served on Novo Nordisk’s Global Finance Board. Mr. Boess received a Bachelor’s degree and Master’s degree in Economics and Finance, specializing in Accounting and Finance from the University of Odense, Denmark.

Stuart Peltz, PHD, 60
Director 

Dr. Peltz founded PTC Therapeutics in 1998 and has served as Chief Executive Officer and a member of the board of directors since the company’s inception. Prior to founding PTC, Dr. Peltz was a Professor in the Department of Molecular Genetics & Microbiology at the Robert Wood Johnson Medical School, Rutgers University. Dr. Peltz currently serves as a director of the Biotechnology Industry Organization (BIO) and serves on BIO’s Emerging Companies Section Governing Board. Dr. Peltz received a Ph.D. from the McArdle Laboratory for Cancer Research at the University of Wisconsin.

Michael Brophy, 40
Director

Mr. Brophy has served as the Chief Financial Officer of Natera since February 2017. Previously, Mr. Brophy served as Natera’s Senior Vice President, Finance and Investor Relations since September 2016, and prior to that, as Vice President, Corporate Development and Investor Relations since September 2015. Prior to joining Natera, Mr. Brophy served in the investment banking division at Morgan Stanley and Deutsche Bank where he focused on advising corporate clients in the life science tools and diagnostics sector. Mr. Brophy holds an MBA from the University of California, Los Angeles and a Bachelor of Science in Economics from the United States Air Force Academy.

ByRoman Developer