FS Development Corp. II
PROPOSED BUSINESS COMBINATION: Pardes Biosciences, Inc.
ENTERPRISE VALUE: $657.6 million
ANTICIPATED SYMBOL: PRDS
FS Development Corp. II proposes to combine with Pardes Biosciences, Inc., n early-stage biopharmaceutical company.
Pardes leverages structure-based drug design and a tunable, reversible covalent chemistry platform for novel drug discovery. The company’s lead product candidate, PBI-0451, is being developed as a potential direct-acting, oral antiviral drug to treat and prevent SARS-CoV-2 infections. PBI-0451 is designed to inhibit the coronavirus main protease, an essential protein for SARS-CoV-2. This protease is highly similar across all coronaviruses, including emerging coronavirus variants. Pardes Biosciences is headquartered in Carlsbad CA.
SUBSEQUENT EVENT – 7/17/23 – LINK
- Pardes Biosciences (Nasdaq: PRDS) to be acquired by MediPacific, Inc. (Purchaser)
- Price per share: minimum $2.02 in cash, with potential additional cash amount up to $0.17 per share
- Final price determined by Company’s net cash at closing
- Deal includes non-tradeable contingent value right (CVR)
- CVR linked to future monetization of COVID-19 antiviral portfolio and related intellectual property
- Purchaser’s subsidiary to start tender offer by July 28, 2023, acquiring all Pardes shares.
- Price per share: min $2.02 cash + max $0.17 cash at closing + CVR entitling 80% of net proceeds from program/asset licensing within 5 years.
- Tender offer subject to conditions: Majority non-affiliate-held shares tendered, $125M net cash at closing, and customary conditions.
- Acquisition expected to close in Q3 2023.
TRANSACTION
- Current Pardes shareholders are converting 100% of their existing equity interests into common stock of the Combined Company.
- In addition to the approximately $201 million held in FSII’s trust account (assuming no redemptions are effected), a group of premier institutional and strategic healthcare investors has committed to participate in the transaction through a common stock PIPE of approximately $75 million at $10 per share.
- The Combined Company is expected to receive gross proceeds of approximately $276 million at the closing of the transaction (assuming no redemptions are effected), which is expected by October 2021.
PIPE
- $75 million (“PIPE”) at $10.00 per share led by Foresite Capital, as well as Gilead Sciences, RA Capital Management and Frazier Life Sciences.
LOCK-UP
- Each Investor agrees that such Investor shall not Transfer any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (whether such shares of Common Stock or any such securities are held by such Investor as of the date of this Agreement or are thereafter acquired) for a period of one hundred eighty (180) days following the Closing Date
SUPPORT AGREEMENT
- The Parent Support Agreement provides that FS Development Holdings II, LLC (the “Sponsor”) shall purchase up to $25,000,000 shares of the Company’s Class A common stock in the event that the Company’s trust account (after giving effect to redemptions by stockholders of the Company) has a cash balance of less than $25,000,000.
NOTABLE CONDITIONS TO CLOSING
- The aggregate cash proceeds from Company’s trust account, together with the proceeds from the Subscriptions, equaling no less than $100,000,000
NOTABLE CONDITION TO TERMINATION
- By the Company or Pardes, if the Closing has not occurred by December 28, 2021, which date shall be automatically extended to January 28, 2022 if the U.S. Securities and Exchange Commission (the “SEC”) has not declared the proxy statement/prospectus effective on or prior to October 28, 2021
ADVISORS
- Jefferies LLC and SVB Leerink acted as co-lead private placement agents for, and financial and capital markets advisor to, FS Development Corp. II.
- Goodwin Procter LLP acted as legal counsel to Pardes.
- White & Case LLP acted as legal counsel to FS Development Corp. II.
MANAGEMENT & BOARD
Executive Officers
Jim Tananbaum, 57
President, Chief Executive Officer and Director
Dr. Tananbaum is also the chief executive officer of Foresite Capital, a U.S.-focused healthcare investment firm, which he founded in 2011. Since June 2020, he has also served as the President, Chief Executive Officer and a director of FS Development Corp. (Nasdaq: FSDC), a blank check company. Prior to founding Foresite Capital, Dr. Tananbaum served as Co-Founder and Managing Director of Prospect Venture Partners L.P. II and III, healthcare venture partnerships, from 2000 to 2010. Dr. Tananbaum was also the Founder of GelTex, Inc. in 1991, an intestinal medicine pharmaceutical company acquired by Sanofi-Genzyme, and Theravance, Inc. in 1997 (now Theravance Biopharma, Inc., a diversified biopharmaceutical company focused on organ-selective medicines, and Innoviva, Inc., a respiratory-focused healthcare asset management company partnered with Glaxo Group Limited). Dr. Tananbaum received a B.S. and a B.S.E.E. from Yale University in Applied Math and Computer Science, and an M.D. and an M.B.A. from Harvard University.
Dennis Ryan, 65
Chief Operating Officer, Chief Financial Officer and Director
Since 2011, Mr. Ryan has also led the Operations Group at Foresite Capital as Chief Financial Officer and Managing Director, and is also the Chief Financial Officer of FS Development Corp. (Nasdaq: FSDC), since June 2020. He currently serves as Board President of Whistlestop, a non-profit providing transportation and nutrition services to seniors. He received a B.A. from University of California, Berkeley in Economics, and an M.B.A from the University of Santa Clara. Mr. Ryan is a licensed certified public accountant in California.
Michael Rome, 36
Vice President and Director
Dr. Rome also serves as Managing Director at Foresite Capital, where he has held various roles since 2016, and as Vice President and a director of FS Development Corp. (Nasdaq: FSDC), since June 2020. From September 2015 to July 2016, he was an Analyst at DAFNA Capital Management, a healthcare hedge fund, where he covered and formulated investment ideas for small/mid-cap biotech companies. Prior to joining DAFNA Capital Management, Dr. Rome worked in early-stage drug development as a Senior Scientist for Vault Pharma, an academic start-up out of the California NanoSystems Institute at UCLA from April 2014 to September 2015. In the past five years, Dr. Rome held a board observer role at Turning Point Therapeutics, Inc., a clinical-stage precision oncology company. Dr. Rome received a B.S. from UCLA in Molecular, Cell and Developmental Biology and a Ph.D. in Biochemistry from Caltech.
Board of Directors
Daniel Dubin, 55
Director
Dr. Dubin is also the Vice Chairman and Head of Biopharma Investment Banking at SVB Leerink, an investment bank specializing in healthcare and life sciences, a role he has held since January 2006. He also serves on the board of directors of FS Development Corp. (Nasdaq: FSDC) and sits on the SVB Leerink’s executive committee. Prior to joining SVB Leerink in 1999, Dr. Dubin co-founded MEDACorp, Inc., a provider of insights on the commercial potential of biotherapeutics and medical devices to healthcare companies and investors. Dr. Dubin holds a B.A. from Dartmouth College in Chemistry and an M.D. from Harvard Medical School.
Owen Hughes, 46
Director
Mr. Hughes is also President, Chief Executive Officer and director of Cullinan Oncology, LLC, an oncology therapeutics company, since September 2017. Prior to joining Cullinan Oncology, Mr. Hughes served as the Chief Business Officer and head of Corporate Development at Intarcia Therapeutics, Inc., a biopharmaceutical company, from February 2013 to September 2017. Mr. Hughes previously acted as Director at Brookside Capital Investors, L.P., a Bain Capital hedge fund, and Senior Portfolio Manager at Pyramis Global Advisors LLC, a Fidelity Investments company. He also serves as Chairman of Radius Health, Inc. (Nasdaq: RDUS) and as a director of Translate Bio, Inc. (Nasdaq: TBIO) and Wren Therapeutics, Inc. In the past five years, he also served on the board of directors of Malin Corporation plc. Mr. Hughes received a B.A. from Dartmouth College in History.
Deepa Pakianathan, 56
Director
Since 2001, Dr. Pakianathan has served as a Managing Member at Delphi Ventures, a venture capital firm. She is also the Chief Executive Officer of Redd Pharmaceuticals, Inc., a pharmaceuticals company, since September 2019. She currently serves on the boards of directors of Calithera Biosciences, Inc. (Nasdaq: CALA), FS Development Corp. (Nasdaq: FSDC), Karyopharm Therapeutics, Inc. (Nasdaq: KPTI), Mereo Biopharma Group plc (formerly OncoMed Pharmaceuticals, Inc.) (Nasdaq: MREO) and Theravance Biopharma, Inc. (Nasdaq: TBPH), and serves as the Executive Vice Chair and Treasurer on the Board of Trustees of the San Francisco Conservatory of Music. In the past five years, she also served on the board of directors of Alder Biopharmaceuticals, Inc. and Alexza Pharmaceuticals, Inc. Dr. Pakianathan holds a B.Sc. from the University of Bombay, India, an M.Sc. from The Cancer Research Institute at the University of Bombay, India and an M.S. and a Ph.D. from Wake Forest University.
Alisa Mall, 43
Director
Ms. Mall is Managing Director at Foresite Capital, responsible for corporate development, long-term capital strategy, investor relations and environmental, social and governance engagement. Prior to joining Foresite Capital, from 2011 to November 2020, Ms. Mall served as Managing Director of Investments at Carnegie Corporation of New York, a philanthropic foundation supporting innovations in education, democratic engagement and international peace, and as Associate Director of Investments for Carnegie Corporation from 2009 to 2011. Previously, she was Director, Equity Capital Markets at Tishman Speyer Properties, a commercial real estate company, from 2007 to 2009, and an attorney with global law firm Orrick Herrington & Sutcliffe LLP from 2004 to 2007. Ms. Mall is a member of the board of directors and governance committee of JBG Smith (NYSE: JBGS), a real estate investment trust. She also serves on the boards of the Pension Real Estate Association (PREA), Breakthrough New York and the Bronfman Fellowship, and is a member of the investment committee of UJA-Federation of New York and the advisory board of Declaration Partners, a family office. Ms. Mall received a J.D. from Stanford Law School and a B.A. in Political Science from Yale College.