Powerful IMO-2125 Data from ILLUMINATE-204 Trial Further Supports
Value of Combination
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Jun. 5, 2018--
BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) (“BioCryst” or the
“Company”), a pharmaceutical company focused on the development and
commercialization of treatments for rare diseases, today issued an open
letter to stockholders in connection with the Company’s Special Meeting
of Stockholders to be held on July 10, 2018.
The full text of the letter follows:
Dear Fellow Stockholder,
BioCryst’s Special Meeting of Stockholders is scheduled for July 10,
2018. We urge you to vote today “FOR” the merger transaction with Idera
Pharmaceuticals, Inc. (“Idera”) using the enclosed proxy card. The
BioCryst Board of Directors believes this transaction represents a
significant opportunity to enhance the value of your investment in
BioCryst and unanimously recommends that stockholders vote “FOR” the
transaction, which will create a new company to be called Valenscion
Incorporated (“Valenscion” or the “combined company”).
We scheduled our Special Meeting for July 10, 2018 to allow sufficient
time prior to the meeting date for our stockholders to consider
additional data for IMO-2125, which was presented by Idera on June 4,
2018 at the American Society of Clinical Oncology (“ASCO”) Annual
Meeting. The additional data reinforces the clinical attractiveness of
this treatment option and supports IMO-2125 as a Phase 3 asset that will
have real utility in the array of potential immuno-oncology treatments
for cancer patients with very few options.
We recognize that some investors have questioned the value of the
BioCryst merger with Idera; however, we believe the concerns expressed
by these investors are fundamentally misguided. We would like to set the
record straight on the merits of the proposed merger, which we believe
is even more compelling today than it was just weeks ago, and again
highlight the benefits of this transaction for our patients, employees
and stockholders.
THE DATA FOR IMO-2125 CONTINUES TO BE CLINICALLY MEANINGFUL AFTER
DOUBLING THE NUMBER OF PATIENTS
THE DATA FOR IMO-2125 FURTHER SUPPORTS OUR CONCLUSION THAT THE IDERA
MERGER IS A VALUE-ENHANCING OPPORTUNITY FOR BIOCRYST STOCKHOLDERS; ONE
THAT APPROPRIATELY VALUES THE RELATIVE CONTRIBUTIONS OF IDERA AND
BIOCRYST
Both BioCryst and Idera have promising late-stage drug candidates. We
strongly believe that the combination of the two companies, creating a
company with a rare disease pipeline, presents a compelling opportunity
for significant potential financial returns for our stockholders.
Idera’s IMO-2125 results presented earlier this month at ASCO create a
treatment profile even more attractive than we considered in our market
research and ultimately used to forecast the value as part of our
Board's comprehensive strategic review process. When BioCryst was
conducting due diligence as part of our Board's comprehensive strategic
review process, we assumed a response rate of 30.0% for IMO-2125 when
determining the appropriate valuation for Idera. The response rate
reported at ASCO of 38.1% demonstrates substantial clinical benefit and
notably, is approximately triple that of response rate of 13% for
Ipilimumab alone. Additionally, IMO-2125 demonstrated a disease control
rate of 71.4% of patients, including patients who are Stable Disease,
some of whom are now more than one year into the trial. We believe this
durable data further supports the value creation potential of the merger.
NEW IDERA DATA SUPPORTS VALUE PROPOSITION OF COMBINED COMPANY,
DE-RISKED PORTFOLIO AND SIGNIFICANT UPSIDE POTENTIAL FOR STOCKHOLDERS
Following its strategic review process, the BioCryst Board and
management team concluded that the transaction with Idera significantly
enhances long-term BioCryst stockholder value and that the valuation and
terms negotiated by the parties were equitable. The notion that the
terms of the agreement are unfairly dilutive to BioCryst stockholders
due to the companies’ disparate risk profiles is premised on misguided
assumptions that: (i) BioCryst’s lead asset is essentially guaranteed to
succeed, and (ii) Idera’s portfolio is unproven and excessively risky.
While those questioning the strategic rationale of the merger are of the
view that the BioCryst pipeline contains significantly greater upside
than that of Idera, their analysis irresponsibly assumes Phase 2 trial
results for BCRX-7353 are highly predictive of the success of our drug
candidates in Phase 3 trials. We have an appropriate level of confidence
in our science, but to assume Phase 3 clinical trial success does not
take into account the inherent risks in biopharmaceutical drug discovery
and development. Instead, BioCryst assigned a probability of success for
the BCRX-7353 Phase 3 pivotal trial of 70%, which management believes is
a reasonable estimate based on the Phase 2 trial results and taking into
account other industry estimates of the success probability rate for
compounds entering Phase 3 of development. We believe our analysis is
appropriate for estimating value and was supported by the fairness
opinion we received from J.P. Morgan, and therefore the BioCryst Board
determined that the merger made strategic and financial sense.
Idera’s recent results for IMO-2125 suggest that its response rate is
even higher than our assumptions, and now with a doubling of the number
of patients treated and evaluated since we conducted this analysis,
there is even more evidence to support our belief in the value of the
combination for BioCryst stockholders.
A CLEAR AND COMPELLING STRATEGIC RATIONALE TO CREATE SUBSTANTIAL VALUE
The BioCryst Board continues to believe that the merger with Idera
creates substantial upside potential for BioCryst stockholders. In
addition, through the strategic review process undertaken by the
BioCryst Board, the Board identified numerous strategic benefits
resulting from the merger.
- Diversifying Risk: Together, BioCryst and Idera will
have a much larger pipeline with a greater number of compelling
late-stage drug candidates. Valenscion’s risk will be distributed more
broadly across multiple promising assets, creating more opportunities
for success and adding greater financial flexibility for the
developmental investments that will need to be made by both BioCryst
and Idera in the coming years.
- Bolstering Development Pipeline: The recently published
data from Idera’s IMO-program further underscores the merits and
strategic rationale for the combination as originally outlined by the
companies in January 2018. Now having a significantly larger data set
for Idera's lead program and a robust result, Valenscion has two Phase
3 assets that have potential to deliver significant value.
- Creating Meaningful Synergies and Cash Generation Opportunities: The
combined company will have meaningful administrative synergy
opportunities, and expects to realize approximately $20 million in
cash synergies in year two and a total of $30 million in annual
pre-tax cost synergies in year three after closing. Together, BioCryst
and Idera are expected to have opportunities to generate non-dilutive
capital, which can be thoughtfully and effectively allocated to
maximize the portfolio’s market potential and create stockholder
value. For example, the cash generated by Idera’s IMO-2125 program
will potentially be used strategically to invest in BCX-7353 launch
activities, creating additional synergies and maximizing the cash use
efficiency of the combined company.
- Combining Powerful Discovery Engines: The combined
company will be well-positioned to capitalize on both BioCryst and
Idera's separate and complementary talents and expertise to
successfully commercialize late-stage development candidates and
expand the number of rare disease targets that can be advanced into
development. By leveraging both structure-guided small molecule design
and nucleic acid/oligonucleotide chemistry within one organization,
Valenscion may also be able to create more effective and potentially
unique treatments for rare diseases that would not be possible for
either BioCryst or Idera on a standalone basis.
With a lower risk profile, a stronger financial foundation, enhanced
discovery capabilities and more opportunities for success, Valenscion
will be well-positioned to capitalize on its rare disease pipeline and
build greater and more sustainable value for the benefit of
stockholders, as well as patients with rare diseases, beyond what the
two companies could achieve alone.
THE PROPOSED MERGER IS THE CULMINATION OF A LENGTHY AND EXTENSIVE
EVALUATION OF STRATEGIC OPPORTUNITIES
Prior to entering the merger agreement, the BioCryst Board conducted a
careful and thoughtful review of strategic opportunities. The Board was
assisted in this work by leading outside financial and legal advisors.
J.P. Morgan Securities LLC is serving as exclusive financial advisor to
BioCryst and provided a fairness opinion to the BioCryst Board in
connection with the transaction.
During the strategic review process, which began in early February 2016
and is described in our proxy statement, the BioCryst Board met numerous
times to discuss a number of potential opportunities to both enhance
value and diversify risk, including considering the value potential of
the Company’s standalone plan, mergers, bolt-on acquisitions and
in-licensing transactions. We also determined the desired attributes of
a strategic counterparty in a potential transaction, and spoke with
multiple credible parties that expressed interest in exploring a
possible strategic transaction.
The merger agreement with Idera is the result of an evaluation of
multiple potential options. After evaluating opportunities and engaging
with five other possible counterparties, the Board determined that the
proposed transaction with Idera creates more compelling potential for
value creation than other alternative strategies available to the
Company. While the Company maintains an open and constructive dialogue
with its stockholders, the Board based its decision on what it
determined to be in the interests of the Company and its stockholders
generally. Any suggestion that the Company did not conduct a thorough
evaluation of strategic options prior to agreeing to the merger or that
the merger was designed to disproportionately benefit insiders or a
single stockholder is simply false. Stockholders need look no further
than our proxy statement, which clearly describes the thoughtful and
deliberate process by which the Board reached its decision.
PROVEN LEADERSHIP AND STRONG GOVERNANCE TO GUIDE PIPELINE DEVELOPMENT
AND DELIVER ON VALUE PROPOSITION
The combined company will have a highly engaged, seasoned Board and
management with a proven track record of getting drugs approved and
successfully launched. The Board will comprise nine members – four from
each of the current BioCryst Board and the current Idera Board, and one
person to be mutually agreed by the BioCryst Board and the Idera Board
who is not a director, officer or affiliate of either BioCryst or Idera.
The mutually agreed director also will not be a representative of the
combined company’s largest stockholder, ensuring no one stockholder
carries undue influence over the company, just as BioCryst operates
today.
As we write the next chapter of BioCryst’s growth, the combined company
is attractively positioned to unlock the compelling value of the merger
while also executing on its strategic plan to drive long-term growth and
attractive returns for stockholders going forward.
Vote “FOR” the Merger Proposal TODAY
Your Board of Directors believes that the merger is value-enhancing
for BioCryst stockholders, and we recommend that stockholders vote today
“FOR” the merger proposal.
Your vote is extremely important, no matter how many shares you own.
Please take a moment to vote “FOR” the proposals set forth on the proxy
card today – by internet, telephone toll-free or by signing, dating and
returning the enclosed proxy card in the postage-paid envelope provided.
If you have any questions or need assistance voting your shares, please
contact Innisfree M&A, our proxy solicitor, by calling toll-free at
(877) 800-5834 (from the U.S. and Canada) and (412) 232-3651 (from other
locations) or collect at (212) 750-5833.
We are excited about the opportunities ahead for BioCryst and thank you
for your continued support.
Sincerely,
The BioCryst Board of Directors
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If you have any questions about how to vote your shares, or
need additional assistance, please contact our proxy solicitor:
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INNISFREE M&A INCORPORATED
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TOLL-FREE at 888-750-5834 or collect at 212-750-5833
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About BioCryst Pharmaceuticals
BioCryst Pharmaceuticals designs, optimizes and develops novel
small-molecule medicines that address both common and rare conditions.
BioCryst has several ongoing development programs including BCX7353, an
oral treatment for hereditary angioedema, galidesivir, a potential
treatment for filoviruses, and a preclinical program to develop oral
Alk-2 inhibitors for the treatment of fibrodysplasia ossificans
progressive (“FOP”). RAPIVAB® (peramivir injection), a viral
neuraminidase inhibitor for the treatment of influenza, is BioCryst's
first approved product and has received regulatory approval in the U.S.,
Canada, Australia, Japan, Taiwan, Korea and the European Union.
Post-marketing commitments for RAPIVAB are ongoing. For more
information, please visit the Company's website at www.BioCryst.com.
Additional Information and Where to Find It
In connection with the proposed mergers, Nautilus Holdco, Inc. (“Holdco”)
has filed with the U.S. Securities and Exchange Commission (the “SEC”),
and the SEC has declared effective on March 29, 2018, a Registration
Statement on Form S-4 (as may be amended from time to time, the “Registration
Statement”) that includes the joint proxy statement of BioCryst
and Idera Pharmaceuticals, Inc. (“Idera”)
and that also constitutes a prospectus of Holdco. BioCryst, Idera and
Holdco may also file other documents with the SEC regarding the proposed
transaction. This document is not a substitute for the definitive joint
proxy statement/prospectus or Registration Statement or any other
document that may be filed by each of BioCryst and Idera with the SEC.
BEFORE MAKING ANY VOTING DECISION, IDERA’S AND BIOCRYST’S RESPECTIVE
STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS IN
ITS ENTIRETY AND ANY OTHER DOCUMENTS FILED BY EACH OF IDERA AND BIOCRYST
WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED
BY REFERENCE THEREIN BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.
Investors and stockholders may obtain free copies of these materials and
other documents filed with the SEC (when available) by BioCryst, Idera
and Holdco through the website maintained by the SEC at www.sec.gov.
Idera and BioCryst make available free of charge at www.iderapharma.com
and www.biocryst.com,
respectively (in the “Investors” section), copies of materials they file
with, or furnish to, the SEC.
Participants in the Solicitation
This document does not constitute a solicitation of proxy, an offer to
purchase or a solicitation of an offer to sell any securities. Idera,
BioCryst and their respective directors, executive officers and certain
employees and other persons may be deemed to be participants in the
solicitation of proxies from the stockholders of Idera and BioCryst in
connection with the proposed mergers. Security holders may obtain
information regarding the names, affiliations and interests of Idera’s
directors and officers in Idera’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2017, which was filed with the SEC on
March 7, 2018 and its definitive proxy statement for the 2018 annual
meeting of stockholders, which was filed with the SEC on May 22, 2018.
Security holders may obtain information regarding the names,
affiliations and interests of BioCryst’s directors and officers in
BioCryst’s Annual Report on Form 10-K for the fiscal year ended December
31, 2017, and any amendments thereto, which was filed with the SEC on
March 12, 2018 and its definitive proxy statement for the 2018 annual
meeting of stockholders, which was filed with the SEC on May 10, 2018.
Additional information about the interests of BioCryst’s directors and
officers and Idera’s directors and officers in the proposed mergers can
be found in the above-referenced Registration Statement. These documents
may be obtained free of charge from the SEC’s website at www.sec.gov,
Idera’s website at www.iderapharma.com
and BioCryst’s website at www.biocryst.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements involve known and
unknown risks, uncertainties and other factors which may cause actual
results, performance or achievements to be materially different from any
future results, performances or achievements expressed or implied by the
forward-looking statements. These statements reflect our current views
with respect to future events and are based on assumptions and are
subject to risks and uncertainties, and important factors that could
cause actual events or results to differ materially from Idera’s or
BioCryst’s plans, estimates or expectations. Given these uncertainties,
you should not place undue reliance on these forward-looking statements.
With respect to the transactions contemplated by the merger agreement
between Idera and BioCryst, these factors could include, but are not
limited to: (i) Idera or BioCryst may be unable to obtain stockholder
approval as required for the mergers; (ii) conditions to the closing of
the mergers may not be satisfied; (iii) the mergers may involve
unexpected costs, liabilities or delays; (iv) the effect of the
announcement of the mergers on the ability of Idera or BioCryst to
retain and hire key personnel and maintain relationships with patients,
doctors and others with whom Idera or BioCryst does business, or on
Idera’s or BioCryst’s operating results and business generally; (v)
Idera’s or BioCryst’s respective businesses may suffer as a result of
uncertainty surrounding the mergers and disruption of management’s
attention due to the mergers; (vi) the outcome of any legal proceedings
related to the mergers; (vii) Idera or BioCryst may be adversely
affected by other economic, business, and/or competitive factors; (viii)
the occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; (ix) risks that
the mergers disrupt current plans and operations and the potential
difficulties in employee retention as a result of the mergers; (x) the
risk that Idera or BioCryst may be unable to obtain governmental and
regulatory approvals required for the transactions, or that required
governmental and regulatory approvals may delay the transactions or
result in the imposition of conditions that could reduce the anticipated
benefits from the transactions contemplated by the merger agreement or
cause the parties to abandon the transactions contemplated by the merger
agreement; (xi) risks that the anticipated benefits of the mergers or
other commercial opportunities may otherwise not be fully realized or
may take longer to realize than expected; (xii) the impact of
legislative, regulatory, competitive and technological changes; (xiii)
risks relating to the value of the new holding company shares to be
issued in the mergers; (xiv) expectations for future clinical trials,
the timing and potential outcomes of clinical studies and interactions
with regulatory authorities; (xv) the risk that the credit ratings of
the combined company or its subsidiaries may be different from what the
companies expect; (xvi) economic and foreign exchange rate volatility;
(xvii) the continued strength of the medical and pharmaceutical markets;
(xviii) the timing, success and market reception for Idera’s and
BioCryst’s products; (xix) the possibility of new technologies outdating
Idera’s or BioCryst’s products; (xx) continued support of Idera’s or
BioCryst’s products by influential medical professionals; (xxi) reliance
on and integration of information technology systems; (xxii) the risks
associated with assumptions the parties make in connection with the
parties’ critical accounting estimates and legal proceedings; (xxiii)
the potential of international unrest, economic downturn or effects of
currencies, tax assessments, tax adjustments, anticipated tax rates, raw
material costs or availability, benefit or retirement plan costs, or
other regulatory compliance costs; and (xxiv) other risks to the
consummation of the mergers, including the risk that the mergers will
not be consummated within the expected time period or at all. These
risks, as well as other risks associated with the proposed mergers, are
more fully discussed in the joint proxy statement/prospectus included in
the Registration Statement filed with the SEC in connection with the
proposed mergers. While the list of factors presented here is, and the
list of factors presented in the Registration Statement are, considered
representative, no such list should be considered a complete statement
of all potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of forward looking
statements. Consequences of material differences in results as compared
with those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems, financial
loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on BioCryst’s or Idera’s
consolidated financial condition, results of operations, credit rating
or liquidity. Readers are urged to consider these factors carefully in
evaluating these forward-looking statements, and not to place undue
reliance on any forward-looking statements. Readers should also
carefully review the risk factors described in other documents that
Idera and BioCryst file from time to time with the SEC. The
forward-looking statements in this document speak only as of the date of
this document. Except as required by law, Idera and BioCryst assume no
obligation to update or revise these forward-looking statements for any
reason, even if new information becomes available in the future.
BCRXW
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Filed by BioCryst Pharmaceuticals, Inc. pursuant to Rule 425
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Under the Securities Act of 1933
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And Deemed Filed Pursuant to Rule 14a-12
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Under the Securities Exchange Act of 1934
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Subject Company: BioCryst Pharmaceuticals, Inc.
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Commission File No. of Subject Company: 000-23186
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View source version on businesswire.com: https://www.businesswire.com/news/home/20180605005867/en/
Source: BioCryst Pharmaceuticals, Inc.
BioCryst Pharmaceuticals
Thomas Staab, 919-859-7910
Senior
Vice President, Chief Financial Officer
tstaab@biocryst.com
or
Additional
Investor Contact:
Innisfree M&A Incorporated
Scott Winter,
212-750-7271