Inhibrx Inc. (NASDAQ: INBX), a clinical-stage biopharmaceutical company, has entered into a definitive agreement with Sanofi, a global healthcare leader, to acquire Inhibrx. This transaction includes the sale of INBRX-101, an innovative therapy for alpha-1 antitrypsin deficiency (AATD). Alongside the merger, Inhibrx will spin off its remaining assets and liabilities into a new publicly traded entity, Inhibrx Biosciences, Inc. (New Inhibrx). This article provides a detailed analysis of the merger, spin-off, and associated financial and regulatory intricacies.
Details of the Merger Agreement
Sanofi will acquire all outstanding shares of Inhibrx at $30.00 per share in cash. Additionally, each Inhibrx stockholder will receive one contingent value right (CVR) per share, entitling them to an additional $5.00 per share if certain regulatory milestones are achieved. This agreement reflects Sanofi’s strategic intent to bolster its biopharmaceutical pipeline with INBRX-101, a promising therapy currently in a registrational trial for AATD.
Spin-Off of New Inhibrx
Prior to the merger’s closure, Inhibrx will spin off all assets and liabilities unrelated to INBRX-101 into New Inhibrx. This new entity will include INBRX-105, INBRX-106, INBRX-109, Inhibrx’s non-101 discovery pipeline, and its corporate infrastructure. Stockholders will receive one share of New Inhibrx for every four shares of Inhibrx common stock held as of May 17, 2024. Sanofi will retain an 8% equity interest in New Inhibrx, which will be capitalized with at least $200 million in cash to support its operations and growth.
Shareholders on INBX to receive 0.25 shares of spinCo (INXB) for each share owned
INXB to begin trading on a when-issued basis 5/28/2024 under symbol INXBV
INBX to begin trading on a when-distributed basis 5/28/2024 under symbol INBXV
Regulatory and Shareholder Approvals
The transaction is subject to customary closing conditions, including regulatory approvals and the affirmative vote of Inhibrx’s stockholders. Following the consummation of the merger, Inhibrx’s common stock will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934. The final voting results will be disclosed in a Current Report on Form 8-K filed with the SEC.
Contingent Value Rights (CVRs)
As part of the merger consideration, stockholders will receive CVRs, representing the right to an additional $5.00 per share upon achieving a specified regulatory milestone. The CVRs provide stockholders with potential future value contingent on the successful regulatory approval of INBRX-101.
Termination Rights and Fees
The merger agreement includes specific termination rights and a termination fee of $54.5 million payable by Inhibrx under certain conditions, such as accepting a superior proposal. Conversely, Sanofi is required to pay a reverse termination fee of $92.1 million if the merger fails due to the inability to secure antitrust clearance.
Legal Challenges and Litigation
Several shareholders have issued demand letters alleging material omissions in the proxy statement, demanding corrective disclosures. Two complaints have been filed in the Supreme Court of the State of New York, asserting breaches of fiduciary duty and seeking to enjoin the consummation of the merger and spin-off. These legal challenges could impact the transaction's timeline and finalization.
Forward-Looking Statements and Risks
The filings include numerous forward-looking statements outlining the risks and uncertainties related to the merger and spin-off. These risks encompass the satisfaction or waiver of closing conditions, potential delays in regulatory approvals, market and economic conditions, and the successful integration and operation of New Inhibrx post-spin-off.
The merger and spin-off transaction between Inhibrx and Sanofi represents a significant strategic move for both companies. Inhibrx stockholders stand to benefit from immediate cash consideration and potential future payments through CVRs. The formation of New Inhibrx allows the continued development of Inhibrx’s broader therapeutic pipeline with substantial financial backing. While the transaction faces regulatory and legal challenges, its successful completion could unlock significant value for stakeholders and advance innovative therapies in the biopharmaceutical landscape.
FAQs
What are the main benefits for Inhibrx stockholders in this merger?
Inhibrx stockholders will receive $30.00 per share in cash, one CVR per share with the potential for an additional $5.00 per share, and shares in New Inhibrx.
What will happen to Inhibrx’s existing pipeline after the spin-off?
Inhibrx’s non-101 assets, including INBRX-105, INBRX-106, and INBRX-109, along with its corporate infrastructure, will be transferred to New Inhibrx.
What are the regulatory hurdles for this transaction?
The transaction requires customary closing conditions, including regulatory approvals and a favorable vote from Inhibrx’s stockholders.
How will the spin-off of New Inhibrx be structured financially?
New Inhibrx will be capitalized with at least $200 million in cash, with Sanofi retaining an 8% equity interest.
What legal challenges does this transaction face?
There are several shareholder demand letters and complaints alleging fiduciary duty breaches, which could affect the timeline and finalization of the transaction.
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