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Health Sciences Acquisition Corporation

Health Sciences Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION:  IMMUNOVANT SCIENCES, LTD.


ESTIMATED CURRENT FUNDS in TRUST: $116.3 Million*
CURRENT PER SHARE REDEMPTION PRICE: $10.12*
EQUITY VALUE: $555.8

Health Sciences Acquisitions Corp. proposes to merge with Immunovant Sciences Ltd. (“Immunovant”), a clinical-stage biopharmaceutical company focusing on autoimmune diseases.

Proceeds from this transaction are expected to finance Phase 2 development of IMVT-1401 in three indications. IMVT-1401 is currently being tested in a Phase 2a trial for Graves’ ophthalmopathy (potentially a first-in-class anti-FcRn), with top-line data expected by Q1 2020, and in a Phase 2a trial for myasthenia gravis, with top-line data expected by Q2 2020. Immunovant plans to file an IND for a third indication, warm autoimmune hemolytic anemia, later this year. The company also intends to pursue additional indications in the future.

HIGHLIGHTS

  • Top shareholders of Immunovant post-closing to include Roivant Sciences and blue-chip biotech investors, including RTW Investments, BVF Partners, Adage Capital Management, Cormorant Asset Management, Eventide Asset Management, and Perceptive Advisors
  • Immunovant is developing IMVT-1401, a fully human antibody to FcRn that delivered a mean IgG reduction of nearly 80% in a Phase 1 study of healthy volunteers receiving 4 weekly 680 mg subcutaneous injections
  • Immunovant is expected to have more than $100 million at closing to fund development of IMVT-1401 into 2H 2021
  • Top-line data from ongoing Phase 2a trial in Graves’ ophthalmopathy expected by Q1 2020
  • Top-line data from ongoing Phase 2a trial in myasthenia gravis expected by Q2 2020

TRANSACTION SUMMARY

  • Upon the closing of the transactions, HSAC will issue (or reserve for issuance upon the exercise of options) approximately 43 million HSAC shares to the current Immunovant shareholders.
  • 10,000 shares of Series A preferred stock of HSAC to be issued to Roivant
  • The aggregate value of the consideration to be paid by HSAC in the business combination is $395 million, before giving effect to Immunovant’s bridge financing.
  • Assuming no redemption from HSAC shareholders, it is estimated that the current security holders of Immunovant will own approximately 77% of the combined company.

EARNOUT

  • Immunovant shareholders may receive up to an additional 20 million HSAC shares (the “Earnout Shares”):
    • 10 million shares if the share price exceeds $17.50 by March 31, 2023
    • An additional 10 million shares if the share price exceeds $31.50 by March 31, 2025

SPONSOR SHARES AND WARRANTS

  • HSAC’s sponsor has agreed to cancel all 10 million of its private warrants.
  • 1.8 million of the sponsor’s founder shares will be cancelled unless HSAC’s common stock exceeds certain stock prices on substantially identical terms and conditions as the Earnout Shares.
    • Sponsor will
      • forfeit a number of shares of HSAC common stock equal to: (A) 1,800,000, multiplied by (B) (i) the number of shares of HSAC common stock validly redeemed, divided by (ii) 11,500,000 (such number of shares, the “Canceled Shares”)
      • subject a number of shares of HSAC common stock equal to 1,800,000 minus the Canceled Shares (the “Sponsor Earnout Shares”) to potential forfeiture in the event that the Milestones are not achieved.
      • Any Sponsor Earnout Shares that have not vested on or prior to March 31, 2025 will be forfeited by the Sponsor after such date.

BRIDGE FINANCING

  • Immunovant also announced that it completed a $35 million private bridge financing with RTW Investments, BVF Partners, and Roivant Sciences Ltd. (“Roivant”). The notes issued in this financing will convert into common shares of Immunovant immediately prior to the closing of the business combination. (DETAILS FORTHCOMING)

VOTING AGREEMENTS

  • HSAC entered into voting agreements with holders of 4,547,000 shares of HSAC common stock pursuant to which such stockholders, including but not limited to the RTW Investments, LP, Adage Capital Management, Cormorant Asset Management, Eventide Asset Management, LLC, and Perceptive Advisors, agreed to vote in favor of the transactions contemplated by the Share Exchange Agreement and to not redeem or sell their shares.
  • HSAC entered into agreements with other investors that agreed to purchase up to 2,374,400 shares of HSAC common stock at HSAC’s request and not to redeem such shares of HSAC common stock in connection with the closing of the Business Combination.

NOTABLE CONDITIONS TO CLOSING

  • A minimum of $65 million cash on HSAC’s balance sheet after any redemption of shares of HSAC common stock

NOTABLE CONDITIONS TO TERMINATION

  • if the closing has not occurred on or prior to January 31, 2020 (the “Outside Closing Date”)

BOARD

  • Immediately after the Closing, the combined company’s board of directors will consist of seven directors, with six directors identified by Roivant and one director identified by HSAC.
  • The holder(s) of a majority of outstanding shares of Series A Preferred Stock will be entitled to elect:
    • four directors (the “Series A Preferred Directors”), as long as the holder(s) of Series A Preferred Stock hold 50% or more of the voting power of all then-outstanding shares of capital stock of the combined company entitled to vote generally at an election of directors,
    • three Series A Preferred Directors, as long as the holder(s) of Series A Preferred Stock hold 40% or more but less than 50% of the voting power of all then-outstanding shares of capital stock of the combined company entitled to vote generally at an election of directors, and
    • two Series A Preferred Directors, as long as the holder(s) of Series A Preferred Stock hold 25% or more but less than 40% of the voting power of all then-outstanding shares of capital stock of the combined company entitled to vote generally at an election of directors;

 

hsac transaction overview


ADVISORS

  • Chardan is acting as HSAC’s M&A and capital markets advisor.
  • Leerink is acting as financial advisor to Immunovant.
  • Loeb & Loeb LLP is representing HSAC.
  • Cooley LLP is representing Immunovant.

 

HEALTH SCIENCES ACQUISITIONS CORP. MANAGEMENT & BOARD


Executive Officers

Roderick Wong, MD, 41
President and Chief Executive Officer & Chairman

Dr. Wong has more than 15 years of healthcare investment experience. Since 2010, he has served as Managing Partner and Chief Investment Officer of RTW, a healthcare-focused investment firm managing $1.9 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. Other current and previous directorships include Rocket Pharmaceuticals, Inc., where Dr. Wong has served as Chairman of the board of directors, a position he has held since Rocket’s inception in July 2015, and Attune Pharmaceuticals, a portfolio company of RTW, where he has served as a director since June 2018; and Milestone Pharmaceuticals and Stoke Therapeutics, portfolio companies of RTW, where he serves as an observer to the board of directors. 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, 42
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, RTW 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. Other current directorships include Rocket Pharmaceuticals, Inc., where he has served as a director since Rocket’s inception in July 2015, and DermTech, 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, 48
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 nearly 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 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, 44
VP of Corporate Strategy & Corporate Communications

Ms. Sirota has served as a Partner and Chief Business Officer at RTW since 2012. Ms. Sirota is responsible for strategy and oversight of RTW’s business development and strategic partnerships with counterparties including banks and academic institutions. She is also responsible for shaping the firm’s governance policies underscoring impact and sustainability. Ms. Sirota has 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 and issuers from 1997 to 1999. Ms. Sirota graduated with honors from Columbia University and also received a Master’s Degree 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

Sukumar Nagendran, MD, 52
Director

From September 2015 to June 2018, Dr. Nagendran served as the Chief Medical Officer and Senior Vice President of AveXis, Inc., where he was responsible for overseeing all of AveXis’s clinical development, medical affairs strategies, and efforts for advancing its pipeline. From 2013 to 2015, he served as Vice President/Head of Global Medical Affairs at Quest Diagnostics Inc., the largest lab/diagnostics provider in the world, where he was instrumental in building the medical affairs function. He has held key leadership positions across multiple medical functions to drive support for many innovative products, including clinical trials and operations, field medical, medical product team, national and regional payer efforts, publications, advocacy and genetic counseling activities and oversight.   Prior to joining Quest Diagnostics, Dr. Nagendran served as Vice President and Head of Medical Affairs at Reata Pharmaceuticals. Prior to that, he was therapeutic-area head for new product development, medical affairs, clinical operations and biometrics, at Daiichi Sankyo, where he oversaw several therapeutic areas, including oncology, cardiovascular disease and diabetes. He has held other senior positions related to clinical development and medical affairs at Pfizer and Novartis. Dr. Nagendran has been a director of Solid Biosciences Inc. since September 2018 and a director of Neurogene, Inc. since February 2019.  In addition, Dr. Nagendran is a founding member of the Robert Wood Johnson Legacy Society and also the sponsor for the Vivian Fonseca and Nagendran Family Diabetes Research Award at the American Diabetes Association to enhance research in minority populations and the Sukumar and Ann Nagendran International Medical Study Scholarship at Rutgers Medical School. He also has significant clinical practice experience. Dr. Nagendran practiced in a large internal medicine physician group and was a staff physician at three hospitals in Phoenix, Arizona, and a member of the PrimeCare managed care committee for Phoenix-based Banner Health Systems, one of the largest nonprofit healthcare systems in the United States. Dr. Nagendran’s research on gene therapy, cardiovascular disease, diabetes, oncology, pulmonary medicine and other areas of medicine has been published in a number of peer-reviewed publications, including NEJM, Endocrine Practice, Current Medical Research & Opinion, Neurology and Journal of Clinical Lipidology. He serves as a member of the Advisory Board of Medocity, Inc., a member of the Advisory Board of Medivo/Prognos Inc. and an Advisor of Brandix I3. Dr. Nagendran completed his internal medicine training at The Mayo Clinic in Rochester, Minnesota and was inducted into the prestigious Mayo Alumni Laureate Group. Dr. Nagendran earned a BA in biochemistry from Rutgers University and his MD from the Robert Wood Johnson Medical School at Rutgers University, where he was awarded academic excellence awards in Internal Medicine, Radiology, Psychiatry and the Robert Wood Johnson Alumni award for the class of 1994.


Pedro Granadillo, 71
Director

Mr. Granadillo has more than 40 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. He currently serves on the board of directors of Haemonetics Corporation, a position he has held since 2004, and Rocket Pharmaceuticals, Inc., a position he has held since January 2018. Mr. Granadillo has previously served on the boards of directors at Dendreon Corporation and Noven Pharmaceuticals, as well as NPS Pharmaceuticals, which was sold to Shire for $5.2 billion in 2015. He graduated from Purdue University with a Bachelor of Science in Industrial Engineering. We believe that Mr. Granadillo’s qualifications to sit on our board include his depth of knowledge of the pharmaceutical industry and his many years of experience serving on the boards of directors of healthcare companies.


George Migausky, 64
Director 

Mr. Migausky has more than 30 years of experience in the life sciences industry, having served as Chief Financial Officer for several public biopharmaceutical and clinical diagnostic companies. In 2017, Mr. Migausky served as interim Chief Financial Officer for Ocular Therapeutix, Inc. Prior to that, he served as Executive Vice President and Chief Financial Officer of Dyax Corp. a position he held from 2008 through the company’s acquisition by Shire for $6.4 billion in 2016. Before joining Dyax, Mr. Migausky served as Chief Financial Officer of Wellstat Management Company from 2007 to 2008; and Chief Financial Officer of IGEN International and BioVeris Corporation from 1986 through their acquisitions by F. Hoffman LaRoche in 2004 and 2007, respectively. Current directorships include Hyperion Catalysis International, a position he has held since 2008, and the Massachusetts Eye and Ear Institute, where he has served as a trustee since 2015. Mr. Migausky has previously served on the board of directors as Chair of the audit committee at Dimension Therapeutics, a position he held from 2015 until the company was acquired in 2017. Mr. Migausky received his BS from Boston College and his MBA from Babson College.


Gotham Makker, MD, 45
Director

Dr. Makker has 20 years of healthcare industry experience. Since 2005, Dr. Makker has served as Chief Executive Officer of Simran Investment Group, LLC, an equity investment fund. Prior to Simran, Dr. Makker was a healthcare portfolio manager and principal at Citadel Investment Group LLC, a position he held from 2002 to 2005. Prior to joining Citadel, Dr. Makker served as an analyst at Oracle Partners LP covering biotechnology and medical device sectors from 2000 to 2001. He began his financial career in 1999, as a senior analyst on the life sciences investment banking team at Hambrecht & Quist. Current directorships include Rocket Pharmaceuticals, Inc., a position he has held since January 2018. Dr. Makker received an MD from the University of Nebraska Medical School and went on to complete the Sarnoff cardiovascular research fellowship at Columbia University, College of Physicians & Surgeons, and at Harvard Medical School, Brigham & Women’s Hospital.