DEFM14A 1 d480137ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒

Filed by a party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

Infinity Pharmaceuticals, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 


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PROPOSED MERGER

YOUR VOTE IS VERY IMPORTANT

To the stockholders of MEI Pharma, Inc. and Infinity Pharmaceuticals, Inc.:

The boards of directors of MEI Pharma, Inc., a Delaware corporation (“MEI”) and Infinity Pharmaceuticals Inc., a Delaware corporation (“Infinity”), have agreed upon a transaction in which Infinity will become a wholly-owned subsidiary of MEI. On February 22, 2023, MEI, Infinity, and Meadow Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of MEI, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Infinity, with Infinity surviving as a wholly owned subsidiary of MEI, and the surviving company of the merger, which transaction is referred to herein as the “Merger.” MEI following the Merger is referred to herein as the combined company.

We are sending this joint proxy statement/prospectus to you to ask you to vote in favor of this transaction and other matters.

If the Merger is consummated, at the effective time of the Merger (the “Effective Time”) each share of Infinity’s common stock, par value $0.001 per share, (the “Infinity Common Stock”), issued and outstanding immediately prior to the Effective Time (other than shares of Infinity Common Stock held in treasury, if any) will be automatically converted into the right to receive 0.052245 shares (the “Exchange Ratio”) of the common stock, par value $0.00000002 per share, of MEI (the “MEI Common Stock”), subject to customary equitable adjustment in the event of any recapitalization, stock split, reverse stock split or similar change.

In addition, each outstanding option to purchase shares of Infinity Common Stock (each, an “Infinity Stock Option”) will become fully vested in accordance with the terms of the underlying stock option agreement. Each Infinity Stock Option will be assumed at the Effective Time by MEI and converted into a stock option to purchase shares of MEI Common Stock. The number of shares of MEI Common Stock underlying each such assumed Infinity Stock Option will be equal to the product of (i) the number of shares of Infinity Common Stock underlying the applicable Infinity Stock Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, with the resulting number of shares of MEI Common Stock rounded down to the nearest whole share, and the exercise price per share of each such assumed Infinity Stock Option will be equal to (a) the per share exercise price applicable to such Infinity Stock Option immediately prior to the Effective Time divided by (b) the Exchange Ratio, with the resulting exercise price per share rounded up to the nearest whole cent. Except as noted above, each assumed and converted Infinity Stock Option will continue to be governed by substantially the same terms and conditions (after giving effect to the full acceleration of vesting of such Infinity Stock Option in connection with the Merger) as were applicable to such Infinity Stock Option immediately prior to the Effective Time. Before the Effective Time, each outstanding Infinity restricted stock unit (each, an “Infinity RSU”) will become fully vested, and the shares of Infinity Common Stock subject to such Infinity RSU will be distributed in accordance with the terms of the applicable restricted stock unit agreement. The shares of Infinity Common Stock issued upon the vesting of Infinity RSUs will be treated as shares of Infinity Common Stock issued and outstanding immediately prior to the Effective Time in accordance with the terms and conditions of the Merger Agreement. No Infinity RSUs will be outstanding from and after the Effective Time.

Each share of MEI Common Stock and option to purchase MEI Common Stock that is issued and outstanding at the Effective Time will remain issued and outstanding, and such shares and options will be unaffected by the Merger. Immediately after the Merger, MEI stockholders as of immediately prior to the Merger are expected to own approximately 58% of the outstanding shares of the combined company, and Infinity stockholders are expected to own approximately 42% of the outstanding shares of the combined company.

Shares of MEI Common Stock are currently quoted on The Nasdaq Stock Market under the symbol “MEIP.” On June 5, 2023, the last trading day before the date of the accompanying joint proxy statement/prospectus, the closing sale price of MEI Common Stock on The Nasdaq Stock Market was $7.42 per share. Shares of Infinity Common Stock are currently quoted on The Nasdaq Global Select Market under the symbol “INFI.” On June 5, 2023, the last


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trading day before the date of the accompanying joint proxy statement/prospectus, the closing sale price of Infinity Common Stock on The Nasdaq Global Select Market was $0.1725 per share. After completion of the Merger, it is expected that the common stock of the combined company will be quoted on the Nasdaq Stock Market under the symbol “KMBX” and the name of the combined company will be changed to “Kimbrx Therapeutics, Inc.”

Your vote is very important. We cannot complete the Merger unless the Infinity stockholders vote to adopt the Merger Agreement and the MEI stockholders vote to approve the issuance of MEI Common Stock. Abstentions or failures to properly cast an affirmative vote for the adoption of the Merger Agreement by any Infinity stockholder will have the same effect as a vote against the adoption of the Merger Agreement. This document is a prospectus relating to the shares of MEI Common Stock to be issued in the Merger and a joint proxy statement for Infinity and MEI to solicit proxies for their respective special meetings of stockholders. It contains answers to frequently asked questions and a summary of the important terms of the Merger, Merger Agreement, and related transactions, followed by a more detailed discussion.

More information about MEI, Infinity, the Merger Agreement and the transactions contemplated thereby (collectively the “Contemplated Transactions”), and the proposals is contained in the accompanying joint proxy statement/prospectus. MEI and Infinity urge you to read the accompanying joint proxy statement/prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 26 OF THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

MEI and Infinity are excited about the opportunities the Merger brings to MEI and Infinity stockholders. Thank you for your consideration and continued support.

Sincerely,

 

/s/ Charles V. Baltic III

Charles V. Baltic III

Chair of the Board

MEI Pharma, Inc.

June 6, 2023

  

/s/ Adelene Q. Perkins

Adelene Q. Perkins

Chair of the Board

Infinity Pharmaceuticals, Inc.

June 6, 2023

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the accompanying joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated June 6, 2023, and is first being mailed to MEI stockholders and Infinity stockholders on or about June 9, 2023.


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MEI PHARMA, INC.

San Diego, California

NOTICE OF SPECIAL MEETING OF MEI STOCKHOLDERS

TO BE HELD JULY 14, 2023                 

To the Stockholders of MEI Pharma, Inc.:

NOTICE IS HEREBY GIVEN that MEI Pharma, Inc. will hold a virtual special meeting of stockholders (the “MEI Special Meeting”), on July 14, 2023, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The MEI Special Meeting will be held entirely as a virtual meeting. You will be able to attend and participate in the MEI Special Meeting online by visiting www.meetnow.global/M44PQGZ, where you will be able to listen to the meeting live, submit questions and vote.

The MEI Special Meeting will be held for the following purposes:

 

1.

To consider and vote upon the proposal to approve, for purposes of Nasdaq Listing Rule 5635(a), of the issuance of shares of MEI Common Stock, $0.00000002 par value per share, to stockholders of Infinity pursuant to the terms of the Agreement and Plan of Merger, dated February 22, 2023, by and among MEI Pharma, Inc., a Delaware corporation (“MEI”), Infinity Pharmaceuticals Inc., a Delaware corporation (“Infinity”), and Meadow Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of MEI , as such agreement may be amended from time to time (the “MEI Nasdaq Proposal”); and

 

2.

To consider and vote on a proposal to approve the adjournment of the MEI Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal (the “MEI Adjournment Proposal”).

 

Record

Date:

  MEI’s board of directors has fixed May 24, 2023 as the record date for the determination of stockholders entitled to notice of, and to vote at, the MEI Special Meeting and any adjournment or postponement thereof (the “MEI Record Date”). Only holders of record of shares of MEI Common Stock at the close of business on the MEI Record Date are entitled to notice of, and to vote at, the MEI Special Meeting. At the close of business on the MEI Record Date, MEI had 6,662,857 shares of common stock outstanding and entitled to vote.

Your vote is important. The majority of the votes cast by MEI stockholders entitled to vote on the proposal at the MEI Special Meeting is required for approval of the MEI Nasdaq Proposal and the MEI Adjournment Proposal. Approval of the MEI Nasdaq Proposal is a condition to the completion of the Merger. Therefore, the Merger cannot be consummated without the approval of the MEI Nasdaq Proposal. The MEI Nasdaq Proposal is described in more detail in the section titled “Matters Being Submitted To A Vote Of MEI Stockholders” in the accompanying joint proxy statement/prospectus, which you should read carefully in its entirety before you vote. A copy of the Merger Agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Even if you plan to virtually attend the MEI Special Meeting, MEI requests that you sign and return the enclosed proxy card or voting instruction form or vote by Internet or phone to ensure that your shares will be represented at the MEI Special Meeting if you are unable to virtually attend. You may change or revoke your proxy at any time before it is voted at the MEI Special Meeting.

After careful consideration, the MEI board of directors (with Sujay R. Kango recusing himself from the vote) has approved the Merger Agreement and has determined that it is advisable to consummate the Merger. The MEI board of directors (with Sujay R. Kango recusing himself from the vote) has approved the MEI Nasdaq Proposal and the MEI Adjournment Proposal described in the accompanying joint proxy statement/prospectus and recommends that its stockholders vote “FOR” the proposals described in the accompanying joint proxy statement/prospectus.

 


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By Order of MEI’s Board of Directors,

 

/s/ Brian G. Drazba
Brian G. Drazba
Secretary and Chief Financial Officer
MEI Pharma, Inc.
June 6, 2023


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LOGO

 

1100 Massachusetts Avenue

Floor 4

Cambridge, MA 02138

 

Tel: (617) 453-1000

Fax: (617) 453-1001

www.infi.com

NOTICE OF SPECIAL MEETING OF INFINITY STOCKHOLDERS

TO BE HELD JULY 14, 2023

To the Stockholders of Infinity Pharmaceuticals, Inc.:

NOTICE IS HEREBY GIVEN that Infinity Pharmaceuticals, Inc. will hold a virtual special meeting of stockholders (the “Infinity Special Meeting”), on July 14, 2023, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The Infinity Special Meeting will be held entirely as a virtual meeting. You will be able to attend and participate in the Infinity Special Meeting online by visiting www.virtualshareholdermeeting.com/INFI2023SM, where you will be able to listen to the meeting live, submit questions and vote.

The Infinity Special Meeting will be held for the following purposes:

 

1.

To approve the adoption of the Agreement and Plan of Merger, dated as of February 22, 2023, as it may be amended from time to time, by and between MEI Pharma, Inc., a Delaware corporation (“MEI”), Infinity Pharmaceuticals Inc., a Delaware corporation (“Infinity”), and Meadow Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of MEI (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Infinity, with Infinity surviving as a wholly owned subsidiary of MEI, and the surviving company of the merger (the “Merger”), which proposal is referred to as the “Infinity Merger Proposal”;

 

2.

To approve, on a non-binding, advisory basis, the compensation that will or may be payable to Infinity’s named executive officers in connection with the Merger, which proposal is referred to as the “Infinity Compensation Proposal”; and

 

3.

To consider and vote on a proposal to approve the adjournment of the Infinity Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the Infinity Special Meeting or any adjournment or postponement thereof to approve the Infinity Merger Proposal, which proposal is referred to as the “Infinity Adjournment Proposal”.

 

Record

Date:

  Infinity’s board of directors has fixed May 22, 2023 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Infinity Special Meeting and any adjournment or postponement thereof (the “Infinity Record Date”). Only holders of record of shares of Infinity’s common stock (the “Infinity Common Stock”) on the Infinity Record Date are entitled to notice of, and to vote at, the Infinity Special Meeting. On the Infinity Record Date, there were 89,904,805 shares of Infinity Common Stock outstanding and entitled to vote.

Your vote is important. The affirmative vote of the holders of a majority of the outstanding shares of Infinity Common Stock entitled to vote thereon is required for approval of the Infinity Merger Proposal. Any abstention or failure to properly cast an affirmative vote for the Infinity Merger Proposal will have the same effect as a vote against the Infinity Merger Proposal. Assuming a quorum is present, the affirmative vote of a majority in voting power of the shares of Infinity Common Stock which are present virtually or by proxy and entitled to vote thereon is required for approval of the Infinity Compensation Proposal and the Infinity Adjournment Proposal. Approval of the Infinity Merger Proposal is a condition to the completion of the Merger. Therefore, the Merger cannot be completed without the approval of the Infinity Merger Proposal. The Infinity Merger Proposal is described in more detail in the section

 


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titled “Matters Being Submitted To A Vote Of Infinity Stockholders” in the accompanying joint proxy statement/prospectus, which you should read carefully in its entirety before you vote. A copy of the Merger Agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Even if you plan to virtually attend the Infinity Special Meeting, Infinity requests that you sign and return the enclosed proxy card or vote by Internet or phone to ensure that your shares will be represented at the Infinity Special Meeting if you are unable to virtually attend. You may change or revoke your proxy at any time before it is voted at the Infinity Special Meeting.

After careful consideration, the Infinity board of directors (with Sujay R. Kango recusing himself from the vote) has approved the Merger Agreement and has determined that it is advisable to consummate the Merger. The Infinity board of directors (with Sujay R. Kango recusing himself from the vote) has approved the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal described in the accompanying joint proxy statement/prospectus and recommends that its stockholders vote “FOR” the proposals described in the accompanying joint proxy statement/prospectus.

By Order of Infinity’s Board of Directors,

Seth A. Tasker

Senior Vice President, Chief Business Officer, and Secretary

Cambridge, Massachusetts

June 6, 2023

 


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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by MEI, constitutes a prospectus of MEI under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the issuance of shares of MEI Common Stock to Infinity stockholders pursuant to the Merger Agreement. This document also constitutes a joint proxy statement of MEI and Infinity under Section 14(a) of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). It also constitutes a notice of meeting with respect to the Infinity Special meeting, at which Infinity stockholders will be asked to consider and vote on the adoption of the Merger Agreement and certain related matters, and the MEI Special Meeting, at which MEI stockholders will be asked to consider and vote on the approval of the issuance of MEI Common Stock pursuant to the Merger Agreement.

Infinity has supplied all information contained in this joint proxy statement/prospectus relating to Infinity, and MEI has supplied all information contained in this joint proxy statement/prospectus relating to MEI.

You should rely only on the information contained in this joint proxy statement/prospectus. Infinity and MEI have not authorized anyone to provide you with information that is different from that contained in this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated June 6, 2023, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date. Neither the mailing of this joint proxy statement/prospectus to MEI stockholders or Infinity stockholders nor the issuance by MEI of shares of MEI Common Stock pursuant to the Merger Agreement will create any implication to the contrary.

 


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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS AND INDUSTRY AND MARKET DATA

     1  

QUESTIONS AND ANSWERS ABOUT THE MERGER

     3  

PROSPECTUS SUMMARY

     15  

Overview of the Companies

     15  

The Merger

     15  

Reasons for the Merger

     16  

Opinion of MEI’s Financial Advisor

     17  

Opinion of Infinity’s Financial Advisor

     17  

Interests of Certain Directors, Officers and Affiliates of MEI and Infinity

     18  

Management Following the Merger

     19  

The Merger Agreement

     20  

Voting by MEI’s and Infinity’s Directors and Executive Officers

     20  

Conditions to the Completion of the Merger

     20  

No Solicitation

     21  

Termination

     21  

Termination Fee

     22  

Material U.S. Federal Income Tax Consequences of the Merger

     22  

Anticipated Accounting Treatment

     22  

Appraisal Rights and Dissenters’ Rights

     23  

Comparison of Rights of Holders of Shares

     23  

Risk Factor Summary

     23  

RISK FACTORS

     26  

THE SPECIAL MEETING OF MEI STOCKHOLDERS

     108  

MATTERS BEING SUBMITTED TO A VOTE OF MEI STOCKHOLDERS

     113  

The MEI Nasdaq Proposal

     113  

The MEI Adjournment Proposal

     114  

THE SPECIAL MEETING OF INFINITY STOCKHOLDERS

     116  

MATTERS BEING SUBMITTED TO A VOTE OF INFINITY STOCKHOLDERS

     119  

The Infinity Merger Proposal

     119  

The Infinity Compensation Proposal

     120  

The Infinity Adjournment Proposal

     121  

THE MERGER

     122  

General Description of the Merger

     122  

Consideration to be Received by the Infinity Stockholders

     122  

Background of the Merger

     122  

MEI’s Reasons for the Merger; Recommendation of the MEI Board

     139  

Infinity’s Reasons for the Merger; Recommendation of the Infinity Board

     143  

Opinion of MEI Financial Advisor

     147  

Summary of Certain MEI Unaudited Prospective Financial Information

     155  

Opinion of Infinity Financial Advisor

     156  

Summary of Certain Infinity Unaudited Prospective Financial Information

     158  

Interests of MEI Directors and Executive Officers in the Merger

     167  

Interests of Infinity Directors and Executive Officers in the Merger

     167  

Delisting and Deregistration of Infinity Common Stock

     175  

Regulatory Approvals

     175  

Anticipated Accounting Treatment

     175  

Appraisal Rights and Dissenters’ Rights

     175  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

     177  

 

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THE MERGER AGREEMENT

     181  

General

     181  

Merger Consideration

     181  

Treatment of Infinity Stock Options

     183  

Treatment of Infinity RSUs

     183  

Directors and Officers of MEI Following the Merger

     184  

Conditions to the Completion of the Merger

     185  

Representations and Warranties

     187  

No Solicitation

     188  

Meetings of Stockholders

     191  

Covenants; Conduct of Business Pending the Merger

     192  

Regulatory Approvals and Related Matters

     194  

Indemnification; Directors’ and Officers’ Insurance

     194  

Other Agreements

     195  

Termination

     196  

Termination Fee

     196  

Specific Performance

     197  

Expenses

     198  

Amendment

     198  

Governing Law

     198  

MEI EXECUTIVE COMPENSATION

     199  

Executive Compensation

     199  

Employment Agreements with Named Executive Officers

     200  

Outstanding Equity Awards at 2022 Fiscal Year-End

     203  

INFINITY EXECUTIVE COMPENSATION

     206  

MEI DIRECTOR COMPENSATION

     212  

INFINITY DIRECTOR COMPENSATION

     214  

MEI’S BUSINESS

     216  

INFINITY’S BUSINESS

     234  

MEI MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     273  

INFINITY MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     287  

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     302  

MANAGEMENT FOLLOWING THE MERGER

     303  

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

     310  

Infinity Transactions

     310  

ANTICIPATED ACCOUNTING TREATMENT

     313  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     314  

MARKET PRICE AND DIVIDEND INFORMATION

     325  

MEI Common Stock

     325  

MEI Dividends

     325  

Infinity Common Stock

     325  

Infinity Dividends

     325  

DESCRIPTION OF MEI COMMON STOCK

     326  

Authorized Common Stock

     326  

Common Stock

     326  

Preferred Stock

     326  

Anti-Takeover Effects of Amended and Restated Certificate of Incorporation and Fifth Amended and Restated Bylaws

     326  

Classified Board of Directors

     326  

Advance Notice Requirements for Shareholder Proposals and Nominations for Election as Directors

     326  

 

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Special Meetings of Stockholders

     327  

COMPARISON OF RIGHTS OF HOLDERS OF MEI COMMON STOCK AND INFINITY COMMON STOCK

     328  

PRINCIPAL STOCKHOLDERS OF MEI

     335  

PRINCIPAL STOCKHOLDERS OF INFINITY

     337  

PRINCIPAL STOCKHOLDERS OF PROPOSED COMBINED COMPANY

     339  

LEGAL MATTERS

     341  

EXPERTS

     341  

WHERE YOU CAN FIND MORE INFORMATION

     342  

HOUSEHOLDING OF PROXY MATERIALS

     343  

COMMUNICATIONS FROM MEI STOCKHOLDERS

     343  

COMMUNICATIONS FROM INFINITY STOCKHOLDERS

     343  

INDEX TO FINANCIAL STATEMENTS

     F-1  

Annex A Agreement and Plan of Merger, dated February 22, 2023, by and among Infinity Pharmaceuticals, Inc., MEI Pharma, Inc., and Meadow Merger Sub, Inc.

     A-1  

Annex B Opinion of Torreya Partners

     B-1  

Annex C Opinion of Aquilo Partners

     C-1  

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS AND INDUSTRY AND MARKET DATA

This joint proxy statement/prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding future financial condition, business strategy and plans and objectives of management of either MEI and Infinity, or the combined company, as applicable for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “seek,” “should,” “will” or the negative of these terms or other similar expressions.

All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

 

   

the plans, strategies and objectives of such management for future operations, including the execution of integration and restructuring plans and the anticipated timing of filings;

 

   

plans to develop and commercialize products;

 

   

the plans, strategies and objectives of such management with respect to the approval and consummation of the Merger;

 

   

the expected benefits of and potential value created by the Merger for the stockholders of Infinity and MEI;

 

   

the satisfaction of certain conditions to the completion of the Merger and whether and when the Merger will be consummated;

 

   

MEI’s and Infinity’s ability to control and correctly estimate their operating expenses and their expenses associated with the Merger;

 

   

the attraction and retention of highly qualified personnel;

 

   

the ability to protect and enhance the combined organization’s products, product candidates and intellectual property;

 

   

expectations concerning Infinity’s relationships and actions with third parties;

 

   

future regulatory, judicial and legislative changes in the combined company’s industry.

You should not rely upon forward-looking statements as predictions of future events. Neither Infinity nor MEI can assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, statements that “we believe” and similar statements reflect the beliefs and opinions on the relevant subject of Infinity, MEI or the combined company, as applicable. These statements are based upon information available as of the date of this prospectus, and while Infinity, MEI or the combined company, as applicable, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

 

   

the risk that the conditions to the consummation of the Merger (the “Closing”) are not satisfied, including the failure to timely, or at all, obtain stockholder approval for the Merger or the MEI Share Issuance;

 

   

uncertainties as to the timing of the consummation of the Merger; risks related to MEI’s and Infinity’s ability to correctly estimate their operating expenses and their expenses associated with the Merger;

 

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the ability of Infinity, MEI or the combined company to protect its intellectual property rights;

 

   

competitive responses to the Merger;

 

   

unexpected costs, charges or expenses resulting from the Merger;

 

   

potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger;

 

   

legislative, regulatory, political and economic developments; and

 

   

the risks set forth in the section titled “Risk Factors” beginning on page 26 of this joint proxy statement/prospectus.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in reports filed with the U.S. Securities and Exchange Commission (the “SEC”) by MEI and Infinity. Please see the section titled “Where You Can Find More Information” beginning on page 341 of this joint proxy statement/prospectus. There can be no assurance that the Merger will be completed, or if it is completed, that it will be completed within the anticipated time period or that the expected benefits of the Merger will be realized.

If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of Infinity, MEI or the combined company could differ materially from the forward-looking statements. All forward-looking statements in this joint proxy statement/prospectus are current only as of the date on which the statements were made. Infinity and MEI do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events, except as otherwise required by the federal securities laws.

In addition, this joint proxy statement/prospectus includes statistical and other industry and market data that was obtained from independent industry publications and research, surveys and studies conducted by independent third parties as well as MEI’s and Infinity’s estimates. The market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. MEI’s and Infinity’s estimates include assumptions based on their respective industry knowledge, industry publications, third-party research and other surveys. While MEI and Infinity believe that their respective internal assumptions and estimates are reasonable, no independent source has verified such assumptions or estimates.

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following are answers to some questions that you, as a stockholder of MEI Pharma, Inc. (“MEI”) or a stockholder of Infinity Pharmaceuticals, Inc. (“Infinity”), may have regarding the proposed combination between MEI and Infinity and the proposals to be considered at the MEI Special Meeting and the Infinity Special Meeting. This section does not provide all the information that might be important to you with respect to the proposed combination between MEI and Infinity. MEI and Infinity urge you to carefully read the remainder of this joint proxy statement/prospectus, including the annexes.

Q: Why am I receiving this joint proxy statement/prospectus?

A: MEI, Infinity and Meadow Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of MEI, have entered into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”). The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Infinity, with Infinity surviving the Merger as a wholly-owned subsidiary of MEI. A copy of the Merger Agreement is included in this joint proxy statement/prospectus as Annex A.

The Merger cannot be completed unless, among other things, Infinity stockholders adopt the Merger Agreement. The approval of the Merger Agreement by MEI stockholders is not required for the Merger to be completed; however, the Merger cannot be completed unless MEI stockholders have approved the issuance of shares to effect the Merger. MEI stockholders are asked to approve the issuance of shares of MEI’s common stock, $0.00000002 par value per share (“MEI Common Stock”), to Infinity stockholders in exchange for their shares of Infinity’s common stock, par value $0.001 per share (the “Infinity Common Stock”).

MEI and Infinity are using this document as a proxy statement to solicit proxies from MEI’s stockholders and Infinity’s stockholders in connection with proposals relating to the Merger at the MEI Special Meeting and Infinity Special Meeting, respectively. MEI is using this document as a prospectus by which MEI will offer and issue MEI Common Stock in connection with the Merger.

This joint proxy statement/prospectus contains important information about the Merger and the proposals being voted on at the MEI Special Meeting and the Infinity Special Meeting. You should read it carefully and in its entirety. The enclosed materials allow MEI stockholders to have their shares voted by proxy without attending the MEI Special Meeting, which will be held virtually, and the Infinity stockholders to have their shares voted by proxy without attending the Infinity Special Meeting, which will be held virtually. Your vote is important. We encourage you to submit your proxy as soon as possible.

Q: What am I being asked to vote on?

A: At the MEI Special Meeting, MEI stockholders will be asked to consider and vote on the following proposals:

 

  1.

To consider and vote to approve, for purposes of Nasdaq Listing Rule 5635(a), the issuance of shares of MEI Common Stock to stockholders of Infinity pursuant to the terms of the Agreement and Plan of Merger, dated February 22, 2023, by and among MEI, Infinity, and Merger Sub as may be amended from time to time (the “MEI Nasdaq Proposal”); and

 

  2.

To consider and vote on a proposal to approve the adjournment of the MEI Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal (the “MEI Adjournment Proposal”).

 

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At the Infinity Special Meeting, Infinity stockholders will be asked to consider and vote on the following proposals:

 

  1.

To consider and vote upon a proposal to approve the adoption of the Agreement and Plan of Merger, dated as of February 22, 2023, by and between MEI, Infinity, and Merger Sub, pursuant to which Merger Sub will merge with and into Infinity, with Infinity surviving as a wholly owned subsidiary of MEI and the surviving company of the merger (the “Merger”), which proposal is referred to as the “Infinity Merger Proposal”;

 

  2.

To consider and vote upon a proposal to approve, on a non-binding, advisory basis, the compensation that will or may be payable to Infinity’s named executive officers in connection with the Merger, which proposal is referred to as the “Infinity Compensation Proposal”; and

 

  3.

To consider and vote on a proposal to approve the adjournment of the Infinity Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the Infinity Special Meeting or any adjournment or postponement thereof to approve the Infinity Merger Proposal, which proposal is referred to as the “Infinity Adjournment Proposal.”

Q: Why are MEI and Infinity proposing the Merger?

A: The boards of directors of MEI and Infinity (with the exception of Sujay R. Kango who recused himself from the vote) each believe that the Merger will provide substantial strategic and financial benefits to their respective companies and stockholders. To review the reasons for the Merger, see “The Merger—MEI’s Reasons for the Merger; Recommendation of the MEI Board” and “The Merger—Infinity’s Reasons for the Merger; Recommendation of the Infinity Board for more information.

Q: What will Infinity stockholders receive in the Merger?

A: At the effective time of the Merger (the “Effective Time”), each share of Infinity Common Stock outstanding at that time (other than certain shares of Infinity Common Stock that may be cancelled pursuant to the terms and conditions of the Merger Agreement) will be converted into the right to receive a number of shares of MEI Common Stock equal to the Exchange Ratio (as defined below), subject to adjustment as described in this joint proxy statement/prospectus.

Q: What is the Exchange Ratio?

A: Each share of Infinity Common Stock issued and outstanding immediately prior to the Merger (other than shares of Infinity Common Stock held in treasury, if any) shall be automatically converted into the right to receive 0.052245 shares of MEI Common Stock (the “Exchange Ratio”). The Exchange Ratio is subject to customary equitable adjustment in the event of any recapitalization, stock split, reverse stock split or similar change.

Q: Are Infinity stockholders guaranteed to receive exactly 0.052245 shares of MEI Common Stock for each share of Infinity Common Stock exchanged in the Merger?

A: Yes, subject to equitable adjustments to the exchange ratio in the event of a stock split, recapitalization, or similar event involving one of the party’s stock. See “Risk Factors” and “The Merger Agreement—Merger Consideration.”

Q: What equity stake will Infinity stockholders hold in MEI immediately following the Merger?

A: Upon the Closing of the Merger, based upon the number of shares of MEI Common Stock expected to be issued in the Merger and an unadjusted Exchange Ratio, pre-Merger MEI stockholders will own approximately 58% of the outstanding equity of the combined company and pre-Merger Infinity stockholders will own approximately 42% of the outstanding equity of the combined company.

 

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Q: When and where is the MEI Special Meeting?

A: The MEI Special Meeting will be held on July 14, 2023, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The MEI Special Meeting will be held entirely online. You will be able to attend and participate in the MEI Special Meeting online by visiting www.meetnow.global/M44PQGZ, where you will be able to listen to the meeting live, submit questions and vote.

Q: When and where is the Infinity Special Meeting?

A: The Infinity Special Meeting will be held on July 14, 2023, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The Infinity Special Meeting will be held entirely online. You will be able to attend and participate in the Infinity Special Meeting online by visiting www.virtualshareholdermeeting.com/INFI2023SM, where you will be able to listen to the meeting live, submit questions and vote.

Q: What do I need to do now?

A: After you have carefully read this joint proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at the MEI Special Meeting or the Infinity Special Meeting, respectively, even if you plan on attending. If you hold your shares in your name as a stockholder of record, you must complete, sign and mail your proxy card in the enclosed postage-paid return envelope as soon as possible or vote by Internet or phone, following the instructions on your proxy card. If you hold your shares in “street name” through a bank, broker or other nominee, you must direct that organization how to vote in accordance with the instructions you have received from it.

Q: What constitutes a quorum for the MEI Special Meeting?

A: In order for business to be conducted at the MEI Special Meeting, a quorum must be present. A quorum of stockholders is necessary to hold a valid meeting. The presence, in person or by proxy, of the holders of one-third of the shares of the common stock issued and outstanding and entitled to vote at the MEI Special Meeting constitutes a quorum. In the absence of a quorum at any meeting or any adjournment thereof, the holders of record of a majority of the shares present in person or by proxy and entitled to vote at such meeting may adjourn such meeting from time to time. A quorum will be present at the MEI Special Meeting if the holders of one-third of the shares of the MEI Common Stock issued and outstanding and entitled to vote as of the close of business on May 24, 2023, which is the MEI Record Date of the MEI Special Meeting, are present virtually at the MEI Special Meeting or represented by proxy. As of the close of business on the MEI Record Date, there were 6,662,857 shares of MEI Common Stock issued and outstanding and entitled to vote. This means that at least 2,220,953 shares must be represented by stockholders present virtually at the MEI Special Meeting or represented by proxy to have a quorum. Your shares will be counted towards the quorum if you submit a valid proxy or attend the MEI Special Meeting. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

Q: What constitutes a quorum for the Infinity Special Meeting?

A: A quorum will be present at the Infinity Special Meeting if the holders of a majority of the Infinity Common Stock issued and outstanding and entitled to vote at the Infinity Special Meeting on May 22, 2023 (the “Infinity Record Date”), is present virtually or represented by proxy. On the Infinity Record Date, there were 89,904,805 shares of Infinity Common Stock issued and outstanding and entitled to vote. This means that at least 44,952,403 shares must be represented virtually or by proxy at the Infinity Special Meeting to have a quorum. Your shares will be counted towards the quorum if you submit a valid proxy or attend the Infinity Special Meeting. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

 

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Q: What is the vote required to approve each proposal?

A: Approval of the MEI Nasdaq Proposal or the MEI Adjournment Proposal requires the majority of the votes cast by MEI stockholders entitled to vote on the proposal. Assuming a quorum is present, if you mark ABSTAIN on your proxy card or when voting by Internet or phone, fail to submit a proxy, or fail to vote at the MEI Special Meeting with respect to the MEI Nasdaq Proposal or MEI Adjournment Proposal, it will have NO EFFECT on the proposal.

Approval of the Infinity Merger Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Infinity Common Stock entitled to vote thereon. Assuming a quorum is present, if you mark ABSTAIN on your proxy card or when voting by Internet or phone, or you attend the Infinity Special Meeting and either fail to submit a proxy or fail to vote at the Infinity Special Meeting with respect to the Infinity Merger Proposal, it will have the same effect as a vote AGAINST the proposal. Approval of each of the Infinity Compensation Proposal and the Infinity Adjournment Proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Infinity Common Stock which are present virtually or by proxy and entitled to vote on the proposal. Assuming a quorum is present, if you mark ABSTAIN on your proxy card or when voting by Internet or phone, fail to submit a proxy, or fail to vote at the Infinity Special Meeting with respect to the Infinity Compensation Proposal or Infinity Adjournment Proposal, it will have the same effect as a vote AGAINST the proposal.

Q: How does the MEI board of directors recommend that I vote at the MEI Special Meeting?

A: The MEI board of directors (with Sujay R. Kango recusing) recommends that MEI’s stockholders vote “FOR” the MEI Nasdaq Proposal and, “FOR” the MEI Adjournment Proposal.

Q: How does the Infinity board of directors recommend that I vote at the Infinity Special Meeting?

A: The Infinity board of directors (with Sujay R. Kango recusing) recommends that Infinity’s stockholders vote “FOR” each of the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal.

Q: As an Infinity stockholder, why is my vote important?

A: The Merger will not be completed unless Infinity stockholders vote to approve the Infinity Merger Proposal. Your vote is important no matter how many shares you own. Please take the time to vote. Take a moment to read the instructions below. Choose the way to vote that is easiest and most convenient for you and cast your vote as soon as possible. Any abstention or failure to properly cast an affirmative vote if your shares of Infinity Common Stock for the Infinity Merger Proposal will have the same effect as a vote against the Infinity Merger Proposal.

Q: Who can vote at the MEI Special Meeting?

A: Holders of outstanding shares of MEI Common Stock as of the close of business on the MEI Record Date are eligible to vote at the MEI Special Meeting.

Q: Who can vote at the Infinity Special Meeting?

A: Holders of outstanding shares of Infinity Common Stock on the Infinity Record Date are eligible to vote at the Infinity Special Meeting.

Q: Am I a MEI stockholder of record or a beneficial owner? Why does this matter?

A: If on the MEI Record Date your shares were registered directly in your name with MEI’s transfer agent, Computershare Trust Company, N.A., then you are a stockholder of record with respect to those shares.

 

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If on the MEI Record Date your shares were held in an account at a broker, bank or other similar organization as your nominee, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the MEI Special Meeting.

The form in which you own your shares affects how you vote your shares and how you can change your vote.

Q: Am I an Infinity stockholder of record or a beneficial owner? Why does this matter?

A: If, on the Infinity Record Date, your shares were registered directly in your name with Infinity’s transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record with respect to those shares.

If, on the Infinity Record Date, your shares were held in an account at a broker, bank or other similar organization as your nominee, referred to as being held in “street name,” then you are the beneficial owner of such shares and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Infinity Special Meeting. The form in which you own your shares affects how you vote your shares and how you can change your vote.

Q: How do I attend the MEI Special Meeting or Infinity Special Meeting and how can I vote my shares?

A: MEI and Infinity are conducting virtual special meetings so their stockholders can participate from any geographic location with internet connectivity. MEI and Infinity have designed the format of the virtual online special meetings to provide stockholders the same ability to participate that they would have at an in-person meeting.

To attend the MEI Special Meeting, you must go to the meeting website at www.meetnow.global/M44PQGZ and enter the 16-digit control number found on your proxy card or voting instruction form sent to you by your bank, broker or other nominee. Once admitted, during the MEI Special Meeting, you may vote, submit questions and view the list of stockholders entitled to vote at the MEI Special Meeting by following the instructions available on the meeting website.

Access to the meeting platform will begin at 9:15 a.m. Eastern Time on July 14, 2023. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting website login page at www.meetnow.global/M44PQGZ. Technical support will be available beginning at 9:15 a.m. Eastern Time on July 14, 2023 and will remain available until the meeting has ended.

To attend the Infinity Special Meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/INFI2023SM and enter the 16-digit control number found on your proxy card or voting instruction form sent to you by your bank, broker or other nominee. Once admitted, during the Infinity Special Meeting, you may vote, submit questions and view the list of stockholders entitled to vote at the Infinity Special Meeting by following the instructions available on the meeting website.

Access to the meeting platform will begin at 8:15 a.m. Eastern Time on July 14, 2023. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting website login page at www.virtualshareholdermeeting.com/INFI2023SM. Technical support will be available beginning at 8:15 a.m. Eastern Time on July 14, 2023 and will remain available until the meeting has ended.

Rules for the conduct of the MEI Special Meeting and Infinity Special Meeting will be available on the applicable meeting website. To obtain a copy of the rules of conduct for the MEI Special Meeting in advance of the MEI Special Meeting, please submit an email to legalproxy@computershare.com. To obtain a copy of the rules of conduct for the Infinity Special Meeting in advance of the Infinity Special Meeting, please submit an email to irpr_info@infi.com.

 

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Regardless of whether you plan to participate in the MEI Special Meeting or Infinity Special Meeting, it is important that your shares be represented and voted at the MEI Special Meeting or Infinity Special Meeting, respectively. Accordingly, MEI and Infinity encourage you to vote in advance of the MEI Special Meeting and Infinity Special Meeting.

Q: How can I vote my shares of MEI Common Stock?

A: For each proposal, you may vote “FOR or AGAINST each proposal, or ABSTAIN from voting on such proposal.

If you are a stockholder of record, you may vote by proxy via telephone, over the Internet or by returning a proxy card, or you may vote online at the MEI Special Meeting. Regardless of whether you plan to participate in the MEI Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still participate in the MEI Special Meeting and vote online during the MEI Special Meeting if you have already voted by proxy.

 

  1.

You may vote over the Internet. If you have Internet access, you may vote your shares at www.envisionreports.com/MEIP by following the instructions on that site or on the “Vote by Internet” instructions on the enclosed proxy card.

 

  2.

You may vote by telephone. You may vote your shares by calling 1-800-652-8683 and following the instructions provided or following the “Vote by Phone” instructions on the enclosed proxy card.

 

  3.

You may vote by mail. You may vote by completing and signing the proxy card enclosed with this joint proxy statement/prospectus and promptly mailing it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it from the United States. The shares you own will be voted according to your completed proxy card. If you sign and return the proxy card, but do not give any instructions on a particular matter described in this joint proxy statement/prospectus, the MEI shares you own will be voted in accordance with the recommendations of the MEI board of directors.

 

  4.

You may vote online during the MEI Special Meeting. To attend the meeting virtually, you must go to the meeting website at www.meetnow.global/M44PQGZ. Once admitted, during the MEI Special Meeting, you may vote by following the instructions available on the meeting website.

The deadline for receipt of a completed proxy card returned by mail at the address stated on the proxy card for the MEI Special Meeting is 10:00 a.m. Eastern Time on July 14, 2023. The deadline for voting via the Internet or by telephone is 11:59 p.m. Eastern Time on July 13, 2023.

If you are a beneficial owner, you may vote your shares by directing the broker, bank or other similar organization that holds your shares as your nominee on how to vote the shares in your account. Please refer to the voting instructions provided by your broker, bank or other nominee. Many organizations allow beneficial owners to give voting instructions via telephone or the Internet, as well as in writing. If you are a beneficial owner and would like to vote your shares at the MEI Special Meeting, please contact your broker, bank or other nominee for instructions and documents that may be required in order to do so.

Q: How can I vote my shares of Infinity Common Stock?

A: If you are the “record holder” of your shares, meaning that you own your shares in your own name and not through a bank or brokerage firm, you may vote in one of four ways:

 

  1.

You may vote over the Internet. If you have Internet access, you may vote your shares at www.proxyvote.com by following the instructions on that site or on the “Vote by Internet” instructions on the enclosed proxy card.

 

  2.

You may vote by telephone. You may vote your shares by calling 1-800-690-6903 and following the instructions provided or following the “Vote by Phone” instructions on the enclosed proxy card.

 

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  3.

You may vote by mail. You may vote by completing and signing the proxy card enclosed with this joint proxy statement/prospectus and promptly mailing it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it from the United States. The shares you own will be voted according to your completed proxy card. If you sign and return the proxy card, but do not give any instructions on a particular matter described in this joint proxy statement/prospectus, the Infinity shares you own will be voted in accordance with the recommendations of the Infinity board of directors.

 

  4.

You may vote online during the Infinity Special Meeting. To attend the meeting virtually, you must go to the meeting website at www.virtualshareholdermeeting.com/INFI2023SM. Once admitted, during the Infinity Special Meeting, you may vote by following the instructions available on the meeting website.

The deadline for receipt of a completed proxy card returned by mail at the address stated on the proxy card for the Infinity Special Meeting is 11:59 p.m. Eastern Time on July 13, 2023. The deadline for voting via the Internet or by telephone is 11:59 p.m. Eastern Time on July 13, 2023.

If you are a beneficial owner, you may vote your shares by directing the broker, bank or other similar organization that holds your shares as your nominee on how to vote the shares in your account. Please refer to the voting instructions provided by your broker, bank or other nominee. Many organizations allow beneficial owners to give voting instructions via telephone or the Internet, as well as in writing. If you are a beneficial owner and would like to vote your shares at the Infinity Special Meeting, please contact your broker, bank or other nominee for instructions and documents that may be required in order to do so.

Q: What if I return an MEI proxy card but do not make specific choices?

A: You will only receive a proxy card if you are the record holder of your shares of MEI Common Stock. If you return a signed proxy card without marking any voting selections, your shares will be voted “FOR” the MEI Nasdaq Proposal and “FOR” the MEI Adjournment Proposal, in accordance with the recommendation of the MEI board of directors (with Sujay R. Kango recusing). If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

Q: What if I return an Infinity proxy card but do not make specific choices?

A: You will only receive a proxy card if you are the record holder of your shares of Infinity Common Stock. If you return a signed proxy card without marking any voting selections, your shares will be voted “FOR” each of the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal in accordance with the recommendation of the Infinity board of directors (with Sujay R. Kango recusing). If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

Q: If my shares of MEI Common Stock or Infinity Common Stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote my shares for me?

A: No. If the shares you own are held in the name of a bank, broker or other nominee, also known as “street name,” that organization, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares held in “street name,” you will need to follow the directions your bank, broker or other nominee provides you. Many banks, brokers or nominees also offer the option of voting over the Internet or by telephone, instructions for which would be provided by your bank, broker or nominee on your voting instruction form.

Under applicable stock exchange rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with

 

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respect to matters that are considered to be “discretionary.” Your bank, broker or other nominee will not be allowed to vote your shares with respect to certain “non-discretionary” items. A “broker non-vote” occurs when shares held by a bank, broker or other nominee in “street name” for a beneficial owner are voted on at least one proposal but not voted with respect to a particular proposal because that organization (i) has not received voting instructions from the beneficial owner for that proposal and (ii) lacks discretionary voting power to vote those shares for that proposal.

The Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal are each expected to be treated as non-discretionary items. Accordingly, Infinity does not expect there to be broker non-votes at the Infinity Special Meeting.

The MEI Nasdaq Proposal and the MEI Adjournment Proposal are each expected to be treated as non-discretionary items. Therefore your bank, broker or other nominee cannot vote your shares of MEI Common Stock without your specific voting instructions. Because the only proposals for consideration at the MEI Special Meeting are non-routine proposals, it is not expected that there will be any broker non-votes at the MEI Special Meeting. However, if there are any broker non-votes, assuming a quorum is present they will have “NO EFFECT” on the outcome of the MEI Nasdaq Proposal and the MEI Adjournment Proposal.

If you are a beneficial owner and would like to vote your shares at the MEI Special Meeting or Infinity Special Meeting, please contact your broker, bank or other nominee for instructions and documents that may be required in order to do so.

Q: Can I change my vote?

A: Yes. If you are a record holder of MEI Common Stock, you can revoke your proxy and change your vote at any time before the final vote at the meeting.

 

   

You may return by mail another properly completed proxy card with a later date, which must be received at the address stated on the proxy card no later than 10:00 a.m., Eastern Time on July 14, 2023.

 

   

You may submit another properly completed proxy with a later date via the Internet or by telephone before the closing of those voting facilities at 11:59 p.m., Eastern Time on July 13, 2023.

 

   

You may participate in the virtual online MEI Special Meeting and vote at the meeting. Simply participating in the virtual online meeting will not, by itself, revoke your proxy.

 

   

MEI stockholders may send a written notice that they are revoking their proxy to MEI’s Corporate Secretary at MEI Pharma, Inc., 11455 El Camino Real, Suite 250, San Diego, California 92130.

A revocation or later-dated proxy received by MEI after the vote will not affect the vote.

If you are a record holder of Infinity Common Stock, you can change your vote and revoke your proxy at any time before the polls close at the Infinity Special Meeting. To do so you must do one of the following:

 

  1.

Sign another proxy card with a later date;

 

  2.

Submit another properly completed proxy with a later date via the Internet or by telephone;

 

  3.

Give written notice before the Infinity Special Meeting that you want to revoke your proxy to Infinity’s corporate secretary at 1100 Massachusetts Avenue, Floor 4, Cambridge, MA 02138; or

 

  4.

Attend and vote at the virtual Infinity Special Meeting.

Your attendance at the Infinity Special Meeting alone will not change your vote or revoke your proxy.

Finally, if you are a beneficial holder (and hold your shares in “street name” through a bank, broker or other nominee), you should contact that organization to revoke your proxy or change your vote in accordance with its instructions.

 

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Q: How do I vote my Infinity 401(k) Plan shares?

A: If you participate in the Infinity Pharmaceuticals Inc. Stock Fund through the Infinity Pharmaceuticals Inc. 401(k) Plan and Trust (the “Infinity 401(k) Plan”), your proxy will also serve as a voting instruction for Principal Trust Company (“Principal”), which serves as trustee of the Infinity 401(k) Plan, with respect to shares of Infinity Common Stock held in your Infinity 401(k) Plan account (the “Infinity 401(k) Plan Shares”), as of the Infinity Record Date. You should sign the proxy card and return it in the enclosed envelope to Broadridge Financial Solutions, Inc., or you may submit your proxy over the Internet or by telephone by following the instructions on the enclosed proxy card. Broadridge will notify Principal of the manner in which you have directed your Infinity 401(k) Plan Shares to be voted. Principal will vote your Infinity 401(k) Plan Shares as of the Infinity Record Date in the manner that you direct. If Broadridge does not receive your voting instructions from you by 11:59 p.m. Eastern Time on July 11, 2023, Principal will vote your Infinity 401(k) Plan Shares in the same proportion as those Infinity 401(k) Plan Shares for which Principal has received proper direction for such matter.

Q: What happens if I fail to submit a proxy or I abstain from voting?

A: If you fail to submit a proxy or fail to instruct your bank, broker or other nominee to vote, assuming a quorum is present at the MEI Special Meeting, it will have no effect on the outcome of the MEI Nasdaq Proposal or the MEI Adjournment Proposal. An abstention occurs when an MEI stockholder returns a proxy with an “ABSTAIN” instruction or virtually attends the MEI Special Meeting and abstains from voting. Assuming a quorum is present, abstentions also will have “NO EFFECT” on such proposals.

If you fail to submit a proxy or fail to instruct your bank, broker or other nominee to vote, assuming a quorum is present at the Infinity Special Meeting (i) it will have no effect on the outcome of the Infinity Adjournment Proposal and Infinity Compensation Proposal, and (ii) it will have the effect of a vote “AGAINST” the Infinity Merger Proposal.

Q: Will Infinity equity awards be affected by the Merger?

A: At the Effective Time, each outstanding option to purchase shares of Infinity Common Stock (each, an “Infinity Stock Option”) will become fully vested in accordance with the terms of the underlying stock option agreement. Each Infinity Stock Option will be assumed at the Effective Time by MEI and converted into a stock option to purchase shares of MEI Common Stock. The number of shares of MEI Common Stock underlying each such assumed Infinity Stock Option will be equal to the product of (i) the number of shares of Infinity Common Stock underlying the applicable Infinity Stock Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, with the resulting number of shares of MEI Common Stock rounded down to the nearest whole share, and the exercise price per share of each such assumed Infinity Stock Option will be equal to (a) the per share exercise price applicable to such Infinity Stock Option immediately prior to the Effective Time divided by (b) the Exchange Ratio, with the resulting exercise price per share rounded up to the nearest whole cent. Except as noted above, each assumed and converted Infinity Stock Option will continue to be governed by substantially the same terms and conditions (after giving effect to the full acceleration of vesting of such Infinity Stock Option in connection with the Merger) as were applicable to such Infinity Stock Option immediately prior to the Effective Time.

Before the Effective Time, each outstanding Infinity restricted stock unit (each, an “Infinity RSU”) will become fully vested and the shares of Infinity Common Stock subject to such Infinity RSU will be distributed in accordance with the terms of the applicable restricted stock unit agreement. The shares of Infinity Common Stock issued upon the vesting of Infinity RSUs will be treated as shares of Infinity Common Stock issued and outstanding immediately prior to the Effective Time in accordance with the terms and conditions of the Merger Agreement. No Infinity RSUs will be outstanding from and after the Effective Time.

 

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Q: What will happen to the Infinity 2013 Employee Stock Purchase Plan, as amended?

A: Prior to the Effective Time, the Infinity board of directors will take action to terminate the purchase periods and offering periods then in effect under the terms of the Infinity 2013 Employee Stock Purchase Plan, as amended (the “Infinity ESPP”), and to exercise all outstanding options under the Infinity ESPP to the extent of accumulated payroll deductions as of a date specified by the Infinity board of directors. No options under the Infinity ESPP will be outstanding from and after the Effective Time.

Q: Who will solicit and pay the cost of soliciting proxies?

A: MEI has engaged Alliance Advisors, LLC to assist in the solicitation of proxies for the MEI Special Meeting. MEI estimates that it will pay Alliance Advisors, LLC a fee of approximately $35,000, plus reimbursement of reasonable expenses. MEI has agreed to indemnify Alliance Advisors, LLC against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Infinity has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the Infinity Special Meeting and to provide related advice and informational support, for a services fee of $35,000 plus the reimbursement of customary disbursements. Infinity has agreed to indemnify Morrow Sodali LLC against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

MEI and Infinity also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of MEI common stock and Infinity common stock, respectively. MEI’s directors, officers and employees and Infinity’s directors, officers and employees also may solicit proxies, by telephone, by mail, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

Q: What are the material U.S. federal income tax consequences of the Merger to Infinity stockholders?

A: The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (as amended, the “Code”). The completion of the Merger is, however, not conditioned on the Merger qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or upon the receipt of an opinion of counsel to that effect. No assurance can be given that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Neither Infinity nor MEI has sought or intends to seek a ruling from the Internal Revenue Service (the “IRS”) or an opinion of counsel as to the U.S. federal income tax consequences of the Merger. If the IRS were to successfully challenge the qualification of the Merger as a “reorganization,” the tax consequences would differ materially from those described in this joint proxy statement/prospectus as discussed below under “Material U.S. Federal Income Tax Consequences of the MergerTax Consequences if the Merger Fails to Qualify as a Reorganization.”

Assuming the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, subject to the limitations and qualifications described below under “Material U.S. Federal Income Tax Consequences of the Merger,” a U.S. Holder (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the Merger”) will generally (i) not recognize any gain or loss upon the exchange of Infinity Common Stock for MEI Common Stock in the Merger (other than with respect to cash received in lieu of a fractional share of Infinity Common Stock), (ii) have a tax basis in the MEI Common Stock received in the Merger (including any fractional share of Infinity Common Stock for which cash is received) equal to the tax basis of the Infinity Common Stock surrendered in exchange therefor, and (iii) have a holding period for the MEI Common Stock received in the Merger (including any fractional share of Infinity Common Stock for which cash is received) that includes its holding period for its Infinity Common Stock surrendered in exchange therefor.

For further information, see “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.

 

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Q: If I am not in favor of the Merger, what are my rights?

A: Neither MEI stockholders nor Infinity stockholders are entitled to appraisal rights under the Delaware General Corporation Law (the “DGCL”). If they are not in favor of the Merger, MEI stockholders may vote against the MEI Nasdaq Proposal and Infinity stockholders may vote against the Infinity Merger Proposal. For more information, see the section entitled “No Appraisal Rights” beginning on page 175 of this joint proxy statement/prospectus. Information about how MEI stockholders may vote on the proposals being considered in connection with the Merger can be found under the section entitled “The Special Meeting of the MEI Stockholders” beginning on page 108 of this joint proxy statement/prospectus. Information about how Infinity stockholders may vote on the proposals being considered in connection with the Merger can be found under the section entitled “The Special Meeting of the Infinity Stockholders” beginning on page 116 of this joint proxy statement/prospectus.

Q: Should I send in my Infinity stock certificates now?

A: No. Please do not send in your Infinity stock certificates with your proxy. After the completion of the Merger, an exchange agent mutually acceptable to MEI and Infinity will send you instructions for exchanging Infinity stock certificates for the merger consideration.

Q: Whom may I contact if I cannot locate my Infinity stock certificate(s)?

A: If you are unable to locate your original Infinity stock certificate(s), you should contact Infinity’s transfer agent, American Stock Transfer & Trust Company, LLC, at 800-937-5449.

Q: What should I do if I hold my shares of Infinity Common Stock in book-entry form directly with Infinity’s transfer agent, as opposed to a physical stock certificate?

A: You are not required to take any special additional actions if your shares of Infinity Common Stock are not represented by a certificate and are instead held in book-entry form with Infinity’s transfer agent. After the completion of the Merger, an exchange agent mutually acceptable to Infinity and MEI will contact you to provide you with details regarding the merger consideration, including shares of MEI Common Stock in book-entry form and any cash to be paid instead of fractional shares in the Merger.

Q: What should I do if I receive more than one set of voting materials?

A: MEI stockholders or Infinity stockholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards. For example, if you hold shares of MEI Common Stock or Infinity Common Stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of MEI Common Stock or Infinity Common Stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction form that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every share of MEI Common Stock or Infinity Common Stock, as appropriate, that you own.

Q: When do you expect to complete the Merger?

A: MEI and Infinity expect to complete the Merger in mid-2023, subject to any potential regulatory review or approval. However, neither MEI nor Infinity can assure you of when or if the Merger will be completed. Infinity must obtain the approval of Infinity’s stockholders for the Infinity Merger Proposal and MEI must obtain the approval of MEI’s stockholders for the MEI Nasdaq Proposal, and both parties must satisfy certain closing conditions. If the Merger is not satisfied prior to the outside date of August 31, 2023, either party may elect to

terminate the Merger Agreement, subject to certain caveats. See “The Merger Agreement—Conditions to the Completion of the Merger” for more information regarding conditions to the completion of the Merger.

 

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Q: What happens if the Merger is not completed?

A: If the Merger is not completed, Infinity stockholders will not receive any consideration for their shares of Infinity Common Stock in connection with the Merger. Instead, MEI and Infinity will remain independent, public companies and, assuming that MEI and Infinity are able to comply with the required listing standards, MEI Common Stock will continue to be traded on The Nasdaq Capital Market and Infinity Common Stock will continue to be traded on The Nasdaq Global Select Market. In addition, if the Merger Agreement is terminated in certain circumstances, MEI and Infinity may be required to pay a termination fee. See “The Merger Agreement—Termination” for a complete discussion of the circumstances under which a termination fee will be required to be paid.

Q: Where can I find the voting results of the MEI Special Meeting and the Infinity Special Meeting?

A: The preliminary voting results will be announced at the MEI Special Meeting and Infinity Special Meeting, respectively. In addition, within four business days following the MEI Special Meeting and Infinity Special Meeting, MEI and Infinity will each disclose the preliminary or, if available, final voting results of the MEI Special Meeting and Infinity Special Meeting on a Current Report on Form 8-K filed with the SEC. If preliminary voting results are disclosed, MEI and Infinity will each file an amended Current Report on Form 8-K with the SEC to disclose final voting results within four business days following certification of the final voting results.

Q: Is the completion of the Merger subject to a financing condition?

A: No. The completion of the Merger is not subject to any financing condition.

Q: How will I know when the other conditions to completion of the Merger have been satisfied?

A: As of the date of this joint proxy statement/prospectus, the parties have not satisfied the closing conditions to the Merger. If the closing conditions are satisfied, MEI and Infinity will each announce the closing of the Merger via the filing of a Current Report on Form 8-K with the SEC. There is also a possibility that the closing conditions to the Merger will not be satisfied prior to the outside date of August 31, 2023, after which date either party may elect to terminate the Merger Agreement, subject to certain caveats. As a result, it is possible that factors outside the control of both companies could result in the Merger being completed at a different time or not at all.

Infinity stockholders will not know the actual Exchange Ratio or the value of the MEI Common Stock to be received as merger consideration until after the date of the MEI Special Meeting and the Infinity Special Meeting. See “Risk Factors.”

Q: Are there any risks that I should consider in deciding whether to vote for the adoption of the Merger Agreement?

A: Yes. You should read and carefully consider the risk factors set forth in the “Risk Factors” section.

Q: Who can answer any questions I may have about the Merger or the transactions contemplated by the Merger Agreement?

A: If you have any questions about the Merger or the transactions contemplated by the Merger Agreement, or if you need additional copies of this joint proxy statement/prospectus, you should contact:

 

For MEI stockholders:

Alliance Advisors, LLC

200 Broadacres Drive, 3rd Floor

Bloomfield, NJ 07003

+1 (888) 511-2635

Email: MEIP@allianceadvisors.com

 

For Infinity stockholders:

Morrow Sodali, LLC

509 Madison Avenue, Suite 1206

New York, NY 10022

Call (800) 662-5200 (Toll-free in North America) or

+ (212) 658-9400

Email: INFI@info.morrowsodali.com

 

 

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PROSPECTUS SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Merger and the proposals being considered at the MEI Special Meeting and the Infinity Special Meeting, you should read this entire proxy statement/prospectus carefully, including the Merger Agreement and the other annexes to which you are referred in this joint proxy statement/prospectus. For more information, please see the section titled “Where You Can Find More Information” beginning on page 341 of this joint proxy statement/prospectus.

Overview of the Companies

Infinity Pharmaceuticals, Inc.

1100 Massachusetts Avenue, Floor 4

Cambridge, Massachusetts 02138

Telephone: (617) 453-1000

Infinity Pharmaceuticals, Inc. is a clinical-stage innovative biopharmaceutical company dedicated to developing novel medicines for people with cancer. Infinity combines proven scientific expertise with a passion for developing novel small molecule drugs that target disease pathways for potential applications in oncology. Infinity is focused on advancing eganelisib, also known as IPI-549, an orally administered, clinical-stage, immuno-oncology product candidate that reprograms macrophages through selective inhibition of the enzyme phosphoinositide-3-kinase-gamma (“PI3K-gamma”). Infinity’s common stock is listed on the Nasdaq Global Select Market under the symbol “INFI.”

MEI Pharma, Inc.

11455 El Camino Real, Suite 250

San Diego, California 92130

Telephone: (858) 369-7100

MEI Pharma, Inc. is a clinical stage pharmaceutical company focused on developing potential new therapies for cancer. MEI’s portfolio of drug candidates includes clinical-stage candidates with differentiated or novel mechanisms of action intended to address unmet medical needs and deliver improved benefit to patients, either as standalone treatments or in combination with other therapeutic options. MEI’s common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.”

Meadow Merger Sub, Inc.

11455 El Camino Real, Suite 250

San Diego, California 92130

Telephone: (858) 369-7100

Meadow Merger Sub, Inc. is a direct, wholly owned subsidiary of MEI. Merger Sub was incorporated in the State of Delaware on December 29, 2022, solely for the purpose of carrying out the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

The Merger (see page 122)

On February 22, 2023, MEI, Infinity and Merger Sub entered into the Merger Agreement. The Merger Agreement provides, among other things, that on the terms and subject to the conditions set forth therein: (i) Merger Sub will merge with and into Infinity, with Infinity being the surviving entity as a wholly-owned subsidiary of MEI (the “Merger” and, collectively with the other transactions contemplated by the Merger Agreement, the “Contemplated Transactions”), (ii) each share of Infinity Common Stock issued and outstanding

 

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immediately prior to the Merger (other than shares of Infinity Common Stock held in treasury, if any) shall be automatically converted into the right to receive 0.052245 shares (the “Exchange Ratio”) of MEI Common Stock, subject to customary equitable adjustment in the event of any recapitalization, stock split, reverse stock split or similar change, (iii) each outstanding Infinity Stock Option will become fully vested in accordance with the terms of the underlying stock option agreement and will be assumed by MEI at the Effective Time and converted into a stock option to purchase shares of MEI Common Stock, and (iv) each Infinity RSU will become fully vested and the shares of Infinity Common Stock subject to such Infinity RSUs will be distributed before the Effective Time in accordance with the terms of the applicable restricted stock unit agreement, and any shares of Infinity Common Stock issued upon the vesting of Infinity RSUs will be treated in accordance with subpart (ii) hereof. Upon completion of the Merger, MEI’s stockholders will own approximately 58% of the combined company’s outstanding common stock and Infinity stockholders will own approximately 42%, subject to the terms of the Merger Agreement. The Merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code.

For a more complete description of the Merger and the Exchange Ratio, please see the section titled “The Merger Agreement” in this joint proxy statement/prospectus.

The Merger will be completed as promptly as practicable, but in no event later than three business days following the day on which the last to be satisfied or waived of each of the conditions to consummation of the Merger set forth in the Merger Agreement (other than those conditions that by their nature are to be satisfied at the consummation of the Merger (the “Closing”), but subject to the satisfaction or waiver of those conditions) are satisfied or waived, including the adoption of the Merger Agreement by the Infinity stockholders and the approval by the MEI stockholders of the issuance of MEI Common Stock in the Merger. The Merger is anticipated to close promptly after the MEI Special Meeting and Infinity Special Meeting scheduled to be held on July 14, 2023. However, MEI and Infinity cannot predict the exact timing of the completion of the Merger because it is subject to the satisfaction or waiver of various conditions.

Reasons for the Merger (see pages 139 and 143)

MEI’s Reasons for the Merger

After consideration and consultation with its senior management and its financial and legal advisors, the MEI board of directors (with Sujay R. Kango recusing himself from the vote) determined that the Merger Agreement, the Merger and other transactions contemplated thereby are advisable, fair to and in the best interests of MEI and its stockholders. The MEI board of directors considered various reasons to reach its determination. For example:

 

   

the MEI board’s consideration of Infinity’s strategic fit with the MEI business after giving effect to the Merger, including with respect to the development of MEI’s existing product candidates, voruciclib and ME-344, and Infinity’s product candidate, eganelisib;

 

   

the prospects of and risks associated with the other strategic or licensing candidates that had made inquiries for a potential transaction with MEI based on the scientific, technical and other due diligence conducted by MEI management and its advisors;

 

   

the MEI board’s view that, as a result of the significant, majority equity interest that the MEI stockholders would have in the post-Merger combined company, MEI stockholders have the opportunity to meaningfully participate in the growth and value creation of the combined company following the closing of the Merger by virtue of their continued ownership of MEI Common Stock; and

 

   

the MEI board’s view of the combined clinical development and regulatory expertise of Infinity and MEI, which both possess relevant experience in the development of pharmaceutical products to treat cancer, particularly including kinase biology target cancer inhibition.

 

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Infinity’s Reasons for the Merger

After consideration, the Infinity board of directors (with Sujay R. Kango recusing himself from the vote), by a vote of directors at its meeting on February 22, 2023, approved and declared advisable the Merger Agreement and the Merger, and recommended that Infinity stockholders vote to approve the Merger Agreement.

In the course of evaluating the Merger Agreement and the Contemplated Transactions, the Infinity board of directors held numerous meetings and consulted with Infinity management and Infinity’s legal and financial advisors and considered a number of factors in reaching its decision to approve the Merger Agreement, the Merger and the Contemplated Transactions, which included the following (not in order of relative importance):

 

   

the Infinity board of directors’ belief that eganelisib has significant commercial potential and the Merger would allow for eganelisib’s continued development;

 

   

the Infinity board of directors’ belief that, as a result of arm’s length negotiations with MEI, Infinity, through Infinity’s management team and financial advisor, negotiated the most favorable equity split for its pre-closing stockholders to which MEI was willing to agree, and that the terms of the Merger Agreement include the most favorable terms to Infinity in the aggregate to which MEI was willing to agree;

 

   

the Infinity board of directors’ belief that, as a result of the significant equity interest that the Infinity stockholders would have in the post-merger combined company, the Infinity stockholders could meaningfully participate in potential value creation from successful development of eganelisib;

 

   

the Infinity board of directors’ belief, after a thorough review of strategic alternatives and discussions with Infinity’s senior management, financial advisor and legal counsel, that the Merger Agreement was more favorable to Infinity’s pre-closing stockholders than the potential value that might have resulted from other strategic and financing options available to Infinity, including a liquidation of Infinity and the distribution of any available cash; and

 

   

the anticipated combined scientific, clinical development and regulatory expertise of Infinity and MEI, which both possess relevant experience in the development of pharmaceutical products to treat cancer.

For a more complete description of the reasons for the Merger, please see the sections titled “The Merger—MEIs Reasons for the Merger; Recommendation of the MEI Board” and “The Merger—Infinitys Reasons for the Merger; Recommendation of the Infinity Board” beginning on pages 139 and 143, respectively, of this joint proxy statement/prospectus.

Opinion of MEI’s Financial Advisor (see page 147)

Torreya Capital, LLC (“Torreya”) rendered the Torreya Opinion to the MEI board of directors that, as of February 22, 2022, based on and subject to the factors and assumptions set forth in the Torreya Opinion, the Exchange Ratio was fair, from a financial point of view to the holders of shares of MEI. For a more complete description of the Torreya Opinion, please see the section titled “The Merger—Opinion of MEI’s Financial Advisor—Torreya Capital, LLC ” beginning on page 147.

Opinion of Infinity’s Financial Advisor (see page 156)

Aquilo Partners (“Aquilo”) delivered its oral opinion to the Infinity board of directors, which was subsequently confirmed in writing, that, as of February 22, 2023, and based upon and subject to the qualifications, limitations and assumptions set forth therein, the Exchange Ratio is fair, from a financial point of view, to the holders of Infinity Common Stock. For a more complete description of Aquilo’s opinion, please see the section titled “The Merger—Opinion of Infinitys Financial Advisor” beginning on page 156.

 

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Interests of Certain Directors, Officers and Affiliates of MEI and Infinity (see page 167)

Interests of MEI Directors and Executive Officers in the Merger

In considering the recommendation of the board of directors of MEI with respect to issuing shares of MEI Common Stock pursuant to the Merger Agreement and the other matters to be acted upon by MEI stockholders at the Special Meeting, MEI stockholders should be aware that certain members of the MEI board of directors and executive officers of MEI have interests in the Merger that may be different from, or in addition to, interests they have as MEI stockholders.

 

   

Daniel P. Gold, Ph.D., Charles V. Baltic III, Thomas C. Reynolds, and Sujay R. Kango, members of the MEI board of directors, and David M. Urso, who joins the MEI board of directors on June 8, 2023, will continue as directors after the Merger, and, following the closing of the Merger, Daniel P. Gold, Ph.D., Charles V. Baltic III, Thomas C. Reynolds and Sujay R. Kango will be eligible to be compensated as directors of MEI pursuant to the MEI’s compensation policy that is expected to remain in place following the Merger.

 

   

Sujay R. Kango serves on the boards of directors of each of MEI and Infinity and holds stock options exercisable for shares of MEI Common Stock and Infinity Common Stock.

 

   

In connection with David M. Urso’s appointment as President and Chief Executive Officer of MEI, as of June 2, 2023, Mr. Urso received a stock option grant equal to 2.5% of the outstanding shares of MEI as of June 2, 2023. On the closing of the Merger, Mr. Urso will receive an additional stock option for a number of MEI shares that is equal to 2.5% of the outstanding shares of MEI on the closing date of the Merger, less the number of shares underlying the option granted on June 2, 2023, subject to the 200,000 share annual limit on the number of shares that may be covered by awards granted to Mr. Urso during a calendar year pursuant to MEI’s equity compensation plan (“CEO Second Grant”). If because of the per person annual share limit, the full number of options pursuant to the CEO Second Grant cannot be granted on the closing date of the Merger, then on January 2, 2024, Mr. Urso will receive an additional stock option grant (“Top Off Grant”) in an amount equal to the number of shares that could not be granted on the closing date of the Merger. If on January 2, 2024, MEI’s equity compensation plan does not have sufficient shares available to make the Top Off Grant, the Top Off Grant will be made on the first subsequent date on which MEI has sufficient shares to make the grant to Mr. Urso under the equity compensation plan.

These interests and others are discussed in more detail in the section titled “The Merger—Interests of MEI Directors and Executive Officers in the Merger” beginning on page 167 of this joint proxy statement/prospectus. The members of MEI’s board of directors were aware of and considered these interests, among other matters, in reaching their decisions to adopt the Merger Agreement, to approve the transactions contemplated by the Merger Agreement and to recommend the approval of the MEI Nasdaq Proposal to MEI’s stockholders.

Interests of Infinity Directors and Executive Officers in the Merger

In considering the recommendations of the Infinity board of directors (with Sujay R. Kango recusing himself from the vote) with respect to the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal, Infinity’s stockholders should be aware that certain of Infinity’s directors and executive officers have interests in the Merger, including financial interests, that may be different from, or in addition to, the interests of the other Infinity stockholders generally. Interests of the directors and executive officers may be different from or in addition to the interests of the stockholders for the following reasons, among others:

 

   

As of March 31, 2023, Infinity’s directors and executive officers beneficially owned, in the aggregate, approximately 11% of the outstanding shares of Infinity Common Stock.

 

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Subject to the terms of the Merger Agreement, at the Effective Time, each outstanding Infinity Stock Option will become fully vested in accordance with the terms of the underlying stock option agreement and be assumed by MEI.

 

   

Before the Effective Time, each outstanding Infinity RSU will become fully vested and the shares of Infinity Common Stock subject to such Infinity RSU will be distributed in accordance with the terms of the applicable restricted stock unit agreement. The shares of Infinity Common Stock issued upon the vesting of Infinity RSUs will be treated as shares of Infinity Common Stock issued and outstanding immediately prior to the Effective Time in accordance with the terms and conditions of the Merger Agreement. No Infinity RSUs will be outstanding from and after the Effective Time.

 

   

Following a termination without cause (as defined in the Infinity Severance Plan) or a resignation for good reason (as defined in the Infinity Severance Plan), including in each case within one year following a change in control, certain executive officers of Infinity would be entitled to certain severance benefits, which include, among other things, an amount, payable in a single lump sum for each executive officer, equal to twelve months of the executive’s monthly base salary, and immediate vesting of the portion of any outstanding equity awards of the executive which would have vested within the one year-period following such change in control.

 

   

Certain executive officers have entered into retention agreements, which among other things, would entitle these executive officers to a retention bonus.

 

   

Norman Selby, Adelene Q. Perkins and Richard Gaynor, M.D., members of the Infinity board of directors, will be appointed as members of the combined company’s board of directors after the Merger, and, following the closing of the Merger, will be eligible to be compensated as directors of the combined company pursuant to MEI’s compensation policy that is expected to remain in place following the Merger.

 

   

Sujay R. Kango serves on the boards of directors of each of MEI and Infinity and holds stock options exercisable for shares of MEI Common Stock and Infinity Common Stock (Sujay R. Kango recused from the merger discussions and vote).

These interests and others are discussed in more detail in the section titled “The Merger—Interests of Infinity Directors and Executive Officers in the Merger” beginning on page 167 of this joint proxy statement/prospectus. The members of Infinity’s board of directors were aware of and considered these interests, among other matters, in reaching their decisions to adopt the Merger Agreement, to approve the transactions contemplated by the Merger Agreement and to recommend the adoption of the Merger Agreement to Infinity’s stockholders.

Management Following the Merger (see page 172)

Effective as of the Closing, the combined company’s executive officers are expected to be:

 

Name

  

Title

David M. Urso

  

Chief Executive Officer

Robert Ilaria, Jr.

  

Chief Medical Officer

Stéphane Peluso

  

Chief Scientific Officer

Brian G. Drazba

  

Chief Financial Officer

Following the Closing, the board of directors of the combined company is expected to be composed of eight members, consisting of Norman C. Selby (currently Infinity’s Lead Independent Director), who is expected to chair the combined company board, Mr. Urso (currently MEI’s Chief Executive Officer and President), Daniel P. Gold, Ph.D. (currently a director of MEI), Adelene Q. Perkins (currently Infinity’s Chief Executive Officer and

 

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Chair of the board of directors of Infinity), Richard Gaynor, M.D. (currently a director of Infinity), Charles V. Baltic III (currently Chair of the board of directors of MEI), Thomas C. Reynolds, M.D., Ph.D. (currently a director of MEI) and Sujay R. Kango (currently a director of MEI and Infinity).

The Merger Agreement and Agreements Related to the Merger Agreement (see page 180)

The terms and conditions of the Merger Agreement are contained in the Merger Agreement, which is attached to this joint proxy statement/prospectus as Annex A and is incorporated by reference herein in its entirety. MEI and Infinity encourage you to read the Merger Agreement carefully, as it is the legal document that governs the business combination. For more information on the Merger Agreement, see the section entitled “The Merger Agreement.”

Voting by MEI’s Directors and Executive Officers (see page 109)

As of the MEI Record Date, directors and executive officers of MEI and their affiliates owned and were entitled to vote 34,582 shares of MEI Common Stock, representing less than 1% of the shares of MEI Common Stock outstanding on the MEI Record Date. MEI currently expects that its directors and executive officers will vote any shares of MEI Common Stock they hold in favor of the MEI Nasdaq Proposal, although none of them has entered into any agreement obligating him or her to do so.

Voting by Infinity’s Directors and Executive Officers (see page 117)

As of the Infinity Record Date, directors and executive officers of Infinity and their affiliates owned and were entitled to vote 1,276,068 shares of Infinity Common Stock, representing approximately 1.42% of the shares of Infinity Common Stock outstanding on the Infinity Record Date. Infinity currently expects that its directors and executive officers will vote any shares of Infinity Common Stock they hold in favor of the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal, although none of them has entered into any agreement obligating him or her to do so.

Conditions to the Completion of the Merger (see page 184)

Under the Merger Agreement, the Closing is subject to, and will take place following the satisfaction or waiver by MEI or Infinity, as applicable, of certain customary closing conditions, including, without limitation: (i) the registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part, which is being filed by MEI with the SEC to register the MEI Common Stock to be issued to the holders of the shares of Infinity Common Stock in connection with the Merger, must become effective and not subject to any stop order or proceeding seeking a stop order; (ii) Infinity must obtain the approval of its stockholders of the Merger and the Contemplated Transactions; (iii) MEI must obtain approval of its stockholders of the issuance of such shares of MEI Common Stock in connection with the Merger; (iv) the absence of any law or judgment of a governmental entity of competent jurisdiction that is in effect and restrains, enjoins, or otherwise prohibits consummation of the Merger; (v) the existing shares of MEI Common Stock must be continually listed on Nasdaq, and the shares of MEI Common Stock issuable pursuant to the Merger Agreement must be approved for listing on Nasdaq; (vi) the performance, in all material respects, by each of Infinity and MEI of such party’s respective obligations pursuant to the Merger Agreement; (vii) the absence of a continuing “material adverse effect”, as such term is defined in the Merger Agreement, on the business, financial condition or results of operations of, respectively, (a) Infinity and its subsidiaries, taken as a whole or (b) MEI and its subsidiaries, taken as a whole; (viii) the accuracy of MEI’s and Infinity’s representations and warranties, subject to specified materiality qualifications; (ix) delivery of customary closing documents, including a customary officer certificate from each of MEI and Infinity and (x) each of MEI and Infinity shall have, at the Closing, an amount of cash greater than or equal to such party’s “Minimum Net Cash” (as such term is defined in the Merger Agreement), in each case, on terms further described in the Merger Agreement.

 

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No Solicitation (see page 187)

Each of MEI and Infinity agreed that, subject to limited exceptions, MEI and Infinity will not, and will cause their subsidiaries and their subsidiaries’ directors, officers and employees not to, and shall cause the investment bankers, attorneys, accountants and other advisors, agents or representatives of Infinity and MEI, and of any of the aforementioned entities and persons, not to, directly or indirectly:

 

   

solicit, initiate, induce, encourage or facilitate any inquiries or the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Infinity Acquisition Proposal (as defined in the Merger Agreement) or MEI Acquisition Proposal (as defined in the Merger Agreement);

 

   

participate in any discussions or negotiations or cooperate in any way with any person regarding any Infinity Acquisition Proposal or MEI Acquisition Proposal or any inquiry, proposal or offer that could reasonably be expected to lead to an Infinity Acquisition Proposal or MEI Acquisition Proposal;

 

   

provide any non-public information or data concerning MEI, Infinity or any of their subsidiaries to any person in connection with any Infinity Acquisition Proposal or MEI Acquisition Proposal or any inquiry, proposal or offer that could reasonably be expected to lead to an Infinity Acquisition Proposal or MEI Acquisition Proposal or for the purpose of soliciting, initiating, inducing, encouraging or facilitating an Infinity Acquisition Proposal or MEI Acquisition Proposal;

 

   

enter into any binding or nonbinding letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, agreement in principle, option agreement, joint venture agreement, partnership agreement, lease agreement or other similar agreement with respect to an Infinity Acquisition Proposal or MEI Acquisition Proposal;

 

   

adopt, approve or recommend or make any public statement approving or recommending any inquiry, proposal or offer that constitutes, or could reasonably be expected to lead to, an Infinity Acquisition Proposal or MEI Acquisition Proposal (including by approving any transaction, or approving any person becoming an “interested stockholder,” for purposes of Section 203 of the DGCL);

 

   

take any action or exempt any person (other than the other parties and their subsidiaries) from the restriction on “business combinations” or any similar provision contained in applicable takeover laws or its organizational or other governing documents; or

 

   

publicly propose, resolve or agree to do any of the foregoing actions.

Termination (see page 195)

The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including without limitation: (i) by mutual written consent of MEI and Infinity; (ii) by either MEI or Infinity, if (a) a governmental authority shall have issued a final and non-appealable permanent restraining order, permanent injunction or other similar permanent order which has the effect of enjoining or otherwise prohibiting consummation of the Contemplated Transactions, (b) the Closing has not occurred on or before August 31, 2023, (c) the Infinity Stockholder Approval has not been obtained at the Infinity Special Meeting and (d) MEI Stockholder Approval has not been obtained at the MEI Special Meeting, in each of (a), (b), (c) and (d) where the terminating party’s material breach of the Merger Agreement is not the cause of, or has resulted in, the failure of such condition; (iii) by Infinity if (a) MEI breaches or fails to perform any of its representations, warranties or covenants contained in the Merger Agreement such that any of Infinity’s conditions to closing the Contemplated Transactions would not be satisfied, and such breach or failure, if curable, is not cured in accordance with the Merger Agreement, (b) MEI has materially breached or failed to perform its covenants to not solicit any alternative acquisition proposals, (c) MEI’s board has made a “Change of Recommendation” (as such term is defined in the Merger Agreement) or (d) MEI has failed to include the recommendation of its board to consummate MEI Share Issuance in its joint proxy statement/prospectus distributed to its stockholders; and

 

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(iv) by MEI if (a) Infinity breaches or fails to perform any of its representations, warranties or covenants contained in the Merger Agreement such that any of MEI’s conditions to closing the Contemplated Transactions would not be satisfied, and such breach or failure, if curable, is not cured in accordance with the Merger Agreement, (b) Infinity has materially breached or failed to perform its covenants to not solicit any alternative acquisition proposals, (c) Infinity’s board has made a “Change of Recommendation” (as such term is defined in the Merger Agreement) or (d) Infinity has failed to include the recommendation of its board to consummate the Merger in its joint proxy statement/prospectus distributed to its stockholders.

Termination Fee (see page 195)

The Merger Agreement provides that a termination fee in the amount of $4,000,000, if payable by MEI, and in the amount of $2,900,000, if payable by Infinity, will be payable if the Merger Agreement is terminated under certain circumstances. It also provides that each party will reimburse the other party for all reasonable out of pocket fees and expenses incurred by such party in connection with the Merger Agreement and the Contemplated Transactions, up to a maximum of $1,000,000 if the Merger Agreement is terminated under certain circumstances.

Material U.S. Federal Income Tax Consequences of the Merger (see page 176)

It is intended that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury regulations promulgated thereunder. The completion of the Merger is, however, not conditioned on the Merger qualifying as such a “reorganization” or upon the receipt of an opinion of counsel to that effect. No assurance can be given that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury regulations promulgated thereunder. In general, and subject to the exceptions, qualifications and limitations set forth in the section titled “Material U.S. Federal Income Tax Consequences of the Merger,” assuming that the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury regulations promulgated thereunder, generally, a U.S. Holder (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the Merger”) that exchanges Infinity Common Stock for MEI Common Stock in the Merger:

 

   

will not recognize any gain or loss upon the exchange of Infinity Common Stock for MEI Common Stock in the Merger, except with respect to cash received in lieu of a fractional share of MEI Common Stock;

 

   

will have a tax basis in the MEI Common Stock received in the Merger (including any fractional share of MEI Common Stock deemed received) equal to the tax basis of the Infinity Common Stock surrendered in exchange therefor; and

 

   

will have a holding period for the MEI Common Stock received in the Merger (including any fractional share of MEI Common Stock deemed received) that includes its holding period for its Infinity Common Stock surrendered in exchange therefor.

All holders of Infinity Common Stock should consult their tax advisors as to the particular tax consequences to them of the Merger, including the applicability and effect of any U.S. federal, state, local, non-U.S., and other tax laws.

Anticipated Accounting Treatment (see page 175)

The Merger is expected to be accounted for as an acquisition of a business pursuant to Accounting Standards Codification Topic 805 –Business Combinations (“ASC 805”). MEI is the accounting acquirer and will record assets acquired and liabilities assumed from Infinity primarily at their respective fair values at the date of completion of the Merger. Any excess of the purchase price over the net fair value of such assets and liabilities

 

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will be recorded as goodwill. MEI is considered to be the accounting acquirer based on the structure of the Merger, relative outstanding share ownership at closing and the composition of the combined company’s board of directors.

No Appraisal Rights (see page 175)

Neither MEI stockholders nor Infinity stockholders are entitled to appraisal rights under the DGCL.

Comparison of Rights of Holders of Common Stock (see page 327)

MEI and Infinity, respectively, are incorporated under the laws of the State of Delaware. If the Merger is completed, Infinity stockholders will become holders of MEI Common Stock and will have different rights as holders of MEI Common Stock than they had as holders of Infinity Common Stock. The differences between the rights of these respective holders result from the differences of the respective governing documents of MEI and Infinity, as the same may be amended in connection with the Merger. For additional information, see the section titled “Comparison of Rights of Holders of MEI Common Stock and Infinity Common Stock” beginning on page 327 of this joint proxy statement/prospectus.

Risk Factor Summary (see page 26)

Both MEI and Infinity are subject to various risks associated with their businesses and their industries. In addition, the Merger, including the possibility that the Merger may not be completed, poses a number of risks to each company and its respective securityholders, including, without limitation, the following risks:

Risks Related to the Merger

 

   

The Exchange Ratio will not be adjusted based on the market price of MEI Common Stock or Infinity Common Stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

 

   

If the conditions to the Merger are not satisfied or waived, the Merger may not occur.

 

   

The Merger may be completed even though a material adverse effect may result from the announcement of the Merger, industry wide changes or certain other causes.

 

   

If MEI and Infinity complete the Merger, the combined company will need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

 

   

MEI and Infinity directors and executive officers have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests.

 

   

MEI and Infinity securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the Merger as compared to their current ownership and voting interests in the respective companies.

 

   

If the Merger is not completed, MEI’s and Infinity’s stock prices may fluctuate significantly.

 

   

During the pendency of the Merger, MEI and Infinity may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect their respective business prospects.

 

   

The financial analyses, estimates and forecasts presented herein and considered by MEI and Infinity in connection with the Merger may not be realized.

 

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If the Merger is not consummated, each of MEI and Infinity would need to determine whether to continue its business, consummate another strategic transaction, or dissolve and liquidate its assets.

 

   

Lawsuits could delay or prevent the Merger.

Risks Related to MEI

 

   

MEI will need substantial additional funds to progress the clinical trial programs for its drug candidates, and to develop new compounds. The actual amount of funds MEI will need will be determined by a number of factors, some of which are beyond MEI’s control.

 

   

MEI is a clinical research and development stage company and is likely to incur operating losses for the foreseeable future.

 

   

MEI is subject to significant obligations to Presage in connection with MEI’s license of voruciclib, and MEI may become subject to significant obligations in connection with future licenses it obtains, which could adversely affect the overall profitability of any products MEI may seek to commercialize, and such licenses of drug candidates, the development and commercialization for which MEI is solely responsible, may never become profitable.

 

   

MEI’s business strategy may include entry into additional collaborative or license agreements. MEI may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements.

 

   

Changes in funding for the FDA and other government agencies or future government shutdowns could cause delays in the submission and regulatory review of marketing applications, which could negatively impact MEI’s business or prospects.

 

   

If any products MEI develops become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, MEI’s ability to successfully commercialize its products will be impaired.

 

   

MEI’s product candidates may face competition sooner than anticipated.

 

   

MEI’s commercial success is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed.

 

   

MEI faces a risk of product liability claims and claims may exceed MEI’s insurance limits.

Risks Related to Infinity

 

   

If the Merger is not completed, substantial doubt exists as to Infinity’s ability to continue as a going concern.

 

   

Raising additional capital may cause dilution to Infinity’s stockholders, restrict its operations or require Infinity to relinquish rights to its technologies or product candidates.

 

   

Infinity has a history of operating losses, expects to incur significant and increasing operating losses in the future, and may never become profitable, or if Infinity becomes profitable, it may not remain profitable.

 

   

If the Merger is not completed, Infinity will need substantial additional funding, and if Infinity is unable to raise capital when needed, it could be forced to delay, reduce or eliminate the development of eganelisib or future efforts to commercialize eganelisib.

 

   

Infinity is dependent on the success of eganelisib, its only product candidate, which remains subject to clinical testing and regulatory approval. If Infinity is unable to initiate or complete

 

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clinical development of, obtain marketing approval for or successfully commercialize eganelisib, either alone or with a collaborator, or if Infinity experiences significant delays in doing so, its business could be substantially harmed.

 

   

If a collaborator terminates or fails to perform its obligations under agreements with Infinity, the development and commercialization of eganelisib or any future product candidates Infinity may develop could be delayed or terminated.

 

   

If Infinity fails to obtain or maintain necessary or useful intellectual property rights, Infinity could encounter substantial delays in the research, development and commercialization of eganelisib and any product candidates that it may develop in the future.

 

   

Even if Infinity completes the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent Infinity from obtaining approvals for the commercialization of eganelisib. If Infinity or its collaborators are not able to obtain, or if there are delays in obtaining, required regulatory approvals, or if they are not able to successfully commercialize eganelisib, then Infinity’s ability to generate revenue will be materially impaired.

 

   

If Infinity is not able to retain key personnel and advisors, it may not be able to operate its business successfully.

 

   

Infinity’s common stock may have a volatile trading price and low trading volume.

 

   

Infinity does not currently meet the requirements for continued listing on the Nasdaq Global Select Market. If Infinity fails to regain compliance with such requirements, its common stock could be delisted from trading, which would decrease the liquidity of Infinity’s common stock and Infinity’s ability to raise additional capital.

Risks Related to the Combined Company

 

   

The failure to successfully integrate the businesses and operations of Infinity and MEI in the expected time frame may adversely affect the combined company’s future results.

 

   

The market price of the combined company’s common stock is expected to be volatile, and the market price of the common stock may drop following the Merger.

 

   

MEI and Infinity will incur substantial direct and indirect costs in contemplation of and as a result of the Merger and the combined company will incur substantial direct and indirect costs in connection with combining the business of MEI and Infinity following the Merger.

 

   

The actual financial position and results of operations of the combined company after the Merger may differ materially from the unaudited pro forma condensed combined financial information for the combined company included in this joint proxy statement/ prospectus.

 

   

The combined company may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on the combined company’s business and operations.

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” beginning on page 26 of this joint proxy statement/prospectus. MEI and Infinity both encourage you to read and consider all of these risks carefully.

 

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RISK FACTORS

The combined company (for the purpose of this “Risk Factors” section, “we,” “us” and “our”) will be faced with a market environment that cannot be predicted and that involves significant risks and uncertainties, many of which will be beyond our control. You should carefully consider all of the information set forth in this joint proxy statement/prospectus. The combined company’s business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price of our common stock would likely decline and you might lose all or part of your investment. You should also read and consider the risks associated with each of the businesses of MEI and Infinity because these risks will also affect the combined company. In addition to the other information contained in this joint proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of Infinity Common Stock or MEI Common Stock. You should also read and consider the other information in this joint proxy statement/prospectus and additional information about Infinity set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and about MEI set forth in its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, as updated by its Quarterly Reports on Form 10-Q, which are filed with the SEC. Please see the section titled “Where You Can Find More Information” beginning on page 341 of this joint proxy statement/prospectus for further information. This joint proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See also “Cautionary Statement Concerning Forward-Looking Statements and Industry and Market Data” on page 1 of this joint proxy statement/prospectus.

Risks Related to MEI’s Business

Risks Related to MEI’s Development Stage

MEI is currently operating in a period of capital markets disruption and economic uncertainty.

The U.S. capital markets are currently experiencing extreme volatility and disruption following the global outbreak of COVID-19, high inflation and the government response thereto, potential economic downturn, publicized failures in the regional banking sector, the war in Ukraine, and other global events. Disruptions in the capital markets in the past have resulted in illiquidity in parts of the capital markets. Future market disruptions and/or illiquidity would be expected to have an adverse effect on MEI’s business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase MEI’s funding costs, limit its access to the capital markets or result in a decision by lenders not to extend credit to MEI. These events have limited and could continue to limit MEI’s investment considerations, limit its ability to grow and have a material negative impact on MEI’s operating results.

MEI will need substantial additional funds to progress the clinical trial programs for its drug candidates, and to develop new compounds. The actual amount of funds MEI will need will be determined by a number of factors, some of which are beyond MEI’s control.

MEI will need substantial additional funds to progress the clinical trial programs for its drug candidates and to develop any additional compounds. The factors that will determine the actual amount of funds that MEI will need to progress the clinical trial programs may include, but are not limited to, the following:

 

   

the therapeutic indications for use being developed;

 

   

the clinical trial endpoints required to achieve regulatory approval;

 

   

the number of clinical trials required to achieve regulatory approval;

 

   

the number of sites included in the trials;

 

   

the length of time required to enroll suitable patients;

 

   

the number of patients who participate in the trials and the rate that they are recruited;

 

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the number of treatment cycles patients complete while they are enrolled in the trials;

 

   

costs and potential difficulties encountered in manufacturing sufficient drug product for the trials; and

 

   

the efficacy and safety profile of the product.

MEI has been opportunistic in its efforts to obtain funding, and MEI expects to continue to evaluate various funding alternatives from time to time. If MEI obtains additional funding, it may adversely affect the market price of their common stock and may be dilutive to existing stockholders. If MEI is unable to obtain additional funds on favorable terms or at all, MEI may be required to cease or reduce its operations. MEI may sell additional shares of common stock, and securities exercisable for or convertible into shares of its common stock, or MEI may seek to obtain debt financing, in each case, to satisfy its capital and operating needs; however, such transactions will be subject to market conditions and there can be no assurance any such transactions will be completed.

MEI may be required to seek additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties at terms which may be unfavorable to MEI.

If MEI raises additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, MEI may have to relinquish certain valuable rights to its product candidates, technologies, intellectual property, future revenue streams or research programs or grant licenses on terms that may not be favorable to MEI. MEI could also be required to seek collaborators for one or more of its current or future product candidates at an earlier stage than otherwise would be desirable or relinquish MEI’s rights to product candidates or technologies that it otherwise would seek to develop or commercialize itself. If MEI is unable to raise additional capital in sufficient amounts or on terms acceptable to MEI, MEI may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its research and development initiatives. Any of the above events could significantly harm MEI’s business, prospects, financial condition and results of operations and cause the price of MEI’s Common Stock to decline.

MEI is a clinical research and development stage company and is likely to incur operating losses for the foreseeable future.

You should consider MEI’s prospects in light of the risks and difficulties frequently encountered by clinical research stage and developmental companies. MEI has incurred net losses of $396.0 million from its inception through March 31, 2023, including a net loss of $20.2 million for the nine months ended March 31, 2023 (excluding $1.6 million of non-cash gain resulting from a change in fair value of MEI’s warrant liability), a net loss of $75.2 million for the year ended June 30, 2022 (excluding $20.8 million of non-cash gain resulting from a change in fair value of MEI’s warrant liability) and a net loss of $59.4 million for the year ended June 30, 2021 (excluding $18.1 million of non-cash gain resulting from a change in fair value of MEI’s warrant liability). MEI anticipates that it will incur operating losses and negative operating cash flow for the foreseeable future. MEI has not yet commercialized any drug candidates and cannot be sure that it will ever be able to do so, or that MEI may ever become profitable.

Risks Related to MEI Clinical Trials

The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and MEI’s current drug candidates may not have favorable results in later studies or trials.

Pre-clinical studies and Phase 1 and Phase 2 clinical trials are an expensive and uncertain process that may take years to complete. Pre-clinical studies and Phase 1 and Phase 2 clinical trials are usually not primarily designed to test the efficacy of a drug candidate, but rather to test safety, to study pharmacokinetics and pharmacodynamics, and to understand the drug candidate’s side effects at various doses and schedules. Favorable

 

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results in early studies or trials, as well as small studies or trials, may not be repeated in later studies or trials, including ongoing pre-clinical studies, large-scale Phase 3 clinical trials, or other studies intended as registration trials, and MEI’s drug candidates in later-stage trials may fail to show desired safety and efficacy despite having progressed through earlier-stage trials. Interim and top-line results, as well as any results from post-hoc data analyses, may also not be predictive of the final results of a clinical study and/or may not support product approval. The FDA also generally does not accept post-hoc data analyses as support for regulatory approval.

Comparisons of results across different studies should be viewed with caution as such comparisons are limited by a number of factors, including differences in study designs and populations. Such comparisons also will not provide a sufficient basis for any comparative claims following product approval. Unfavorable results from ongoing pre-clinical studies or clinical trials could result in delays, modifications or abandonment of ongoing or future clinical trials, or abandonment of a clinical program. Pre-clinical and clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals or commercialization. Negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial to be delayed, repeated or terminated, or a clinical program to be abandoned.

The outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease may materially and adversely impact MEI’s business, including its preclinical studies and clinical trials.

In December 2019, the novel coronavirus disease, COVID-19, was identified in Wuhan, China. This virus has been declared a pandemic and has spread to multiple global regions. The outbreak and government measures taken in response have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. In response to the COVID-19 pandemic, “shelter in place” orders and other public health guidance measures were implemented across much of the U.S., Europe and Asia, including in the locations of MEI’s offices, clinical trial sites, key vendors and partners. Although some of such orders have been lifted in certain geographic locations, such measures may be, and, in some cases, have been re-implemented due an increase in the number of positive cases of COVID-19 or severity thereof, including cases attributable to new variants. These restrictions, as well as government restrictions on travel and a lack of public confidence in the safety of air travel and the use of public transportation have reduced and may continue to reduce the willingness of patients to participate in MEI’s clinical trials and the ability of regulatory officials and clinical monitors to perform visits of MEI’s clinical trial locations. As a result, MEI’s clinical development program timelines have been and may continue to be negatively affected by COVID-19, which could materially and adversely affect MEI’s business, financial condition and results of operations. Despite the vaccination of a large portion of the U.S. adult population, a significant portion of the global adult population remains unvaccinated. The ineffectiveness of vaccines or public perception thereof, including in combating new variants of the virus, could lead to increased governmental restrictions and changes in public behavior adversely affecting the economy.

As a result of the ongoing COVID-19 pandemic, or similar pandemics, and related “shelter in place” orders and other public health guidance measures, MEI has experienced disruptions that have materially and adversely impacted its clinical trials, including delays in patient enrollment. MEI may in the future experience disruptions that could materially and adversely impact its clinical trials, business, financial condition and results of operations, including:

 

   

additional delays or difficulties in enrolling patients in MEI clinical trials, including the potential need to suspend or delay enrollment;

 

   

delays or difficulties in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical site investigators and clinical site staff;

 

   

increased rates of patients withdrawing from MEI’s clinical trials following enrollment as a result of contracting COVID-19 or other health conditions, due to social distancing measures or state law requirements, or being forced to quarantine;

 

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diversion of healthcare resources away from the conduct of clinical trials or the closure of clinical trial sites, including the diversion of hospitals serving as MEI’s clinical trial sites and hospital staff supporting the conduct of MEI’s clinical trials;

 

   

the need to modify, suspend, postpone, or terminate clinical trials;

 

   

the need to implement alternative study procedures, including alternative methods for drug candidate delivery and administration, alternative study sites, remote study procedures, and alternative methods to obtain subject informed consent;

 

   

potential noncompliance or deviations from the protocol or regulatory requirements due to necessary safety or public health measures;

 

   

interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints;

 

   

interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines and may limit MEI’s ability to interact with agency representatives or obtain inspections or assessments that are necessary for approval;

 

   

delays or disruptions in preclinical experiments and investigational new drug application-enabling studies due to restrictions of on-site staff and unforeseen circumstances at contract research organizations and vendors;

 

   

interruption of, or delays in receiving, supplies of MEI’s product candidates from its contract manufacturing organizations and other clinical or pre-clinical study materials due to staffing shortages, production slowdowns or stoppages, disruptions in delivery systems, material shortages, and order prioritization of other companies’ products, such as under the Defense Production Act;

 

   

changes or deviations from manufacturing requirements, that may adversely affect MEI’s product candidates or that may require FDA pre-approval or notification;

 

   

limitations on MEI’s ability to recruit and hire key personnel due to the inability to meet with candidates because of travel restrictions and “shelter in place” orders;

 

   

limitations on employee resources that would otherwise be focused on the conduct of MEI’s preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; and

 

   

interruption or delays to MEI’s sourced discovery and clinical activities.

The foregoing may require that MEI consult with relevant review and ethics committees, Institutional Review Boards (“IRBs”), and the FDA. The foregoing may also impact the integrity of MEI’s study data. The effects of the ongoing COVID-19 pandemic may also increase the need for clinical trial patient monitoring and regulatory reporting of adverse effects.

The ongoing COVID-19 pandemic and the governmental response continues to rapidly evolve. In light of the ongoing COVID-19 pandemic, the FDA has issued a number of guidance documents, including guidance related to the potential effect of the ongoing COVID-19 pandemic on many clinical trial programs. The FDA also issued guidance on additional steps that are required to maintain GMPs during the pandemic, in addition to a number of other COVID-19 related guidance.

The extent to which the outbreak impacts MEI’s business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence. If MEI or any of the third parties with whom MEI engages were to experience shutdowns or other business disruptions, MEI’s ability to conduct its business in the manner and on the timelines presently planned could be materially and negatively impacted.

 

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Changes in drug candidate manufacturing or formulation may result in additional costs or delay.

As drug candidates are developed through preclinical studies to late-stage clinical trials toward approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, manufacturing sites, formulation, and methods of delivery are altered along the way in an effort to optimize processes and results. Any of these changes could cause MEI drug candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. Such changes may also require additional studies to demonstrate the comparability of the product candidate using prior processes, formulation, or manufacturers, FDA notification, or FDA approval. Any of the foregoing could limit MEI’s future revenues and growth.

Risks Related to MEI’s Licensing and Collaboration Agreements

If third parties with whom MEI collaborates on the development and commercialization of MEI’s drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of MEI’s drug candidates or if they terminate their agreements with MEI, MEI may not be able to develop or commercialize its drug candidates.

MEI has in the past and may in the future enter into agreements to collaborate with third parties on the development, manufacturing or commercialization of its drug candidates in the future. In connection with these agreements, MEI may grant certain rights regarding the use of its patents and technology. The counterparties may be responsible for development, manufacturing or commercialization of MEI’s drug candidates and the costs related thereto.

MEI’s counterparties might not fulfill all of their obligations to MEI. In addition, the agreements with MEI’s counterparties provide the counterparties with substantial control of the development and commercialization of MEI’s drug candidates and discretion whether to devote resources to the full pursuit thereof or otherwise fail to fully pursue the development and commercialization of MEI’s drug candidates. Even without breaching their obligations to MEI, MEI’s counterparties may not devote adequate resources or otherwise pursue the development and commercialization of MEI’s drug candidates, whether as a result of their assessment of the likelihood of success of such efforts, for financial reasons or otherwise. MEI’s ability to receive revenue from its drug candidates may be dependent upon their efforts. If they fail to devote adequate resources or otherwise do not successfully develop, commercialize or manufacture MEI’s drug candidates, MEI may not receive the future milestone payments or royalties provided for in the agreement. In addition, under certain circumstances, including MEI’s failure to satisfy its obligations under the agreement, the counterparty may have the right to terminate the agreement.

MEI could also become involved in disputes with its counterparties, which could lead to delays in or termination of the agreement and time-consuming and expensive litigation or arbitration.

If MEI’s counterparties are unwilling or unable to fulfill their obligations or otherwise fail to fully pursue the development and commercialization of MEI’s drug candidates or if the agreement is terminated, MEI may lack sufficient resources to develop and commercialize its drug candidates on its own and may be unable to reach agreement with a suitable alternative collaborator. The failure to develop and commercialize MEI drug candidates would have a material adverse effect on MEI’s business, operating results, prospects and financial condition.

 

 

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MEI is subject to significant obligations to Presage in connection with MEI’s license of voruciclib, and MEI may become subject to significant obligations in connection with future licenses it obtains, which could adversely affect the overall profitability of any products MEI may seek to commercialize, and such licenses of drug candidates, the development and commercialization for which MEI is solely responsible, may never become profitable.

In September 2017, MEI entered into a license agreement with Presage (“the Presage License Agreement”). Under the terms of the agreement, Presage granted MEI exclusive worldwide rights to develop, manufacture and commercialize voruciclib, a clinical-stage, oral and selective CDK inhibitor, and related compounds. In exchange, MEI paid Presage $2.9 million and are obligated for additional potential payments of up to $181 million upon the achievement of certain development, regulatory and commercial milestones. MEI will also pay mid-single-digit tiered royalties on the net sales of any product successfully developed pursuant to such agreement. MEI may enter into similar agreements in the future that require it to make significant payments upon obtainment of development, regulatory or commercial milestones. MEI may be obligated to make milestone or royalty payments when it does not have the cash on hand to make these payments or have available cash for MEI’s other development efforts. These milestone and royalty payments could adversely affect the overall profitability for MEI of any products that it may seek to commercialize. In addition, if MEI fails to comply with its obligations under the license agreement, the counterparty may have the right to terminate the agreement. In such a case, MEI would lose its rights to the intellectual property covered by the license agreement and MEI would not be able to develop, manufacture or commercialize its drug candidates.

The profitability of MEI’s license agreement with Presage depends on the successful development, regulatory approval and commercialization of voruciclib. MEI is solely responsible for the development and commercialization of voruciclib, including the related costs. Drug development is a long, expensive and uncertain process and delay or failure can occur at any stage of MEI’s clinical trials. MEI cannot be certain that it will ever receive regulatory approval for voruciclib or that it will be successfully commercialized, even if approved.

MEI’s business strategy may include entry into additional collaborative or license agreements. MEI may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements.

MEI’s current business strategy may include the entry into additional collaborative or license agreements for the development and commercialization of its drug and drug candidates. The negotiation and consummation of these types of agreements typically involve simultaneous discussions with multiple potential collaborators or licensees and require significant time and resources. In addition, in attracting the attention of pharmaceutical and biotechnology company collaborators or licensees, MEI competes with numerous other third parties with product opportunities as well as the collaborators’ or licensees’ own internal product opportunities. MEI may not be able to consummate collaborative or license agreements, or MEI may not be able to negotiate commercially acceptable terms for these agreements.

If MEI does enter into such arrangements, it could be dependent upon the subsequent success of these other parties in performing their respective responsibilities and the cooperation of MEI’s partners. MEI’s collaborators may not cooperate with MEI or perform their obligations under MEI’s agreements with them. MEI cannot control the amount and timing of its collaborators’ resources that will be devoted to researching MEI product candidates pursuant to MEI’s collaborative agreements with them or whether MEI’s collaborators will comply with the applicable regulatory requirements. MEI’s collaborators may choose to pursue existing or alternative technologies in preference to those being developed in collaboration with MEI.

Under agreements with any collaborators or licensees MEI may work with in the future, MEI may rely significantly on them to, among other activities:

 

 

fund research and development activities with MEI;

 

 

pay MEI fees upon the achievement of milestones; and

 

 

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market for or with MEI any commercial products that result from the collaborations.

If MEI does not consummate collaborative or license agreements, MEI may use its financial resources more rapidly on its drug development efforts, continue to defer certain development activities or forego the exploitation of certain geographic territories, any of which could have a material adverse effect on MEI’s business prospects. Further, MEI may not be successful in overseeing any such collaborative arrangements. If MEI fails to establish and maintain necessary collaborative or license relationships, MEI’s business prospects could suffer.

Collaboration agreements may not lead to development or commercialization of drug candidates in the most efficient manner, or at all. If any collaborations MEI might enter into do not result in the successful development and commercialization of drug candidates or if one of MEI’s collaborators subsequently terminates its agreement with MEI, MEI may not receive any future research funding or milestone or royalty payments under the collaboration. If MEI does not receive the funding it expects under the agreements, MEI’s development of its drug candidates could be delayed, and MEI may need additional resources to develop its drug candidates and its product platform. All of the risks relating to product development, regulatory approval and commercialization described in MEI’s Annual Report also apply to the activities of MEI’s collaborators. Moreover, should MEI’s collaborators not comply with the applicable regulatory or legal requirements, MEI and/or they, may be subject to regulatory enforcement action.

Risks Related to FDA and Non-U.S. Regulation

Final approval by regulatory authorities of MEI’s drug candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect MEI’s ability to generate operating revenues.

MEI will not generate any operating revenue until MEI, a licensee, or a potential collaborator successfully commercialize one of MEI’s drug candidates. Currently, MEI has drug candidates at different stages of development, and each will need to successfully complete certain clinical studies and obtain regulatory approval before potential commercialization. MEI may experience unforeseen events during product development that may substantially delay or prevent product approval. For example, the FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements or if the trial poses an unexpected serious harm to clinical trial patients. The FDA or an IRB may also impose conditions on the conduct of a clinical trial. Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to clinical trial patients, a lack of favorable results, or changing business priorities.

The pre-clinical and clinical development, manufacturing, labeling, packaging, storage, recordkeeping, export, marketing and distribution, and other possible activities relating to MEI’s drug candidates are subject to extensive regulation by the FDA and other regulatory agencies. Failure to comply with applicable regulatory requirements may, either before or after product approval, subject MEI to administrative or judicially imposed sanctions that may negatively impact the approval of one or more of MEI’s drug candidates or otherwise negatively impact MEI’s business.

Neither collaborators, licensees nor MEI are permitted to market a drug candidate in the U.S. until the particular drug candidate is approved for marketing by the FDA. Specific pre-clinical data, chemistry, manufacturing and controls data, a proposed clinical trial protocol and other information must be submitted to the FDA as part of an IND application, and clinical trials may commence only after the IND application becomes effective. To market a new drug in the U.S., MEI must submit to the FDA and obtain FDA approval of an NDA. An NDA must be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry, manufacturing and controls to demonstrate the safety and effectiveness of the drug candidate.

 

 

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Obtaining approval of an NDA can be a lengthy, expensive and uncertain process. Regulatory approval of an NDA is not guaranteed. The number and types of pre-clinical studies and clinical trials that will be required for FDA approval varies depending on the drug candidate, the disease or condition that the drug candidate is designed to target and the regulations applicable to any particular drug candidate. The FDA may also require additional studies or data after a trial has begun or more studies or data than MEI otherwise has anticipated. Despite the time and expense exerted in pre-clinical and clinical studies, failure can occur at any stage, and MEI could encounter problems that delay its product candidate development, trigger additional requirements from the FDA, or that cause MEI to abandon clinical trials or to repeat or perform additional pre-clinical studies and clinical trials. The FDA can delay, limit or deny approval of a drug candidate for many reasons, and product candidate development programs may be delayed or may not be successful for many reasons including but not limited to, the following:

 

   

the FDA or IRBs may not authorize MEI to commence, amend, or continue clinical studies;

 

   

MEI may be required to amend its clinical studies in such a way that it compromises the study data or makes the ongoing conduct of the study impracticable;

 

   

there may be deviations from the clinical study protocol that may result in the need to drop patients from the study, increase the study enrollment size or duration, or that may compromise the reliability of the study and the resulting data;

 

   

MEI may not be able to enroll a sufficient number of qualified patients for clinical trials in a timely manner or at all, patients may drop out of MEI’s clinical trials or be lost to follow-up at a higher rate than MEI anticipates, patients may not follow the clinical trial procedures, or the number of patients required for clinical trials may be larger than MEI anticipates;

 

   

MEI may have delays in adding new investigators or clinical trial sites, or MEI may experience a withdrawal of clinical trial sites;

 

   

the supply or quality of MEI’s product candidates or other materials necessary to conduct clinical trials of MEI’s product candidates may be insufficient or inadequate, including as a result of global trade policies;

 

   

a drug candidate may not be deemed adequately safe or effective for an intended use;

 

   

the FDA may not find the data from pre-clinical studies and clinical trials sufficient;

 

   

MEI may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development;

 

   

the FDA or comparable foreign regulatory authorities may disagree with MEI’s chosen endpoints;

 

   

results from MEI’s non-primary endpoints may contradict the results of MEI’s primary endpoints, raising questions regarding product efficacy;

 

   

the FDA or comparable foreign regulatory authorities may not find MEI’s dose-finding clinical trials and data from other sources adequate and/or may disagree with MEI’s proposed product dosages for administration.

 

   

there may be changes to standard of care that impact the design and conduct of MEI’s trial, may result in studies no longer being clinically significant, may require that MEI changes its studies once they have already commenced, or may result in other products being preferred over MEI’s product candidates, if they are approved;

 

   

to the extent that MEI is developing drug candidates for use in combination with other products, clinical trials may be more complex, resulting data may be more difficult to interpret, MEI may not be able to demonstrate that clinical trial results are attributable to its drug candidate, or developments with respect to the other product or standard of care may impact MEI’s ability to obtain product approval for its drug candidate or to successfully market MEI’s drug candidate;

 

 

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even if MEI’s product candidates perform satisfactorily in clinical studies, regulatory authorities may still have remaining questions or concerns based on outcomes observed with respect to other products and product candidates in the same pharmacologic class;

 

   

the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries;

 

   

the FDA may require that MEI conducts additional pre-clinical or clinical studies, change its manufacturing process, or gather additional manufacturing information above what MEI currently has planned for;

 

   

the FDA’s interpretation and MEI’s interpretation of data from pre-clinical studies and clinical trials may differ significantly;

 

   

the FDA may not agree with MEI’s intended indications, the design of MEI’s clinical or pre-clinical studies, or there may be a flaw in the design that does not become apparent until the studies are well advanced;

 

   

MEI may not be able to establish agreements with contractors or collaborators, including clinical trial sites and CROs, or they or MEI may fail to comply with applicable FDA, protocol, and other regulatory requirements, including those identified in other risk factors;

 

   

the FDA may not approve the manufacturing processes or facilities;

 

   

the FDA may change its approval policies or adopt new laws, guidance, or regulations and MEI’s development program may not meet newly imposed requirements;

 

   

the cost of clinical trials of MEI’s product candidates may be greater than anticipated or MEI may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; or

 

   

the FDA may not accept an NDA or other submission due to, among other reasons, the content or formatting of the submission.

MEI’s pre-clinical and clinical data, other information and procedures relating to a drug candidate may not be sufficient to support approval by the FDA or any other U.S. or foreign regulatory authority, or regulatory interpretation of these data and procedures may be unfavorable. MEI may not be successful in any effort to take advantage of expedited regulatory pathways for serious or life-threatening illnesses or to secure marketing authorization from the FDA. MEI may not be able to demonstrate that its product candidates provide a benefit over existing therapies and, when used in combination with other therapies, MEI may not be able to demonstrate that its product candidates contributed to any observed effect. MEI cannot be certain that any NDA it submits will be approved by the FDA for full or accelerated approval on a timely basis, if at all. Securing accelerated approval requires demonstrating a meaningful therapeutic benefit over available existing treatments. Accelerated approvals are based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. If approved, the FDA will require post-marketing studies to verify clinical benefit. Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from the market on an expedited basis. Indeed, companies have previously withdrawn approved indications following failure to confirm a clinical benefit for their products. Moreover, in recent years, the accelerated approval pathway has come under significant FDA and public scrutiny. Accordingly, the FDA may be more conservative in granting accelerated approval or, if granted, may be more apt to withdrawal approval if clinical benefit is not confirmed. There may also be legislative or regulatory changes to the accelerated approval pathway which may impact the ability to obtain or maintain any such approvals, if received.

 

 

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Should MEI decide to seek accelerated approval, the FDA may not agree that the accelerated approval pathway is appropriate, may disagree with MEI’s chosen surrogate endpoints, or may find that the accelerated approval criteria are not met. Should the FDA disagree with MEI’s approach, MEI would be required to conduct additional clinical studies prior to submitting an NDA and prior to the FDA granting marketing approval. Moreover, should MEI receive accelerated approval for a product candidate, the FDA-approved label will indicate that the clinical benefit of the product has not been established and that continued approval is contingent upon verification of a clinical benefit in confirmatory trials.

MEI’s business and reputation may be harmed by any failure or significant delay in receiving regulatory approval for the sale of any drugs resulting from its drug candidates. As a result, MEI cannot predict when or whether regulatory approval will be obtained for any drug MEI develops. Additionally, other factors may serve to delay, limit or prevent the final approval by regulatory authorities of MEI drug candidates for commercial use, including, but not limited to:

 

   

voruciclib and ME-344 are in various stages of development, and MEI or its licensees will need to conduct significant clinical testing and development work to demonstrate the quality, safety, and efficacy of these drug candidates before applications for marketing can be filed with the FDA, or with the regulatory authorities of other countries;

 

   

development and testing of product formulation, including identification of suitable excipients, or chemical additives intended to facilitate delivery of MEI’s drug candidates;

 

   

it may take MEI many years to complete the testing of its drug candidates, and failure can occur at any stage of this process; and

 

   

negative or inconclusive results, statistically or clinically insignificant results, or adverse medical events during a clinical trial could cause MEI to delay or terminate its development efforts.

Significant delays relating to any preclinical or clinical trials also could shorten any periods during which MEI may have the exclusive right to commercialize its product candidates or allow its competitors to bring products to market before MEI does. This may prevent MEI from receiving marketing approvals and impair MEI’s ability to successfully commercialize its product candidates and may harm its business and results of operations. If MEI experiences delays in obtaining approval, if MEI fails to obtain approval of a product candidate or if the label for a product candidate does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate, the commercial prospects for such product candidate may be harmed and MEI’s ability to generate revenues from that product candidate will be materially impaired. Accordingly, the successful development of any of MEI’s drug candidates is uncertain and, accordingly, MEI may never commercialize any of these drug candidates or generate significant revenue.

The FDA may determine that MEI drug candidates have undesirable side effects that could delay or prevent regulatory approval or commercialization.

Undesirable side effects caused by MEI drug candidates could cause MEI, IRBs, and other reviewing entities or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities. Undesirable side effects may also result in requirements for costly post-marketing testing and surveillance, or other requirements, including REMS, to monitor the safety or efficacy of the products. These could prevent MEI from commercializing and generating revenues from the sale of its drug candidates.

Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause side effects that prevented further development of the compound. In addition, adverse events which had initially been considered unrelated to the study treatment may later be found to be caused by the study treatment. Moreover, incorrect or improper use of MEI’s drug candidates could cause unexpected side effects or adverse events. If any of MEI’s drug candidates are associated with serious adverse events or undesirable side effects or

 

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have properties that are unexpected, MEI may need to abandon development or limit development of that drug candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. The therapeutic-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may significantly harm MEI’s business, financial condition, results of operations, and prospects.

If MEI experiences delays or difficulties in the enrollment of patients in clinical trials, MEI’s completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented.

MEI may not be able to initiate or continue conducting clinical trials for its drug candidates if MEI is unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the U.S. Competitors of MEI may also have ongoing clinical trials for drug candidates that are intended to treat the same indications as MEI’s drug candidates, and patients who would otherwise be eligible for MEI clinical trials may instead enroll in clinical trials of MEI’s competitors’ drug candidates. Patient enrollment is affected by other factors including:

 

   

the size and nature of the patient population;

 

   

the severity of the disease under investigation;

 

   

the existence of current treatments for the indications for which MEI is conducting clinical trials;

 

   

the eligibility criteria for and design of the clinical trial in question, including factors such as frequency of required assessments, length of the study and ongoing monitoring requirements;

 

   

the perceived risks and benefits of the drug candidate, including the potential advantages or disadvantages of the drug candidate being studied in relation to other available therapies;

 

   

competition in recruiting and enrolling patients in clinical trials;

 

   

efforts to facilitate timely enrolment in clinical trials;

 

   

patient referral practices of physicians;

 

   

effectiveness of publicity created by clinical trial sites regarding the trial;

 

   

patients’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the drug candidate;

 

   

an inability to obtain or maintain patient informed consents;

 

   

the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up;

 

   

the ability to monitor patients adequately during and after treatment;

 

   

the ability to compensate patients for their time and effort; and

 

   

the proximity and availability of clinical trial sites for prospective patients.

MEI’s inability to enroll a sufficient number of patients for its clinical trials would result in significant delays and could require MEI to abandon one or more clinical trials altogether. In particular, there may be low or slow enrollment, and the studies may enroll subjects that do not meet the inclusion criteria, requiring the erroneously enrolled subjects to be excluded and the trial population to be increased. Moreover, patients in MEI’s clinical trials may be at risk for dropping out of MEI studies if they are not experiencing relief of their disease. A significant number of withdrawn patients would compromise the quality of MEI’s data.

Enrollment delays in MEI’s clinical trials may result in increased development costs for MEI’s drug candidates, or the inability to complete development of MEI’s drug candidates, which would cause the value of MEI to decline, limit MEI’s ability to obtain additional financing, and materially impair MEI’s ability to generate revenues.

 

 

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Changes in funding for the FDA and other government agencies or future government shutdowns could cause delays in the submission and regulatory review of marketing applications, which could negatively impact MEI’s business or prospects.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept submission, applications, and the payment of user fees, and statutory, regulatory, and policy changes, including the Congressional reauthorization of the FDA’s user fee bills. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies, including as a result of pandemics like COVID-19 and legislative actions, may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect MEI’s business. For example, Congress is currently negotiating reauthorization of the FDA user fee bills, which are critical to the FDA’s operations. Moreover, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, if the FDA is required to furlough review staff or other necessary employees, or if agency operations are otherwise impacted, it could significantly affect the ability of the FDA to timely review and process MEI’s regulatory submissions, which could have a material adverse effect on MEI’s business or prospects.

Failure to obtain regulatory approval in foreign jurisdictions would prevent MEI from marketing its products internationally.

MEI may attempt to have its drug candidates marketed outside the U.S. In order to market MEI products in many non-U.S. jurisdictions, MEI must obtain separate international regulatory approvals and comply with numerous and varying regulatory requirements. To date, MEI has not filed for marketing approval for any of its drug candidates and may not receive the approvals necessary to commercialize its drug candidates in any market.

The approval procedure varies among countries and may include all of the risks associated with obtaining FDA approval. Further, the time required to obtain foreign regulatory approval may differ from that required to obtain FDA approval, and additional pre-clinical studies, clinical trials, other testing and data review may be required. MEI may not obtain foreign regulatory approvals on a timely basis, if at all. Additionally, approval by the FDA does not ensure approval by regulatory agencies in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory agencies in other foreign countries or by the FDA. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in other jurisdictions, including approval by the FDA. The failure to obtain regulatory approval in foreign jurisdictions could limit commercialization of MEI’s products, reduce MEI’s ability to generate profits and harm its business.

Any designation granted by the FDA for any of MEI’s product candidates may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that MEI’s product candidates will receive marketing approval. MEI may also not be able to obtain or maintain any such designation.

There are a number of FDA programs that are intended to speed the development of drugs that are intended to treat serious diseases and conditions when there is an unmet need, including Fast Track and Break Through Therapy Designation. Receipt of such designations is within the discretion of the FDA. Accordingly, even if MEI believes one of its drug candidates meets the criteria for a designation, the FDA may disagree. If MEI receives any designation, the potential reduced timelines associated with designation may introduce significant chemistry, manufacturing and controls challenges for product development as manufacturing development may need to take

 

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place at a faster pace than would otherwise be required because the FDA will expect that properly qualified and manufactured product be available at the time of product approval. In any event, the receipt of a designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even after granting a designation, the FDA may later decide that such product candidates no longer meet the conditions for qualification and rescind such designations.

Any orphan drug designations MEI receives may not confer marketing exclusivity or other benefits.

In the U.S., under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition. Such diseases and conditions are those that affect fewer than 200,000 individuals in the U.S., or if they affect more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and making a drug available in the U.S. for these types of diseases or conditions will be recovered from sales of the drug. Orphan drug designation must be requested before submitting an NDA. If the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by that agency. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, but it can lead to financial incentives, such as opportunities for grant funding toward clinical trial costs, tax advantages and user-fee waivers. The EMA and the UK also have programs for orphan drugs.

There is no guarantee that a drug candidate will receive orphan drug designation. There is also no guarantee that MEI would be able to maintain any designations that it receives. For instance, orphan drug designation in the U.S., EU or UK may be revoked for a number of reasons. If a drug that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the drug is entitled to orphan drug marketing exclusivity for a period of seven years. Orphan drug marketing exclusivity generally prevents the FDA from approving another application, including a full NDA, to market the same drug or biological product for the same orphan use for seven years, except in limited circumstances, including if the FDA concludes that the later drug is safer, more effective or makes a major contribution to patient care. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and is intended for the same use as the drug in question. MEI may not be able to obtain future orphan drug designations that it may apply for or maintain any orphan drug designations that MEI may receive. A designated orphan drug also may not receive orphan drug marketing exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation or if it is deemed to be the same drug as a previously approved drug and cannot demonstrate clinical superiority. Similarly, in the EMA (and the MHRA), orphan drugs can receive an exclusivity period of ten years, but can be reduced to six years if the drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

Orphan drug exclusivity may be lost if the FDA, EMA or MHRA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. Orphan drug exclusivity also may not protect a product from competition. For instance, the FDA may approve a drug that is the same drug with orphan exclusivity for a different indication or a different drug for the same indication as the orphan product. Even after an orphan product is approved, the FDA can also subsequently approve a product containing the same principal molecular features for the same condition if the FDA concludes that the latter product is clinically superior. The FDA may further grant orphan designation to multiple sponsors for the same compound or active molecule and for the same indication. If another sponsor receives FDA approval for such product before MEI does, MEI would be prevented from launching its product in the U.S. for the orphan indication for a period of at least seven years unless MEI can demonstrate clinical superiority.

 

 

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Risks Related to the Commercialization of MEI Drug Candidates

Even if MEI or MEI’s licensees receive regulatory approval to commercialize its drug candidates, MEI’s ability to generate revenues from any resulting products will be subject to a variety of risks, many of which are out of MEI’s control.

Even if MEI’s drug candidates obtain regulatory approval, resulting products may not gain market acceptance among physicians, patients, healthcare payers or the medical community. MEI believes that the degree of market acceptance and MEI’s ability to generate revenues from such products will depend on a number of factors, including, but not limited to, the following:

 

   

timing of market introduction of MEI’s drugs and competitive drugs;

 

   

actual and perceived efficacy and safety of MEI’s drug candidates;

 

   

prevalence and severity of any side effects;

 

   

potential or perceived advantages or disadvantages over alternative treatments;

 

   

potential post-marketing commitments imposed by regulatory authorities, such as patient registries;

 

   

strength of sales, marketing and distribution support;

 

   

price of MEI’s future products, both in absolute terms and relative to alternative treatments;

 

   

the effect of current and future healthcare laws on MEI’s drug candidates; and

 

   

availability of coverage and reimbursement from government and other third party payers.

If any of MEI’s drugs are approved and fail to achieve market acceptance, MEI may not be able to generate significant revenue to achieve or sustain profitability.

If any products MEI develops become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, MEI’s ability to successfully commercialize its products will be impaired.

MEI’s future revenues, profitability and access to capital will be affected by the continuing efforts of governmental and private third party payers to manage, contain or reduce the costs of health care through various means, such as capping prices, limiting price increases, reducing reimbursement, and requiring rebates. MEI is also unsure of the impact of any future health care reform legislation or other changes in healthcare policy may have on MEI’s business or what actions federal, state, foreign and private payers may take or reforms that may be implemented in the future. Therefore, it is difficult to predict the effect of any potential reform on MEI’s business. MEI’s ability to commercialize its drug candidates successfully will depend, in part, on the extent to which reimbursement for the cost of such drug candidates and related treatments will be available from government health administration authorities, such as Medicare and Medicaid in the U.S., private health insurers and other organizations. Significant uncertainty exists as to the reimbursement status of newly approved health care products, particularly for indications for which there is no current effective treatment or for which medical care typically is not sought. Adequate third party coverage may not be available to enable MEI to maintain price levels sufficient to realize an appropriate return on its investment in research and development. If adequate coverage and reimbursement levels are not provided by government and third party payers for use of MEI products, MEI’s products may fail to achieve market acceptance without a substantial reduction in price or at all and MEI’s results of operations will be harmed. In addition, government regulation may restrict MEI’s business and financial relationships with health care providers and managed care intermediaries in ways that could impact MEI’s ability to successfully market its products.

Further, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which have resulted in several recent Congressional inquiries and proposed and enacted bills by Congress and the states designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program

 

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reimbursement methodologies for products. Most recently, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022 (the “IRA”) which among other things, contains multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

In addition, the U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs, including price-controls, restrictions on reimbursement, requirements for substitution of generic products for branded prescription drugs, and permitting importation of drugs from outside the U.S. to limit the growth of government paid health care costs. For example, the U.S. government has passed legislation requiring pharmaceutical manufacturers that participate in federal healthcare programs to provide rebates and discounts to certain entities and governmental payors. Further, Congress and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. Individual states in the U.S. have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

MEI’s drug candidates are subject to ongoing government regulation both before and after regulatory approval.

Both before and after regulatory approval, MEI’s drug candidates are subject to strict and ongoing regulation. Compliance with such regulations may consume substantial financial and management resources and expose MEI and its collaborators to the potential for other adverse circumstances. For example, a regulatory authority can place restrictions on the sale or marketing of a drug in order to manage the risks identified during initial clinical trials or after the drug is on the market. A regulatory authority can condition the approval for a drug on costly post-marketing follow-up studies. Based on these studies, if a regulatory authority does not believe that the drug demonstrates a clinical benefit to patients or an acceptable safety profile, it could limit the indications for which a drug may be sold or revoke the drug’s marketing approval. In addition, identification of certain side effects either during clinical trials or after a drug is on the market may result in reformulation of a drug, additional pre-clinical and clinical trials, labeling changes, termination of ongoing clinical trials or withdrawal of approval. Any of these events could delay or prevent MEI from generating revenue from the commercialization of these drugs and cause MEI to incur significant additional costs.

Compliance with the applicable regulatory requirements may result in significant expenses and MEI and its third party contractors and collaborators may be subject to unannounced FDA and other regulatory authority inspections and assessments. Any failure to comply with the applicable regulatory requirements or problems with MEI’s drug candidates may result in regulatory enforcement or other actions, including:

 

   

restrictions on manufacturing or distribution, or marketing of any approved products;

 

   

restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions;

 

   

modifications to promotional pieces or issuance of corrective information;

 

   

requirements to conduct post-marketing studies or other clinical trials;

 

   

clinical holds or termination of clinical trials;

 

   

requirements to establish or modify a REMS or a comparable foreign authority may require that MEI establish or modify a similar strategy;

 

   

changes to the way the product is administered;

 

   

liability for harm caused to patients or subjects;

 

   

reputational harm;

 

 

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the product becoming less competitive;

 

   

warning, untitled, or cyber letters;

 

   

suspension of marketing or withdrawal of the products from the market;

 

   

regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product;

 

   

refusal to approve pending applications or supplements to approved applications that MEI submits;

 

   

recalls of products;

 

   

fines, restitution or disgorgement of profits or revenues;

 

   

suspension or withdrawal of marketing approvals;

 

   

refusal to permit the import or export of MEI’s products;

 

   

product seizure or detention;

 

   

FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or

 

   

injunctions or the imposition of civil or criminal penalties, including imprisonment.

Non-compliance with any foreign jurisdictions’ requirements, including requirements regarding the protection of personal information, can also lead to significant penalties and sanctions.

Any of these events could prevent MEI from achieving or maintaining regulatory product approval and market acceptance of the particular drug candidate, if approved, or could substantially increase the costs and expenses of developing and commercializing such product, which in turn could delay or prevent MEI from generating significant revenues from its sale.

Other changes may also impact MEI’s ability to conduct studies and the approvability or marketability of MEI’s drug candidates, including changes in law, government regulation, or FDA policy, including review policies, which may be due to changes in the U.S. government and U.S. administration, or changes in medical practice or standard of care.

If MEI is slow or unable to adapt to changes in existing requirements, standards of care, or the adoption of new requirements or policies, or if MEI is not able to maintain regulatory compliance, MEI may lose any marketing approval that it may have obtained and be subject to regulatory enforcement action. Should any of the above actions take place, they could adversely affect MEI’s ability to achieve or sustain profitability.

MEI may not be able to establish the contractual arrangements necessary to develop, market and distribute its drug candidates.

A key part of MEI’s strategy is to establish contractual relationships with third parties to package, market and distribute its drug candidates. There is no assurance that MEI will be able to negotiate commercially acceptable licensing or other agreements for the future exploitation of its drug candidates, including continued clinical development, manufacture or marketing. If MEI is unable to successfully contract for these services, or if arrangements for these services are terminated, MEI may have to delay its commercialization program which will adversely affect its ability to generate operating revenues.

 

 

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MEI’s commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than MEI’s drug candidates.

The development of drug candidates is highly competitive. A number of other companies have products or drug candidates that have either been approved or are in various stages of pre-clinical or clinical development that are intended for the same therapeutic indications for which MEI’s drug candidates are being developed. Some of these potential competing drug candidates are further advanced in development than MEI’s drug candidates and may be commercialized sooner. Even if MEI is successful in developing effective drugs, its compounds may not compete successfully with products produced by MEI’s competitors.

MEI’s competitors include pharmaceutical companies and biotechnology companies, as well as universities and public and private research institutions. In addition, companies active in different but related fields represent substantial competition for MEI. Many of MEI’s competitors developing oncology drugs have significantly greater capital resources, larger research and development staffs and facilities and greater experience in drug development, regulation, manufacturing and marketing than MEI does. These organizations also compete with MEI and its service providers, to recruit qualified personnel, and with MEI to attract partners for joint ventures and to license technologies that are competitive with MEI. As a result, MEI’s competitors may be able to more easily develop technologies and products that would render MEI’s technologies or its drug candidates obsolete or non-competitive.

MEI’s product candidates may face competition sooner than anticipated.

MEI’s product candidates, if approved, may face competition from other products that are the same as or similar to MEI’s product candidates. If the FDA or comparable foreign regulatory authorities approve generic or similar versions of any of MEI’s product candidates that receive marketing approval, or such authorities do not grant MEI’s products appropriate periods of regulatory exclusivity before approving generic or similar versions of MEI’s products, the sales of MEI’s products could be adversely affected.

Once an NDA is approved, the product will become a “reference listed drug” in the FDA’s Orange Book. Other applicants may then seek approval of generic versions of MEI’s products through submission of Abbreviated New Drug Applications (“ANDA”) in the U.S. Generic products may be significantly less costly to bring to market than the reference listed drug and companies that produce generic products are generally able to offer them at lower prices, and are generally preferred by third party payors. As a result, the FDA, the administration and Congress have recently taken steps to encourage increased generic drug competition in the market in an effort to bring down drug costs. Following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference listed drug is typically lost to the generic product. Moreover, in addition to generic competition, MEI could face competition from other companies seeking approval of drug products that are similar to MEI’s using the 505(b)(2) regulatory pathway. Such applicants may be able to rely on MEI’s product candidates, if approved, or other approved drug products or published literature to develop drug products that are similar to MEI’s. The introduction of a drug product similar to MEI’s product candidates could expose MEI to increased competition.

Any ANDA or 505(b)(2) applicants seeking to rely upon any of MEI’s product candidates, if such product candidates are approved, would need to submit patent certification statements with their applications for any of MEI’s patents that are listed in the FDA’s Orange Book. There are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Orange Book. MEI may be unable to obtain patents covering its product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. If one of MEI’s product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, an ANDA or 505(b)(2) applicant would not have to submit a patent certification with regard to such patent to the FDA, in which case, MEI would not receive the protections provided by the Hatch Waxman Act.

 

 

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Moreover, if an ANDA or 505(b)(2) applicant files a paragraph IV challenge to any patents that MEI may list in the FDA’s Orange Book and if MEI does not file a timely patent infringement lawsuit, the ANDA or 505(b)(2) applicant would not be subject to a 30-month stay. If MEI did file such an action, the litigation or other proceedings to enforce or defend its intellectual property rights would likely be complex in nature, may be expensive and time consuming, may divert MEI’s management’s attention from its core business, and may result in unfavorable results that could adversely impact MEI’s ability to prevent third parties from competing with its products. Accordingly, upon approval of MEI’s product candidates MEI may be subject to generic competition or competition from similar products, or may need to commence patent infringement proceedings, which would divert its resources.

MEI currently anticipates that it may be eligible for five years of non-patent marketing exclusivity in the U.S. This exclusivity, however, would not prevent other companies from submitting full NDAs. To the extent MEI does not receive any anticipated periods of regulatory exclusivity or to the extent the FDA or foreign regulatory authorities approve any generic, similar, or other competing products, MEI’s business would be adversely impacted. Competition that MEI’s products may face from generic, similar, or other competing products could materially and adversely impact its future revenue, profitability, and cash flows and substantially limit MEI’s ability to obtain a return on the investments it has made in those product candidates.

Risks Related to MEI’s Reliance on Third Parties

MEI relies on third parties to conduct its clinical trials and pre-clinical studies. If those parties do not successfully carry out their contractual duties or meet expected deadlines, MEI’s drug candidates may not advance in a timely manner or at all.

In the course of MEI’s pre-clinical testing and clinical trials, MEI relies on third parties, including laboratories, investigators, CROs, manufacturers, and distributors to perform critical services. For example, MEI relies on third parties to conduct its clinical trials and many of its pre-clinical studies, which are required to be conducted consistent with regulations on GLPs and GCPs. CROs and study sites are responsible for many aspects of the trials, including finding and enrolling subjects for testing and administering the trials. Although MEI relies on these third parties to conduct its pre-clinical and clinical trials, MEI is responsible for ensuring that each of its trials are conducted in accordance with its investigational plan and protocol and that the integrity of the studies and resulting data is protected. While MEI has agreements governing the activities of such third parties, MEI has limited influence and control over their actual performance and activities. Moreover, the FDA and foreign regulatory authorities require MEI to comply with regulations and standards, commonly referred to as GCPs, for conducting, monitoring, recording, and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trial subjects are adequately informed of the potential risks of participating in clinical trials. MEI’s reliance on third parties does not relieve it of these responsibilities and requirements. These third parties may not be available when MEI needs them or, if they are available, may not devote sufficient time or resources to MEI’s studies, may not comply with all regulatory and contractual requirements, or may not otherwise perform their services in a timely or acceptable manner, and MEI may need to enter into new arrangements with alternative third parties and MEI’s clinical trials may be extended, delayed or terminated. These independent third parties may also have relationships with other commercial entities, some of which may compete with MEI. In addition, if such third parties fail to perform their obligations in compliance with MEI’s protocols or the applicable regulatory requirements, MEI’s trials may not meet regulatory requirements or may need to be repeated, MEI may not receive marketing approvals, or MEI or such third parties may face regulatory enforcement.

Agreements with third parties conducting or otherwise assisting with MEI’s clinical or preclinical studies might terminate for a variety of reasons, including a failure to perform by the third parties. If any of MEI’s relationships with these third parties terminate, MEI may not be able to enter into arrangements with alternative providers or to do so on commercially reasonable terms. Switching or adding additional third parties involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new third party

 

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commences work. As a result, if MEI needs to enter into alternative arrangements, it could delay MEI’s product development activities and adversely affect its business. Though MEI carefully manages its relationships with third parties, there can be no assurance that MEI will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on MEI’s business, financial condition and prospects, and results of operations.

Accordingly, as a result of MEI’s dependence on third parties, MEI may face delays, failures or cost increases outside of its direct control. These risks also apply to the development activities of collaborators, and MEI does not control their research and development, clinical trial or regulatory activities.

In addition, MEI will be required to report certain financial interests of its third party investigators if these relationships exceed certain financial thresholds or meet other criteria. The FDA or comparable foreign regulatory authorities may question the integrity of the data from those clinical trials conducted by investigators who may have conflicts of interest.

MEI also cannot assure you that upon inspection or review by a given regulatory authority, such regulatory authority will determine that any of MEI’s trials complies with the applicable regulatory requirements. In addition, MEI’s clinical trials must be conducted with drug candidates that were produced under cGMP conditions. Failure to comply with these regulations may require MEI to repeat clinical trials, which would delay the regulatory approval process. MEI is also required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in enforcement actions and adverse publicity.

MEI will depend on third party suppliers and contract manufacturers for the manufacturing of its drug candidates and have no direct control over the cost and timing of manufacturing these drug candidates. Increases in the cost of manufacturing MEI’s drug candidates or delays in manufacturing would increase its costs of conducting clinical trials and could adversely affect MEI’s future profitability.

MEI does not intend to manufacture its drug candidates themselves, and will rely on third parties for its drug supplies both for clinical trials and for commercial quantities in the future. MEI has taken the strategic decision not to manufacture active pharmaceutical ingredients (“API”), nor finished product, for its drug candidates, as these can be more economically supplied by third parties with particular expertise in this area. MEI has identified contract facilities that are registered with the FDA, have a track record of large- scale API and drug product manufacturing, and have already invested in capital and equipment. MEI has no direct control over the manufacturing of its drug candidates, or the cost thereof. If the contract manufacturers are unable to produce sufficient quantities of MEI’s drug candidates, as a result of a lack of available materials or otherwise, MEI’s ability to complete product candidate development and MEI’s future profitability would be adversely affected. If the cost of manufacturing increases, or if the cost of the materials used increases, these costs will be passed on to MEI, making the cost of conducting clinical trials more expensive. Increases in manufacturing costs could adversely affect MEI’s future profitability if MEI is unable to pass all of the increased costs along to its customers.

If these third party suppliers and contract manufacturers do not successfully carry out their contractual duties, meet expected deadlines or manufacture MEI’s drug candidates in accordance with regulatory requirements, if there are disagreements between MEI and such parties, or if such parties are unable to expand capacities to support commercialization of any of MEI’s drug candidates for which MEI obtains marketing approval, MEI may not be able to produce, or may be delayed in producing sufficient drug candidates to meet its supply requirements. Any delays in obtaining adequate supplies with respect to MEI’s drug candidates and components may delay the development or commercialization of its drug candidates.

 

 

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Further, MEI, along with its contract manufacturers, are required to comply with FDA requirements for cGMPs, related to product testing, quality assurance, manufacturing and documentation. MEI’s contract manufacturers may not be able to comply with the applicable FDA regulatory requirements, which could result in delays to MEI’s product development programs, could result in adverse regulatory actions against MEI or its contract manufacturers, and could prevent MEI from ultimately receiving product marketing approval. They also generally must pass an FDA preapproval inspection or assessment for conformity with cGMPs before MEI can obtain approval to manufacture its drug candidates and will be subject to ongoing, periodic, unannounced inspection or assessment by the FDA and corresponding state agencies to ensure strict compliance with cGMP, and other applicable government regulations and corresponding foreign standards. If MEI and its contract manufacturers fail to achieve and maintain high manufacturing standards in compliance with cGMP, MEI may experience manufacturing errors resulting in defective products that could be harmful to patients, product recalls or withdrawals, delays or interruptions of production or failures in product testing or delivery, clinical trial or other development program delays, delay or prevention of filing or approval of marketing applications for MEI’s products, cost overruns or other problems that could seriously harm MEI’s business. Not complying with FDA requirements could result in a product recall, costly and time-consuming corrective or preventative actions, or prevent commercialization of MEI’sdrug candidates and delay MEI’s business development activities. In addition, such failure could be the basis for the FDA to issue a warning or untitled letter or take other regulatory or legal enforcement action, including recall or seizure, total or partial suspension of production, suspension of ongoing clinical trials, refusal to approve pending applications or supplemental applications, and potentially civil and/or criminal penalties depending on the matter.

If MEI needs to replace any of its manufacturers or establish additional manufacturing arrangements, MEI may not succeed in its efforts. MEI’s drug candidates may compete with other products and drug candidates for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that are both capable of manufacturing for MEI and willing to do so. If MEI’s existing third party manufacturers, or the third parties that MEI engages in the future to manufacture a product or component for commercial sale or for MEI’s clinical trials should cease to continue to do so for any reason, MEI would likely experience delays in obtaining sufficient quantities of its drug candidates for MEI to meet commercial demand or to advance its clinical trials while MEI identifies and qualifies replacement suppliers. These third party facilities may also be affected by natural disasters, such as floods or fire, or such facilities could face manufacturing issues, such as contamination or regulatory findings following a regulatory inspection or assessment of such facility. In such instances, MEI may need to locate an appropriate replacement third party relationship, which may not be readily available or on acceptable terms, which would cause additional delay and increased expense. The addition of a new or alternative manufacturer may also require FDA approvals and may have a material adverse effect on MEI’s business.

MEI or its third party manufacturers may also encounter shortages in the raw materials, therapeutic substances, or active pharmaceutical ingredients necessary to produce MEI’s drug candidates in the quantities needed for its clinical trials or, if MEI’s drug candidates are approved, in sufficient quantities for commercialization or to meet an increase in demand. Such shortages may occur for a variety of reasons, including capacity constraints, delays or disruptions in the market, and shortages caused by the purchase of such materials by MEI’s competitors or others. MEI or its third party manufacturers’ failure to obtain the raw materials, therapeutic substances, or active pharmaceutical ingredients necessary to manufacture sufficient quantities of MEI’s drug candidates may have a material adverse effect on MEI’s business. If for any reason MEI is unable to obtain adequate supplies of its drug candidates or the components used to manufacture them, it will be more difficult for MEI to develop its drug candidates and compete effectively.

MEI relies on acquisitions or licenses from third parties to expand its pipeline of drug candidates.

MEI is not presently engaged in drug discovery activities. In order to expand MEI’s pipeline of drug candidates for future development, MEI may need to purchase or in-license any such drug candidates. The success of this strategy depends in large part on the combination of MEI’s regulatory and development capabilities and expertise

 

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and its ability to identify, select and acquire or in-license clinically-enabled product candidates on terms that are acceptable to MEI. Identifying, selecting and acquiring or in-licensing promising product candidates requires substantial technical expertise, and MEI has limited experience in identifying and integrating any acquired product candidates into its current infrastructure. Efforts to do so may not result in the actual acquisition or in-license of a particular drug candidate, potentially resulting in a diversion of MEI’s management’s time and the expenditure of its resources with no resulting benefit. If MEI is unable to identify, select and acquire or license suitable product candidates from third parties on terms acceptable to MEI, MEI’s business and prospects may be limited.

Risks Related to MEI’s Intellectual Property

MEI’s commercial success is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed.

Patent protection and trade secret protection are important to MEI’s business and its future will depend, in part on MEI’s ability to maintain trade secret protection, obtain patents and operate without infringing the proprietary rights of others both in the U.S. and abroad. Litigation or other legal proceedings may be necessary to defend against claims of infringement, to enforce MEI’s patents or to protect its trade secrets. Such litigation could result in substantial costs and diversion of MEI’s management’s attention.

The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. MEI acquired patents and patent applications related to voruciclib from Presage in 2017, and acquired both issued patents and pending patent applications related to ME-344 from Novogen in relation to its Isoflavone-based compounds, which MEI previously licensed from Novogen, in 2011. Additionally, Novogen had previously applied for patents in a number of countries with respect to the use of their isoflavone compounds, including ME-344. Finally, in September 2013, MEI acquired patents and patent applications related to zandelisib from Pathway Therapeutics, Inc.

The patent applications may not proceed to grant or may be amended to reduce the scope of protection of any patent granted. The applications and patents may also be opposed or challenged by third parties. MEI’s commercial success will depend, in part, on its ability to obtain and maintain effective patent protection for its compounds and their use in treating, preventing, or curing cancer, and to successfully defend patent rights in those technologies against third party challenges. As patent applications in the U.S. are maintained in secrecy until published or issued and as publication of discoveries in the scientific or patent literature often lag behind the actual discoveries, MEI cannot be certain that MEI or Presage were the first to make the inventions covered by the pending patent applications or issued patents referred to above or that MEI or Presage were the first to file patent applications for such inventions. Additionally, the breadth of claims allowed in biotechnology and pharmaceutical patents or their enforceability cannot be predicted. MEI cannot be sure that, should any patents issue, MEI will be provided with adequate protection against potentially competitive products. Furthermore, MEI cannot be sure that should patents issue, they will be of commercial value to MEI, or that private parties, including competitors, will not successfully challenge its patents or circumvent MEI’s patent position in the U.S. or abroad.

Claims by other companies that MEI infringes on their proprietary technology may result in liability for damages or stop MEI’s development and commercialization efforts.

The pharmaceutical industry is highly competitive, and patents have been applied for by, and issued to, other parties relating to products competitive with the compounds that MEI has acquired. Therefore, voruciclib, ME-344, and zandelisib, and any other drug candidates, may give rise to claims that they infringe the patents or proprietary rights of other parties existing now and in the future.

 

 

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Furthermore, to the extent that MEI or its consultants or research collaborators use intellectual property owned by others in work performed for MEI, disputes may also arise as to the rights in such intellectual property or in resulting know-how and inventions. An adverse claim could subject MEI to significant liabilities to such other parties and/or require disputed rights to be licensed from such other parties.

MEI has contracted formulation development and manufacturing process development work for its product candidates. This process has identified a number of excipients, or additives to improve drug delivery, which may be used in the formulations. Excipients, among other things, perform the function of a carrier of the active drug ingredient. Some of these identified excipients or carriers may be included in third party patents in some countries. MEI intends to seek a license if it decides to use a patented excipient in the marketed product or MEI may choose one of those excipients that does not have a license requirement.

MEI cannot be sure that any license required under any such patents or proprietary rights would be made available on terms acceptable to MEI, if at all. If MEI does not obtain such licenses, it may encounter delays in product market introductions, or may find that the development, manufacture or sale of products requiring such licenses may be precluded.

MEI may be subject to claims by third parties asserting that MEI or its employees have misappropriated their intellectual property, or claiming ownership of what MEI regards as its own intellectual property.

Many MEI employees and the employees of Kyowa Kirin and third parties upon which MEI relies to conduct its clinical trials were previously employed at universities or at other biotechnology or pharmaceutical companies, some of which may be competitors or potential competitors. Some of these employees executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment. Although MEI tries to ensure that its employees do not use the proprietary information or know-how of others in their work for MEI, MEI may be subject to claims that MEI or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party. Litigation may be necessary to defend against such claims. If MEI fails in defending any such claims, in addition to paying monetary damages, MEI may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and MEI could be required to obtain a license from such third party to commercialize MEI’s technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if MEI is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while MEI typically requires its employees, consultants, advisors and collaborators who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to MEI, MEI may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that MEI regards as its own, which may result in claims by or against MEI related to the ownership of such intellectual property. If MEI fails in prosecuting or defending any such claims, in addition to paying monetary damages, MEI may lose valuable intellectual property rights. Even if MEI is successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to MEI’s senior management and scientific personnel.

MEI may be subject to substantial costs stemming from its defense against third party intellectual property infringement claims.

Third parties may assert that MEI is using their proprietary information without authorization. Third parties may also have or obtain patents and may claim that technologies licensed to or used by MEI infringe their patents. If MEI is required to defend patent infringement actions brought by third parties, or if MEI sues to protect its own patent rights, MEI may be required to pay substantial litigation costs and managerial attention may be diverted from business operations even if the outcome is not adverse to MEI. In addition, any legal action that seeks damages or an injunction to stop MEI from carrying on its commercial activities relating to the affected

 

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technologies could subject MEI to monetary liability and require MEI or any third party licensors to obtain a license to continue to use the affected technologies. MEI cannot predict whether it would prevail in any of these types of actions or that any required license would be made available on commercially acceptable terms or at all.

General Business Risks

MEI faces a risk of product liability claims and claims may exceed MEI’s insurance limits.

MEI’s business exposes MEI to the risk of product liability claims. This risk is inherent in the manufacturing, testing and marketing of human therapeutic products. Moreover, regardless of merit or eventual outcome, liability claims can have other adverse consequences, including:

 

   

loss of revenue from decreased demand for MEI’s products and/or drug candidates;

 

   

impairment of MEI’s business reputation or financial stability;

 

   

costs of related litigation;

 

   

substantial monetary awards to patients or other claimants;

 

   

diversion of management attention;

 

   

withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs;

 

   

the inability to commercialize MEI’s drug candidates;

 

   

significant negative media attention;

 

   

decrease in MEI’s stock price; or

 

   

initiation of investigations, and enforcement actions by regulators; and product recalls, withdrawals, revocation of approvals, or labeling, marketing or promotional restrictions.

MEI’s product liability insurance coverage is subject to deductibles and coverage limitations. MEI may not be able to obtain or maintain adequate protection against potential liabilities, or claims may exceed MEI’s insurance limits. If MEI cannot or does not sufficiently insure against potential product liability claims, MEI may be exposed to significant liabilities, which may materially and adversely affect its business development and commercialization efforts.

MEI employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on MEI’s business.

MEI is exposed to the risk of employee fraud or other misconduct. Misconduct by employees, independent contractors, consultants, commercial partners, manufacturers, investigators, or CROs could include intentional, reckless, negligent, or unintentional failures to comply with FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the FDA, properly calculate pricing information required by federal programs, comply with federal procurement rules or contract terms, report financial information or data accurately or disclose unauthorized activities to MEI. This misconduct could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to MEI’s reputation. It is not always possible to identify and deter this type of misconduct, and the precautions MEI takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting MEI from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Moreover, it is possible for a whistleblower to pursue a False Claims Act, (“FCA”), case against MEI even if the government considers the claim unmeritorious and declines to intervene, which could require MEI to incur costs defending against such a claim. Further, due to the risk that a judgment in an FCA case could result in exclusion from federal health programs or debarment from government contracts, whistleblower cases often result in large settlements. If any

 

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such actions are instituted against MEI, and MEI is not successful in defending itself or asserting its rights, those actions could have a significant impact on MEI’s business, financial condition, and results of operations, including the imposition of significant fines or other sanctions.

MEI’s business and operations would suffer in the event of system failures.

MEI’s internal computer systems and those of its CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failures. If such an event were to occur and cause interruptions in MEI’s operations, it could result in a material disruption of MEI’s drug candidate development and, if such drug candidates are approved commercialization programs. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in MEI’s regulatory approval efforts and significantly increase MEI’s costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to MEI’s data or applications, or inappropriate disclosure of personal, confidential or proprietary information, MEI could incur liability and regulatory enforcement actions, and the further development of any of MEI’s drug candidates could be delayed.

MEI’s efforts will be seriously jeopardized if MEI is unable to retain and attract key employees.

MEI’s success depends on the continued contributions of its principal management, development and scientific personnel. MEI faces competition for such personnel, and MEI believe that risks and uncertainties related to its business, including the timing and risk associated with research and development, MEI’s available and anticipated cash resources, and the volatility of MEI’s stock price, may impact its ability to hire and retain key and other personnel. The loss of services of MEI’s Chief Executive Officer or other key employees could adversely impact MEI’s operations and ability to generate or raise additional capital.

Negative U.S. and global economic conditions may pose challenges to MEI’s business strategy, which relies on funding from the financial markets or collaborators.

Negative conditions in the U.S. or global economy, including financial markets, may adversely affect MEI’s business and the business of current and prospective vendors, licensees and collaborators, and others with whom MEI does or may conduct business. The duration and severity of these conditions is uncertain. If negative economic conditions occur, MEI may be unable to secure funding on terms satisfactory to MEI to sustain its operations or to find suitable collaborators to advance MEI’s internal programs, even if MEI achieves positive results from its drug development programs.

Laws, rules and regulations relating to public companies may be costly and impact MEI’s ability to attract and retain directors and executive officers.

Laws and regulations affecting public companies, including rules adopted by the SEC and by Nasdaq, may result in increased costs to MEI. These laws, rules and regulations could make it more difficult or costly for MEI to obtain certain types of insurance, including director and officer liability insurance, and MEI may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for MEI to attract and retain qualified persons to serve on its board of directors, on its board committees or as executive officers. MEI cannot estimate accurately the amount or timing of additional costs it may incur to respond to these laws, rules and regulations.

 

 

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MEI identified a material weakness in its internal control over financial reporting and determined that its disclosure controls and procedures were ineffective as of June 30, 2021. As a result, MEI restated its financial statements as of and for the years ended June 30, 2021 and 2020. Relevant unaudited interim financial information for each of the quarterly periods ended September 30, 2020 through December 31, 2021 were also restated. As of March 31, 2023, MEI is in the process of remediating this material weakness. In the future, MEI may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in its financial statements or cause MEI to fail to meet its period reporting obligations.

Under the supervision and with the participation of MEI’s management, including its Chief Executive Officer and Chief Financial Officer, MEI conducted an assessment of the effectiveness of its internal control over financial reporting as of June 30, 2021. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of MEI’s annual or interim financial statements will not be prevented or detected on a timely basis. In Management’s Report on Internal Control over Financial Reporting included in MEI’s original Form 10-K for the year ended June 30, 2021, filed on September 2, 2021, (the “Original Form 10-K”) MEI’s management previously concluded that it maintained effective internal control over financial reporting as of June 30, 2021. MEI’s management subsequently concluded that a material weakness existed and its internal control over financial reporting was not effective as of June 30, 2021.

In May 2022, MEI determined that it had made certain errors in the manner in which MEI recognized revenue from its License, Development and Commercialization Agreement with Kyowa Kirin Co., Ltd (the “Kyowa Kirin Commercialization Agreement”) with the result that revenue was overstated in some quarters and understated in other quarters in MEI’s financial statements during 2020 and 2021. The errors relate to the appropriate timing and amounts of revenue recognized over time under the cost-to-cost method associated with the Kyowa Kirin Commercialization Agreement.

As a result, MEI determined that there were material errors in the financial statements that required a restatement of the June 30, 2021 and 2020 financial statements included in the Original Form 10-K for the year ended June 30, 2021 and MEI’s Forms 10-Q for the quarterly periods ended September 30, 2020 through December 31, 2021. This was due to the inadequate design and implementation of controls to evaluate and monitor the accounting for revenue recognition related to license agreements.

MEI’s management is implementing enhanced internal controls to remediate the material weakness. The remediation plan includes enhancement of MEI’s contract review of license agreements to confirm appropriate understanding of the terms, as well as implementation of a control designed to evaluate and monitor, at inception and on a quarterly basis, the estimated consideration to be received under license agreements for purposes of revenue recognition, analysis of deferred revenue balances, and enhanced detailed review of MEI’s revenue recognition models. As of March 31, 2023, MEI is in the process of remediating this material weakness.

If MEI is not able to comply with the requirements of the Sarbanes-Oxley Act or if MEI is unable to maintain effective internal control over financial reporting, MEI may not be able to produce timely and accurate financial statements or guarantee that information required to be disclosed by MEI in the reports that it files with the SEC, is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. Any failure of MEI’s internal control over financial reporting or disclosure controls and procedures could cause MEI’s investors to lose confidence in its publicly reported information, cause the market price of MEI’s stock to decline, expose MEI to sanctions or investigations by the SEC or other regulatory authorities, or impact MEI’s results of operations.

 

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Security breaches and privacy issues could compromise MEI’s information and expose it to liability, which would cause MEI’s business and reputation to suffer.

In the ordinary course of MEI’s business, MEI collects and stores sensitive data, including intellectual property, MEI’s proprietary business information and that of its suppliers, as well as personally identifiable information of clinical trial participants and employees. Similarly, MEI’s third party providers possess certain of MEI’s sensitive protected health data. The secure maintenance of this information is critical to MEI’s operations and business strategy. Despite MEI’s reasonable security measures, MEI’s information technology and infrastructure may be vulnerable to cyberattacks or breached due to employee error, malfeasance or other disruptions. Cyberattacks and other security incidents are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Although MEI develops and maintains systems and controls designed to prevent these events from occurring, and MEI has a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, and such systems, controls and processes may not be successful in preventing a breach or other incident. Any such security incident could compromise MEI’s networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. MEI could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. In addition, MEI’s liability insurance may not be sufficient in type or amount to cover MEI against claims related to security breaches, cyberattacks and other related security incidents.

The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect MEI’s business, including compliance with the Health Insurance Portability and Accountability Act of 1996 and state laws requiring security breach notification. The collection and use of personal health data of individuals in the European Union is also governed by strict data protection laws. In addition to existing laws, since May 25, 2018, the General Data Protection Regulation (“GDPR”) has imposed obligations with respect to European Union data and substantial fines for breaches of the data protection rules. The GDPR increased MEI’s responsibility and potential liability in relation to personal data that it processes, and MEI was required to implement additional mechanisms to comply with the GDPR and related European Union data protection rules. Enforcement uncertainty and the costs associated with ensuring GDPR compliance may be onerous and adversely affect MEI’s business, operating results, prospects and financial condition.

MEI continues to evaluate the legal issues that arise concerning transfer of personal data of residents of the European Economic Area (“EEA”) member states or the U.K. to the U.S. or other jurisdictions that are not deemed adequate by the European Commission. Among other steps, MEI is implementing the new standard contractual clauses issued on June 4, 2021 by the European Commission. It remains uncertain how these standard contractual clauses will be implemented by the data exporters and data importers and whether they will ultimately be deemed sufficient by European courts. MEI Pharma observes the developments and will agree to the appropriate data transfer mechanism. In addition to standard contractual clauses, MEI may rely on individual contents of the patients where appropriate and necessary to safeguard the data flow from the EU to the U.S. Present solutions to legitimize transfers of personal data from the EEA may be challenged or deemed insufficient. MEI may, in addition to other impacts, experience additional costs associated with increased compliance burdens, and MEI and its customers face the potential for regulators in the EEA or U.K. to apply different standards to the transfer of personal data from the EEA/ U.K. to the U.S., and to block, or require ad hoc verification of measures taken with respect to, certain data flows from the EEA or U.K. to the U.S. MEI may also be required to engage in new contract negotiations with third parties that aid in processing data on MEI’s behalf. MEI may experience reluctance or refusal by current or prospective European clinical trial sites and CROs to use its products, and MEI may find it necessary or desirable to make further changes to its processing of personal data of EEA or U.K. data subjects.

 

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Additionally, California has the California Consumer Privacy Act (“CCPA”), which creates individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households. The CCPA may significantly impact MEI’s business activities and require substantial compliance costs that adversely affect business, operating results, prospects and financial condition. Amendments to the CCPA mandated by the California Privacy Rights Act (“CPRA”) will impose additional privacy requirements, effective on January 1, 2023. Similarly comprehensive state consumer privacy laws in other states, such as Virginia, Utah, Connecticut and Colorado will also become effective in 2023. These new state privacy measures may reflect the start of a movement in other state legislatures to enact more comprehensive privacy laws, which would create a more complex privacy regulatory landscape for MEI’s business in the U.S. In addition, there is privacy legislation and rulemaking efforts at the federal level which may increase MEI’s privacy obligations in the U.S.

Thus, any access, disclosure or other loss of information, including MEI’s data being breached at its partners or third party providers, along with violations of privacy laws that exist and are increasing around the world, could result in legal claims or proceedings and liability under laws that protect the privacy of personal information, disrupt MEI’s operations and damage its reputation, which could adversely affect MEI’s business.

If MEI fails to comply with environmental, health and safety laws and regulations, MEI could become subject to fines or penalties or incur costs that could harm its business.

MEI is subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, MEI’s operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste. Even if MEI contracts with third parties for the disposal of these materials and waste, MEI cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of MEI’s hazardous materials, MEI could be held liable for any resulting damages, and any liability could exceed MEI’s resources. MEI also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

MEI maintains workers’ compensation insurance to cover it for costs and expenses MEI may incur due to injuries to its employees resulting from the use of hazardous materials, but this insurance may not provide adequate coverage against potential liabilities. However, MEI does not maintain insurance for environmental liability or toxic tort claims that may be asserted against MEI.

In addition, MEI may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair MEI’s research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

MEI or the third parties upon whom MEI depends may be adversely affected by natural disasters and MEI’s business continuity and disaster recovery plans may not adequately protect it from a serious disaster.

Events outside of MEI’s control, including natural disasters and public health emergencies, could severely disrupt its operations and have a material adverse effect on MEI’s business, operating results, prospects or financial condition. If a natural disaster, or public health emergency such as COVID-19, power outage or other event occurred that prevented MEI from conducting its clinical trials, including by damaging its critical infrastructure, such as third party facilities, or that otherwise disrupted operations and travel, it may be difficult or, in certain cases, impossible for MEI to continue its business for a substantial period of time. The disaster recovery and business continuity plans MEI has in place may prove inadequate in the event of a serious disaster or similar event. MEI may incur substantial expenses as a result of the limited nature of its disaster recovery and business continuity plans, which could have a material adverse effect on MEI’s business, operating results, prospects or financial condition.

 

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Limitations on the deductibility of net operating losses could adversely affect MEI’s business and financial condition.

MEI has a history of net operating losses. In December 2017, the U.S government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act limits the deduction of net operating losses to 80% of current year taxable income. The limitations on the net operating loss deduction, as well other changes in tax policy, may subject MEI to additional taxation, adversely affecting MEI’s results of operations and financial condition.

Risks Related to Securities Markets and Investment in MEI Stock

The trading price of the shares of MEI common stock has been and may continue to be highly volatile and could decline in value and MEI may incur significant costs from class action litigation.

The trading price of MEI common stock could be highly volatile in response to various factors, many of which are beyond MEI’s control, including, but not limited to, the following:

 

   

failure to successfully develop MEI’s drug candidates;

 

   

design, results and timing of clinical trials and pre-clinical studies;

 

   

announcements of technological innovations by MEI or its competitors;

 

   

new products introduced or announced by MEI or its competitors;

 

   

changes in financial estimates by securities analysts;

 

   

actual or anticipated variations in operating results;

 

   

expiration or termination of licenses, research contracts or other collaboration agreements;

 

   

conditions or trends in the regulatory climate and the biotechnology, pharmaceutical and genomics industries;

 

   

instability in the stock market as a result of current or future domestic and global events;

 

   

changes in the market valuations of similar companies;

 

   

the liquidity of any market for MEI’s securities; and

 

   

threatened or actual delisting of MEI common stock from a national stock exchange.

Equity markets in general, and the market for biotechnology and life sciences companies in particular, have experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies traded in those markets. In addition, changes in economic conditions in the U.S., the Europe or globally, particularly in the context of current global events, could impact upon MEI’s ability to grow profitably. Adverse economic changes are outside of MEI’s control and may result in material adverse impacts on MEI’s business or its results of operations. These broad market and industry factors may materially affect the market price of shares of its common stock, regardless of MEI’s development and operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been instituted against that company. Such litigation, if instituted against MEI, could cause MEI to incur substantial costs and divert management’s attention and resources.

Future sales of MEI common stock, including common stock issued upon exercise of outstanding warrants or options, may depress the market price of MEI’s common stock and cause stockholders to experience dilution.

The market price of MEI common stock could decline as a result of sales of substantial amounts of MEI common stock in the public market, including upon exercise of outstanding warrants or stock options, and any subsequent sales of such shares. As of March 31, 2023, MEI had outstanding warrants exercisable to purchase 802,949 shares of common stock at an exercise price of $50.80 per share, which expire in May 2023. In October 2022, MEI engaged Torreya Partners as a financial adviser and agreed to issue warrants to acquire shares of MEI

 

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Common Stock having a value equal to $0.5 million. MEI issued 102,513 warrants at an exercise price of $6.80 per share to Torreya in February 2023. MEI also had outstanding options to purchase 1,252,931 shares of common stock. MEI may seek additional capital through one or more additional equity transactions in the future; however, such transactions will be subject to market conditions and there can be no assurance any such transactions will be completed. If MEI sells shares in the future, the prices at which MEI sells these future shares will vary, and these variations may be significant. Stockholders will experience significant dilution if MEI sells these future shares at prices significantly below the price at which such previous stockholders invested.

Because MEI does not intend to pay, and has not paid, any cash dividends on its shares of common stock, MEI stockholders will not be able to receive a return on their shares unless the value of MEI common stock appreciates and they sell their shares.

MEI has never paid or declared any cash dividends on its common stock, and MEI intends to retain any future earnings to finance the development and expansion of its business. MEI does not anticipate paying any cash dividends on its common stock in the foreseeable future. Therefore, MEI stockholders will not be able to receive a return on their investment unless the value of MEI common stock appreciates and they sell their shares.

MEI will have broad discretion over the use of the net proceeds from any exercise of outstanding warrants and options.

MEI will have broad discretion to use the net proceeds to MEI upon any exercise of outstanding warrants and options, and investors in MEI stock will be relying on the judgment of MEI’s board of directors and management regarding the application of these proceeds. Although MEI expects to use a substantial portion of the net proceeds from any exercise of the warrants and options for general corporate purposes and progression of its clinical trial programs, MEI has not allocated these net proceeds for specific purposes.

MEI is authorized to issue blank check preferred stock, which could adversely affect the holders of MEI common stock.

The MEI COI allows it to issue blank check preferred stock with rights potentially senior to those of MEI common stock without any further vote or action by the holders of MEI common stock. The issuance of a class of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of MEI common stock or could adversely affect the rights and powers, including voting rights, of such holders. In certain circumstances, such issuance could have the effect of decreasing the market price of MEI shares, or making a change in control of the Company more difficult.

Anti-takeover provisions contained in the MEI COI and fifth amended and restated bylaws (“MEI Bylaws”), as well as provisions of Delaware law, could impair a takeover attempt.

The MEI COI and MEI Bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. MEI is also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for MEI securities. These provisions include:

 

   

a staggered board providing for three classes of directors, which limits the ability of a stockholder or group to gain control of MEI’s board;

 

   

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

the right of MEI’s board to elect a director to fill a vacancy created by the expansion of MEI’s board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on MEI’s board; and

 

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advance notice procedures that stockholders must comply with in order to nominate candidates to MEI’s board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of MEI.

The MEI Bylaws require, to the fullest extent permitted by law, that derivative actions brought in MEI’s name, actions against its directors, officers other employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against MEI’s directors, officers, other employees or stockholders.

The MEI Bylaws provide that, unless MEI consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on behalf of MEI, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of MEI to MEI or MEI’s stockholders, (iii) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine, and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, provided, however, that, in each case, if the Court of Chancery does not have jurisdiction, the forum for such action shall be another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants therein.

Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of MEI shall be deemed to have notice of and consented to such provisions.

Notwithstanding the foregoing, the forum selection provision of MEI’s fifth amended and restated bylaws will not apply to suits brought to enforce any liability or duty created by the federal securities laws or any other claim for which the federal district courts of the U.S. of America shall be the sole and exclusive forum.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with MEI or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the MEI Bylaws to be inapplicable or unenforceable in an action, MEI may incur additional costs associated with resolving such action in other jurisdictions, which could harm MEI’s business, operating results and financial condition.

MEI’s executive officers and directors may sell shares of their stock, and these sales could adversely affect MEI’s stock price.

Sales of MEI stock by its executive officers and directors, or the perception that such sales may occur, could cause the market price of MEI common stock to decline or could make it more difficult for MEI to raise funds through the sale of equity in the future, either as part, or outside, of trading plans under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

RISKS RELATED TO INFINITY

Risks Related to Infinity’s Financial Position and Need for Additional Capital

If the Merger is not completed, substantial doubt exists as to Infinity’s ability to continue as a going concern.

As of December 31, 2022 and 2021, Infinity had cash and cash equivalents of $38.3 million and $80.7 million, respectively. As of December 31, 2022, Infinity had an accumulated deficit of $856.0 million and during the year

 

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ended December 31, 2022 used $42.4 million in cash and cash equivalents to fund operating activities. Infinity expects to continue to incur substantial operating losses and negative cash flows from operations for the foreseeable future. These conditions raise substantial doubt about Infinity’s ability to continue as a going concern for at least twelve months from the date Infinity’s consolidated financial statements were issued on March 28, 2023. Moreover, Infinity has not established a source of revenue and it expects to continue to incur losses for the foreseeable future as it continues its development of, and seek marketing approvals for, its product candidates. These factors individually and collectively raise substantial doubt about Infinity’s ability to continue as a going concern and therefore it may be more difficult for it to attract investors. Unless Infinity is able to raise additional capital to finance its operations, its long-term business plan may not be accomplished, and it may be forced to cease, reduce, or delay operations.

Raising additional capital may cause dilution to Infinity’s stockholders, restrict its operations or require Infinity to relinquish rights to its technologies or product candidates.

If the Merger is not completed, Infinity may seek additional funding through public or private financings of equity or debt securities, but such financing may not be available on acceptable terms, if at all. If Infinity raises additional funds through the issuance of additional debt or equity securities, it may not be able to raise capital at the price it desires, as underscored by its current noncompliance with the Minimum Bid Requirement (as defined below). Any public offering could result in dilution to Infinity’s existing stockholders, increased fixed payment obligations and the existence of securities with rights that may adversely affect the rights of Infinity’s existing stockholders including liquidation or other preferences and anti-dilution protections.

In addition, securing financing could require a substantial amount of time and attention from Infinity’s management and may divert a disproportionate amount of its attention away from day-to-day activities, which may adversely affect Infinity’s management’s ability to oversee the development of its product candidates.

Infinity may also seek additional funds through arrangements with collaborators or other third parties, or through project financing. These arrangements would generally require it to relinquish or encumber valuable rights to its technologies, future revenue streams, or product candidates, and Infinity may not be able to enter into such agreements on acceptable terms, if at all.

If Infinity is unable to obtain additional funding on a timely basis, Infinity’s board of directors may conclude that it is in the best interest of stockholders to cease normal operations and wind down the company through bankruptcy or dissolution proceedings. In such case, there would be no assurances as to the amount or timing of available cash remaining, if any, to distribute to stockholders after paying Infinity’s obligations and setting aside funds for reserves.

Infinity has a history of operating losses, expects to incur significant and increasing operating losses in the future, and may never become profitable, or if Infinity becomes profitable, it may not remain profitable.

Infinity has no approved products, has not generated product revenue from sales, and have primarily incurred operating losses. As of December 31, 2022, Infinity had an accumulated deficit of $856.0 million. Infinity expects to continue to spend significant resources to fund eganelisib, its selective inhibitor of PI3K-gamma. While Infinity may have net income in some periods as the result of non-recurring collaboration revenue, it expects to incur substantial operating losses over the next several years as its clinical trial and drug manufacturing activities continue. In addition, if Infinity proceeds to seek and possibly obtain regulatory approval of eganelisib, Infinity would expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution, to the extent such sales, marketing, manufacturing and distribution are not the responsibility of a future collaborator. As a result, Infinity expects that its accumulated deficit would also increase significantly.

Eganelisib is under clinical development and may never be approved for sale or generate any revenue. Infinity will not be able to generate product revenue unless and until eganelisib successfully completes clinical trials and receives regulatory approval. Infinity does not expect to generate revenue from product sales for the foreseeable future. Even if Infinity eventually generate revenues, it may never be profitable, and if Infinity does achieve

 

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profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. Infinity’s failure to become and remain profitable would decrease the value of Infinity and could impair its ability to raise capital, expand its business, and maintain its research and development efforts, and cause a decline in the value of its common stock.

If the Merger is not completed, Infinity will need substantial additional funding, and if Infinity is unable to raise capital when needed, it could be forced to delay, reduce or eliminate the development of eganelisib or future efforts to commercialize eganelisib.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a time consuming, expensive and uncertain process that takes years to complete. Infinity will need substantial additional funds to support its planned operations, but substantial doubt exists about its ability to continue as a going concern for at least twelve months from the date Infinity’s consolidated financial statements were issued on March 28, 2023. See the risk factor “If the Merger is not completed, substantial doubt exists as to Infinity’s ability to continue as a going concern” for more information.

Infinity’s estimate as to how long it expects its existing cash and cash equivalents to be able to continue to fund its operations will depend on many factors, which assumptions may prove to be wrong, and Infinity could use its available capital resources sooner than it currently expects. Further, changing circumstances, some of which may be beyond Infinity’s control, could cause it to consume capital significantly faster than it currently anticipates, and it may need to seek additional funds sooner than planned. Infinity’s future funding requirements, both short-term and long-term, will depend on many factors, including, but not limited to, the scope, progress, results and costs of developing and marketing eganelisib, including costs of acquiring raw materials and manufacturing, as well as the impact of delays as a result of the COVID-19 pandemic. Infinity’s funding requirements will further depend on the timing and amount of additional revenues, if any, received from commercial sales of eganelisib and from collaboration agreements and funding arrangements, regulatory and commercial-based milestone payments from Sol-Gel related to patidegib, and additional royalty and milestone payments owed to Takeda Pharmaceutical Company Limited (“Takeda”).

Infinity has broad discretion in the use of its available cash and other sources of funding and may not use them effectively.

Infinity’s management has broad discretion in the use of its available cash and other sources of funding and could spend those resources in ways that do not improve its results of operations or enhance the value of its common stock. The failure by Infinity’s management to apply these funds effectively could result in financial losses that could cause the price of its common stock to decline and delay the development of eganelisib or any future product candidate. Infinity may invest its available cash pending its use in a manner that does not produce income or that loses value.

Risks Related to the Development and Commercialization of Eganelisib and Any Future Product Candidate

Infinity is dependent on the success of eganelisib, its only product candidate, which remains subject to clinical testing and regulatory approval. If Infinity is unable to initiate or complete clinical development of, obtain marketing approval for or successfully commercialize eganelisib, either alone or with a collaborator, or if Infinity experiences significant delays in doing so, its business could be substantially harmed.

Infinity currently has no products approved for sale and are investing substantially all of its efforts and financial resources in the development of eganelisib. The success of eganelisib will depend on Infinity’s ability to generate product revenue, which will heavily depend on the successful completion of the Merger and the successful clinical development and eventual commercialization of eganelisib. Infinity also expects that the success of eganelisib will depend primarily on its therapeutic potential in combination with other therapeutics, such as checkpoint inhibitor therapies, and not as a monotherapy.

 

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To date, Infinity has not obtained approval from the Food and Drug Administration (“FDA”) or any comparable foreign regulatory authority to market or sell eganelisib or any other product candidates. Rigorous preclinical testing, testing in clinical trials, and an extensive regulatory approval process are required in the United States and in many foreign jurisdictions prior to the commercial sale of medicinal products. If Infinity’s current clinical trials for eganelisib are successful, it will need to conduct further clinical trials and will need to apply for regulatory approval before it may market or sell any products based on eganelisib. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. It is possible that eganelisib will not obtain marketing approval. Even if eganelisib has a beneficial effect, that effect may not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of Infinity’s clinical trials. Conversely, as a result of the same factors, Infinity’s clinical trials may indicate an apparent positive effect of eganelisib that is greater than the actual positive effect, if any. Similarly, in clinical trials Infinity may fail to detect toxicity of or intolerability caused by eganelisib or mistakenly believe that eganelisib is toxic or not well tolerated when that is not in fact the case.

Infinity cannot predict whether it will encounter problems with any of its ongoing or planned clinical trials that will cause it or regulatory authorities to delay, suspend, or discontinue clinical trials or to delay the analysis of data from ongoing clinical trials. Moreover, Infinity, or any collaborators, may experience any of a number of possible unforeseen adverse events in connection with clinical trials, many of which are beyond Infinity’s control, including:

 

 

insufficient or inadequate supply, delays in distribution or deficient quality of, or inability to purchase or manufacture drug product, combination drugs, comparator drugs or other materials necessary to conduct Infinity’s or any collaborators’ clinical trials. For example, in 2021 Bristol Myers Squibb Company (“BMS”) experienced a temporary global manufacturing-related supply shortage of nab-paclitaxel, or Abraxane®, a drug used in the MARIO-3 combination study of patients with unresectable locally advanced or metastatic front-line TNBC;

 

 

unfavorable results of discussions with the FDA or comparable foreign authorities regarding the scope or design of Infinity’s, or any collaborators’, clinical trials or Infinity’s or their interpretation of data from preclinical studies and clinical trials;

 

 

delays in receiving, or the inability to obtain, required approvals from institutional review boards or other reviewing entities at clinical sites selected for participation in Infinity’s clinical trials;

 

 

delays in enrolling patients into clinical trials;

 

 

a lower than anticipated retention rate of patients in clinical trials due to, among other reasons, patients that enroll in a clinical trial misrepresenting their eligibility to do so or otherwise not complying with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration and cost;

 

 

the number of patients required for clinical trials of eganelisib, the speed of patient enrollment and the rate of participant drop outs may differ from the expectations of Infinity or its collaborators;

 

 

the cost of planned clinical trials of eganelisib may be greater than Infinity anticipates;

 

 

comparator or combination drugs, or components or ingredients thereof or conducting clinical trials on Infinity’s behalf or on behalf of any collaborators, to comply with regulatory requirements or meet their contractual obligations to Infinity or any collaborators in a timely manner or at all;

 

 

the requirement by regulators or institutional review boards that Infinity, or any collaborators, or Infinity’s or their investigators, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their standards of conduct, a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of eganelisib, or findings of undesirable effects caused by a chemically or mechanistically similar product or product candidate;

 

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the need to repeat or discontinue clinical trials as a result of inconclusive or negative results or unforeseen complications in testing, or because the results of later trials may not confirm positive results from earlier preclinical studies or clinical trials;

 

 

unfavorable FDA or other foreign regulatory inspection and review of a clinical trial site, us, or a vendor of Infinity, or records of any clinical or preclinical investigation;

 

 

delays or failures by Infinity or any collaborators in reaching agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

 

 

failures by the FDA or comparable foreign regulatory authorities to approve the manufacturing processes or facilities of third-party manufacturers with which Infinity, or any collaborators, enter into agreements for clinical and commercial supplies, or subsequent findings of fault with such processes or facilities;

 

 

insufficient or inadequate supply or quality of raw materials, manufactured product candidates, combination or comparator drugs or other materials necessary to conduct clinical trials of eganelisib, or the inability to acquire such materials at acceptable cost, which may result in interruptions in supply;

 

 

significant changes in the approval policies or regulations of the FDA or comparable foreign regulatory authorities, which may rendering Infinity’s clinical data insufficient to obtain marketing approval;

 

 

serious and unexpected drug-related side effects experienced by participants in Infinity or any collaborators’ clinical trials, which may occur even if they were not observed in earlier trials or only observed in a limited number of participants;

 

 

a finding that the trial participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of eganelisib;

 

 

the placement by the FDA or a foreign regulatory authority of a clinical hold on a trial;

 

 

outcomes of third party trials of drugs and drug candidates that Infinity also uses in its combination trials, such as F. Hoffmann-La Roche Ltd. (“Roche”)’s decision to voluntarily withdraw its accelerated approval in the United States for atezolizumab in combination with nab-paclitaxel for patients with PD-L1(+) metastatic TNBC after IMpassion131, Roche’s post marketing study evaluating atezolizumab and paclitaxel in TNBC patients, did not meet its primary endpoint; and

 

 

any restrictions on, or post-approval commitments with regard to, any regulatory approval Infinity ultimately obtains that render the product candidate not commercially viable.

The delay, suspension or discontinuation of any of Infinity’s or any collaborators’ clinical trials, or a delay in the analysis of clinical data for eganelisib, for any of the foregoing reasons, could adversely affect Infinity’s ability to obtain regulatory approval for and to commercialize eganelisib, increase Infinity’s operating expenses and have a material adverse effect on its financial results.

Product development costs for Infinity, or any collaborators, will increase if Infinity, or they, experience delays in testing or pursuing marketing approvals and Infinity, or they, may be required to obtain additional funds to complete clinical trials and prepare for possible commercialization of eganelisib. Infinity does not know whether its clinical trials will begin as planned, will need to be restructured, or will be completed on schedule or at all. Significant preclinical study or clinical trial delays also could shorten any periods during which Infinity, or any collaborators, may have the exclusive right to commercialize eganelisib or allow its competitors, or the competitors of any current or future collaborators, to bring products to market before Infinity, or any collaborators, do and impair its ability, or the ability of any collaborators, to successfully commercialize eganelisib and may harm Infinity’s business and results of operations. In addition, many of the factors that lead to clinical trial delays may ultimately lead to the denial of marketing approval of eganelisib, or, in the event that Infinity’s clinical trials remain unable to demonstrate meaningful clinical benefit, its failure to reach the marketing approval stage at all.

 

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Adverse events or undesirable side effects caused by, or other unexpected properties of, eganelisib, alone or in combination with other agents, may be identified during clinical development and could delay or prevent eganelisib marketing approval or limit its use.

Adverse events or undesirable side effects caused by, or other unexpected properties of, eganelisib, alone or in combination with other agents, could cause Infinity, any collaborators, an institutional review board or regulatory authorities to interrupt, delay or halt clinical trials of eganelisib and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities. If eganelisib is associated with adverse events or undesirable side effects or has properties that are unexpected, Infinity, or any collaborators, may need to abandon or delay development of eganelisib, or limit its development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Even though eganelisib has initially shown promise in earlier stage testing, it may later be found to cause undesirable or unexpected side effects that prevent its further development. Combining two or more agents may increase the instances of or severity of adverse events or undesirable effects.

Interim top-line and preliminary results from Infinity’s clinical trials that it announces or publishes from time to time may change as more patient data become available and are subject to audit and verification procedures, which could result in material changes in the final data.

From time to time, Infinity may publish interim top-line or preliminary results from its clinical trials. Interim results from clinical trials that Infinity may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or top-line results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data Infinity previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Differences between preliminary or interim data and final data could significantly harm Infinity’s business prospects and may cause the trading price of Infinity’s common stock to fluctuate significantly.

Even assuming approval of a drug candidate, Infinity’s business may suffer if the market opportunities for eganelisib or product candidates it may develop in the future are smaller than Infinity believes them to be.

Infinity’s projections of both the number of people who are affected by disease within Infinity’s target indications, as well as the subset of these people who have the potential to benefit from treatment with eganelisib or product candidates Infinity may develop in the future, are based on Infinity’s beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, healthcare utilization databases and market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The potentially addressable patient population for eganelisib may be limited or may not be amenable to treatment with eganelisib, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect Infinity’s results of operations and its business.

Infinity is conducting clinical trials for eganelisib, and may conduct additional clinical trials in the future, at sites outside the United States. The FDA may not accept data from trials conducted in such locations and the conduct of trials outside the United States could subject Infinity to additional delays and expense.

MARIO-275, Infinity’s Phase 2 global study, is being conducted, and Infinity may choose to conduct future clinical trials, at trial sites located in the United States and Europe. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA, such as the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with good clinical practices; the FDA must be able to validate the data from the trial through an onsite inspection if necessary; the trial population must also have a similar profile to the U.S. population; and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful, except to the extent the disease being studied does not typically

 

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occur in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any trial that Infinity conducts outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt Infinity’s development of eganelisib or any future product candidates.

In addition, the conduct of clinical trials outside the United States could have a significant adverse impact on Infinity. Risks inherent in conducting international clinical trials include:

 

 

clinical practice patterns and standards of care that vary widely among countries;

 

 

non-U.S. regulatory authority requirements that could restrict or limit Infinity’s ability to conduct its clinical trials;

 

 

administrative burdens of conducting clinical trials under multiple non-U.S. regulatory authority schema;

 

 

foreign exchange fluctuations;

 

 

diminished protection of intellectual property in some countries; and

 

 

geopolitical actions, including war and terrorism, disease outbreak, such as the COVID-19 pandemic, or natural disasters including earthquakes, typhoons, floods and fires.

If Infinity is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, its development plans may be impacted.

In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.

For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act (“FDORA”), Congress required sponsors to develop and submit a diversity action plan for each phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, actions plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them. In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans. Similarly, the regulatory landscape related to clinical trials in the EU recently evolved. The EU Clinical Trials Regulation (“CTR”), which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. While the Clinical Trials Directive required a separate clinical trial application (“CTA”) to be submitted in each member state, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application to all member states concerned. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state. The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules. Each member state’s decision is communicated to the sponsor via the centralized EU portal. Once the CTA is approved, clinical study development may proceed.

Results of preclinical studies and early clinical trials may not be predictive of results of future late-stage clinical trials.

The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of clinical trials do not necessarily predict success in future clinical trials. Many

 

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companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier development, and Infinity could face similar setbacks. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. If Infinity fails to receive positive results in clinical trials of eganelisib, the development timeline and regulatory approval and commercialization prospects for eganelisib and, correspondingly, its business and financial prospects, would be negatively impacted.

Infinity’s inability to enroll sufficient numbers of patients in its clinical trials, or any delays in patient enrollment, could result in increased costs and longer development periods for Infinity’s product candidates.

Clinical trials require sufficient patient enrollment. Infinity’s failure to enroll patients in a clinical trial could delay the initiation or completion of the clinical trial beyond current expectations. In addition, the FDA or other comparable foreign regulatory authorities could require Infinity to conduct clinical trials with a larger number of patients than has been projected for eganelisib or any product candidates Infinity may develop in the future. As a result of these factors, Infinity may not be able to enroll a sufficient number of patients in a timely or cost-effective manner. Furthermore, enrolled patients may drop out of a clinical trial for reasons such as being included in a placebo or comparator arm in a trial, the occurrence of adverse side effects, whether or not related to Infinity’s product candidate, or low or no activity of its product candidate at one or more dose levels being testes, which could impair the validity or statistical significance of the clinical trial. Please refer to “Risks Related to COVID-19 Pandemic” for a further discussion of the impact of COVID-19 on enrollment in Infinity’s clinical trials. A delay in Infinity’s clinical trial activities could adversely affect its ability to obtain regulatory approval for and to commercialize its product candidates, increase its operating expenses, and have a material adverse effect on its financial results.

Even if a product candidate receives marketing approval in the future, Infinity or others may later discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, which could compromise Infinity’s ability, or that of any future collaborator, to market such product candidate.

Even if Infinity receives regulatory approval for a product candidate, it will have tested it in only a small number of patients in carefully defined subsets and over a limited period of time during its clinical trials, such as is the case for eganelisib. If any future applications for marketing are approved and more patients begin to use Infinity’s products, or patients use such products for a longer period of time, such products might be less effective than indicated by Infinity’s clinical trials. Furthermore, new risks and side effects associated with such products may be discovered or previously observed risks and side effects may become more prevalent and/or clinically significant.

In addition, supplemental clinical trials that may be conducted on a drug following its initial approval may produce findings that are inconsistent with the trial results previously submitted to regulatory authorities. As a result, regulatory authorities may revoke their approvals, or Infinity may be required to conduct additional clinical trials, make changes in labeling of a product (including a “black box” warning or a contraindication) or the manner in which it is administered, reformulate such product or make changes to and obtain new approvals for Infinity and its suppliers’ manufacturing facilities. Infinity also might have to withdraw or recall such product from the marketplace, and regulators might seize such product. Infinity might be subject to fines, injunctions, or the imposition of civil or criminal penalties. Any of these results could decrease or prevent any sales of Infinity’s approved product or substantially increase the costs and expenses of commercializing and marketing its product, harm its reputation, business and operations, result in Infinity and its collaborators’ becoming subject to lawsuits, including class actions and could negatively impact Infinity’s stock price.

 

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Even if a product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, in which case Infinity may not be able to generate significant revenues from product sales to become profitable.

Even if a product candidate obtains regulatory approval, it may not gain market acceptance among physicians, patients, managed care organizations, third-party payors, and the medical community for a variety of reasons including:

 

 

timing of Infinity’s receipt of any marketing approvals, the terms of any such approvals and the countries in which any such approvals are obtained;

 

 

timing of market introduction of competitive products;

 

 

lower demonstrated clinical safety or efficacy, or less convenient or more difficult route of administration, compared to competitive products;

 

 

lack of cost-effectiveness;

 

 

lack of reimbursement from government payors, managed care plans and other third-party payors;

 

 

prevalence and severity of side effects;

 

 

potential advantages of alternative treatment methods;

 

 

whether it is designated under physician treatment guidelines as a first, second or third line therapy;

 

 

changes in the standard of care for targeted indications;

 

 

limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling;

 

 

safety concerns with similar products marketed by others;

 

 

the reluctance of the target population to try new therapies and of physicians to prescribe those therapies;

 

 

the lack of success of Infinity’s physician education programs; and

 

 

ineffective sales, marketing and distribution support.

If any product candidate Infinity develops, such as eganelisib, received marketing approval but fails to achieve market acceptance, Infinity would not be able to generate significant revenue, which may adversely impact its ability to become profitable.

If Infinity obtains approval to commercialize a product candidate outside of the United States, a variety of risks associated with international operations could materially adversely affect Infinity’s business.

Infinity expects that it will be subject to additional risks in commercializing any product candidate outside the United States, including:

 

 

different regulatory requirements for approval of drugs and biologics in foreign countries;

 

 

reduced protection for intellectual property rights;

 

 

unexpected changes in tariffs, trade barriers and regulatory requirements;

 

 

economic weakness, including inflation, or political instability in particular foreign economies and markets;

 

 

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

 

 

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

 

 

workforce uncertainty in countries where labor unrest is more common than in the United States;

 

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production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

 

business interruptions resulting from geopolitical actions, including war and terrorism, disease outbreak, or natural disasters including earthquakes, typhoons, floods and fires.

Even if Infinity receives regulatory approvals for marketing any product candidates it may develop, it could lose its regulatory approvals and its business would be adversely affected if Infinity, its collaborators, or its contract manufacturers fail to comply with continuing regulatory requirements.

The FDA and other regulatory agencies continue to review products even after they receive initial approval. If Infinity receives approval to commercialize any product candidates, the manufacturing, marketing and sale of these drugs will be subject to continuing regulation, including compliance with quality systems regulations, the FDA’s current good manufacturing practices (“cGMPs”), adverse event requirements and prohibitions on promoting a product for unapproved uses. Enforcement actions resulting from Infinity’s failure to comply with government and regulatory requirements could result in fines, suspension of approvals, withdrawal of approvals, product recalls, product seizures, mandatory operating restrictions, criminal prosecution, civil penalties and other actions that could impair the manufacturing, marketing and sale of any product candidates and Infinity’s ability to conduct its business.

If Infinity is unable to establish sales, marketing and distribution capabilities or enter into sales, marketing and distribution arrangements with third parties, it may not be successful in commercializing any product candidates if approved.

Infinity has no experience in the sale, marketing or distribution of pharmaceutical products and does not currently have the necessary infrastructure to do so. To achieve commercial success for any approved product, Infinity must either develop a sales and marketing organization or outsource these functions to third parties. The development of sales, marketing and distribution capabilities would require substantial resources, would be time consuming and could delay any product launch. If the commercial launch of a product candidate for which Infinity recruits a sales force and establish marketing and distribution capabilities is delayed or does not occur for any reason, Infinity could have prematurely or unnecessarily incurred these commercialization costs, and Infinity’s investment could be lost if it cannot retain or reposition its sales and marketing personnel. In addition, Infinity may not be able to hire or retain a sales force that is sufficient in size or has adequate expertise in the medical markets that it chooses to target. If Infinity is unable to establish or retain a sales force and marketing and distribution capabilities, its operating results may be adversely affected. Infinity may seek to collaborate with potential partners if it believes they have development or commercialization expertise relevant to one or more of its products, even if it believes it could otherwise develop and commercialize the product independently. As a result of entering into these arrangements, Infinity’s product revenues or the profitability of these product revenues may be lower, perhaps substantially lower, than if it were to directly market and sell its products in those markets. Furthermore, Infinity may be unsuccessful in entering into the necessary arrangements with third parties or may be unable to do so on terms that are favorable to Infinity. In addition, Infinity may have little or no control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market its products effectively.

Infinity’s competitors and potential competitors may develop products that make eganelisib less attractive or obsolete.

Immuno-oncology (“IO”) is a highly competitive and rapidly changing segment of the pharmaceutical industry. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are pursuing the development of novel drugs that target various oncology diseases. Infinity currently faces, and expects to continue to face, intense and increasing competition as new products enter the market and advanced technologies become available. Infinity believes that there are competitors in clinical and pre-clinical development of their PI3K-gamma selective inhibitors and that other competitors are developing or commercializing therapies targeting macrophage reprogramming biology. For

 

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more information on Infinity’s competitors, please see the section titled “Infinity’s Business” in this joint proxy statement/prospectus.

Infinity’s competitors may commence and complete clinical testing of their product candidates, obtain regulatory approvals and begin commercialization of their products sooner than Infinity and/or its collaborators may for eganelisib. These competitive products may have superior safety or efficacy, have more attractive pharmacologic properties, or be manufactured less expensively than eganelisib. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of Infinity’s competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with Infinity in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, the development of eganelisib or future product candidates Infinity may develop. If Infinity is unable to compete effectively against these companies on the basis of safety, efficacy or cost, then it may not be able to commercialize eganelisib or achieve a competitive position in the market. This would adversely affect Infinity’s ability to generate revenues.

Even if Infinity, or any future collaborators, are able to commercialize eganelisib, the product may become subject to unfavorable pricing regulations, third-party payor reimbursement practices or healthcare reform initiatives, any of which could harm its business.

The commercial success of eganelisib will depend substantially, both domestically and abroad, on the extent to which the costs of eganelisib will be paid by third-party payors, including government healthcare programs and private health insurers. If coverage is not available, or reimbursement is limited, Infinity, or any future collaborators, may not be able to successfully commercialize eganelisib. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow Infinity, or any future collaborators, to establish or maintain pricing sufficient to realize a sufficient return on its or their investments. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors and coverage and reimbursement levels for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time consuming and costly process that may require Infinity to provide scientific and clinical support for the use of its products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

The extent to which patients have third-party payor coverage that could in principle cover treatment with eganelisib may be affected by legislative and regulatory changes relating to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “ACA”). For instance, the so-called “individual mandate” provisions of the ACA require most individuals to carry acceptable insurance for themselves and their family, whether through the government or a private insurer, or else incur a penalty. However, the tax reform legislation signed into law on December 22, 2017, eliminated the penalty for failure to comply with the individual mandate, effective for periods beginning after December 31, 2018. This change and other legislative or regulatory actions in relation to the ACA may increase the pool of patients lacking third-party payor coverage. There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved drugs. Marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, Infinity, or any future collaborators, might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product, possibly for lengthy time periods, or prevent it altogether, which may negatively impact the revenues Infinity is able to generate from the sale of the product in that country. Adverse pricing limitations may hinder Infinity’s ability or the ability of any future collaborators to recoup Infinity’s or their investment in eganelisib, even if eganelisib obtains marketing approval.

 

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Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Therefore, Infinity’s ability, and the ability of any future collaborators, to successfully commercialize eganelisib will depend in part on the extent to which coverage and adequate reimbursement for eganelisib and related treatments will be available from third-party payors. Third-party payors decide which medications they will cover and establish reimbursement levels. The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect Infinity’s ability or that of any future collaborators to sell eganelisib profitably. These payors may not view eganelisib as cost-effective, and coverage and reimbursement may not be available to Infinity’s customers, or those of any future collaborators, or may not be sufficient to allow eganelisib to be marketed on a competitive basis. Cost-control initiatives could cause Infinity, or any future collaborators, to decrease the price Infinity, or they, might establish for eganelisib, which could result in lower than anticipated product revenues. If the prices for eganelisib decrease or if governmental and other third-party payors do not provide coverage or adequate reimbursement, Infinity’s prospects for revenue and profitability will suffer.

There may also be delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers Infinity’s costs, including research, development, manufacture, sale and distribution. Reimbursement rates may vary, by way of example, according to the use of the product and the clinical setting in which it is used. Reimbursement rates may also be based on reimbursement levels already set for lower cost drugs or may be incorporated into existing payments for other services.

In addition, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged. Further, the net reimbursement for drug products may be subject to additional reductions if there are changes to laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. An inability to promptly obtain coverage and adequate payment rates from both government-funded and private payors for eganelisib could significantly harm Infinity’s operating results, its ability to raise capital needed to commercialize eganelisib and its overall financial condition.

If the FDA or comparable foreign regulatory authorities grant marketing approval for generic versions of eganelisib, or such authorities do not grant eganelisib appropriate periods of data exclusivity before approving generic versions of eganelisib, sales of eganelisib could be adversely affected.

Once an NDA is approved, the product covered thereby becomes a “reference-listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” or the Orange Book. Manufacturers may seek approval of generic versions of reference-listed drugs through submission of abbreviated new drug applications (“ANDAs”) in the United States. In support of an ANDA, a generic manufacturer need not conduct clinical trials. Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference-listed drug and companies that produce generic products are generally able to offer them at lower prices. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference-listed drug may be lost to the generic product.

The FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference-listed drug has expired. The FDCA provides a period of five years of non-patent exclusivity for a new drug containing a new chemical entity (“NCE”). Specifically, in cases where such exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is

 

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accompanied by a Paragraph IV certification that a patent covering the reference-listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference-listed drug. When the composition of matter patents underlying Infinity’s product candidates expire, it is possible that another applicant could obtain approval to produce generic versions of Infinity’s product candidates. If any product Infinity develops does not receive five years of NCE exclusivity, the FDA may approve generic versions of such product three years after its date of approval, subject to the requirement that the ANDA applicant certifies to any patents listed for Infinity’s products in the Orange Book. Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if Infinity still has patent protection for its product.

Product liability lawsuits against Infinity or any licensees could cause Infinity or its licensees to incur substantial liabilities and could limit commercialization of any products that Infinity or they may develop.

Infinity faces an inherent risk of product liability exposure related to the testing of eganelisib or any future product candidates in human clinical trials, and Infinity and any licensees will face an even greater risk as Infinity or they commercially sell any products that Infinity or they may develop, such as duvelisib. If Infinity or its licensees cannot successfully defend itself or themselves against claims that Infinity’s product candidates or products caused injuries, Infinity could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in, among other consequences, decreased demand for any product candidates or medicines that Infinity may develop, injury to its reputation and significant negative media attention, withdrawal of clinical trial participants, significant costs to defend the related litigation, substantial monetary awards to trial participants or patients, loss of revenue, reduced resources of Infinity’s management to pursue its business strategy, and the inability to commercialize any medicines that Infinity may develop. Although Infinity maintains product liability insurance coverage, it may not be adequate to cover all liabilities that it may incur. Infinity anticipates that it will need to increase its insurance coverage as it advances or expands its clinical trials and if it successfully commercializes any products. Insurance coverage is increasingly expensive. Infinity may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. In addition, if one of Infinity’s licensees were to become subject to product liability claims or were unable to successfully defend themselves against such claims, any such licensee could be more likely to terminate such relationship with Infinity and therefore substantially limit the commercial potential of its products.

Unfavorable global economic conditions could adversely affect Infinity’s business, financial condition or results of operations.

Infinity’s results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. The 2008 global financial crisis caused extreme volatility and disruptions in the capital and credit markets. More recently, the COVID-19 pandemic has also adversely impacted the global economy. A severe or prolonged economic downturn, such as that in 2008, could result in a variety of risks to Infinity’s business, including weakened demand for eganelisib or any future product candidates Infinity may develop and its ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could strain Infinity’s suppliers, possibly resulting in supply disruption, or cause delays in payments for its services by third-party payors or its collaborators. Any of the foregoing could harm Infinity’s business and it cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact its business.

Risks Related to the COVID-19 Pandemic

Public health epidemics or outbreaks, including the COVID-19 pandemic, have had, and may continue to have, an adverse impact on Infinity’s business.

In December 2019, a novel strain of coronavirus emerged in China causing the disease COVID-19. This disease has spread worldwide and was deemed a “pandemic” by the World Health Organization on March 11, 2020.. As of March 2023, case rates for COVID-19 have dropped considerably, and most government-mandated

 

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COVID-19 precautions were lifted in 2022. However, given the volatile nature of COVID-19 to date, such restrictions could return in part or in whole during a future spike in case rates. Infinity has highlighted the key risks associated with the COVID-19 pandemic on its operations throughout these risk factors, including without limitation the following:

 

 

The COVID-19 pandemic may materially and adversely affect Infinity’s clinical trial operations and its financial results. Infinity is conducting its clinical trials at sites in geographies that were seriously impacted by the COVID-19 pandemic and could be in the event of a future spike. Infinity is continuing to evaluate enrollment trends in its studies as well as the impact of COVID-19 on its clinical programs. Patients currently enrolled on MARIO-275, MARIO-3 and MARIO-1 have continued treatment and study visits with limited disruption, and Infinity is working closely with trial sites to support the continued treatment of patients in compliance with study protocols. At this time, there are no anticipated disruptions to drug supply.

 

 

The COVID-19 pandemic could impact Infinity’s future supply chain. Infinity currently relies on third-party manufacturers to produce its preclinical and clinical drug supplies, and it may also rely upon third-party manufacturers to produce commercial supplies of eganelisib, also known as IPI-549. Infinity believes it has already manufactured all drug product necessary to conduct its current clinical trials. Further, Infinity believes that a sufficient supply of drug substance and drug product intermediates is available in the United States for additional drug product manufacturing if required to support its clinical development program and potential preclinical studies. However, a future spike of the COVID-19 pandemic or any future pandemic could impact its future supply chain. Refer to the risk factor entitled “Infinity currently relies on third-party manufacturers to produce its preclinical and clinical drug supplies, and it may also rely upon third-party manufacturers to produce commercial supplies of eganelisib” for more information related to the risks related to Infinity’s dependence on third-party manufacturers to produce preclinical, clinical, and commercial supplies of eganelisib.

 

 

COVID safety protocols, quarantine requirements, and social distancing measures adopted by or imposed upon Infinity and its vendors may impact Infinity’s business operations. Governments and employers have combated the COVID-19 pandemic through implementation of safety protocols and quarantine requirements that may require prolonged absences from work and social distancing measures intended to keep individuals physically distant from one another. Such measures, which have been lifted at the present time, may be re-instated during periods of increased COVID case rates and have had or may have an adverse impact on Infinity’s business operations.

On January 30, 2023, the Biden Administration announced that it will end the public health emergency declarations related to COVID-19 on May 11, 2023. On January 31, 2023, the FDA indicated that it would soon issue a Federal Register notice describing how the termination of the public health emergency will impact the agency’s COVID-19 related guidance’s, including the clinical trial guidance and updates thereto.

Risks Related to Infinity’s Dependence on Third Parties

If a collaborator terminates or fails to perform its obligations under agreements with Infinity, the development and commercialization of eganelisib or any future product candidates Infinity may develop could be delayed or terminated.

Infinity currently has worldwide development and commercialization rights to eganelisib, subject to certain success-based milestone payment obligations to its licensor, Takeda, as described in more detail under “Infinity’s Business” in this joint proxy statement/prospectus. Infinity licenses certain patent and other intellectual property rights under that certain Amended and Restated Development and License Agreement, dated as of December 2012, by and between Infinity and Intellikine, Inc. (as amended, the “Takeda Agreement”) and that certain License Agreement, dated as of November 1, 2016, by and between Infinity and Verastem Inc. (the “Secura Bio Agreement”). Infinity may in the future seek other third-party collaborators. The success of a strategic alliance

 

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with any partner is largely dependent on the resources, efforts, technology and skills brought to such alliance by such partner. The benefits of such alliances will be reduced or eliminated if any such partner:

 

   

does not or cannot devote the necessary resources to the development, marketing and distribution of such product or products;

 

   

decides not to pursue development and commercialization of the program or to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding, the belief that other product candidates may have a higher likelihood of obtaining regulatory approval or potential to generate a greater return on investment, or external factors, such as an acquisition, that divert resources or create competing priorities;

 

   

does not perform its obligations as expected;

 

   

does not have sufficient resources necessary or is otherwise unable to carry the program through clinical development, regulatory approval and commercialization;

 

   

cannot obtain the necessary regulatory approvals;

 

   

delays clinical trials, provides insufficient funding for a clinical trial program, stops a clinical trial or abandons the program, repeats or conducts new clinical trials or requires a new formulation of the program for clinical testing;

 

   

independently develops, or develops with third parties, products that compete directly or indirectly with the program;

 

   

does not properly maintain or defend Infinity’s intellectual property rights or uses Infinity’s proprietary information in such a way as to invite litigation that could jeopardize or invalidate Infinity’s intellectual property or proprietary information or expose Infinity to potential litigation;

 

   

infringes the intellectual property rights of third parties, which may expose Infinity to litigation and potential liability; or

 

   

terminates the collaboration prior to its completion.

If such partner were to terminate its arrangements with Infinity, or breach such arrangements, or fail to maintain the financial resources necessary to continue financing its portion of development, manufacturing, and commercialization costs, as applicable, Infinity may not have the financial resources or capabilities necessary to continue development and commercialization of the product candidate on its own. Consequently, the development and commercialization of the affected product candidate could be delayed, curtailed or terminated, and Infinity may find it difficult to attract a new collaborator for such product candidate.

Disputes and difficulties in these types of relationships are common, often due to priorities changing over time, conflicting priorities or conflicting interests. Merger and acquisition activity may exacerbate these conflicts. Much of the potential revenue from alliances consists of payments contingent upon the achievement of specified milestones and royalties payable on sales of any successfully developed drugs. Any such contingent revenue will depend upon Infinity, and its collaborators’, ability to successfully develop, launch, market and sell new drugs. In some cases, Infinity will not be involved in some or all of these processes, and will depend entirely on its collaborators.

If any future collaborator fails to develop or effectively commercialize a product candidate that is the subject of Infinity’s strategic alliance with them, it may not be able to develop and commercialize such product candidate independently, and its financial condition and operations would be negatively impacted.

Infinity relies on third parties to conduct its clinical trials, and those third parties may not perform satisfactorily.

Infinity relies on third parties such as contract research organizations, medical institutions and external investigators to enroll qualified patients, conduct its clinical trials and provide services in connection with such

 

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clinical trials, and it intends to rely on these and other similar entities in the future. Infinity’s reliance on these third parties for clinical development activities reduces its control over these activities. Accordingly, these third-party contractors may not complete activities on schedule or conduct its clinical trials in accordance with regulatory requirements or the trial design. If these third parties do not successfully carry out their contractual obligations or meet expected deadlines, Infinity may be required to replace them. Replacing a third-party contractor may result in a delay of the affected trial and unplanned costs. If this were to occur, Infinity’s ability to obtain regulatory approval for and to commercialize eganelisib or any product candidate that it may develop in the future could be delayed.

In addition, Infinity is responsible for ensuring that each of its clinical trials are conducted in accordance with the general investigational plan and protocol for the trial. The FDA requires Infinity to comply with certain standards, referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Infinity’s reliance on third parties that it does not control does not relieve it of these responsibilities and requirements. If any of Infinity’s trial investigators or third-party contractors does not comply with good clinical practices, Infinity may not be able to use the data and reported results from the trial. If this noncompliance were to occur, Infinity’s ability to obtain regulatory approval for and to commercialize its product candidate could be delayed or put at risk.

Infinity currently relies on third-party manufacturers to produce its preclinical and clinical drug supplies, and it may also rely upon third-party manufacturers to produce commercial supplies of eganelisib.

Eganelisib requires precise, high quality manufacturing under cGMP. The third-party manufacturers on which Infinity relies on may fail to comply with cGMPs and other applicable government regulations and corresponding foreign standards. These regulations govern manufacturing processes and procedures and the implementation and operation of systems to control and assure the quality of products. The FDA and foreign regulatory authorities may, at any time, audit or inspect a manufacturing facility to ensure compliance with cGMPs and other quality standards. Any failure by Infinity’s contract manufacturers to achieve and maintain high manufacturing and quality control standards could result in the inability of eganelisib to be released for use in one or more countries. In addition, such a failure could result in, among other things, patient injury or death, product liability claims, penalties or other monetary sanctions, the failure of regulatory authorities to grant marketing approval of eganelisib, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of eganelisib, operating restrictions and/or criminal prosecution, any of which could significantly and adversely affect supply of eganelisib and seriously hurt Infinity’s business.

Contract manufacturers may also encounter difficulties involving production yields or delays in performing their services. Infinity does not have control over third-party manufacturers’ performance and compliance with applicable regulations and standards. If, for any reason, including natural disaster, epidemic or pandemic, such as the ongoing COVID-19 pandemic, Infinity’s manufacturers cannot perform as agreed, it may be unable to replace such third-party manufacturers in a timely manner, and the production of eganelisib or any future product candidates would be interrupted, resulting in delays in clinical trials and additional costs. Switching manufacturers may be difficult because the number of potential manufacturers is limited, the demand for such services is high and, depending on the type of material manufactured at the contract facility, the change in contract manufacturer must be submitted to and/or approved by the FDA and comparable regulatory authorities outside of the United States. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of Infinity’s product candidates after receipt of regulatory approval. It may be difficult or impossible for Infinity to quickly find a replacement manufacturer on acceptable terms, or at all.

To date, eganelisib has been manufactured for preclinical testing and clinical trials primarily by third-party manufacturers. If the FDA or other regulatory agencies approve eganelisib for commercial sale, Infinity expects that it would continue to rely, at least initially, on third-party manufacturers to produce commercial quantities of eganelisib. These manufacturers may not be able to successfully increase the manufacturing capacity for

 

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eganelisib in a timely or economical manner, or at all, particularly if impacted by COVID-19. Significant scale-up of manufacturing might entail changes in the manufacturing process that would have to be submitted to or approved by the FDA or other regulatory agencies. If contract manufacturers engaged by Infinity are unable to successfully increase the manufacturing capacity for eganelisib, or Infinity is unable to establish its own manufacturing capabilities, the commercial launch of any approved products may be delayed or there may be a shortage in supply.

Risks Related to Infinity’s Intellectual Property

If Infinity fails to obtain or maintain necessary or useful intellectual property rights, Infinity could encounter substantial delays in the research, development and commercialization of eganelisib and any product candidates that it may develop in the future.

Infinity currently has rights to certain intellectual property through the Takeda Agreement to develop eganelisib and other product candidates that it may in the future develop under its PI3K inhibitor program. In addition, Infinity has rights to certain intellectual property through the Takeda Agreement that it has exclusively licensed to Secura Bio pursuant to the Secura Bio Agreement. Infinity may decide to license additional third-party technology that it deems necessary or useful for its business. However, Infinity may be unable to acquire or in-license any compositions, methods of use, processes or other intellectual property rights from third parties that Infinity identifies as necessary for eganelisib at a reasonable cost, or at all. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that Infinity may consider attractive. These established companies may have a competitive advantage over Infinity due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive Infinity to be a competitor may be unwilling to assign or license rights to Infinity.

Infinity sometimes collaborates with non-profit and academic institutions to accelerate its preclinical research or development under written agreements with these institutions. Typically, these institutions provide Infinity with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, Infinity may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to it or it may decide not to execute such option if it believes such license is not necessary to pursue its program. If Infinity is unable or opt not to do so, the institution may offer the intellectual property rights to other parties, potentially blocking its ability to pursue its program.

If Infinity does not obtain or maintain these intellectual property rights which it requires, it could encounter substantial delays in developing and commercializing eganelisib or any other potential product candidate while it attempts to develop alternative technologies, methods and product candidates, which it may not be able to accomplish. If Infinity is ultimately unable to do so, it may be unable to develop or commercialize its product candidate, which could harm its business significantly.

If Infinity fails to comply with its obligations under its existing and any future intellectual property licenses with third parties, it could lose license rights that are important to its business.

Infinity is a party to several license agreements under which it licenses patent rights and other intellectual property related to its business including the Takeda Agreement, under which it obtained rights to discover, develop and commercialize pharmaceutical products targeting the delta and/or gamma isoforms of PI3K, including eganelisib and duvelisib. Infinity may enter into additional license agreements in the future. For example, pursuant to the Takeda Agreement, Infinity paid a $2.0 million success-based milestone payment to Takeda in October 2019 associated with MARIO-275. Infinity is obligated to pay Takeda up to $3.0 million in remaining success-based development milestone payments and up to $165.0 million in remaining regulatory and commercialization success-based milestone payments for one product candidate other than duvelisib, which could be eganelisib. Infinity’s license agreements impose, and it expects that future license agreements will impose, various diligence, milestone payment, royalty, insurance and other obligations on it. If Infinity fails to comply with its obligations under these licenses, its licensors may have the right to terminate these license

 

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agreements, in which event it might not be able to market eganelisib or any other product candidate that is covered by these agreements, or its licensors may convert the license to a non-exclusive license, which could adversely affect the value of eganelisib or any other product candidate being developed under the license agreement. Termination of these license agreements or reduction or elimination of its licensed rights may also result in Infinity having to negotiate new or reinstated licenses with less favorable terms. For example, if Infinity fails to use diligent efforts to develop and commercialize products licensed under the Takeda Agreement, or if Secura Bio materially breaches the Secura Bio Agreement, Infinity could lose its license rights under the Takeda Agreement, including rights to eganelisib.

Infinity’s intellectual property licenses with third parties may be subject to disagreements over contract interpretations, which could narrow the scope of its rights to the relevant intellectual property or technology or increase its financial or other obligations to its licensors.

The agreements under which Infinity currently licenses intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what Infinity believes to be the scope of its rights to the relevant intellectual property or technology, or increase what Infinity believes to be its financial or other obligations under the relevant agreement, either of which could harm its business, financial condition, results of operations and prospects.

Infinity’s success depends substantially upon its ability to obtain and maintain intellectual property protection for eganelisib.

Infinity owns or holds exclusive licenses to a number of U.S. and foreign patents and patent applications directed to eganelisib. Infinity’s success depends on its ability to obtain patent protection both in the United States and in other countries for eganelisib, its methods of manufacture and its methods of use. Infinity’s ability to protect eganelisib from unauthorized or infringing use by third parties depends substantially on Infinity’s ability to obtain and enforce its patents.

Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering pharmaceutical inventions and molecular diagnostics and the claim scope of these patents, Infinity’s ability to obtain and enforce patents that may issue from any pending or future patent applications is uncertain and involves complex legal, scientific and factual questions. The standards that the United States Patent and Trademark Office (“USPTO”), and its foreign counterparts use to grant patents are not always applied predictably or uniformly and are subject to change. To date, no consistent policy has emerged regarding the breadth of claims allowed in pharmaceutical or molecular diagnostics patents. Thus, Infinity cannot guarantee that any patents will issue from any pending or future patent applications owned by or licensed to it. Even if patents do issue, Infinity cannot guarantee that the claims of these patents will be held valid or enforceable by a court of law, will provide it with any significant protection against competitive products or will afford it a commercial advantage over competitive products.

The Leahy-Smith America Invents Act, or the America Invents Act, reforms United States patent law in part by changing the standard for patent approval for certain patents from a “first to invent” standard to a “first to file” standard and developing a post-grant review system. This new law changes United States patent law in a way that may severely weaken Infinity’s ability to obtain patent protection in the United States. Additionally, recent judicial decisions establishing new case law and a reinterpretation of past case law, as well as regulatory initiatives, may make it more difficult for Infinity to protect its intellectual property.

Issued patents that Infinity has or may obtain or license may not provide it with any meaningful protection, prevent competitors from competing with Infinity or otherwise provide is with any competitive advantage. Infinity’s competitors may be able to circumvent its patents by developing similar or alternative technologies or products in a non-infringing manner.

If Infinity does not obtain adequate intellectual property protection for its products in the United States, competitors could duplicate them without repeating the extensive testing that Infinity will have been required to undertake to obtain

 

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approval by the FDA. Regardless of any patent protection, under the current statutory framework, the FDA is prohibited by law from approving any generic version of any of Infinity’s products for up to five years after it has approved its product. Upon the expiration of that period, or if that time period is altered, the FDA could approve a generic version of Infinity’s product unless Infinity has patent protection sufficient for it to block that generic version. Without sufficient patent protection, the applicant for a generic version of Infinity’s product would only be required to conduct a relatively inexpensive study to show that its product is bioequivalent to Infinity’s product and would not have to repeat the studies that Infinity conducted to demonstrate that the product is safe and effective.

In the absence of adequate patent protection in other countries, competitors may similarly be able to obtain regulatory approval in those countries for products that duplicate eganelisib. The laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as in the United States. Many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions. Some of Infinity’s development efforts may be performed in China, India and other countries outside of the United States through third-party contractors. Infinity may not be able to monitor and assess intellectual property developed by these contractors effectively; therefore, Infinity may not be able to appropriately protect this intellectual property and could lose valuable intellectual property rights. In addition, the legal protection afforded to inventors and owners of intellectual property in countries outside of the United States may not be as protective of intellectual property rights as in the United States, and Infinity may, therefore, be unable to acquire and protect intellectual property developed by these contractors to the same extent as if these development activities were being conducted in the United States. If Infinity encounters difficulties in protecting its intellectual property rights in foreign jurisdictions, its business prospects could be substantially harmed.

In addition, Infinity relies on intellectual property assignment agreements with its collaborators, vendors, employees, consultants, clinical investigators, scientific advisors and other collaborators to grant it ownership of new intellectual property that is developed by them. These agreements may not result in the effective assignment to Infinity of that intellectual property.

Other agreements through which Infinity licenses patent rights may not give it control over patent prosecution or maintenance, so that Infinity may not be able to control which claims or arguments are presented and may not be able to secure, maintain, or successfully enforce necessary or desirable patent protection from those patent rights. If Infinity is unable to obtain control over patent prosecution in these other agreements, it cannot be certain that patent prosecution and maintenance activities by its licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents.

Infinity, or any future partners, collaborators or licensees, may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection for them. Therefore, Infinity may miss potential opportunities to strengthen its patent position.

It is possible that defects of form in the preparation or filing of Infinity’s patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope or patent term adjustments. If Infinity or its partners, collaborators, licensees, or licensors, whether current or future, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If Infinity’s partners, collaborators, licensees or licensors are not fully cooperative or disagree with Infinity as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form, preparation, prosecution, or enforcement of Infinity’s patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents. Any of these outcomes could impair Infinity’s ability to prevent competition from third parties, which may have an adverse impact on its business. As a result, Infinity’s ownership of key intellectual property could be compromised.

 

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Confidentiality agreements may not adequately prevent disclosure of trade secrets and other proprietary information.

To protect Infinity’s proprietary technology, it relies in part on confidentiality agreements with its vendors, collaborators, employees, consultants, scientific advisors, clinical investigators and other collaborators. Infinity generally requires each of these individuals and entities to execute a confidentiality agreement at the commencement of a relationship with it. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure or misuse of confidential information or other breaches of the agreements.

In addition, Infinity may rely on trade secrets to protect its technology, especially where it does not believe patent protection is appropriate or obtainable. Trade secrets are, however, difficult to protect. Others may independently discover Infinity’s trade secrets and proprietary information, and in such case Infinity could not assert any trade secret rights against such party. Enforcing a claim that a party illegally obtained and is using Infinity’s trade secrets is difficult, expensive and time consuming, and the outcome is unpredictable. In addition, courts outside of the United States may be less willing to protect trade secrets. Costly and time-consuming litigation could be necessary to seek to enforce and determine the scope of Infinity’s proprietary rights and could result in a diversion of management’s attention, and failure to obtain or maintain trade secret protection could adversely affect Infinity’s competitive business position.

Patent interference, opposition or similar proceedings relating to Infinity’s intellectual property portfolio are costly, and an unfavorable outcome could prevent Infinity from commercializing eganelisib.

Patent applications in the United States are maintained in confidence for up to 18 months after their filing. In some cases, however, patent applications remain confidential in the USPTO for the entire time prior to issuance as a U.S. patent. Similarly, publication of discoveries in the scientific or patent literature often lags behind actual discoveries. Consequently, Infinity cannot be certain that it was the first to invent, or the first to file patent applications on, eganelisib or its therapeutic use. In the event that a third party has also filed a U.S. patent application relating to eganelisib or a similar invention, Infinity may have to participate in interference or derivation proceedings declared by the USPTO or the third party to determine priority of invention in the United States. An adverse decision in an interference or derivation proceeding may result in the loss of rights under a patent or patent application. In addition, the cost of interference proceedings could be substantial.

Claims by third parties of intellectual property infringement are costly and distracting, and could deprive Infinity of valuable rights it needs to develop or commercialize eganelisib and any product candidate that it might develop in the future or impact the commercialization of duvelisib and the royalties owed to it under the Secura Bio Agreement.

Infinity’s commercial success will depend on whether there are third-party patents or other intellectual property relevant to its potential products that may block or hinder its ability to develop and commercialize eganelisib. Infinity may not have identified all U.S. and foreign patents or published applications that may adversely affect

its business either by blocking its ability to manufacture or commercialize its drugs or by covering similar technologies that adversely affect the applicable market. In addition, Infinity may undertake research and development with respect to eganelisib, even when Infinity is aware of third-party patents that may be relevant to eganelisib, on the basis that it may challenge or license such patents. There are no assurances that such licenses will be available on commercially reasonable terms, or at all. If such licenses are not available, Infinity may become subject to patent litigation and, while it cannot predict the outcome of any litigation, it may be expensive and time consuming. If Infinity is unsuccessful in litigation concerning patents owned by third parties, Infinity may be precluded from selling eganelisib.

While Infinity is not currently aware of any litigation or third-party claims of intellectual property infringement related to eganelisib or duvelisib, the biopharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights. Other parties may obtain patents and claim that the use of Infinity’s or Secura Bio’s technologies infringes these patents or that it or Secura Bio are

 

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employing their proprietary technology without authorization. Infinity or Secura Bio could incur substantial costs and diversion of management and technical personnel in defending against any claims that the manufacture and sale of Infinity’s potential products or use of its or Secura Bio’s technologies infringes any patents, or defending against any claim that Infinity or Secura Bio are employing any proprietary technology without authorization. The outcome of patent litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of the adverse party, especially in pharmaceutical patent cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree. In the event of a successful claim of infringement against Infinity, Infinity or Secura Bio may be required to:

 

 

pay substantial damages;

 

 

stop developing, manufacturing and/or commercializing eganelisib or duvelisib (as applicable);

 

 

develop non-infringing product candidates, technologies and methods; and

 

 

obtain one or more licenses from other parties, which could result in Infinity’s or Secura Bio paying substantial royalties or the granting of cross-licenses to Infinity’s or Secura Bio’s technologies.

If any of the foregoing were to occur, Infinity may be unable to commercialize eganelisib, or Infinity may elect to cease certain of its business operations, either of which could severely harm its business.

Infinity may undertake infringement or other legal proceedings against third parties, causing it to spend substantial resources on litigation and exposing Infinity’s intellectual property portfolio to challenge.

Competitors may infringe Infinity’s patents. To prevent infringement or unauthorized use, Infinity may need to file infringement suits, which are expensive and time-consuming. In an infringement proceeding, a court may decide that one or more of Infinity’s patents is invalid, unenforceable, or both. Even if the validity of Infinity’s patents is upheld, a court may refuse to stop the other party from using the technology at issue on the ground that the other party’s activities are not covered by Infinity’s patents. In this case, third parties may be able to use Infinity’s patented technology without paying licensing fees or royalties. Policing unauthorized use of Infinity’s intellectual property is difficult, and it may not be able to prevent misappropriation of its proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States. In addition, third parties may affirmatively challenge Infinity’s rights to, or the scope or validity of, its patent rights.

Patent terms may be inadequate to protect Infinity’s competitive position on its products for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Infinity expects to seek extensions of patent terms in the United States and, if available, in other countries where it is prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension). However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with Infinity’s assessment of whether such extensions are available, and may refuse to grant extensions to Infinity’s patents, or may grant more limited extensions than Infinity requests. If this occurs, Infinity’s competitors may be able to take advantage of its investment in development and clinical trials by referencing Infinity’s’ clinical and preclinical data and launch their product earlier than might otherwise be the case.

Infinity may be subject to claims by third parties asserting that Infinity or its employees have misappropriated their intellectual property, or claiming ownership of what Infinity regards as its own intellectual property.

Many of Infinity’s employees and its licensors’ employees, including Infinity’s senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies, some of which may

 

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be competitors or potential competitors. Some of these employees, including each member of Infinity’s senior management, executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment. Although Infinity tries to ensure that its employees do not use the proprietary information or know-how of others in their work for Infinity, Infinity may be subject to claims that it or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party. Litigation may be necessary to defend against such claims. If Infinity fails in defending any such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and Infinity could be required to obtain a license from such third party to commercialize its technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if Infinity is successful in defending against such claims, litigation could result in substantial costs and be a distraction to its senior management and scientific personnel.

In addition, while Infinity typically requires its employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to Infinity, Infinity may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that Infinity regards as its own, which may result in claims by or against Infinity related to the ownership of such intellectual property. If Infinity fails in prosecuting or defending any such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights. Even if Infinity is successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to its senior management and scientific personnel.

If Infinity’s trademarks and trade names are not adequately protected, then it may not be able to build name recognition in its markets of interest and its business may be adversely affected.

Infinity has not yet registered trademarks in is potential markets. Any registered trademarks or trade names may be challenged, circumvented or declared generic or determined to be infringing on other marks. Infinity may not be able to protect its rights to these trademarks and trade names, which it needs to build name recognition among potential partners or customers in its markets of interest. At times, competitors may adopt trade names or trademarks similar to Infinity’s, thereby impeding its ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of Infinity’s registered or unregistered trademarks or trade names. Over the long term, if Infinity is unable to establish name recognition based on its trademarks and trade names, then it may not be able to compete effectively and its business may be adversely affected. Infinity’s efforts to enforce or protect its proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact its financial condition or results of operations.

Obtaining and maintaining Infinity’s patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and its patent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which non-compliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If Infinity or its sublicensees fail to comply with these requirements, competitors might be able to enter the market earlier than would otherwise have been the case, which could decrease Infinity’s revenue from that product.

 

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Intellectual property rights do not necessarily address all potential threats.

The degree of future protection afforded by Infinity’s intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect its business or permit Infinity to maintain its competitive advantage. For example:

 

 

others may be able to make products that are similar to eganelisib or any future product candidates Infinity may develop but that are not covered by the claims of the patents that it owns or licenses or may own in the future;

 

 

Infinity, or any partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that Infinity licenses or may own in the future;

 

 

Infinity, or any partners or collaborators, might not have been the first to file patent applications covering certain of Infinity’s or their inventions;

 

 

others may independently develop similar or alternative technologies or duplicate any of Infinity’s technologies without infringing its owned or licensed intellectual property rights;

 

 

it is possible that Infinity’s pending licensed patent applications or those that it may own in the future will not lead to issued patents;

 

 

issued patents that Infinity holds rights to may be held invalid or unenforceable, including as a result of legal challenges by its competitors;

 

 

Infinity’s competitors might conduct research and development activities in countries where it does not have patent rights and then use the information learned from such activities to develop competitive products for sale in its major commercial markets;

 

 

Infinity may not develop additional proprietary technologies that are patentable;

 

 

the patents of others may have an adverse effect on Infinity’s business; and

 

 

Infinity may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

Risks Related to Regulatory Approval and Marketing of Eganelisib and Other Legal Compliance Matters

Even if Infinity completes the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent Infinity from obtaining approvals for the commercialization of eganelisib. If Infinity or its collaborators are not able to obtain, or if there are delays in obtaining, required regulatory approvals, or if they are not able to successfully commercialize eganelisib, then Infinity’s ability to generate revenue will be materially impaired.

Eganelisib and the activities associated with its development and commercialization, including its design, testing, manufacture, safety, efficacy, record keeping, labeling, storage, approval, advertising, promotion, sale and distribution, export and import, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the European Medicines Agency (the “EMA”) and comparable regulatory authorities in other countries. Failure to obtain marketing approval for eganelisib will prevent Infinity from commercializing eganelisib. Infinity and its collaborators have not received approval to market eganelisib from regulatory authorities in any jurisdiction. Infinity has only limited experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party contract research organizations to assist Infinity in this process.

Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information, including manufacturing information, to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Eganelisib may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude Infinity from obtaining marketing approval or prevent or limit commercial use.

 

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The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that Infinity’s data is insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of eganelisib. Any marketing approval Infinity or its collaborators ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

Accordingly, if Infinity or its collaborators experience delays in obtaining approval or if Infinity or its collaborators fail to obtain approval of eganelisib, the commercial prospects for eganelisib may be harmed, and Infinity’s ability to generate revenues will be materially impaired.

Failure to obtain marketing approval in foreign jurisdictions would prevent eganelisib from being marketed in such jurisdictions.

In order to market and sell Infinity’s medicines in the European Union and many other jurisdictions, Infinity or its third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, a product must be approved for reimbursement before the product can be approved for sale in that country. Infinity or its third-party collaborators may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. Infinity may not be able to file for marketing approvals and may not receive necessary approvals to commercialize eganelisib in any market.

Additionally, Infinity could face heightened risks with respect to seeking marketing approval in the United Kingdom as a result of the withdrawal of the United Kingdom from the EU (“Brexit”). The United Kingdom is no longer part of the European Single Market and European Union Customs Union. As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency (the “MHRA”) became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern Ireland will continue to be subject to European Union rules under the Northern Ireland Protocol. The MHRA will rely on the Human Medicines Regulations 2012 (SI 2012/1916) (as amended, the “HMR”) as the basis for regulating medicines. The HMR has incorporated into the domestic law of the body of European Union law instruments governing medicinal products that pre-existed prior to the United Kingdom’s withdrawal from the European Union. Since a significant proportion of the regulatory framework for pharmaceutical products in the U.K. covering the quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit may have a material impact upon the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of Infinity’s product candidates in the U.K. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force Infinity to restrict or delay efforts to seek regulatory approval in the United Kingdom for its product candidates, which could significantly and materially harm its business.

 

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Infinity may seek certain designations for its product candidates, including Breakthrough Therapy, Fast Track and Priority Review designations in the US, and PRIME Designation in the EU, but it might not receive such designations, and even if it does, such designations may not lead to a faster development or regulatory review or approval process.

Infinity may seek certain designations for one or more of its product candidates that could expedite review and approval by the FDA. A Breakthrough Therapy product is defined as a product that is intended, alone or in combination with one or more other products, to treat a serious condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For products that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.

The FDA may also designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective.

Infinity may also seek a priority review designation for one or more of its product candidates. If the FDA determines that a product candidate offers major advances in treatment or provides a treatment where no adequate therapy exists, the FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months.

These designations are within the discretion of the FDA. Accordingly, even if Infinity believes that one of its product candidates meets the criteria for these designations, the FDA may disagree and instead determine not to make such designation. Further, even if Infinity receives a designation, the receipt of such designation for a product candidate may not result in a faster development or regulatory review or approval process compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of Infinity’s product candidates qualifies for these designations, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

In the EU, Infinity may seek PRIME designation for its product candidates in the future. PRIME is a voluntary program aimed at enhancing the EMA’s role to reinforce scientific and regulatory support in order to optimize development and enable accelerated assessment of new medicines that are of major public health interest with the potential to address unmet medical needs. The program focuses on medicines that target conditions for which there exists no satisfactory method of treatment in the EU or even if such a method exists, it may offer a major therapeutic advantage over existing treatments. PRIME is limited to medicines under development and not authorized in the EU and the applicant intends to apply for an initial marketing authorization application through the centralized procedure. To be accepted for PRIME, a product candidate must meet the eligibility criteria in respect of its major public health interest and therapeutic innovation based on information that is capable of substantiating the claims.

The benefits of a PRIME designation include the appointment of a CHMP rapporteur to provide continued support and help to build knowledge ahead of a marketing authorization application, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review, meaning reduction in the review time for an opinion on approvability to be issued earlier in the application process. PRIME enables an applicant to request parallel EMA scientific advice and health technology assessment advice to facilitate timely market access. Even if Infinity receives PRIME designation for any of its product candidates,

 

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the designation may not result in a materially faster development process, review or approval compared to conventional EMA procedures. Further, obtaining PRIME designation does not assure or increase the likelihood of EMA’s grant of a marketing authorization.

Even if Infinity or its collaborators obtain marketing approvals for eganelisib, the terms of approvals and ongoing regulation of eganelisib may limit how it manufactures and markets eganelisib, which could impair its ability to generate revenue.

Once marketing approval has been granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation. Infinity, and any collaborators, must therefore comply with requirements concerning advertising and promotion for eganelisib. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, Infinity and any collaborators will not be able to promote any products Infinity develops for indications or uses for which they are not approved.

In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs applicable to drug manufacturers or quality assurance standards applicable to medical device manufacturers, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. Infinity, any contract manufacturers Infinity may engage in the future, its current or future collaborators and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product such as the requirement to implement a risk evaluation and mitigation strategy.

Accordingly, assuming Infinity, or any of its collaborators, receive marketing approval for eganelisib, Infinity, its collaborators, and Infinity and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control.

If Infinity, and any collaborators, are not able to comply with post-approval regulatory requirements, Infinity, and its collaborators, could have the marketing approvals for its products withdrawn by regulatory authorities and its, or any collaborators’, ability to market any future products could be limited, which could adversely affect Infinity’s ability to achieve or sustain profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on Infinity’s operating results and financial condition.

Eganelisib could be subject to restrictions or withdrawal from the market, and Infinity may be subject to substantial penalties, if it or its collaborators fail to comply with regulatory requirements or if Infinity or its collaborators experience unanticipated problems with eganelisib, when and if it is approved.

Any product candidate for which Infinity or its collaborators obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to quality control and manufacturing, quality assurance and corresponding maintenance of records and documents, and requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of eganelisib is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the medicine, including the requirement to implement a risk evaluation and mitigation strategy.

 

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The FDA and other agencies, including the Department of Justice (the “DOJ”), closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA and DOJ impose stringent restrictions on manufacturers’ communications regarding off-label use and if Infinity does not market its products for their approved indications, Infinity may be subject to enforcement action for off-label marketing. Violations of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations and enforcement actions alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with Infinity’s products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

 

 

restrictions on such products, manufacturers or manufacturing processes;

 

 

restrictions on the labeling or marketing of a product;

 

 

restrictions on distribution or use of a product;

 

 

requirements to conduct post-marketing studies or clinical trials;

 

 

warning letters or untitled letters;

 

 

withdrawal of the products from the market;

 

 

refusal to approve pending applications or supplements to approved applications that Infinity submits;

 

 

recall of products;

 

 

damage to relationships with any potential collaborators;

 

 

unfavorable press coverage and damage to Infinity’s reputation;

 

 

fines, restitution or disgorgement of profits or revenues;

 

 

suspension or withdrawal of marketing approvals;

 

 

refusal to permit the import or export of Infinity’s products;

 

 

product seizure;

 

 

injunctions or the imposition of civil or criminal penalties; and

 

 

litigation involving patients using Infinity’s products.

Similar restrictions apply to the approval of Infinity’s products in the EU. The holder of a marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. These include: compliance with the EU’s stringent pharmacovigilance or safety reporting rules, which can impose post-authorization studies and additional monitoring obligations; the manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory; and the marketing and promotion of authorized drugs, which are strictly regulated in the EU and are also subject to Member State of the European Union (the “EU Member State”) laws.

Infinity’s relationships with health care providers, physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other health care laws and regulations, which, in the event of a violation, could expose Infinity to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Health care providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which Infinity obtains marketing approval. Infinity’s future arrangements with health care providers, physicians and third-party payors may expose Infinity to broadly applicable fraud and abuse and other health care laws and regulations that may constrain the business or financial

 

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arrangements and relationships through which Infinity markets, sells and distributes any products for which it obtains marketing approval. Restrictions under applicable federal and state health care laws and regulations include the following:

 

 

the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal health care program such as Medicare and Medicaid;

 

 

the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal health care program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties;

 

 

the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters;

 

 

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

 

 

the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs to report payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, as well as ownership and investment interests held by physicians and teaching hospitals; and

 

 

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws and transparency statutes, may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental third-party payors, including private insurers.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

If Infinity’s operations are found to be in violation of any of the laws described above or any governmental regulations that apply to Infinity, it may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of its operations. Any penalties, damages, fines, curtailment or restructuring of its operations could adversely affect its financial results. As Infinity moves toward potential commercialization of eganelisib, any corporate compliance program Infinity designs would be intended to ensure that Infinity will market and sell any future products that it successfully develops from eganelisib or other product candidates it may develop in compliance with all applicable laws and regulations. However, if implemented, Infinity cannot guarantee that such program would protect it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Infinity and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on Infinity’s business, including the imposition of significant fines or other sanctions.

Efforts to ensure that Infinity’s business arrangements with third parties will comply with applicable health care laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that Infinity’s business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other health care laws and regulations. If Infinity’s operations are found to be in

 

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violation of any of these laws or any other governmental regulations that may apply to Infinity, it may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded health care programs, such as Medicare and Medicaid, and the curtailment or restructuring of its operations. If any of the physicians or other health care providers or entities with whom Infinity expects to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded health care programs.

Existing and future legislation may increase the difficulty and cost for Infinity and any future collaborators to obtain marketing approval of and commercialize eganelisib or any product candidates Infinity may develop and affect the prices it, or they, may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of Infinity’s product candidates, restrict or regulate post-approval activities and affect Infinity’s ability, or the ability of any future collaborators, to profitably sell any products for which Infinity, or they, obtain marketing approval. Infinity expects that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that it, or any future collaborators, may receive for any approved products.

In March 2010, President Obama signed into law the ACA. In addition, other legislative changes have been proposed and adopted since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031. These Medicare sequester reductions were suspended and reduced through the end of June 2022, with the full 2% cut resuming thereafter., The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices Infinity may obtain for any of its product candidates for which it may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used. Indeed, under current legislation, the actual reductions in Medicare payments may vary up to 4%.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and congressional actions to repeal and replace provisions of the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. On December 14, 2018, a U.S. District Court judge in the Northern District of Texas ruled that the individual mandate portion of the PPACA is an essential and inseverable feature of the PPACA, and therefore because the mandate was repealed as part of the TCJA, the remaining provisions of the PPACA are invalid as well. The U.S. Supreme Court heard this case on November 10, 2020 and, on June 17, 2021, dismissed this action after finding that the plaintiffs do not have standing to challenge the constitutionality of the ACA. Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain results.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. On January 28, 2021, however, President Biden issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access. Under this Order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including

 

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complications related to COVID-19; demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the Health Insurance Marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and the ACA; and policies that reduce affordability of coverage or financial assistance, including for dependents. This Executive Order also directs the U.S. Department of Health and Human Services to create a special enrollment period for the Health Insurance Marketplace in response to the COVID-19 pandemic.

Infinity expects that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that it receives for any approved product and/or the level of reimbursement physicians receive for administering any approved product it might bring to market. Reductions in reimbursement levels may negatively impact the prices Infinity receives or the frequency with which its products are prescribed or administered. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that Infinity may successfully develop and for which it may obtain marketing approval and may affect its overall financial condition and ability to develop or commercialize product candidates.

The prices of prescription pharmaceuticals in the United States and foreign jurisdictions is subject to considerable legislative and executive actions and could impact the prices Infinity obtains for its products, if and when licensed.

The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the United States. There have been several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid. In 2020, President Trump issued several executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations. These regulations include an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries, effective January 1, 2021. That rule, however, has been subject to a nationwide preliminary injunction and, on December 29, 2021, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule to rescind it. With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries’ access to evidence-based care.

In addition, in October 2020, the Department of Health and Human Services (“HHS”) and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program (“SIP”) to import certain prescription drugs from Canada into the United States. The final rule is currently the subject of ongoing litigation, but at least six states (Vermont, Colorado, Florida, Maine, New Mexico, and New Hampshire) have passed laws allowing for the importation of drugs from Canada with the intent of developing SIPs for review and approval by the FDA. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The final rule would eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager (“PBM”) service fees. It originally was set to go into effect on January 1, 2022, but with passage of the Inflation Reduction Act (“IRA”), has been delayed by Congress to January 1, 2032.

More recently, on August 16, 2022, the IRA was signed into law by President Biden. The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

 

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imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition. Nonetheless, since CMS may establish a maximum price for these products in price negotiations, Infinity would be fully at risk of government action if its products are the subject of Medicare price negotiations. Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that Infinity would not be able to achieve the expected return on its drug products or full value of its patents protecting its products if prices are set after such products have been on the market for nine years.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year. In addition, the IRA potentially raises legal risks with respect to individuals participating in a Medicare Part D prescription drug plan who may experience a gap in coverage if they required coverage above their initial annual coverage limit before they reached the higher threshold, or catastrophic period of the plan. Individuals requiring services exceeding the initial annual coverage limit and below the catastrophic period, must pay 100% of the cost of their prescriptions until they reach the catastrophic period. Among other things, the IRA contains many provisions aimed at reducing this financial burden on individuals by reducing the co-insurance and co-payment costs, expanding eligibility for lower income subsidy plans, and price caps on annual out-of-pocket expenses, each of which could have potential pricing and reporting implications.

Accordingly, while it is currently unclear how the IRA will be effectuated, Infinity cannot predict with certainty what impact any federal or state health reforms will have on it, but such changes could impose new or more stringent regulatory requirements on its activities or result in reduced reimbursement for its products, any of which could adversely affect its business, results of operations and financial condition.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for Infinity’s products, once approved, or put pressure on its product pricing. Infinity expects that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for its product candidates or additional pricing pressures.

In the European Union, similar political, economic and regulatory developments may affect Infinity’s ability to profitably commercialize its product candidates, if approved. In markets outside of the United States and the European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In some countries, particularly the

 

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countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, Infinity may be required to conduct a clinical trial that compares the cost-effectiveness of its product candidate to other available therapies. If reimbursement of Infinity’s products are unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, its business could be harmed, possibly materially.

Infinity is subject to U.S. and foreign anti-corruption and anti-money laundering laws with respect to its operations and non-compliance with such laws can subject it to criminal and/or civil liability and harm its business.

Infinity is subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money laundering laws in countries in which Infinity conducts activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. Infinity may have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. In addition, Infinity may engage third-party intermediaries to promote its clinical research activities abroad and/or to obtain necessary permits, licenses, and other regulatory approvals. Infinity can be held liable for the corrupt or other illegal activities of these third-party intermediaries, its employees, representatives, contractors, partners, and agents, even if Infinity does not explicitly authorize or have actual knowledge of such activities.

Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. The FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.

Infinity cannot ensure that its employees and third-party intermediaries will comply with such anti-corruption laws. Noncompliance with anti-corruption and anti-money laundering laws could subject Infinity to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if Infinity does not prevail in any possible civil or criminal litigation, its business, results of operations and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional fees. In certain cases, enforcement authorities may even cause Infinity to appoint an independent compliance monitor which can result in added costs and administrative burdens.

Further, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order, or use of medicinal products is prohibited in the European Union. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of European Union Member States, such as the UK Bribery Act 2010. Infringement of these laws could result in substantial fines and imprisonment. Payments made to physicians in certain European Union Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization, and/or the regulatory authorities of the individual European Union Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct applicable in the European Union Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines, or imprisonment.

 

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Infinity is subject to governmental export and import controls that could impair its ability to compete in international markets due to licensing requirements and subject it to liability if it is not in compliance with applicable laws.

Infinity’s products and solutions are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of Infinity’s products and solutions outside of the United States must be made in compliance with these laws and regulations. If Infinity fails to comply with these laws and regulations, Infinity and certain of its employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on Infinity and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.

In addition, changes in Infinity’s products or solutions or changes in applicable export or import laws and regulations may create delays in the introduction, provision, or sale of Infinity’s products and solutions in international markets, prevent customers from using its products and solutions or, in some cases, prevent the export or import of its products and solutions to certain countries, governments or persons altogether. Any limitation on Infinity’s ability to export, provide, or sell its products and solutions could adversely affect its business, financial condition and results of operations.

If Infinity fails to comply with environmental, health and safety laws and regulations, Infinity could become subject to fines or penalties or incur costs that could harm its business.

Infinity is subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, its operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if Infinity contracts with third parties for the disposal of these materials and waste products, it cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of Infinity’s hazardous materials, Infinity could be held liable for any resulting damages, and any liability could exceed its resources. Infinity also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

Infinity maintains workers’ compensation insurance to cover it for costs and expenses it may incur due to injuries to its employees resulting from the use of hazardous materials, as well as other work-related injuries, but this insurance may not provide adequate coverage against potential liabilities. However, Infinity does not maintain insurance for environmental liability or toxic tort claims that may be asserted against it.

In addition, Infinity may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair its research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

Infinity’s internal computer systems, or those of any collaborators or contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of its product development programs.

Despite the implementation of security measures and certain data recovery measures, Infinity’s internal computer systems and those of third parties with which Infinity contracts are vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, sabotage, natural disasters, terrorism, war, and telecommunication and electrical failures. Any system failure, accident or security breach that causes interruptions in Infinity’s operations, for Infinity or those third parties with which it contracts, could result in a material disruption of Infinity’s product development programs and business operations, in addition to possibly requiring substantial expenditures of resources to remedy. For example, the loss of clinical trial data from completed clinical trials could result in delays in Infinity’s regulatory approval efforts and significantly increase its costs to recover or

 

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reproduce the data. To the extent that any disruption or security breach results in a loss of, or damage to, Infinity data or applications, or inappropriate disclosure of confidential or proprietary information, Infinity may incur liabilities and the further development of eganelisib, or any future product candidates it may develop, may be delayed. In addition, Infinity may not have adequate insurance coverage to provide compensation for any losses associated with such events.

Infinity could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of Infinity, including personal information of its employees. In addition, outside parties may attempt to penetrate Infinity’s systems or those of its vendors or fraudulently induce its employees or employees of Infinity’s vendors to disclose sensitive information to gain access to its data. Like other companies, Infinity may experience threats to its data and systems, including malicious codes and viruses, and other cyber-attacks. The number and complexity of these threats continue to increase over time. If a material breach of Infinity security or that of its vendors occurs, the market perception of the effectiveness of Infinity’s security measures could be harmed, Infinity could lose business and its reputation and credibility could be damaged. Infinity could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. Although Infinity develops and maintains systems and controls designed to prevent these events from occurring, and has a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite Infinity’s efforts, the possibility of these events occurring cannot be eliminated entirely.

Compliance with global privacy and data security requirements could result in additional costs and liabilities to Infinity or inhibit its ability to collect and process data globally, and the failure to comply with such requirements could have a material adverse effect on Infinity’s business, financial condition or results of operations.

The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, virtually every jurisdiction in which Infinity operates has established its own data security and privacy frameworks with which Infinity must comply. For example, the European Union’s General Data Protection Regulation 2016/679 (the “GDPR”) imposes strict obligations on the processing of personal data, including personal health data, and the free movement of such data. The GDPR applies to any company established in the European Union as well as any company outside the European Union that processes personal data in connection with the offering of goods or services to individuals in the European Union or the monitoring of their behavior. The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, obligations relating to: processing health and other sensitive data; obtaining consent of individuals; providing notice to individuals regarding data processing activities; responding to data subject requests; taking certain measures when engaging third-party processors; notifying data subjects and regulators of data breaches; implementing safeguards to protect the security and confidentiality of personal data; and transferring personal data to countries outside the European Union, including the United States. The GDPR imposes additional obligations and risks upon Infinity’s business and substantially increases the penalties to which it could be subject in the event of any non-compliance, including fines of up to €20 million or 4% of total worldwide annual turnover, whichever is higher. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages. In July 2020, the Court of Justice of the European Union (the “CJEU”) invalidated the EU-U.S. Privacy Shield, one of the mechanisms used to legitimize the transfer of personal data from the European Economic Area (the “EEA”) to the U.S. The CJEU decision also drew into question the long-term viability of an alternative means of data transfer, the standard contractual clauses, for transfers of personal data from the EEA to the U.S. While Infinity is not self-certified under the Privacy Shield, this CJEU decision may lead to increased scrutiny on data transfers from the EEA to the U.S. generally and increase Infinity’s costs of compliance with data privacy legislation as well as Infinity’s costs of negotiating appropriate privacy and security agreements with its vendors and business partners. Additionally, in October 2022, President Joe Biden signed an executive order to

 

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implement the EU-U.S. Data Privacy Framework, which would serve as a replacement to the EU-US Privacy Shield. The EC initiated the process to adopt an adequacy decision for the EU-US Data Privacy Framework in December 2022. It is unclear if and when the framework will be finalized and whether it will be challenged in court. The uncertainty around this issue may further impact Infinity’s business operations in the EU.

Given the breadth and depth of changes in data protection obligations, preparing for and complying with the GDPR’s requirements has required and will continue to require significant time, resources and a review of Infinity’s technologies, systems and practices, as well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the European Union. The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as health care data or other personal information from clinical trials, could require Infinity to change its business practices or lead to government enforcement actions, private litigation or significant fines and penalties against it, reputational harm and could have a material adverse effect on Infinity’s business, financial condition or results of operations.

Infinity’s employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for Infinity and harm its reputation.

Infinity is exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards it has established, comply with federal and state health care fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to Infinity. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to Infinity’s reputation. It is not always possible to identify and deter employee misconduct, and the precautions Infinity takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. If any such actions are instituted against Infinity, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on its business and results of operations, including the imposition of significant fines or other sanctions.

Risks Related to Employee Matters and Managing Potential Future Growth

If Infinity is not able to retain key personnel and advisors, it may not be able to operate its business successfully.

Infinity is highly dependent on its executive leadership team. All of these individuals are employees-at-will, which means that neither Infinity nor the employee is obligated to a fixed term of service and that the employment relationship may be terminated by either Infinity or the employee at any time, without notice and whether or not cause or good reason exists for such termination. The loss of the services of any of these individuals might impede the achievement of Infinity’s research, development and commercialization objectives. Infinity does not maintain “key person” insurance on any of its employees. Infinity’s planned Merger with MEI creates additional risk that its key personnel may explore other opportunities outside of Infinity.

Retaining qualified scientific and business personnel is also critical to Infinity’s success. Infinity’s industry has experienced a high rate of turnover of management personnel in recent years. If Infinity loses one or more of its executive officers or other key employees, its ability to implement its business strategy successfully could be seriously harmed. This competition is particularly intense near Infinity’s headquarters in Cambridge, Massachusetts. Infinity may not be able to attract or retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. In addition,

 

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Infinity may face additional challenges in retaining its existing senior management and key employees for its company as its business needs change.

Infinity also experiences competition in the hiring of scientific personnel from universities and research institutions. In addition, Infinity relies on consultants and advisors, including scientific and clinical advisors, to assist it in formulating its research and development strategy. Infinity’s consultants and advisors may be employed by other entities, have commitments under consulting or advisory contracts with third parties that limit their availability to Infinity, or both.

Risks Related to Infinity’s Common Stock

Infinity’s common stock may have a volatile trading price and low trading volume.

The market price of Infinity’s common stock has been and Infinity expects it to continue to be subject to significant fluctuations. Some of the factors that may cause the market price of Infinity’s common stock to fluctuate include:

 

 

the results of Infinity’s current and any future clinical trials of eganelisib;

 

 

future sales of, and the trading volume in, Infinity common stock;

 

 

the impact of the COVID-19 pandemic on the economy or Infinity’s business;

 

 

announcements regarding the timing of enrollment and data readouts from Infinity’s trials, including any delays;

 

 

announcements of strategic transactions relating to Infinity’s programs or the company;

 

 

Infinity’s entry into key agreements, including those related to the acquisition or in-licensing of new programs, or the termination of key agreements, including the Takeda Agreement or the Secura Bio Agreement;

 

 

the results and timing of regulatory reviews relating to the approval of eganelisib;

 

 

the initiation of, material developments in, or conclusion of litigation, including but not limited to litigation to enforce or defend any of Infinity’s intellectual property rights or to defend product liability claims;

 

 

the failure of eganelisib, if approved, to achieve commercial success;

 

 

the results of clinical trials conducted by others on drugs that would compete with eganelisib;

 

 

the regulatory approval of drugs that would compete with eganelisib;

 

 

issues in manufacturing eganelisib;

 

 

the loss of executive officers or other key employees;

 

 

changes in estimates or recommendations, or publication of inaccurate or unfavorable research about Infinity’s business, by securities analysts who cover Infinity’s common stock;

 

 

future financings through the issuance of equity or debt securities or otherwise;

 

 

health care reform measures, including changes in the structure of health care payment systems;

 

 

Infinity’s cash position and period-to-period fluctuations in Infinity’s financial results; and

 

 

general and industry-specific economic and/or capital market conditions.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of Infinity’s common stock.

In the past, when the market price of a stock has been volatile, as Infinity’s stock price may be, holders of that stock have occasionally brought securities class action litigation against the company that issued the stock. If any

 

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of Infinity’s stockholders were to bring a lawsuit of this type against Infinity, even if the lawsuit is without merit, negative publicity could be generated, and Infinity could incur substantial costs defending the lawsuit. A stockholder lawsuit could also divert the time and attention of Infinity’s management.

Infinity does not currently meet the requirements for continued listing on the Nasdaq Global Select Market. If Infinity fails to regain compliance with such requirements, its common stock could be delisted from trading, which would decrease the liquidity of Infinity’s common stock and Infinity’s ability to raise additional capital.

Infinity’s common stock is currently listed on the Nasdaq Global Select Market. Infinity is required to meet specified requirements in order to maintain its listing on the Nasdaq Global Select Market, including, among other things, a minimum bid price of $1.00 per share (the “Minimum Bid Price”) under Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Requirement”) and a minimum market value of listed securities of $50,000,000 under Nasdaq Listing Rule 5450(b)(2)(A), or the Minimum MVLS Requirement. On December 28, 2022, Infinity received a deficiency letter (the “December 2022 Bid Price Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market, LLC (“Nasdaq”), notifying Infinity that, for the last 30 consecutive business days, the bid price for its common stock was below the Minimum Bid Price required to maintain continued listing on the Nasdaq Global Select Market. The December 2022 Bid Price Notice has no immediate effect on the listing of Infinity’s common stock. Infinity has 180 calendar days, or until June 26, 2023, to regain compliance with the Minimum Bid Requirement. If at any time during this 180-day period the closing bid price of Infinity’s common stock is at least $1.00 per share for a minimum of ten consecutive business days, Nasdaq will provide Infinity written confirmation of compliance and the Minimum Bid Requirement matter will be closed. If Infinity fails to satisfy this requirement within the initial 180 calendar day period, it may be eligible for an additional 180 calendar day compliance period if it submits an application to transfer to the Nasdaq Capital Market, then meets specified continued and initial listing standards for the Nasdaq Capital Market and provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. However, there can be no assurance that Infinity can satisfy all of the requirements to secure such additional compliance period, including without limitation the continued and initial listing standards for the Nasdaq Capital Market, or that it will be able to regain compliance with the Minimum Bid Requirement, or that it can maintain compliance with the other listing requirements even if it successfully transfers to the Nasdaq Capital Market. Infinity currently does not satisfy various specified requirements for listing on the Nasdaq Capital Market.

Even if Infinity successfully transfers to the Nasdaq Capital Market on June 26, 2023, a transfer of Infinity’s listing to the Nasdaq Capital Market could adversely affect the liquidity of its common stock. Any such event could make it more difficult to dispose of, or obtain accurate quotations for the price of, Infinity’s common stock, and there also would likely be a reduction in its coverage by securities analysts and the news media, which could cause the price of Infinity’s common stock to decline further. Infinity may also face other material adverse consequences in such event, such as negative publicity, a decreased ability to obtain additional financing, diminished investor and/or employee confidence, and the loss of business development opportunities, some or all of which may contribute to a further decline in Infinity’s stock price.

If Infinity does not regain compliance with the Minimum Bid Requirement by June 26, 2023, and it does not meet the requirements to transfer to the Nasdaq Capital Market at that time, then it will receive written notification that its securities are subject to delisting. At that time, Infinity may appeal the Staff’s delisting determination to a Nasdaq Listing Qualifications Panel pursuant to procedures set forth in the applicable Nasdaq Listing Rules.

In addition, on April 4, 2023, Infinity received a deficiency letter (the “April 2023 MVLS Notice”) from the Listing Qualifications Department of Nasdaq notifying Infinity that the listing of its common stock was not in compliance with the Minimum MVLS Requirement for the previous 30 consecutive business days required to maintain continued listing on the Nasdaq Global Select Market. The Staff also noted in the April 2023 MVLS Notice that Infinity is not in compliance with Nasdaq Listing Rule 5450(b)(3)(A), which requires listed companies to have total assets and total revenue of at least $50,000,000 each for the most recently completed

 

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fiscal year or for two of the three most recently completed fiscal years. The April 2023 MVLS Notice has no immediate effect on the listing of Infinity’s common stock. Infinity has 180 calendar days, or until October 2, 2023, to regain compliance with the Minimum MVLS Requirement (assuming it has theretofore resolved the Minimum Bid Requirement described in the prior paragraph). If, at any time before October 2, 2023 (assuming it has theretofore resolved the Minimum Bid Requirement described in the prior paragraph), the market value of Infinity’s listed securities closes at $50,000,000 or more for a minimum of ten consecutive business days, the Staff will provide written notification to Infinity that it has regained compliance with the Minimum MVLS Requirement and this matter will be closed. If Infinity does not regain compliance with the Minimum MVLS Requirement by October 2, 2023 (assuming it has theretofore resolved the Minimum Bid Requirement described in the prior paragraph), it will receive written notification that its securities are subject to delisting. At that time, Infinity may appeal the Staff’s delisting determination to a Nasdaq Listing Qualifications Panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.

The estimates and judgments Infinity makes, or the assumptions on which it relies, in preparing its consolidated financial statements could prove inaccurate.

Infinity’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires Infinity to make estimates and judgments that affect the reported amounts of its assets, liabilities, revenues and expenses. Such estimates and judgments include those related to revenue recognition, impairment of long-lived assets, accrued expenses, assumptions in the valuation of stock-based compensation and income taxes. Infinity bases its estimates and judgments on historical experience, facts and circumstances known to it and on various assumptions that it believes to be reasonable under the circumstances. These estimates and judgments, or the assumptions underlying them, may change over time or prove inaccurate. If this is the case, Infinity may be required to restate its financial statements, which could in turn subject Infinity to securities class action litigation. Defending against such potential litigation relating to a restatement of its financial statements would be expensive and would require significant attention and resources of Infinity’s management. Moreover, Infinity’s insurance to cover its obligations with respect to the ultimate resolution of any such litigation may be inadequate. As a result of these factors, any such potential litigation could have a material adverse effect on Infinity’s financial results and cause its stock price to decline.

If Infinity is not able to maintain effective internal control under Section 404 of the Sarbanes-Oxley Act, its business and stock price could be adversely affected.

Section 404 of the Sarbanes-Oxley Act of 2002 requires Infinity, on an annual basis, to review and evaluate its internal control. Any failure by Infinity to maintain the effectiveness of its internal control in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act, which could be impacted by employee turnover, as such requirements exist today or may be modified, supplemented or amended in the future, could have a material adverse effect on Infinity’s business, operating results and stock price.

Infinity might not be able to utilize a significant portion of its net operating loss carryforwards and research and development tax credit carryforwards.

Infinity has incurred significant net losses since its inception and cannot guarantee when, if ever, it will become profitable. Unused net operating loss and tax credit carryforwards will carry forward to offset future taxable income, subject to applicable limitations on the use of those losses. Federal net operating losses incurred in taxable years ending on or before December 31, 2017, are eligible to be carried forward for up to 20 years, and to be deducted in full against income for the years to which they may be carried. Federal net operating losses incurred in taxable years ending after December 31, 2017, are eligible to be carried forward indefinitely, but may offset no more than 80% of the taxable income for the years to which they are carried (computed without regard to the deduction for carryovers of net operating losses). To the extent they expire unused, these net operating loss and tax credit carryforwards will not be available to offset future income tax liabilities.

 

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In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss and credit carryovers to reduce its tax liability for post-change periods may be limited. Infinity has had ownership changes in the past, expects to experience an ownership change in connection with the Merger, and may experience future ownership changes as a result of subsequent shifts in its stock ownership, some of which may be outside of its control. As a result, Infinity’s ability to use its historical net operating loss and tax credit carryovers to offset future income tax liabilities is limited by prior ownership changes and may become limited by additional ownership changes in the future. In addition, Infinity has not conducted a detailed study to document whether its historical activities qualify to support the research and development credits currently claimed as a carryover. A detailed study could result in adjustment to Infinity’s research and development credit carryovers which adjustment could adversely impact its use of those attributes to offset future income tax liabilities.

Changes in tax laws or in their implementation could adversely affect Infinity’s business and financial condition.

Changes in tax law may adversely affect Infinity’s business or financial condition. The TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% and limitation of the deduction for net operating losses to 80% of current year taxable income for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be carried forward indefinitely) In addition, beginning in 2022, the TCJA eliminates the option to deduct research and development expenditures currently and requires corporations to capitalize and amortize them over five years.

In addition to the CARES Act, as part of Congress’ response to the COVID-19 pandemic, economic relief legislation was enacted in 2020 and 2021 containing tax provisions. The IRA, which was signed into law in August 2022, also introduced new tax provisions, including a one percent excise tax imposed on certain stock repurchases by publicly traded corporations. The one percent excise tax generally applies to any acquisition of stock by the publicly traded corporation (or certain of its affiliates) from a stockholder of the corporation in exchange for money or other property (other than stock of the corporation itself), subject to a de minimis exception. Thus, the excise tax could apply to certain transactions that are not traditional stock repurchases.

Regulatory guidance under the TCJA, the IRA, and additional legislation is and continues to be forthcoming, and such guidance could ultimately increase or lessen their impact on Infinity’s business and financial condition. In addition, it is uncertain if and to what extent various states will conform to the TCJA, the IRA and additional tax legislation.

Infinity’s effective tax rate may fluctuate, and it may incur obligations in tax jurisdictions in excess of accrued amounts.

Infinity’s effective tax rate may be different than experienced in the past due to numerous factors, including as a result of applying the provisions of the TCJA (as such provisions may be elaborated on or further developed in guidance, regulations and technical corrections pertaining to the TCJA), changes in the mix of Infinity’s profitability apportioned to tax jurisdictions in which it may operate, the results of examinations and audits of its tax filings, its inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws. Any of these factors could cause Infinity to experience an effective tax rate significantly different from previous periods or its current expectations and may result in tax obligations in excess of amounts accrued in its financial statements.

 

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Because Infinity does not anticipate paying cash dividends, stock price appreciation, if any, will be Infinity’s stockholders’ sole return on investment.

Infinity anticipates retaining any future earnings for reinvestment in the infrastructure and personnel necessary to support its development and potential commercialization efforts. Therefore, Infinity does not anticipate paying cash dividends in the future. As a result, only appreciation of the price of its common stock will provide a return to stockholders. Investors seeking cash dividends should not invest in Infinity common stock.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of Infinity’s business may rely, which could negatively impact its business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which Infinity’s operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect Infinity’s business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities and it is possible that the government may shutdown again. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process Infinity’s regulatory submissions, which could have a material adverse effect on its business. Further, future government shutdowns could impact Infinity’s ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations.

Anti-takeover provisions in Infinity’s organizational documents and Delaware law may make an acquisition of Infinity difficult.

Infinity is incorporated in Delaware. Anti-takeover provisions of Delaware law and Infinity’s organizational documents may make a change in control more difficult. Also, under Delaware law, Infinity’s board of directors may adopt additional anti-takeover measures. For example, Infinity’s charter authorizes Infinity’s board of directors to issue up to 1,000,000 shares of undesignated preferred stock and to determine the terms of those shares of stock without any further action by Infinity stockholders. If Infinity’s board of directors exercises this power, it could be more difficult for a third party to acquire a majority of Infinity’s outstanding voting stock. Infinity’s charter and Infinity’s Amended and Restated Bylaws (the “Infinity Bylaws”) also contain provisions limiting the ability of stockholders to call special meetings of stockholders.

Infinity’s stock incentive plan generally permits Infinity’s board of directors to provide for acceleration of vesting of options granted under that plan in the event of certain transactions that result in a change of control. If Infinity’s board of directors uses its authority to accelerate vesting of options, this action could make an acquisition more costly, and it could prevent an acquisition from going forward.

Moreover, because Infinity is incorporated in Delaware, Infinity is governed by the provisions of Section 203 of the DGCL statute, which generally prohibits a person who owns in excess of 15% of Infinity’s outstanding voting stock from engaging in a transaction with Infinity for a period of three years after the date on which such person acquired in excess of 15% of Infinity’s outstanding voting common stock, unless the transaction is approved by Infinity’s board of directors and holders of at least two-thirds of Infinity’s outstanding voting stock, excluding shares held by such person. The prohibition against such transactions does not apply if, among other things, prior to the time that such person became an interested stockholder, Infinity’s board of directors approved the transaction in which such person acquired 15% or more of Infinity’s outstanding voting stock. The existence

 

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of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of Infinity’s common stock.

Infinity’s investments are subject to risks that may cause losses and affect the liquidity of these investments.

As of December 31, 2022, Infinity had $38.3 million in cash and cash equivalents. Infinity historically has invested these amounts in money market funds, corporate obligations, U.S. government-sponsored enterprise obligations, and U.S. Treasury securities meeting the criteria of its investment policy, which prioritizes the preservation of Infinity’s capital. Corporate obligations may include obligations issued by corporations in countries other than the United States, including some issues that have not been guaranteed by governments and government agencies. Infinity’s investments are subject to general credit, liquidity, market and interest rate risks and instability in the financial markets. Infinity may realize losses in the fair value of these investments or a complete loss of these investments. In addition, should Infinity’s investments cease paying or reduce the amount of interest paid to Infinity, its interest income would suffer. These market risks associated with Infinity’s investment portfolio may have a material adverse effect on Infinity’s financial results and the availability of cash to fund its operations.

Risk Factors of the Combined Company

The failure to successfully integrate the businesses and operations of Infinity and MEI in the expected time frame may adversely affect the combined company’s future results.

Infinity and MEI have operated independently and there can be no assurances that the businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Infinity or MEI employees, independent contractors, principal investigators, Clinical Research Organizations (“CROs”), consultants, vendors, and any other third parties, the disruption of our ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of Infinity and MEI in order to realize the anticipated benefits of the Merger so the combined company performs as expected:

 

   

combining the companies’ operations and corporate functions;

 

   

combining the businesses of Infinity and MEI and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the Merger, the failure of which would result in the anticipated benefits of the Merger not being realized in the time frame currently anticipated or at all;

 

   

integrating personnel from the two companies, especially in the post-COVID-19 environment which has required many people to work remotely in many locations;

 

   

integrating and unifying Infinity’s and MEI’s pipeline of product candidates in development;

 

   

identifying and eliminating redundant and underperforming functions and assets;

 

   

harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

 

   

maintaining existing agreements with employees, independent contractors, principal investigators, CROs, consultants, vendors, and any other third parties, avoiding delays in entering into new agreements with prospective employees, independent contractors, principal investigators, CROs, consultants, vendors, and any other third parties, and leveraging relationships with such third parties for the benefit of the combined company;

 

   

addressing possible differences in business backgrounds, corporate cultures and management philosophies;

 

   

consolidating the companies’ administrative and information technology infrastructure;

 

   

clinical development, coordinating research, commercialization, and marketing efforts;

 

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coordinating geographically dispersed organizations; and

 

   

effecting actions that may be required in connection with obtaining regulatory or other governmental approvals.

In addition, at times the attention our management may be focused on the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to us, which may disrupt our ongoing business.

The market price of the combined company’s common stock is expected to be volatile, and the market price of the common stock may drop following the Merger.

The market price of the combined company’s common stock following the Merger could be subject to significant fluctuations. Some of the factors that may cause the market price of the combined company’s common stock to fluctuate include:

 

   

results of clinical trials and preclinical studies of the combined company’s product candidates, or those of the combined company’s competitors or the combined company’s existing or future collaborators;

 

   

failure to meet or exceed financial and development projections the combined company may provide to the public;

 

   

failure to meet or exceed the financial and development projections of the investment community;

 

   

if the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts;

 

   

announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by the combined company or its competitors;

 

   

actions taken by regulatory agencies with respect to the combined company’s product candidates, clinical studies, manufacturing process or sales and marketing terms;

 

   

disputes or other developments relating to proprietary rights, including patents, litigation matters, and the combined company’s ability to obtain patent protection for its technologies;

 

   

additions or departures of key personnel;

 

   

significant lawsuits, including patent or stockholder litigation;

 

   

if securities or industry analysts do not publish research or reports about the combined company’s business, or if they issue adverse or misleading opinions regarding its business and stock;

 

   

changes in the market valuations of similar companies;

 

   

general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors;

 

   

sales of securities by the combined company or its securityholders in the future;

 

   

if the combined company fails to raise an adequate amount of capital to fund its operations and continued development of its product candidates;

 

   

trading volume of the combined company’s common stock;

 

   

announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;

 

   

adverse publicity relating to precision medicine product candidates, including with respect to other products in such markets;

 

   

the introduction of technological innovations or new therapies that compete with the products and services of the combined company; and

 

   

period-to-period fluctuations in the combined company’s financial results.

 

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Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined company’s common stock. In addition, a recession, depression or other sustained adverse market event resulting from the spread of COVID-19 or otherwise could materially and adversely affect the combined company’s business and the value of its common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies. Furthermore, market volatility may lead to increased shareholder activism if the combined company experiences a market valuation that activists believe is not reflective of its intrinsic value. Activist campaigns that contest or conflict with the combined company’s strategic direction or seek changes in the composition of its board of directors could have an adverse effect on its operating results and financial condition.

MEI and Infinity have incurred and will incur substantial direct and indirect costs as a result of the Merger and the combined company will incur substantial direct and indirect costs in connection with combining the business of MEI and Infinity following the Merger.

MEI and Infinity have incurred and will incur substantial expenses in connection with and as a result of consummating the Merger, and over a period of time following the consummation of the Merger, the combined company also expects to incur substantial expenses in connection with coordinating and, in certain cases, combining the businesses, operations, policies and procedures of MEI and Infinity. A portion of the transaction costs related to the Merger will be incurred regardless of whether the Merger is consummated. While MEI and Infinity have assumed that a certain level of transaction expenses will be incurred, factors beyond MEI’s and Infinity’s control could affect the total amount or the timing of these expenses. These expenses may exceed the costs historically borne by MEI and Infinity. These expenses could adversely affect the financial condition, results of operations and cash flows of the combined company following the consummation of the Merger.

The actual financial position and results of operations of the combined company after the Merger may differ materially from the unaudited pro forma condensed combined financial information for the combined company included in this joint proxy statement/prospectus.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is presented for informational purposes only and may not be an indication of what MEI’s and/or Infinity’s financial position or results of operations would have been had the Merger been consummated on the dates indicated. The unaudited pro forma condensed combined financial information has been derived from the audited and unaudited historical financial statements of Infinity and MEI and certain adjustments and assumptions regarding Infinity and MEI after giving effect to the Merger. The assets and liabilities of MEI and Infinity have been measured at fair value based on various preliminary estimates using assumptions that Infinity and MEI management believes are reasonable, utilizing information currently available. These fair value measurements can be highly subjective and the reasonable application of measurement principles may result in a range of alternative estimates using the same facts and circumstances. These estimates, which require extensive use of accounting estimates and management judgment, may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the unaudited pro forma condensed combined financial information and the final acquisition accounting will occur and could have a material impact on the unaudited pro forma condensed combined financial information and the combined company’s financial position and future results of operations.

In addition, the assumptions used in preparing the unaudited pro forma condensed combined financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the consummation of the Merger. Any material variance from the pro forma condensed combined financial information may cause significant variations in the market price of the combined company’s common stock. See “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 313 of this joint proxy statement/prospectus.

 

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Sales of shares of MEI Common Stock after the completion of the Merger may cause the market price of MEI Common Stock to fall.

Infinity stockholders may decide not to hold the shares of MEI Common Stock they receive in the Merger and other Infinity stockholders, such as funds with limitations on the amount of stock they are permitted to hold in individual issuers, may be required to sell shares of MEI Common Stock that they receive in the Merger. Such sales, or market perception of such sales, of MEI Common Stock could result in higher than average trading volume following the Closing and may cause the market price for MEI Common Stock to decline. Such sales may take place promptly following the Merger or at other times in the future. There is no lock-up in place that would prevent institutional or larger stockholders from selling some or all of their MEI Common Stock after the close of the transaction.

If third parties threaten to terminate, terminate or alter existing contracts or relationships with MEI or Infinity, MEI’s and Infinity’s respective businesses may be materially harmed.

Infinity has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require Infinity to obtain consents from these other parties in connection with the Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenues and may lose rights that are material to the business of the combined company. In addition, third parties with whom Infinity or MEI currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Merger or the termination of the Merger Agreement.

Both Infinity and MEI have operated with a loss and negative cash flows for the entirety of their existence and it is expected the combined company will have to raise significant capital in the future that could be dilutive to stockholders of the combined company.

Both Infinity and MEI have operated with a loss and negative cash flows for the entirety of their existence. Infinity and MEI have incurred significant net operating losses in every year since inception and expect to continue to incur significant expenses and operating losses for the foreseeable future. Infinity’s net losses were approximately $44.4 million for the year ended December 31, 2022 and approximately $11.0 million for the three months ended March 31, 2023. MEI’s net losses were approximately $54.5 million for the year ended June 30, 2022 and approximately $21.8 million for the nine months ended March 31, 2023. Based on the combined company’s anticipated cash balances, it is anticipated that the combined company will have cash liquidity through mid-2025.

The combined company may not be able to raise capital to continue operations in the future which could result in bankruptcy or liquidation of the combined company. As a result, adequate funding may not be available to the combined company on acceptable terms, or at all.

MEI and Infinity do not anticipate that the combined company will pay any cash dividends in the foreseeable future.

The current expectation is that the combined company will retain its future earnings, if any, to fund the growth of the combined company’s business as opposed to paying dividends. As a result, capital appreciation, if any, of the common stock of the combined company will be the sole source of gain, if any, for the combined company’s stockholders for the foreseeable future.

The combined company may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on the combined company’s business and operations.

The combined company may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the combination of MEI’s business and Infinity’s business following the

 

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Merger. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations. In addition, in the past, stockholders have initiated class action lawsuits against biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against the combined company, could cause the combined company to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on the combined company’s business, financial condition and results of operations.

After completion of the Merger, the combined company’s executive officers, directors and principal stockholders will have the ability to control or significantly influence all matters submitted to the combined company’s stockholders for approval.

Upon the completion of the Merger, it is anticipated that the combined company’s executive officers, directors and principal stockholders will, in the aggregate, beneficially own approximately 6.7% of the combined company’s outstanding shares of common stock, subject to certain assumptions disclosed elsewhere in this joint proxy statement/prospectus. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to the combined company’s stockholders for approval, as well as the combined company’s management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of the combined company’s assets. This concentration of voting power could delay or prevent an acquisition of the combined company on terms that other stockholders may desire.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about the combined company, its business or its market, its stock price and trading volume could decline.

The trading market for the combined company’s common stock will be influenced by the research and reports that equity research analysts publish about it and its business. Equity research analysts may elect not to provide research coverage of the combined company’s common stock after the completion of the Merger, and such lack of research coverage may adversely affect the market price of its common stock. In the event it does have equity research analyst coverage, the price of the combined company’s common stock could decline if one or more equity research analysts downgrade its stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of the combined company or fails to publish reports on it regularly, demand for its common stock could decrease, which in turn could cause its stock price or trading volume to decline.

The combined company’s ability to utilize its net operating loss carryforwards and tax credit carryforwards may be subject to limitations.

The combined company’s ability to use its federal and state net operating losses (“NOLs”) to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon the combined company’s generation of future taxable income, and MEI and Infinity cannot predict with certainty when, or whether, the combined company will generate sufficient taxable income to use all of its NOLs. In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss and credit carryovers to reduce its tax liability for post-change periods may be limited. MEI and Infinity have experienced such ownership changes in the past, and expect that the Merger, if completed, will result in an ownership change of Infinity. The combined company may experience additional ownership changes in the future due to subsequent shifts in its stock ownership (some of which are outside of its control). Consequently, even if the combined company achieves profitability, it may not be able to utilize a material portion of MEI’s, Infinity’s, or the combined company’s NOL carryforwards and other tax attributes, which could have a material adverse effect on cash flow and results of operations. Similar provisions of state tax law may also apply to limit the combined company’s use of accumulated state tax attributes. There is also a risk that due to regulatory changes, such as

 

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suspensions on the use of NOLs, or other unforeseen reasons, the combined company’s existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

If and when the combined company is no longer a smaller reporting company or otherwise no longer qualifies for applicable exemptions, the combined company will be subject to additional laws and regulations affecting public companies that will increase the combined company’s costs and the demands on management and could harm the combined company’s operating results.

The combined company will be subject to the reporting requirements of the Exchange Act, which requires, among other things, that the combined company file with the SEC, annual, quarterly and current reports with respect to the combined company’s business and financial condition as well as other disclosure and corporate governance requirements. However, as a “smaller reporting company,” the combined company may take advantage of some exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation in the combined company’s periodic reports and proxy statements. Once the combined company is no longer a smaller reporting company or otherwise qualifies for these exemptions, the combined company will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal, accounting and other expenses to do so. If the combined company is not able to comply with the requirements in a timely manner or at all, the combined company’s financial condition or the market price of the combined company’s common stock may be harmed. For example, if the combined company or its independent auditor identifies deficiencies in the combined company’s internal control over financial reporting that are deemed to be material weaknesses, the combined company could face additional costs to remedy those deficiencies, the market price of the combined company’s stock could decline or the combined company could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

The combined company will have broad discretion in the use of the cash and cash equivalents of the combined company and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment.

The combined company will have broad discretion over the use of the cash and cash equivalents of the combined company. You may not agree with the combined company’s decisions, and its use of the proceeds may not yield any return on your investment. The combined company’s failure to apply these resources effectively could compromise its ability to pursue its growth strategy and the combined company might not be able to yield a significant return, if any, on its investment of these net proceeds. You will not have the opportunity to influence its decisions on how to use the combined company’s cash resources.

Risks Related to the Merger

The Exchange Ratio will not be adjusted based on the market price of MEI Common Stock or Infinity Common Stock, so the merger consideration at the Closing may have a greater or lesser value than at the time the Merger Agreement was signed.

At the Effective Time, outstanding Infinity Common Stock will be converted into shares of MEI Common Stock. Applying the Exchange Ratio, the former Infinity stockholders immediately before the Merger are expected to own approximately 42% of the outstanding equity of the combined company immediately following the Merger, and MEI stockholders immediately before the Merger are expected to own approximately 58% of the outstanding equity of the combined company immediately following the Merger, subject to certain assumptions.

The number of shares Infinity stockholders will be entitled to receive pursuant to the Merger Agreement will not be affected by changes in the market price of MEI Common Stock or Infinity Common Stock before the completion of the Merger. Therefore, if before the completion of the Merger, the market price of MEI Common Stock increases from the market price on the date of the Merger Agreement and/or the market price of Infinity Common Stock declines from the market price on the date of the Merger Agreement, then Infinity

 

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stockholders could receive merger consideration with substantially more value for their Infinity Common Stock than the parties had negotiated when they established the Exchange Ratio. Similarly, if before the completion of the Merger the market price of MEI Common Stock declines from the market price on the date of the Merger Agreement and/or the market price of Infinity Common Stock increases from the market price on the date of the Merger Agreement, then Infinity stockholders could receive merger consideration with substantially lower value. The Merger Agreement does not include a price-based termination right.

If the conditions to the Merger are not satisfied or waived, the Merger may not occur.

Even if the Infinity stockholders adopt the Merger Agreement and approve the Infinity Merger Proposal and the MEI stockholders approve the MEI Nasdaq Proposal, specified conditions must be satisfied or waived to complete the Merger. These conditions are set forth in the Merger Agreement and described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 184 of this joint proxy statement/prospectus. MEI and Infinity cannot assure you that all of the conditions to the consummation of the Merger will be satisfied or waived. If the conditions are not satisfied or waived, the Merger may not occur or the Closing may be delayed, and MEI and Infinity each may lose some or all of the intended benefits of the Merger.

The Merger may be completed even though a material adverse effect may result from the announcement of the Merger, industry wide changes or other causes.

In general, neither MEI nor Infinity is obligated to complete the Merger if there is a continuing material adverse effect affecting the other party between February 22, 2023, the date of the Merger Agreement, and the Closing. However, certain types of changes are excluded from the concept of a “material adverse effect.” Such exclusions include, but are not limited to, changes in general business or economic conditions that generally affect the industry, political conditions, acts of war or terrorism or the outbreak or escalation of armed hostilities, natural disasters, epidemics and pandemics, certain measures and responses with respect to COVID-19, changes in laws or U.S. GAAP, certain changes in the price or trading volume of MEI Common Stock or Infinity Common Stock, certain failures by MEI or Infinity to meet internal or analysts’ expectations or projections or the results of operations, and changes resulting from the announcement, performance or pendency of the Merger. Therefore, if any of these events were to occur, impacting MEI or Infinity, the other party would still be obliged to consummate the closing of the Merger. If any such adverse changes occur and MEI and Infinity consummate the closing of the Merger, the stock price of the combined company may suffer. This in turn may reduce the value of the Merger to the stockholders of MEI, Infinity or both. For a more complete discussion of what constitutes a material adverse effect on MEI or Infinity, see the section titled “The Merger Agreement—Representations and Warranties” beginning on page 186 of this joint proxy statement/prospectus.

If MEI and Infinity complete the Merger, the combined company may need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

Additional financing may not be available to the combined company when it is needed or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the combined company, including MEI’s pre-Merger stockholders and Infinity’s former stockholders. It is also possible that the terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the combined company.

 

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MEI and Infinity directors and executive officers have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests.

Directors and executive officers of MEI and Infinity have interests in the Merger that are different from, or in addition to, the interests of other MEI and Infinity stockholders generally. These interests with respect to MEI’s directors and executive officers may include, among others, that Daniel P. Gold, Ph.D., Charles V. Baltic III, Thomas C. Reynolds, and Sujay R. Kango, members of the MEI board of directors, will continue as directors after the Merger. In addition, following the Closing, David Urso (currently MEI’s Chief Executive Officer and President) is expected to serve as Chief Executive Officer of the combined company. These interests with respect to Infinity’s directors and executive officers may include, among others, (i) the acceleration of equity award vesting, (ii) that options to purchase shares of Infinity Common Stock will be converted into and become fully vested options to purchase shares of common stock of the combined company, (iii) retention payments for continued services to and through the Closing, (iv) severance payments if employment is terminated in a qualifying termination in connection with the Merger and (v) all of Infinity’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement. In addition, following the Closing, Robert Ilaria, Jr., M.D. (currently Infinity’s Chief Medical Officer) is expected to serve as Chief Medical Officer of the combined company and Stéphane Peluso, Ph.D. (currently Infinity’s Chief Scientific Officer) is expected to serve as Chief Scientific Officer of the combined company.

Sujay R. Kango serves on the boards of directors of each of MEI and Infinity. The boards of directors of MEI and Infinity considered, among other things, that Mr. Kango holds stock options exercisable for shares of MEI Common Stock and Infinity Common Stock.

Further, the board of directors of the combined company will include certain current directors and executive officers of MEI and Infinity. Following the Closing, the board of directors of the combined company is expected to be composed of eight members, consisting of Norman C. Selby (currently Infinity’s Lead Independent Director), who is expected to chair the combined company board, David Urso (currently MEI’s Chief Executive Officer and President), Daniel P. Gold, Ph.D. (currently a director of MEI), Adelene Q. Perkins (currently Infinity’s Chief Executive Officer and Chair of the board of directors of Infinity), Richard Gaynor, M.D. (currently a director of Infinity), Charles V. Baltic III (currently Chair of the board of directors of MEI), Thomas C. Reynolds, M.D., Ph.D. (currently a director of MEI) and Sujay R. Kango (currently a director of MEI and Infinity). The non-employee directors of the combined company will be eligible to be compensated pursuant to the MEI non-employee director compensation policy that is expected to remain in place following the Effective Time.

The MEI and Infinity boards of directors were aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement and approve the Merger, and in the case of the Infinity board of directors, recommend the approval of the Merger Agreement to Infinity’s stockholders. These interests, among other factors, may have influenced the directors and executive officers of MEI and Infinity to support or approve the Merger.

For more information regarding the interests of MEI and Infinity directors and executive officers in the Merger, please see the sections titled “The Merger—Interests of MEI Directors and Executive Officers in the Merger” beginning on page 167 and “The Merger—Interests of Infinity Directors and Executive Officers in the Merger” beginning on page 167 of this joint proxy statement/prospectus.

MEI and Infinity securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the Merger as compared to their current ownership and voting interests in the respective companies.

Applying the Exchange Ratio, the former Infinity stockholders immediately before the Merger are expected to own approximately 42% of the outstanding equity of the combined company immediately following the Merger, and MEI stockholders immediately before the Merger are expected to own approximately 58% of the outstanding

 

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equity of the combined company immediately following the Merger, subject to certain assumptions. If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the

Merger, MEI and Infinity stockholders will have experienced substantial dilution of their ownership and voting interests in the respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the Merger.

If the Merger is not completed, MEI’s and Infinity’s stock prices may fluctuate significantly.

The market price of MEI Common Stock is subject to significant fluctuations. During the 12-month period ended May 31, 2023, the closing sales price of MEI Common Stock on The Nasdaq Capital Market ranged from a high of $12.96 on June 27, 2022 to a low of $4.20 on February 24, 2023. The market price of Infinity Common Stock is also subject to significant fluctuations. During the 12-month period ended May 31, 2023, the closing sales price of Infinity’s Common Stock on The Nasdaq Global Select Market ranged from a high of $1.70 on August 24, 2022, to a low of $0.14 on April 12, 2023.

Market prices for securities of pharmaceutical, biotechnology and other life science companies have historically been particularly volatile. In addition, the market prices of MEI Common Stock and Infinity Common Stock will likely be volatile based on whether stockholders and other investors believe that MEI and Infinity can complete the Merger or otherwise raise additional capital to support the combined company’s operations if the Merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The volatility of the market prices of MEI Common Stock and Infinity Common Stock are exacerbated by low trading volume. Additional factors that may cause the market prices of MEI Common Stock and Infinity Common Stock, respectively, to fluctuate include:

 

   

the initiation of, material developments in, or conclusion of litigation to enforce or defend its intellectual property rights or defend against claims involving the intellectual property rights of others;

 

   

the entry into, or termination of, key agreements, including commercial partner agreements;

 

   

announcements by commercial partners or competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;

 

   

the introduction of technological innovations or new therapies that compete with its future products;

 

   

the loss of key employees;

 

   

future sales of its common stock;

 

   

general and industry-specific economic conditions that may affect its research and development expenditures;

 

   

the failure to meet industry analyst expectations; and

 

   

period-to-period fluctuations in financial results.

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading prices of MEI Common Stock and Infinity Common Stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.

During the pendency of the Merger, MEI and Infinity may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect their respective business prospects.

Covenants in the Merger Agreement impede the ability of MEI and Infinity to make acquisitions during the pendency of the Merger, subject to specified exceptions. As a result, if the Merger is not completed, the parties

 

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may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, inducing, encouraging, or facilitating any inquiries, proposals or offers that constitute or could reasonably be expected to lead to certain transactions involving a third party, including a merger, sale of assets or other business combination, subject to specified exceptions. Any such transactions could be favorable to such party’s stockholders, but the parties may be unable to pursue them. For more information, see the section titled “The Merger Agreement—No Solicitation.”

Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the Merger.

The terms of the Merger Agreement prohibit each of MEI and Infinity from soliciting or engaging in discussions with third parties regarding alternative acquisition proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal and that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable law, as described in further detail in the section titled “The Merger Agreement—No Solicitation.” In addition, if the Merger Agreement is terminated by MEI or Infinity under certain circumstances, including because of a decision by either company’s board of directors to accept a superior proposal, such company would be required to pay the other a termination fee. This termination fee may discourage third parties from submitting alternative takeover proposals to either company or its stockholders and may cause such company’s board of directors to be less inclined to recommend an alternative proposal.

The financial analyses, estimates and forecasts presented herein and considered by MEI and Infinity in connection with the Merger may not be realized.

The unaudited prospective financial information of MEI and Infinity presented herein and considered by MEI and Infinity in connection with the Merger was not prepared with a view toward public disclosure, and such information and the estimated synergies were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The estimates and assumptions underlying the unaudited prospective financial information and estimated synergies involve judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions, future tax rates and future business decisions which may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among others, risks and uncertainties described under the sections titled “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements and Industry and Market Data,” all of which are difficult to predict and many of which are beyond the control of MEI and/or Infinity. In addition, the unaudited prospective financial information and estimated synergies will be affected by MEI’s or Infinity’s, as applicable, ability to achieve strategic goals, objectives and targets over the applicable periods. As a result, there can be no assurance that the underlying assumptions will prove to be accurate or that the projected results or synergies will be realized, and actual results or synergies likely will differ, and may differ materially, from those reflected in the unaudited prospective financial information and the estimated synergies, whether or not the Merger is completed, which could have an adverse effect on MEI’s and Infinity’s business, financial condition and result of operations.

The announcement and pendency of the Merger, whether or not consummated, may adversely affect the trading price of MEI Common Stock, Infinity Common Stock, and each party’s business prospects.

The announcement and pendency of the Merger, whether or not consummated, may adversely affect the trading price of MEI Common Stock, Infinity Common Stock, and each party’s business prospects. In the event that the Merger is not completed, the announcement of the termination of the Merger Agreement may also adversely affect the trading price of MEI Common Stock, Infinity Common Stock, and the business prospects of the respective companies.

 

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Failure to consummate the Merger may result in either MEI or Infinity paying a termination fee to the other party and could harm the common stock price of the party obligated to pay the termination fee and such party’s future business and operations.

The Merger will not be consummated if the conditions precedent to the consummation of the transaction are not satisfied or waived, or if the Merger Agreement is terminated in accordance with its terms. If the Merger is not consummated, MEI and Infinity, as applicable, are subject to the following risks:

 

   

if the Merger Agreement is terminated under certain circumstances, MEI may be required to pay Infinity a termination fee of $4,000,000 and/or reimburse Infinity’s reasonable out of pocket fees and expenses incurred in connection with the Merger Agreement and the transaction contemplated thereby up to a maximum of $1,000,000;

 

   

if the Merger Agreement is terminated under certain circumstances, Infinity may be required to pay MEI a termination fee of $2,900,000 and/or reimburse MEI’s reasonable out of pocket fees and expenses incurred in connection with the Merger Agreement and the transaction contemplated thereby up to a maximum of $1,000,000; and

 

   

the price of either party’s common stock may decline and remain volatile.

If the Merger does not close for any reason, either party’s board of directors may elect to, among other things, attempt to complete another strategic transaction, attempt to sell or otherwise dispose of such company’s various assets, dissolve or liquidate its assets, declare bankruptcy or seek to continue to operate its business. If either company seeks another strategic transaction or attempts to sell or otherwise dispose of its various assets, there is no assurance that it will be able to do so, that the terms would be equal to or superior to the terms of the Merger or as to the timing of such transaction. If either company decides to dissolve and liquidates its assets, such company would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurance as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

If the Merger is not consummated, each of MEI and Infinity would need to determine whether to continue its business, consummate another strategic transaction, or dissolve and liquidate its assets.

If the Merger is not consummated, MEI and Infinity, as applicable, may be unable to retain the services of key remaining members of its management teams and, as a result, may be unable to seek or consummate another strategic transaction, properly dissolve and liquidate its assets or continue its business. If the Merger is not successfully consummated, the boards of directors of MEI and Infinity may dissolve or liquidate the respective company’s assets to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to MEI’s or Infinity’s stockholders, as applicable, will depend heavily on the timing of such transaction or liquidation.

If the Merger does not close for any reason, the board of directors of Infinity may elect to, among other things, dissolve or liquidate its assets, which may include seeking protection from creditors in a bankruptcy proceeding. If Infinity decided to dissolve and liquidate its assets, it would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

In the event of a dissolution and liquidation, the amount of cash available for distribution to MEI’s stockholders or Infinity’s stockholders, as applicable, will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as MEI or Infinity, as applicable, fund its operations in preparation for the consummation of the Merger. Further, the Merger Agreement contains certain termination rights for each party, and provides that, upon termination under specified circumstances, either party may be required to pay the other a termination fee, which would further decrease such company’s’ available cash resources. If either party’s board of directors were to approve and recommend, and its stockholders were to approve, a dissolution and liquidation, such company would be required under Delaware

 

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corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to its stockholders. As applicable, MEI’s and Infinity’s commitments and contingent liabilities may include (i) regulatory and clinical obligations remaining under its clinical trials; (ii) obligations under its employment, separation and retention agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control; and (iii) potential litigation against such company, and other various claims and legal actions arising in the ordinary course of business. As a result of this requirement, a portion of MEI’s assets and Infinity’s assets, as applicable, may need to be reserved pending the resolution of such obligations. In addition, either company may be subject to litigation or other claims related to a dissolution and liquidation of such company. If a dissolution and liquidation were pursued, such company’s board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of MEI Common Stock and Infinity Common Stock, as applicable, could lose all or a significant portion of their investment in the event of its liquidation, dissolution or winding up.

MEI or Infinity may waive one or more of the conditions to the Merger, and may do so without re-soliciting stockholder approval.

MEI or Infinity may agree to waive, in whole or in part, some of the conditions to each party’s obligations to complete the Merger, to the extent permitted by applicable law. For example, it is a condition to MEI’s and Infinity’s respective obligations to close the Merger that certain of the representations and warranties of the other party are true and correct in all respects as of the date of the Closing (the “Closing Date”), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect. However, if the board of directors of either party determines that it is in the best interests of the stockholders of that company to waive any such breach by the other party, then such board of directors may elect to waive that condition.

In the event of a waiver of a condition, the boards of directors of MEI and Infinity will evaluate the materiality of any such waiver to determine whether amendment of this joint proxy statement/prospectus and re-solicitation of proxies is necessary. In the event that the boards of directors of the waiving party, in its own reasonable discretion, determines any such waiver is not significant enough to require re-solicitation of its stockholders, it will have the discretion to cause the Merger to be completed without seeking further stockholder approval, which decision may have a material adverse effect on the stockholders of the combined company following the Merger. For example, the market could react negatively to such information, which may cause a substantial decline in the price of the common stock of the combined company following the Merger.

Notwithstanding the foregoing, certain closing conditions may not be waived due to applicable law, or otherwise. The following closing conditions may not be waived: receipt of the requisite stockholder approvals; the effectiveness of the registration statement of which this joint proxy statement/prospectus forms a part; and the absence of any order or injunction that has the effect of prohibiting the consummation of the Merger. The foregoing closing conditions are the only closing conditions to the Merger that may not be waived. All other closing conditions to the Merger may be waived by MEI and/or Infinity, as applicable. See the section “The Merger Agreement—Conditions to the Completion of the Merger” for further information.

The Merger may not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, resulting in recognition of taxable gain or loss by Infinity stockholders in respect of their Infinity Common Stock.

As discussed in the section titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger, the Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) Code. However, Infinity has not sought and does not intend to seek a ruling from the IRS or an opinion of counsel regarding the intended tax treatment of the Merger. Consequently, there can be no assurance that the IRS will not challenge the intended tax treatment of the Merger and, if challenged, that a court would not sustain the IRS’s position. In the event that the Merger does not qualify as a “reorganization” within the meaning of Section 368(a)

 

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of the Code, each U.S. Holder (as defined in the section titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) would recognize gain or loss upon the exchange of shares of Infinity Common Stock for MEI Common Stock in the Merger equal to the difference between the fair market value of the shares of MEI Common Stock received in exchange for the shares of Infinity Common Stock (plus any cash received in lieu of a fractional share) and such U.S. Holder’s adjusted tax basis in the shares of Infinity Common Stock surrendered. Each Infinity stockholder is urged to consult with his, her or its own tax advisor with respect to the tax consequences of the Merger.

Lawsuits could delay or prevent the Merger.

Putative stockholder complaints, including stockholder class action complaints, and other complaints may be threatened or filed against MEI, Infinity, and/or their respective boards of directors in connection with the transactions contemplated by the Merger Agreement. MEI, Infinity, and/or their respective boards of directors may not be successful in defending against any such claims. The outcome of litigation is uncertain, and any such lawsuits that may be threatened or filed against MEI, Infinity, and/or their respective boards of directors could delay or prevent the Merger from becoming effective or from becoming effective within the intended timeframe, divert the attention of MEI’s and/or Infinity’s management and employees from their respective day-to-day businesses and otherwise adversely affect their respective financial conditions.

 

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THE SPECIAL MEETING OF MEI STOCKHOLDERS

Date, Time, and Place

The MEI Special Meeting will be held at on July 14, 2023, as a virtual meeting via the Internet at www.meetnow.global/M44PQGZ.

On or about June 9, 2023, MEI will commence mailing this joint proxy statement/prospectus and the enclosed form of proxy card to its stockholders entitled to vote at the MEI Special Meeting.

Purposes of the MEI Special Meeting

At the MEI Special Meeting, MEI stockholders will be asked to consider and vote upon the following proposals:

Proposal No. 1 – The MEI Nasdaq Proposal: the proposal to approve, for purposes of Nasdaq Listing Rule 5635(a), the issuance of shares of MEI Common Stock, $0.00000002 par value per share, to stockholders of Infinity pursuant to the terms of the Merger Agreement.

Proposal No. 2 – The MEI Adjournment Proposal: the proposal to approve the adjournment of the MEI Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal.

In accordance with the MEI Bylaws and the DGCL, except as otherwise required by law, business transacted at the MEI Special Meeting will be limited to those matters set forth in the notice of the meeting.

Recommendation of MEI’s Board of Directors

MEI’s board of directors recommends that the MEI stockholders vote “FOR” the MEI Nasdaq Proposal and “FOR” the MEI Adjournment Proposal, as required. See “The Merger—MEIs Reasons for the Merger; Recommendation of MEIs Board of Directors” beginning on page 139 of this joint proxy statement/prospectus.

Assuming a quorum is present, if you mark “ABSTAIN” on your proxy card or when voting by Internet or phone, fail to submit a proxy, or fail to vote at the MEI Special Meeting with respect to the MEI Nasdaq Proposal or MEI Adjournment Proposal, it will have “NO EFFECT” on the proposal.

Record Date for the MEI Special Meeting and Quorum

MEI Record Date

Only holders of record of shares of MEI Common Stock at the close of business, Eastern Time, on May 24, 2023, the MEI Record Date for the MEI Special Meeting, will be entitled to receive notice of, and to vote, at the MEI Special Meeting or any postponement or adjournment thereof. Each share of MEI Common Stock entitles the holder thereof to cast one vote on each matter that comes before the MEI Special Meeting.

As of the MEI Record Date for the MEI Special Meeting, there were 6,662,857 shares of MEI Common Stock outstanding and entitled to vote at the MEI Special Meeting.

Quorum

In order for business to be conducted at the MEI Special Meeting, a quorum must be present. A quorum of stockholders is necessary to hold a valid meeting. The presence, in person or by proxy, of the holders of one-third of the shares of the common stock issued and outstanding and entitled to vote, as of the close of business on the MEI Record Date, at the Special Meeting will constitute a quorum. If a quorum is not present at the Special Meeting, we expect that the meeting would be adjourned or postponed to solicit additional proxies. Abstentions and broker non-votes, if any, will be counted towards a quorum.

 

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If you hold your shares of MEI Common Stock in a bank, broker or other nominee, your shares of MEI Common Stock will be counted toward determining whether a quorum is present only if you instruct that organization on how to vote your shares with respect to one or more of the proposals. If you do not instruct your bank, broker, or other nominee on how to vote your shares, your shares will not be included in the calculation of the number of shares of MEI Common Stock represented at the MEI Special Meeting for purposes of determining whether a quorum is present.

Required Vote, Abstentions and Failure to Vote

Assuming a quorum is present, the following table presents the votes required for, and the effect of abstentions or a failure to vote on, approval of the MEI Nasdaq Proposal and the MEI Adjournment Proposal.

 

Proposal

  

Votes Required

  

Effect of Abstentions or
Failure to Vote

  

Broker-Non Votes

MEI Nasdaq Proposal    The affirmative vote of a majority of votes cast by MEI stockholders entitled to vote on the proposal.    Abstentions will have “NO EFFECT” on the MEI Nasdaq Proposal.    The failure to vote your shares held in “street name” will have “NO EFFECT” on the MEI Nasdaq Proposal.
MEI Adjournment Proposal    The affirmative vote of a majority of votes cast by MEI stockholders entitled to vote on the proposal.    Abstentions will have “NO EFFECT” on the MEI Adjournment Proposal.    The failure to vote your shares held in “street name” will have “NO EFFECT” on the MEI Adjournment Proposal.

Voting by MEI’s Directors and Executive Officers

As of the MEI Record Date, directors and executive officers of MEI and their affiliates owned and were entitled to vote shares of MEI Common Stock, representing less than 1% of the shares of MEI Common Stock outstanding on the MEI Record Date. MEI currently expects that MEI’s directors and executive officers will vote any shares of MEI Common Stock they hold in favor of the MEI Nasdaq Proposal and, if necessary, the MEI Adjournment Proposal, although none of them has entered into any agreement obligating him or her to do so. Approval of the MEI Nasdaq Proposal and MEI Adjournment Proposal require the affirmative vote of a majority of votes cast by MEI stockholders entitled to vote on the proposal.

Voting of Proxies

Stockholders of Record

If you are a stockholder of record of shares of MEI Common Stock as of the MEI Record Date, a proxy card is enclosed with this joint proxy statement/prospectus for your use. MEI requests that MEI stockholders of record submit their proxies over the Internet, by telephone or by completing and signing the accompanying proxy card and returning it promptly. Information and applicable deadlines for authorizing a proxy to vote by telephone or through the Internet are set forth on the enclosed proxy card. When the accompanying proxy card is returned properly executed, the shares of MEI Common Stock represented by it will be voted at the MEI Special Meeting or any adjournment or postponement thereof in accordance with the instructions contained in the proxy card.

If a proxy is signed and returned without an indication as to how the shares of MEI Common Stock represented by the proxy are to be voted with regard to a particular proposal, the shares of MEI Common Stock represented by the proxy will be voted in favor of each such proposal, as applicable, in accordance with the recommendation of MEI’s board of directors.

 

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Beneficial Owners of Shares Held by a Bank, Broker or Other Nominee

If you hold your shares of MEI Common Stock in a brokerage account or if your shares of MEI Common Stock are held by a bank or other nominee (that is, in “street name”), you must provide the bank, broker or other nominee that holds your shares with instructions on how to vote your shares of MEI Common Stock. Please follow the voting instructions provided by your bank, broker, or other nominee. Please note that you are not permitted to vote shares of MEI Common Stock held in “street name” by returning a proxy card directly to MEI or by voting in person at the MEI Special Meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker, or other nominee. Obtaining a legal proxy may take several days.

If your shares of MEI Common Stock are held in “street name,” your bank, broker, or other nominee will only vote your shares if you provide instructions on how to vote on the relevant proposal. Brokers do not have discretionary authority to vote on non-routine matters. A “broker non-vote” occurs when a broker submits a proxy that states that the broker votes for at least one proposal, but does not vote for proposals on non-routine matters because the broker has not received instructions from the beneficial owners on how to vote and thus does not have discretionary authority to vote on those proposals. Because all of the matters to be considered at the MEI Special Meeting are non-routine and brokers will not have discretionary authority to vote on any of the MEI Proposals, MEI does not expect to receive any broker non-votes. If your shares of MEI Common Stock are held in “street name” and you do not instruct your bank, broker, or other nominee on how to vote your shares, your bank, broker, or other nominee will not be permitted to vote your shares of MEI Common Stock on the MEI Nasdaq Proposal or the MEI Adjournment Proposal. Assuming a quorum is present, this failure to instruct your bank, broker, or other nominee will have “NO EFFECT” on the MEI Nasdaq Proposal or the MEI Adjournment Proposal.

Your vote is important. Accordingly, please submit a proxy by telephone, over the Internet, or by signing and returning the enclosed proxy card, or by submitting instructions on how to vote your shares to your broker, bank or other nominee, as soon as possible, whether or not you plan to attend the MEI Special Meeting.

Revocability of Proxies and Changes to an MEI Stockholder’s Vote

If you are a holder of shares of MEI Common Stock as of the MEI Record Date, you have the power to revoke your proxy at any time before it is voted at the MEI Special Meeting.

If you are a record holder of shares of MEI Common Stock, you can revoke your proxy in one of three ways:

 

   

sending a written notice of revocation that is received by MEI prior to 10:00 a.m. Eastern Time on the day of the MEI Special Meeting, stating that you are revoking your proxy, to MEI Corporate Secretary at MEI’s corporate headquarters, 11455 El Camino Real, Suite 250, San Diego, California 92130.

 

   

submitting a new proxy bearing a later date (by Internet, telephone or mail) that is received by MEI prior to 11:59 p.m. Eastern Time on the day preceding the MEI Special Meeting; or

 

   

attending the MEI Special Meeting and voting online or giving a written notice of revocation to the Secretary of MEI prior to the voting at the MEI Special Meeting (your attendance at the meeting will not, by itself, revoke your proxy; you must vote online at the meeting to change your vote or submit a written notice of revocation to revoke your proxy).

If you wish to change your vote at the MEI Special Meeting, you must vote online at such meeting or give a written notice of revocation to the Secretary of MEI prior to the voting at the MEI Special Meeting.

The latest dated completed proxy will be the one that counts. Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

MEI Pharma, Inc.

11455 El Camino Real, Suite 250

San Diego, California 92130

Attn: Corporate Secretary

 

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If you are a MEI stockholder whose shares of MEI Common Stock are held in “street name” by a bank, broker, or other nominee, you may revoke your proxy or voting instructions and vote your shares of MEI Common Stock online at the MEI Special Meeting only in accordance with the rules and procedures of your bank, broker, or other nominee. You must follow the directions you receive from your bank, broker, or other nominee in order to change or revoke your proxy or voting instructions and should contact your bank, broker, or other nominee to do so.

Solicitation of Proxies

The MEI board of directors is soliciting your proxy to vote your shares at the MEI Special Meeting. The cost of the solicitation of proxies from MEI stockholders will be borne by MEI. In addition to solicitations by mail, MEI’s directors, officers and employees may solicit proxies personally, by telephone, by facsimile or otherwise, without additional compensation. MEI will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of shares of MEI Common Stock held of record on the MEI Record Date and will provide customary reimbursement to such firms for the cost of forwarding these materials. MEI has retained Alliance Advisors, LLC to assist it in soliciting proxies using the means referred to above. MEI will pay the fees of Alliance Advisors, LLC, which MEI expects to be approximately $35,000, plus reimbursement of out-of-pocket expenses.

Adjournments

Although it is not currently expected, the MEI Special Meeting may, from time to time, if necessary or appropriate, be adjourned for the purpose of soliciting additional proxies, including in the event that there are insufficient votes at the time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal. If a quorum is not present, the holders of record of a majority of the shares present in person or by proxy and entitled to vote at such meeting may adjourn such meeting from time to time. If a quorum is not present at the MEI Special Meeting, each vote cast in favor of the MEI Adjournment Proposal will count as a vote cast in favor of adjourning the meeting. Pursuant to the MEI Bylaws, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which adjournment is taken and the adjournment is for not more than 30 days. If the MEI Special Meeting is adjourned, stockholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use.

Postponements

At any time prior to convening the MEI Special Meeting, MEI’s board of directors may postpone the MEI Special Meeting for any reason without the approval of the MEI stockholders. Although it is not currently expected, MEI’s board of directors may postpone the MEI Special Meeting for the purpose of soliciting additional proxies if MEI has not received sufficient proxies to constitute a quorum or sufficient votes for approval of the MEI Nasdaq Proposal. If the MEI Special Meeting is postponed for the purpose of soliciting additional proxies, stockholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use.

Attending the MEI Special Meeting

The MEI Special Meeting will be conducted completely as a virtual meeting via the Internet. MEI believes that holding the MEI Special Meeting completely online will enable greater participation and improved communication. Stockholders may attend the meeting and vote their shares electronically during the meeting via the live webcast by visiting www.meetnow.global/M44PQGZ. You will need to have your 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials) to join and vote at the MEI Special Meeting. Questions pertinent to matters to be acted upon at the MEI Special Meeting will be answered during the MEI Special Meeting, subject to time constraints. In the interests of time and efficiency, MEI reserves the right to group questions of a similar nature together to facilitate the question and answer portion of the meeting. MEI may not be able to answer all questions submitted in the allotted time.

Even if your shares of MEI Common Stock are held in “street name,” you are welcome to attend the MEI Special Meeting. If your shares of MEI Common Stock are held in “street name,” you may not vote your shares of MEI Common Stock in person at the MEI Special Meeting unless you obtain a proxy, executed in your favor, from the

 

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holder of record (i.e., your bank, broker, or other nominee). If you hold your shares of MEI Common Stock in “street name” and wish to vote in person, please contact your bank, broker, or other nominee before the MEI Special Meeting to obtain the necessary proxy from the holder of record.

MEI will have technicians ready to assist you with any technical difficulties you may have in obtaining access to the MEI Special Meeting virtually. If you encounter any difficulties accessing the virtual meeting during check-in or the meeting, please call the technical support number that will be posted on the virtual meeting platform log-in page.

Stockholder List

A list of MEI stockholders entitled to vote at the MEI Special Meeting will be available for inspection at MEI’s principal executive offices, located at 11455 El Camino Real, Suite 250, San Diego, California, 92130, at least ten days prior to the date of the MEI Special Meeting and continuing through the MEI Special Meeting for any purpose germane to the MEI Special Meeting. The list will also be available at the MEI Special Meeting for inspection by any MEI stockholder present at the MEI Special Meeting.

Assistance

If you need assistance in completing your proxy card or have questions regarding the MEI Special Meeting, please contact:

MEI Pharma, Inc.

11455 El Camino Real, Suite 250

San Diego, California 92130

(858) 369-7100

investor@meipharma.com 

 

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MATTERS BEING SUBMITTED TO A VOTE OF MEI STOCKHOLDERS

The MEI Nasdaq Proposal

PROPOSAL 1: APPROVAL OF THE ISSUANCE OF MEI COMMON STOCK TO INFINITY STOCKHOLDERS

Overview

In connection with the proposed Merger, MEI intends to effect (subject to the terms and conditions of the Merger Agreement), for purposes of complying with the applicable listing rules of the Nasdaq Capital Market, the issuance of up to 4,824,893 shares of MEI Common Stock to Infinity stockholders upon the Closing. For further information, please see the section entitled “The Merger,” as well as the annexes to this joint proxy statement/prospectus.

Why MEI Needs Stockholder Approval

We are seeking stockholder approval in order to comply with Nasdaq Listing Rule 5635(a).

Under Nasdaq Listing Rule 5635(a), stockholder approval is required prior to the issuance of securities in connection with the acquisition of another company where, due to the present or potential issuance of common stock, other than common stock issued in a public offering (i) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such securities (or securities convertible into or exercisable for common stock); or (ii) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.

Effect of Proposal on MEI Stockholders and Infinity Stockholders

If the MEI Nasdaq Proposal is adopted, we will issue up to 4,824,893 shares of MEI Common Stock to Infinity stockholders upon the Closing.

The issuance of the shares of MEI Common Stock described above would result in significant dilution to MEI stockholders and result in MEI stockholders having a smaller percentage interest in the voting power, liquidation value and aggregate book value of MEI.

As of April 23, 2023, MEI had 6,662,857 shares of common stock outstanding. Based upon the initially estimated exchange ratio, following the Merger (i) MEI securityholders immediately before the Merger are expected to own approximately 58% of the aggregate number of outstanding shares of MEI common stock following the Merger and (ii) Infinity securityholders immediately before the Merger are expected to own approximately 42% of the aggregate number of outstanding shares of MEI common stock following the

Merger, subject to certain assumptions (including as to the amount of Infinity net cash at Closing, which could be materially different). The foregoing percentages do not give effect to the exercise or conversion of outstanding stock options or warrants.

In the event that this Proposal is not approved by MEI stockholders, the Merger cannot be consummated. In the event that this Proposal is approved by MEI stockholders, but the Merger Agreement is terminated (without the Merger being consummated) prior to the issuance of shares of MEI Common Stock pursuant to the Merger Agreement, MEI will not issue such shares of MEI Common Stock.

 

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Resolution to be Voted Upon

The full text of the resolution to be proposed is as follows:

“RESOLVED, that for the purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635(a), the issuance of shares of MEI Common Stock pursuant to the Merger Agreement, be approved.”

Required Vote for Approval

The approval of the MEI Nasdaq Proposal requires the affirmative vote of a majority of the votes cast by stockholders present in person or represented by proxy and entitled to vote thereon at the MEI Special Meeting (which would include presence by virtual attendance at the MEI Special Meeting). An abstention will be counted towards the quorum requirement but will not count as a vote cast at the MEI Special Meeting and will have “NO EFFECT” on the MEI Nasdaq Proposal. A broker non-vote will neither be counted towards the quorum requirement (as the Proposals we believe will be considered as non-discretionary) nor count as a vote cast in the MEI Special Meeting and will have “NO EFFECT” on the MEI Nasdaq Proposal.

The MEI Nasdaq Proposal is conditioned on the approval and adoption of the Infinity Merger Proposal.

Recommendation of Our Board

OUR BOARD OF DIRECTORS RECOMMENDS THAT MEI STOCKHOLDERS

VOTE “FOR” THE APPROVAL OF THE MEI NASDAQ PROPOSAL (PROPOSAL 1).

Interests of MEI’s Directors

The existence of financial and personal interests of one or more of MEI’s directors may result in a conflict of interest on the part of such director(s) between what he, she, or they may believe is in the best interests of MEI and its stockholders and what he, she, or they may believe is best for himself, herself, or themselves in determining to recommend that stockholders vote for the MEI Nasdaq Proposal. In addition, MEI’s directors and officers have interests in the Merger that may conflict with your interests as a stockholder. See the section titled “The Merger—Interests of MEI’s Directors and Executive Officers in the Merger” for a further discussion of these considerations.

The MEI Adjournment Proposal

PROPOSAL 2: APPROVAL OF POSSIBLE ADJOURNMENT OF THE MEI SPECIAL MEETING

The MEI Adjournment Proposal, if adopted, will allow MEI to adjourn the MEI Special Meeting to a later date or dates to permit further solicitation of proxies. The MEI Adjournment Proposal will only be presented to MEI stockholders in the event that, at the time of the MEI Special Meeting, it is necessary or appropriate to solicit additional proxies, including in the event that there are insufficient votes at the time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal.

Consequences if the Adjournment Proposal is Not Approved

If the MEI Adjournment Proposal is presented at the MEI Special Meeting and is not approved by the stockholders of MEI, MEI may not be able to adjourn the MEI Special Meeting to a later date in the event, based on the tabulated votes, that there are not sufficient votes at the time of the MEI Special Meeting to approve the MEI Nasdaq Proposal. In such event, the Merger may not be completed.

Resolution to be Voted Upon

The full text of the resolution to be proposed is as follows:

RESOLVED, the proposal to approve the adjournment of the MEI Special Meeting from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the

 

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time of the MEI Special Meeting or any adjournment or postponement thereof to approve the MEI Nasdaq Proposal, is approved and adopted in all respects.

Adoption of the MEI Adjournment Proposal is not conditioned upon the adoption of any of the other Proposals.

Required Vote

The approval of the MEI Adjournment Proposal requires the affirmative vote of a majority of the votes cast by stockholders present in person or represented by proxy and entitled to vote thereon at the MEI Special Meeting (which would include presence by virtual attendance at the MEI Special Meeting). An abstention will be counted towards the quorum requirement but will not count as a vote cast at the MEI Special Meeting and, assuming no quorum is present, will have “NO EFFECT” on the MEI Adjournment Proposal. A broker non-vote will neither be counted towards the quorum requirement (as the Proposals we believe will be considered as non-discretionary) nor count as a vote cast in the MEI Special Meeting and will have “NO EFFECT” on the MEI Adjournment Proposal.

The approval and adoption of the MEI Adjournment Proposal is not a condition for nor conditioned on the approval of any other Proposal at the MEI Special Meeting.

Recommendation of MEI Board

IF THE MEI ADJOURNMENT RESOLUTION IS PRESENTED TO MEI STOCKHOLDERS,

MEI’S BOARD OF DIRECTORS RECOMMENDS THAT ITS STOCKHOLDERS

VOTE “FOR” THE APPROVAL OF THE MEI ADJOURNMENT PROPOSAL (PROPOSAL 2).

 

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THE SPECIAL MEETING OF INFINITY STOCKHOLDERS

Date, Time, and Place

The Infinity Special Meeting will be held on July 14, 2023, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date, as a virtual meeting via the Internet at www.virtualshareholdermeeting.com/INFI2023SM. Infinity is sending this joint proxy statement/prospectus to its stockholders in connection with the solicitation of proxies by Infinity’s board of directors for use at the Infinity Special Meeting and any adjournments or postponements thereof. On or about June 9, 2023, Infinity will commence mailing this joint proxy statement/prospectus and the enclosed form of proxy card to its stockholders entitled to vote at the Infinity Special Meeting.

Purposes of the Infinity Special Meeting

The Infinity Special Meeting will be held for the following purposes:

 

  1.

To approve the adoption of the Merger Agreement, pursuant to which Merger Sub will merge with and into Infinity, with Infinity surviving as a wholly owned subsidiary of MEI, and the surviving company of the Merger, which proposal is referred to as the “Infinity Merger Proposal”;

 

  2.

To approve, on a non-binding, advisory basis, the compensation that will or may be payable to Infinity’s named executive officers in connection with the Merger, which proposal is referred to as the “Infinity Compensation Proposal”; and

 

  3.

To approve the adjournment of the Infinity Special Meeting, from time to time, if necessary or appropriate, including to solicit additional proxies in the event that there are insufficient votes at the time of the Infinity Special Meeting or any adjournment or postponement thereof to approve the Infinity Merger Proposal, which proposal is referred to as the “Infinity Adjournment Proposal.”

Recommendation of Infinity’s Board of Directors

Infinity’s board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Infinity and its stockholders to approve the adoption of the Merger Agreement. Infinity’s board of directors recommends that Infinity’s stockholders vote “FOR” the Infinity Merger Proposal.

Infinity’s board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Infinity and its stockholders to approve, on a non-binding, advisory basis, the compensation that will or may be payable to Infinity’s named executive officers in connection with the Merger. Infinity’s board of directors recommends that Infinity’s stockholders vote “FOR” the Infinity Compensation Proposal.

Infinity’s board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Infinity and its stockholders to approve the possible adjournment of the Infinity Special Meeting. Infinity’s board of directors recommends that Infinity’s stockholders vote “FOR” the Infinity Adjournment Proposal.

Record Date and Quorum

Infinity’s board of directors has fixed May 22, 2023 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Infinity Special Meeting and any adjournment or postponement thereof (the “Infinity Record Date”). Only holders of record of shares of Infinity Common Stock on the Infinity Record Date are entitled to notice of, and to vote at, the Infinity Special Meeting. On the Infinity Record Date, Infinity had 89,904,805 shares of common stock outstanding and entitled to vote.

A quorum will be present at the Infinity Special Meeting if the holders of a majority of the Infinity Common Stock issued and outstanding and entitled to vote on the Infinity Record Date is present virtually or represented by proxy. On the Infinity Record Date, there were 89,904,805 shares of Infinity Common Stock issued and outstanding and

 

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entitled to vote. This means that at least 44,952,403 shares must be represented virtually or by proxy at the Infinity Special Meeting to have a quorum. Your shares will be counted towards the quorum if you submit a valid proxy or virtually attend the Infinity Special Meeting. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

Required Vote, Abstentions and Failure to Vote

Approval of the Infinity Merger Proposal is a condition to the completion of the Merger. Therefore, the Merger cannot be completed without the approval of the Infinity Merger Proposal. The Infinity Merger Proposal is described in more detail in the section titled “Matters Being Submitted To A Vote Of Infinity Stockholders” in the joint proxy statement/prospectus, which you should read carefully in its entirety before you vote. A copy of the Merger Agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

Assuming a quorum is present:

 

   

approval of the Infinity Merger Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Infinity Common Stock entitled to vote thereon. Abstentions will have the same effect as a vote against this proposal.

 

   

approval of each of the Infinity Compensation Proposal and the Infinity Adjournment Proposal requires the affirmative vote of the holders of a majority in voting power of the shares of Infinity Common Stock which are present virtually or by proxy and entitled to vote thereon. Abstentions will have the same effect as a vote against such proposals.

Voting by Infinity’s Directors and Executive Officers

As of the Infinity Record Date, directors and executive officers of Infinity and their affiliates owned and were entitled to vote 1,276,068 shares of Infinity’s Common Stock, representing approximately 1.42% of the shares of Infinity Common Stock outstanding on the Infinity Record Date. Infinity currently expects that Infinity’s directors and executive officers will vote any shares of Infinity Common Stock they hold in favor of the Infinity Merger Proposal, the Infinity Compensation Proposal and the Infinity Adjournment Proposal, although none of them has entered into any agreement obligating him or her to do so.

Voting and Revocation of Proxies

The proxy accompanying this joint proxy statement/prospectus is solicited on behalf of Infinity’s board of directors for use at the Infinity Special Meeting.

If, as of the Infinity Record Date, your shares were registered directly in your name with the transfer agent for the Infinity Common Stock, American Stock Transfer & Trust Company, then you are a stockholder of record. Whether or not you plan to virtually attend the Infinity Special Meeting, Infinity urges you to fill out and return the proxy card or vote by proxy over the telephone or on the internet as instructed below to ensure your vote is counted.

The procedures for voting are as follows: If you are a stockholder of record, you may vote at the Infinity Special Meeting. Alternatively, you may vote by proxy by using the accompanying proxy card, over the internet or by telephone. Whether or not you plan to virtually attend the Infinity Special Meeting, Infinity encourages you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Infinity Special Meeting, you may still virtually attend the Infinity Special Meeting and vote online during the meeting. In such case, your previously submitted proxy will be disregarded.

 

   

To vote at the Infinity Special Meeting, attend the Infinity Special Meeting virtually and vote online during the meeting.

 

   

To vote using the proxy card by mail, simply complete, sign and date the accompanying proxy card and return it promptly in the envelope provided. If you return your signed proxy card before the Infinity Special Meeting, Infinity will vote your shares in accordance with the proxy card.

 

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To vote by proxy over the internet, follow the instructions provided on the proxy card.

 

   

To vote by telephone, you may vote by proxy by calling the toll free number found on the proxy card.

If you are a beneficial owner of shares registered in the name of your broker, bank or other nominee, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote online during the Infinity Special Meeting, please contact your broker, bank or other nominee for instructions and documents that may be required in order to do so.

Infinity provides internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

All properly executed proxies that are not revoked will be voted at the Infinity Special Meeting and at any adjournments or postponements of the Infinity Special Meeting in accordance with the instructions contained in the proxy. If a holder of Infinity Common Stock executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted “FOR” all of the proposals in accordance with the recommendation of Infinity’s board of directors.

If you are a stockholder of record of Infinity, you may change your vote at any time before your proxy is voted at the Infinity Special Meeting in any one of the following ways:

 

   

You may submit another properly completed proxy with a later date by mail, by telephone or via the internet.

 

   

You may send a written notice that you are revoking your proxy to Infinity’s Corporate Secretary at 1100 Massachusetts Avenue, Floor 4, Cambridge, Massachusetts 02138.

 

   

You may attend the Infinity Special Meeting virtually and vote online during the meeting. Simply attending the Infinity Special Meeting will not, by itself, revoke your proxy.

If your shares are held by your broker, bank or other nominee, you should follow the instructions provided by it.

Solicitation of Proxies

The Infinity board of directors is soliciting your proxy to vote your shares at the Infinity Special Meeting. The cost of the solicitation of proxies from Infinity stockholders will be borne by Infinity. In addition to solicitations by mail, Infinity’s directors, officers and employees may solicit proxies personally, by telephone, by facsimile or otherwise, without additional compensation. Infinity will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of shares of Infinity’s Common Stock held of record on the Infinity Record Date and will provide customary reimbursement to such firms for the cost of forwarding these materials. Infinity has retained Morrow Sodali to assist it in soliciting proxies using the means referred to above. Infinity will pay the fees of Morrow Sodali, which Infinity expects to be approximately $35,000, plus reimbursement of out-of-pocket expenses.

Other Matters

As of the date of this joint proxy statement/prospectus, Infinity’s board of directors does not know of any business to be presented at the Infinity Special Meeting other than as set forth in the notice accompanying this joint proxy statement/prospectus. If any other matters should properly come before the Infinity Special Meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

 

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MATTERS BEING SUBMITTED TO A VOTE OF INFINITY STOCKHOLDERS

The Infinity Merger Proposal

PROPOSAL 1: APPROVAL OF THE ADOPTION OF THE MERGER AGREEMENT

Infinity’s stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement, pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Infinity, with Infinity continuing as a wholly owned subsidiary of MEI and the surviving corporation of the Merger, which transaction is referred to herein as the Merger. The Merger and the terms of the Merger Agreement are described in more detail under “The Merger” and “The Merger Agreement,” beginning on pages 122 and 180, respectively, of this joint proxy statement/prospectus, and Infinity’s stockholders are encouraged to read the full text of the Merger Agreement, which is attached as Annex A hereto. It is a condition to the completion of the Merger that Infinity’s stockholders approve the Infinity Merger Proposal.

The Infinity board of directors, after due and careful discussion and consideration, approved and declared advisable the Merger Agreement and the Merger and determined that the Merger Agreement and the Merger are fair to and in the best interests of Infinity and its stockholders. The Infinity board of directors accordingly recommends that Infinity’s stockholders adopt the Merger Agreement.

THE INFINITY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE INFINITY MERGER PROPOSAL (PROPOSAL 1).

 

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The Infinity Compensation Proposal

PROPOSAL 2: TO APPROVE, ON A NON-BINDING, ADVISORY BASIS, THE COMPENSATION THAT WILL OR MAY BE PAYABLE TO INFINITY’S NAMED EXECUTIVE OFFICERS IN CONNECTION WITH THE MERGER

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, Infinity is seeking the approval of its stockholders, on a non-binding, advisory basis, of the compensation that will or may be payable to Infinity’s named executive officers in connection with the Merger as disclosed in the section titled “The Merger—Compensation Payable to Infinity Named Executive Officers beginning on page 172 of this joint proxy statement/prospectus. The Infinity Compensation Proposal gives Infinity’s stockholders the opportunity to express their views on the merger-related compensation of Infinity’s named executive officers.

Accordingly, Infinity is asking its stockholders to vote “FOR” the adoption of the following resolution, on a non-binding, advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to Infinity’s named executive officers in connection with the Merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in the section titled “The Merger—Compensation Payable to Infinity Named Executive Officers” of the joint proxy statement/prospectus for this meeting is hereby APPROVED.”

The vote on the Infinity Compensation Proposal is a vote separate and apart from the vote to adopt the Merger Agreement. Accordingly, if you are a stockholder, you may vote to approve the Infinity Merger Proposal and vote not to approve the Infinity Compensation Proposal, and vice versa. Because the vote on the Infinity Compensation Proposal is advisory only, it will not be binding on Infinity. If the Merger is completed, the merger-related compensation may be paid to Infinity’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if stockholders fail to approve the Infinity Compensation Proposal.

THE INFINITY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE INFINITY COMPENSATION PROPOSAL (PROPOSAL 2).

 

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Infinity Adjournment Proposal

PROPOSAL 3: APPROVAL OF POSSIBLE ADJOURNMENT OF THE INFINITY SPECIAL MEETING

If Infinity fails to receive a sufficient number of votes to approve the Infinity Merger Proposal or the Infinity Compensation Proposal, Infinity may propose to adjourn the Infinity Special Meeting, for a period of not more than 60 days, for the purpose of soliciting additional proxies to approve the Infinity Merger Proposal or the Infinity Compensation Proposal. Infinity currently does not intend to propose adjournment at the Infinity Special Meeting if there are sufficient votes to approve the Infinity Merger Proposal and the Infinity Compensation Proposal. Additionally, pursuant to Article II, Section 9 of the Infinity Bylaws, except to the extent inconsistent with any rules and regulations adopted by Infinity’s board of directors for conduct at the Infinity Special Meeting, the person presiding over any meeting of Infinity’s stockholders shall have the right and authority to convene and (for any or no reason) to adjourn the meeting as, in the judgment of such presiding person, is appropriate for the proper conduct of the meeting.

THE INFINITY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE INFINITY ADJOURNMENT PROPOSAL (PROPOSAL 3).

 

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THE MERGER

This section of the proxy statement/prospectus describes certain material aspects of the proposed Merger. This section may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus and the documents incorporated herein by reference, including the full text of the Merger Agreement, which is attached as Annex A, for a more complete understanding of the Merger. In addition, (i) important business and financial information about MEI is incorporated into this proxy statement/prospectus by reference and (ii) important business and financial information about Infinity is incorporated into this proxy statement/prospectus by reference. See also “Where You Can Find More Information” beginning on page 341 of this proxy statement/prospectus.

General Description of the Merger

MEI Pharma, Inc., which is referred to as MEI, Infinity Pharmaceuticals Inc., which is referred to as Infinity, and Meadow Merger Sub, Inc., a wholly-owned subsidiary of MEI, which is referred to as Merger Sub, have entered into the Agreement and Plan of Merger, dated as of February 22, 2023 (as it may be amended from time to time), which is referred to as the merger agreement, which provides for the merger of Merger Sub, with and into Infinity. As a result of the merger, the separate existence of Merger Sub will cease and Infinity will continue its existence under the laws of the State of Delaware as the surviving corporation and as a wholly-owned subsidiary of MEI. It is expected that the name of the combined company will be changed to “Kimbrx Therapeutics, Inc.” after completion of the Merger.

Consideration to be Received by the Infinity Stockholders

At the effective time, by virtue of the merger and without any further action on the part of the parties, holders of any securities of Infinity, Merger Sub or of any other person, each share of Infinity common stock that is issued and outstanding immediately prior to the effective time (other than shares of Infinity common stock owned by Infinity or MEI) will be automatically converted into and become exchangeable for 0.052245 shares of MEI common stock, which we refer to as the exchange ratio, and cash in lieu of any fractional shares of MEI common stock any former holder of Infinity common stock would otherwise be entitled to receive.

The exchange ratio is fixed, which means that it will not change between now and the date of the merger, regardless of whether the market price of either MEI common stock or Infinity common stock changes. Therefore, the value of the merger consideration will depend on the market price of MEI common stock at the effective time. The market price of MEI common stock has fluctuated since the date of the announcement of the merger agreement and may continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the special meetings, the date the merger is completed and thereafter. The market price of MEI common stock, when received by Infinity stockholders after the merger is completed, could be greater than, less than or the same as the market price of MEI common stock on the date of this joint proxy statement/prospectus or at the time of the special meeting. Accordingly, you should obtain current market quotations for MEI common stock and Infinity common stock before deciding how to vote with respect to any of the proposals described in this joint proxy statement/prospectus. MEI common stock is traded on the Nasdaq Capital Market under the symbol “MEIP” and Infinity common stock is traded on the Nasdaq Global Market under the symbol “INFI.”

At the effective time, all shares of Infinity common stock owned by MEI or Infinity will be cancelled and will cease to exist, and no consideration will be delivered in exchange for such shares.

Background of the Merger

Each of the MEI board of directors and the Infinity board of directors, together with members of the management teams of their respective companies, regularly reviews and assesses the opportunities and risks associated with their respective development programs and their respective company’s overall performance, future growth prospects and associated capital needs, business plans and overall direction, and considers a variety of strategic alternatives that may be available to their respective companies, including continuing to pursue its strategy as a

 

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standalone company or pursuing potential strategic or financing transactions with third parties, in each case with the goal of maximizing stockholder value.

From July 2021 through June 2022, the Infinity board of directors and members of Infinity management engaged in efforts to explore potential strategic relationships that would provide funding sufficient to enable the continued development of eganelisib and its advancement into additional clinical studies. These efforts primarily included evaluation of potential licensing and strategic collaboration opportunities with pharmaceutical or biotech companies and discussions on potential broad clinical development plans that were intended to capitalize on the breadth of data generated with eganelisib in multiple settings.

On May 23, 2022, the MEI board of directors formed an Ad Hoc Strategic Transactions Committee (the “MEI Ad Hoc Strategy Committee”) to assist the MEI board of directors in considering and evaluating potential strategic alternatives available to MEI in light of the FDA’s earlier decision to discourage the pursuit of a marketing authorization for MEI’s product candidate, zandelisib, via the accelerated approval pathway based on data generated by the single arm Phase 2 study in subjects with follicular lymphoma or marginal zone lymphoma after failure of two or more prior therapies. The MEI Ad Hoc Strategy Committee consisted of Ms. Cheryl Cohen, Dr. Nick Glover, Ms. Tamar Howson and Mr. Sujay Kango, with Ms. Cohen serving as Chair.

On June 16, 2022, the Infinity board of directors held a meeting, with members of Infinity management participating, to discuss, among other things, the pathway for continued development of eganelisib. Infinity management and the Infinity board of directors concluded that a strategic partnership remained the most attractive pathway for continued development of eganelisib given the higher cost of the later stage clinical trials needed for eganelisib’s continued development, the relatively high infrastructure costs that must be borne by a public pharmaceutical company with a single product candidate such as Infinity and the general deterioration of biotech market conditions including decreases in valuations and financings, Federal Reserve interest rate increases and concerns regarding government price setting under the Inflation Reduction Act. As part of this discussion, members of Infinity management shared with the Infinity board of directors that, in accordance with direction from the Infinity board of directors, Infinity management had contacted approximately 25 larger, commercial stage, profitable, public pharmaceutical and biotechnology companies, each with an oncology focus, that Infinity management perceived as having sufficient financial resources to either acquire Infinity for cash, license eganelisib or fund continued development of eganelisib to assess potential interest in entering into a strategic relationship to acquire rights to eganelisib. We refer to this group of companies as “Group A.” Members of Infinity management also discussed with the Infinity board of directors a potential engagement of Aquilo Partners, referred to herein as “Aquilo,” an investment banking firm that Infinity previously engaged in connection with other matters. In connection with this discussion, Infinity management proposed for the Infinity board’s consideration a list of smaller, development stage private and public oncology-focused biotech companies that Infinity management and Aquilo were evaluating for suitability as potential partners in a strategic transaction, including a merger of equals transaction, rather than a cash-based license of eganelisib or an acquisition of Infinity for cash consideration, because Infinity management perceived this group to be less likely to have sufficient cash resources to make the related payments required for such a transaction. We refer to this group of companies as “Group B.” After considering the information presented by Infinity management, the Infinity board of directors determined to continue the parallel evaluation of strategic partnering opportunities with Group A companies, and those Group B companies that Infinity management determined to be suitable to assess interest in a possible business combination, and continue to identify additional companies to include in Group A and Group B at the discretion of Infinity management.

On June 30, 2022, Adelene Perkins, Chief Executive Officer of Infinity, held an introductory call with the Chief Executive Officer of an oncology development-focused biotech company that we refer to as “Party A1,” one of the Group A companies. The Chief Executive Officer of Party A1 expressed interest in evaluating an option to license eganelisib and exploring other potential strategic transactions.

On July 20, 2022, the Infinity board of directors held a meeting, with members of Infinity management participating, to discuss the status of Infinity’s efforts to explore strategic opportunities with potential pharmaceutical or biotech

 

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company partners that could advance efforts to develop eganelisib. As part of the discussion, Infinity management updated the Infinity board of directors on the status of discussions with five parties with which Infinity management had ongoing discussions regarding various types of strategic transactions, including three Group A companies, including Party A1, and two Group B companies. Additionally, Infinity management updated the Infinity board of directors on the status of its efforts to work with Aquilo to contact over 25 Group B companies in addition to the two referenced above to assess their interest in a possible business combination. The Infinity board of directors directed Infinity management to assess whether any Group A companies that had previously declined interest generally in a strategic transaction could potentially be interested in acquiring Infinity and to reapproach such companies to solicit offers for such an acquisition and to otherwise continue its general efforts to seek strategic opportunities, including by continuing its related discussions with Party A1.

On August 4, 2022, Infinity entered into an engagement letter with Aquilo as its financial advisor. Infinity’s decision to engage Aquilo as its advisor was based on Aquilo’s experience and expertise as a financial and strategic advisor in a wide variety of transactions, including transactions in the life sciences industry, and its familiarity with Infinity’s business. Pursuant to its engagement, Aquilo continued to work with Infinity management to identify potential candidates for a strategic transaction.

On September 13, 2022, Party A1 submitted a non-binding term sheet to Infinity for an exclusive option for the exclusive license of eganelisib. From September until November of 2022, Party A1 conducted due diligence on the eganelisib program, and Infinity and Party A1 continued discussions regarding the terms of the proposed option to license eganelisib.

On September 22, 2022, Ms. Perkins held an introductory phone call with the Chief Executive Officer of a Group B company we refer to as “Party B1” to discuss the potential interest level in evaluating a merger of Infinity and Party B1.

On September 26, 2022, Ms. Perkins reached out to Mr. Kango, who, in addition to being a member of the MEI board of directors, is also a member of the Infinity board of directors, to request an introduction to Dr. Gold from MEI.

On September 28, 2022, a Group A company that we refer to as “Party A2” contacted Infinity expressing interest in evaluating the eganelisib program for a potential strategic partnership. During October and November 2022, Infinity and Party A2 held discussions relating to a potential strategic relationship between their two companies.

On September 28, 2022, Mr. Kango introduced Ms. Perkins and Dr. Daniel P. Gold, Ph.D. by email and on September 30, 2022, Ms. Perkins and Dr. Gold held an introductory phone call to discuss potential interest in evaluating a combination of Infinity and MEI. Mr. Kango was not otherwise involved in the introductory call. During September and October 2022, Infinity and MEI held discussions relating to a potential combination between Infinity and MEI.

Beginning October 2022, Mr. Kango resigned from the MEI Ad Hoc Strategy Committee, recused himself from any meetings of the MEI board of directors in which a potential transaction with Infinity would be discussed and recused himself from any meeting of the Infinity board of directors in which a potential transaction with MEI would be discussed because he sat on both the MEI board of directors and the Infinity board of directors.

On October 4, 2022, Infinity and MEI entered into a mutual confidential disclosure agreement to enable discussions and the exchange of business and technical diligence materials on a confidential basis. No confidential disclosure agreement entered into by Infinity or MEI with respect to a potential acquisition of, or business combination or strategic relationship with, Infinity or MEI, as applicable, including the mutual confidential disclosure agreement between Infinity and MEI, contains any standstill provision. In October and November 2022, representatives of Infinity and MEI had numerous preliminary discussions about a potential transaction and conducted due diligence of each other’s programs and businesses. MEI’s due diligence of Infinity primarily focused on Infinity’s strategic fit for a potential business combination transaction with MEI, including

 

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the focus of each on oncology and domain knowledge of each in kinase biology and tumor inhibition, and particularly Infinity’s clinical-stage product candidate, eganelisib, including potential commercial opportunities for eganelisib in conjunction with MEI’s internal pipeline strategy with respect to MEI’s existing pipeline programs. MEI’s due diligence of Infinity also focused on the potential for the two organizations’ culture fit. Infinity’s due diligence of MEI primarily focused on assessing whether MEI would have sufficient cash resources to enable continued development of eganelisib after completion of a business combination and a review of MEI’s existing pipeline programs as well as the two organizations’ culture fit.

On October 19, 2022, Ms. Perkins and Dr. Gold had an initial conversation regarding the possible management of the combined company. The parties agreed that the composition of the potential management team would need to be reviewed by each company’s board of directors in the context of the overall organization size and structure as well as the final development pipeline of the combined company.

On October 25, 2022, the Infinity board of directors held a meeting at which members of Infinity management participated. Mr. Kango recused himself from this board meeting. As part of the meeting, the Infinity board of directors discussed the status of the process undertaken by Infinity to explore a strategic relationship with the Group A and Group B companies to advance the development of eganelisib. Members of Infinity management reviewed a numerical summary of Infinity’s outreaches, noting that, as of the October 25 board meeting (i) two of the three Group A companies and one of the two Group B companies that Infinity management had reported to the Infinity board of directors at the July 22, 2022 meeting as being in active discussions with Infinity on the eganelisib program had indicated they were no longer interested in pursuing a transaction with Infinity at that time, (ii) there were two Group A companies in active discussions on the eganelisib program, including Party A1, and (iii) four Group B companies, including MEI and the other Group B company that Infinity management had reported to the Infinity board of directors at the July 22, 2022 meeting as being in active discussions with Infinity on the eganelisib program, were in active discussions on the eganelisib program, and Infinity was awaiting feedback from another three Group B companies following an initial review of the eganelisib program. The other Group A and Group B companies contacted had indicated that they were not interested in pursuing a transaction with Infinity at that time. In addition, Infinity management updated the Infinity board of directors on efforts to identify and contact additional companies that had not been part of the list of companies identified to the Infinity board of directors at the July 20 meeting, as previously directed by the board. Infinity management noted Infinity had contacted 35 Group A companies in total, including an additional 10 larger companies it had contacted following the Infinity meeting held on June 16, 2022, to assess interest in a strategic partnership for the development of eganelisib or sale of Infinity for cash, focusing on oncology companies with checkpoint inhibitor or other immune-oncology programs. With respect to the Group B companies, management noted that Aquilo had conducted a screen of over 600 public companies and over 150 private companies to identify additional potential strategic opportunities, and Aquilo and Infinity management had together contacted over 50 of such companies, representing an additional outreach of 22 Group B companies following the July 20, 2022 Infinity meeting. Infinity management noted that, in general, the Group B companies had indicated they were primarily interested in discussing transactions for the acquisition of Infinity for stock consideration or an option to license eganelisib.

Also, at the October 25, 2022 meeting, Ms. Perkins expressed to the Infinity board of directors her view that, based on feedback received to date from Infinity’s outreaches to Group A and Group B companies, that a sale of Infinity or strategic partnership that would enable the broad clinical development of eganelisib was less likely to be available at this time, and Infinity would likely need to pursue transactions supporting a narrower clinical development plan. The reasons generally cited by Group A companies declining to pursue a broad strategic transaction included lack of a strategic fit with the priorities of such company, or a desire to see additional eganelisib safety and efficacy data from a randomized, controlled clinical study, before committing to funding, a study which would take several years to complete. Infinity management then described to the Infinity board of directors the latest proposal for an option for an exclusive license to eganelisib received from Party A1 and conveyed that Party A1 was conducting technical diligence. The Infinity board of directors and Infinity management discussed whether the proposed transaction with Party A1 or a business combination with MEI would be more likely to maximize stockholder value. Ms. Perkins noted that although discussions with Party A1

 

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were at a more advanced stage than discussions with MEI, she believed a merger with MEI offered a greater opportunity for Infinity’s stockholders because they would retain meaningful ownership in the merged company and, therefore, would meaningfully participate in any value created by eganelisib’s future development. Ms. Perkins noted that Infinity’s grant of an option to acquire an exclusive license to eganelisib to Party A1, on the other hand, would be expected to limit upside potential for Infinity’s stockholders to an option exercise fee and would foreclose other strategic opportunities. Following this discussion, the Infinity board of directors directed management to focus efforts on pursuing a potential transaction with MEI while advancing discussions with Party A1, and to also continue to evaluate other reasonably available opportunities. Ms. Perkins noted that members of the MEI management team were scheduled to meet with members of Infinity management the following day and reviewed a proposed agenda.

On October 27, 2022, MEI entered into an engagement letter with Torreya Capital, LLC (“Torreya”) for Torreya to act as MEI’s advisor for financial and strategic matters. Torreya had been previously identified by the Ad Hoc Strategy Committee as a potential advisor with respect to a strategic transaction involving MEI. MEI’s decision to engage Torreya as its advisor was based on Torreya’s experience and expertise as a financial and strategic advisor in a wide variety of transactions, including transactions in the life sciences industry, and its familiarity with MEI’s business, including having been previously retained by MEI for advisory work.

On October 28, 2022, Infinity held a first meeting with Party B1 to discuss eganelisib.

On November 4, 2022, Party B1 expressed interest in a potential business combination between Infinity and Party B1 and these discussions continued throughout November.

On November 7, 2022, at the direction of the MEI board of directors, Torreya began an assignment to help consider potential strategic alternatives for MEI, which included the option to continue as a standalone company or wind up the operations of MEI and declare a dividend of available cash to MEI’s stockholders. With regards to a potential transaction, at the direction of the MEI board of directors, Torreya focused its efforts primarily on strategic or licensing transactions with oncology and/or hematology biotech companies, in each case with a potential strategic partner with one or more commercially viable clinical product candidate(s) with an established proof of concept and a management team and a board of directors with the breadth, skills, experience and sophistication to accomplish the transaction on a reasonable timeline. It was agreed by the MEI Transactions Committee and Torreya that any outreach by Torreya should wait until after the outcome and potential ramifications of the zandelisib FDA meeting at the end of the month were known. At that FDA meeting, the future development pathway of zandelisib would be discussed which could lead to either the determination to continue zandelisib development as planned or, as actually happened, the determination to discontinue MEI’s development of zandelisib. Over the next several months, Torreya subsequently contacted or was contacted by 22 companies (not including Infinity), including public biotech companies, private biotech companies and academic institutions regarding a potential strategic or licensing transactions involving MEI.

On November 16, 2022, Dr. Gold and Ms. Perkins had a phone call to discuss details of the potential strategic transaction between MEI and Infinity, including arranging discussions between members of MEI management and Infinity management to produce a non-binding term sheet.

On November 16, 2022, Party A1 informed Infinity that it would not be interested in pursuing a potential transaction for an option for an exclusive license to eganelisib until data from a randomized controlled clinical trial to definitively assess the safety and efficacy profile of eganelisib became available.

On November 17, 2022, a representative of Party A2 communicated to Infinity management that Party A2 no longer intended to pursue a partnership to develop eganelisib.

On November 21, 2022, the Infinity board of directors held a virtual meeting, in which members of Infinity management and, at the invitation of the Infinity board of directors, representatives of Infinity’s outside legal counsel, WilmerHale, participated to discuss the status of Infinity’s efforts to secure a potential strategic transaction to enable

 

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the further development of eganelisib. Consistent with past practice, Mr. Kango recused himself from this board meeting. Ms. Perkins provided an update on Infinity’s discussions with MEI and Party B1 as well as the indications from Party A1, Party A2 and the other Group A and Group B companies that Infinity management had reported to the Infinity board of directors at the October 25, 2022 meeting as being in active discussions with Infinity on the eganelisib program that they were no longer interested in pursuing the potential transaction with Infinity at such time. The Infinity board of directors discussed the potential of submitting to MEI a draft non-binding term sheet, prepared by Infinity management with input from WilmerHale and Aquilo and presented to the Infinity board of directors (the “November 21 Proposal”). Such term sheet was for an all-stock merger of equals (the “Potential Transaction”) whereby, following the conversion of shares of the applicable company pursuant to the merger, the shares of each company outstanding immediately prior to closing would represent 50% of the issued and outstanding shares of capital stock of the combined company. The Infinity board of directors, Infinity management and WilmerHale also discussed the other terms contained in the November 21 Proposal, including, among other things, (i) governance of the combined post-merger company including a chair of the board of directors to be designated by Infinity subject to MEI’s consent and executive officers to be mutually agreed upon by the parties, and an initial board of directors comprised of seven directors, with three directors designated by Infinity, three directors to be designated by MEI and one director to be mutually agreed upon by the parties, (ii) the name and location of the headquarters of the combined company to be determined at a later date, (iii) the combined company’s stock to be listed on Nasdaq, (iv) the process and timing for concluding due diligence and negotiating a definitive merger agreement, and (v) the entry by MEI and Infinity into a period of exclusivity, the terms of which would be negotiated in a separate document. The November 21 Proposal also provided that provisions regarding MEI’s net cash would be determined following the completion of due diligence. At the conclusion of the discussion, the Infinity board of directors directed Infinity management to submit the November 21 Proposal to MEI and, upon satisfactory agreement on key transaction terms, seek to enter into an exclusivity arrangement with MEI. Additionally, the Infinity board of directors delegated authority to Ms. Perkins to negotiate each term contained in the non-binding term sheet for the November 21 Proposal in her reasonable discretion, provided that Ms. Perkins stay within a prespecified range of percentages of the total outstanding common stock of the combined company that the Infinity stockholders would own following the Potential Transaction.

At the November 21, 2022 meeting of the Infinity board of directors, the Infinity board of directors also resolved to form a transaction committee of the Infinity board of directors composed of Norman Selby, Infinity’s lead independent director, David Beier and Anthony Evnin (the “Infinity Transaction Committee”) with authority to establish, approve, monitor and direct the process and procedures related to the review and evaluation of a possible strategic transaction with a third party; respond to any communications, inquiries or proposals regarding a possible strategic transaction; review, evaluate, investigate, pursue and negotiate the terms and conditions of a possible strategic transaction; solicit expressions of interest or proposals for a possible strategic transactions in connection with any process approved by the Infinity board of directors; recommend to the Infinity board of directors any proposed rejection or approval of a possible strategic transaction; and review, analyze, evaluate and monitor all proceedings and activities of Infinity related to a possible strategic transaction.

Also on November 21, 2022, following the adjournment of the November 21, 2022 meeting of the Infinity board of directors, representatives of Infinity management and MEI management held a virtual meeting wherein Infinity shared the November 21 Proposal with MEI, and the parties discussed the terms reflected therein.

On November 22, 2022, the MEI board of directors held a virtual meeting, together with representatives of MEI’s counsel, Morgan, Lewis & Bockius LLP (“Morgan Lewis”). Consistent with past practice, Mr. Kango recused himself from this board meeting. At the meeting, the MEI board of directors dissolved the Ad Hoc Strategy Committee and formed a transactions committee (the “MEI Transactions Committee”) for efficiency purposes to assist the board of directors and MEI management in evaluating the Potential Transaction as well as other potential strategic alternatives, which would consist of Mr. Charles Baltic, Mr. Fred Driscoll and Dr. Thomas Reynolds, with Mr. Baltic serving as Chair and Dr. Christine White serving as alternate. The MEI Transactions Committee was empowered to review and evaluate the Potential Transaction and any other strategic alternatives and to make recommendations to the MEI board of directors with respect thereto. The MEI board of directors also discussed the outcome of a recent telephonic meeting with the FDA, at which time the agency

 

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conveyed guidance regarding the design and statistical analysis for MEI’s zandelisib trial in combination with rituximab versus standard immunochemotherapy in patients with relapsed indolent non Hodgkin’s lymphoma and their decision to deny a request for accelerated approval of MEI’s product candidate zandelisib based on a response endpoint using randomized data.

On November 23, 2022, representatives from WilmerHale, Aquilo, Morgan Lewis, Torreya, and members of Infinity and MEI management held a conference call to discuss diligence matters, the timeline for the Potential Transaction and the drafting of definitive agreements. The parties agreed to continue to negotiate key business terms in the November 21 Proposal, while also beginning to draft the definitive merger agreement.

On November 24, 2022, Infinity was contacted by a business development representative from a Group A pharmaceutical company, which had not previously expressed interested in partnering with Infinity, which we refer to as “Party A3,” now expressing interest in a potential partnership regarding eganelisib.

On November 25, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed the Potential Transaction, including Infinity’s programs and product candidates, the exchange ratio set forth in the November 21 Proposal and the proposed exclusivity arrangement with Infinity. The MEI Transactions Committee agreed to progress discussions with Infinity regarding the November 21 Proposal and to propose to the MEI board of directors entering into an exclusivity arrangement with Infinity while seeking a more favorable exchange ratio for the stockholders of MEI.

On November 28, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed the November 21 Proposal and inquiries regarding other potential strategic alternatives that Torreya had received to date. The MEI Transactions Committee agreed to prepare a counterproposal for Infinity that would include, among other things, an exchange ratio resulting in an ownership split between Infinity’s stockholders and MEI’s stockholders of 40% and 60%, respectively, of the combined company. The MEI Transactions Committee agreed that none of the inquiries regarding other potential strategic alternatives provided to date had risen to the level appropriate for further consideration at that time.

On November 29, 2022, members of MEI management and members of Infinity management had a call to discuss the organizational structure of a combined company.

On November 30, 2022, MEI responded to the November 21 Proposal with a counterproposal (the “November 30 Proposal”) that increased the MEI’s stockholders’ post-transaction ownership of the combined company to 60% of the shares of the combined company on a fully diluted basis and proposed changes to the terms related to the governance and leadership structure of the transaction to provide that (i) the size of the board of directors of the combined company be increased to eight members, with the additional member to be designated by MEI, and (ii) the chief executive officer of the combined company be designated by MEI subject to Infinity consent prior to the signing of a definitive merger agreement and be included as one of MEI’s designees on the board of directors of the combined company.

On December 1, 2022, members of Infinity management discussed MEI’s November 30 Proposal with Aquilo and WilmerHale. Aquilo, WilmerHale and Infinity management prepared a written response to MEI’s counterproposal (the “December 1 Proposal”) whereby, following the conversion of shares of the applicable company pursuant to the merger, the shares outstanding of Infinity immediately prior to closing would represent 45% of the combined company on a fully diluted basis and the shares outstanding of MEI immediately prior to closing would represent 55% of the combined company on a fully diluted basis. Additionally, the December 1 Proposal included the issuance of contingent value rights that would have the effect of increasing the ownership of the combined company by Infinity’s stockholders to 55%, based on the achievement of either of two prespecified milestones related to the prioritized, randomized, controlled, Phase 2 study of eganelisib in patients

 

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with squamous cell cancer of the head and neck cancer or the achievement of a prespecified business development milestone. Infinity also proposed that the exchange ratio be subject to upward or downward adjustment based on any variance in MEI’s net cash at the closing of the transaction from $100 million and that Infinity’s obligation to close the transaction be conditioned on MEI having at least a specified amount of minimum net cash at closing, with such amount to be mutually agreed upon by the parties. Aquilo delivered the December 1 Proposal to MEI on December 1, 2022.

On December 2, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed the December 1 Proposal. The MEI Transactions Committee agreed that representatives of MEI would contact representatives of Infinity to discuss the December 1 Proposal.

Also on December 2, 2022, following the adjournment of the MEI Transactions Committee Meeting, Dr. Gold and Ms. Perkins discussed each of the exchange ratios set forth in the November 21 Proposal, the November 30 Proposal and the December 1 Proposal, and the methodology behind such proposed exchange ratios. As part of this discussion, Ms. Perkins and Dr. Gold discussed the possibility of revising the exchange ratio to reflect a post-merger ownership split of the combined company of 55% in favor of MEI’s stockholders and 45% in favor of Infinity’s stockholders, with no issuance of contingent value rights to Infinity stockholders, subject to their respective board’s approval. Dr. Gold and Ms. Perkins agreed to discuss such revised exchange ratio with the MEI Transactions Committee and the Infinity board of directors, respectively. The parties further discussed but did not determine any mutually acceptable compromises regarding whether the exchange ratio would be subject to any adjustment based on MEI’s net cash or whether the merger agreement would contain closing conditions related to either party’s net cash at closing.

On December 3, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed the December 1 Proposal and the outcome of the follow-up discussions between representatives of MEI and Infinity. Dr. Gold updated the MEI Transactions Committee regarding the proposed exchange ratio resulting in an ownership split between Infinity’s stockholders and MEI’s stockholders of 45% and 55%, respectively, with no issuance of contingent value rights that could alter the exchange ratio, as Dr. Gold had discussed with Ms. Perkins on December 2. The MEI Transactions Committee agreed to discuss such proposal with the MEI board of directors and seek further guidance from the MEI board of directors regarding such proposal and the Potential Transaction generally.

On December 5, 2022, the MEI board of directors held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis. Consistent with past practice, Mr. Kango recused himself from this board meeting. At the meeting, among other items, the MEI board of directors discussed the Potential Transaction, a potential strategic realignment (including a related reduction-in-force) as a result of the FDA determination on November 21, 2022 to deny a request for accelerated approval of MEI’s product candidate, zandelisib, based on a response endpoint using randomized data. The MEI board of directors agreed to discontinue the global development of zandelisib outside of Japan and proceed with its strategic realignment (including the related reduction-in-force) as announced publicly later that day.

Also on December 5, 2022, MEI issued a press release, publicly announcing that it planned to discontinue the global development of zandelisib outside of Japan and proceed with its strategic realignment (including the related reduction-in-force), that it had engaged Torreya as financial advisor to help explore additional strategic opportunities and adjourning its annual meeting of stockholders, which had been scheduled for that day, to January 5, 2023.

On December 6, 2022, the MEI board of directors held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. Consistent with past practice, Mr. Kango recused himself from this board meeting. At the meeting, among other items, the MEI board of directors

 

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discussed the Potential Transaction and inquiries regarding other potential strategic or licensing alternatives that Torreya had received as of that date. The MEI board of directors agreed to progress discussions with Infinity regarding the Potential Transaction, and to enter into a limited period of exclusivity with Infinity. The MEI board of directors agreed that the period of exclusivity should terminate shortly before the J.P. Morgan Conference (as defined below) to allow MEI to explore other potential strategic opportunities at the J.P. Morgan Conference if MEI and Infinity had not earlier entered into a binding agreement with respect to the Potential Transaction.

On December 8, 2022, Morgan Lewis and WilmerHale engaged in discussions about the Potential Transaction and confirmed their respective clients’ agreement that, absent any additional considerations being identified that would warrant revising the transaction structure, MEI would be the legal acquirer in the merger.

On December 9, 2022, Infinity and MEI executed an Exclusivity Agreement providing for an exclusivity period for the negotiation of the Potential Transaction ending on January 8, 2023 (the “Exclusivity Agreement”). The Exclusivity Agreement included exceptions that allowed each party to arrange meetings with third parties to be held during the J.P. Morgan Conference, provided that neither party would be permitted to disclose to any third party that the purpose of any such meeting would be to discuss a possible merger, acquisition or similar material transaction involving such party.

On December 9, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. The MEI Transactions Committee was updated on, among other things, the status and process of due diligence on Infinity, and Torreya’s proposed strategy with respect to identifying and evaluating other potential strategic and licensing opportunities following the conclusion of the proposed period of exclusivity with Infinity.

On December 12, 2022, Dr. Gold and Mr. Urso met with members of the Infinity board of directors and Infinity management at Infinity’s headquarters to discuss the proposed clinical plan for eganelisib and proposed plans for the combined company following the closing of the Potential Transaction.

On December 13, 2022, the Infinity board of directors held a virtual meeting in which members of Infinity management, as well as representatives from Aquilo and WilmerHale participated. Consistent with past practice, Mr. Kango recused himself from this board meeting. Mr. Tasker reviewed the terms for the Potential Transaction under consideration based on discussions between Ms. Perkins and Dr. Gold on December 2, including a possible post-merger ownership split of the combined company of 55% for MEI’s shareholders and 45% for Infinity’s stockholders. Mr. Tasker noted that the prospective board of directors of the combined company could range from seven to eight members, with three or four designated by MEI, three designated by Infinity and one mutually agreed on. Mr. Tasker additionally noted that the structure of the transaction, and name and headquarters of the combined company, had yet to be determined. A representative from WilmerHale reviewed potential considerations for the structure of the merger. Members of Infinity management reviewed the projected asset pipeline of the combined company and a high-level overview of clinical development plans. A representative of Aquilo reviewed Aquilo’s methodology for assessing the fairness of the Potential Transaction to Infinity’s stockholders and reviewed the methodology of an analysis evaluating the potential business combination compared to alternative financing opportunities, noting that alternative financing opportunities may not be available to Infinity in the current market conditions. Mr. Urso and Dr. Gold were also present for a portion of the meeting as an introduction to the Infinity board of directors.

On December 14, 2022, Morgan Lewis circulated the initial draft of the merger agreement, based on the preliminary terms discussed by Infinity and MEI in connection with their negotiation of the preliminary non-binding term sheet, to WilmerHale. The merger agreement contemplated a “one-step” merger structure, in which a subsidiary of MEI would merge with and into Infinity in a reverse triangular merger, with Infinity surviving such merger. Infinity’s stockholders would vote on the proposed merger, and MEI’s stockholders would vote on the issuance of shares of MEI common stock pursuant to the terms of the merger agreement (the “MEI Share Issuance”). Consistent with MEI’s position during the term sheet discussion, the draft merger agreement did not contain any adjustments to the

 

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exchange ratio based on the amount of MEI’s net cash as of the closing of the transaction, and the draft conditioned each party’s obligation to close on the other party having an amount of net cash at the closing of the transaction in excess of an applicable threshold to be negotiated by the parties.

On December 15, 2022, Mr. Driscoll sent an email to the MEI board of directors whereby he resigned from the MEI Transactions Committee and recused himself from all future discussions and meetings regarding Infinity.

On December 16, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed that Ms. Cohen, Mr. Driscoll and Ms. Howson would be recused from all future discussions and meetings regarding or implicated by the Potential Transaction by the MEI board of directors (and with respect to Mr. Driscoll, any such discussions by the MEI Transactions Committee as well), and in fact were so recused, because they each served on the boards of other companies involved in head and neck cancer research, and that given Mr. Driscoll’s recusal, Mr. Driscoll had resigned from the MEI Transactions Committee and would be replaced by the alternate member of the MEI Transactions Committee, Ms. White. The MEI Transactions Committee also discussed the recent meetings and discussions between management teams with respect to the Potential Transaction, MEI’s long-range financial forecasts and MEI’s internal pipeline strategy with respect to MEI’s two pipeline assets, voruciclib and ME-344.

On December 17, 2022, Ms. Cohen sent an email to Mr. Baltic and Ms. White, confirming that she would be recused from all future discussions and meetings regarding or implicated by a potential strategic transaction, including the Potential Transaction.

On December 20, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed the financial and staffing needs of the combined company following the closing of the Potential Transaction, the commercial opportunities for Infinity’s product candidate, eganelisib, and the status and process of the Potential Transaction. The MEI Transactions Committee was updated on the ongoing negotiations of various definitive transaction documents, including the merger agreement, and certain material issues therein.

On December 21, 2022, after discussing the terms reflected in the initial draft of the merger agreement with Infinity, WilmerHale sent a revised draft of the merger agreement to Morgan Lewis which, among other things, (i) accepted the “one-step” merger structure, in which a subsidiary of MEI would merge with and into Infinity in a reverse triangular merger, with Infinity surviving such merger, as proposed in Morgan Lewis’s December 14 draft of the merger agreement, (ii) revised the exchange ratio to include an adjustment mechanism that would have the result of proportionally increasing or decreasing the Infinity stockholders’ aggregate ownership of the combined company in the event that MEI’s net cash as of the closing of the Potential Transaction is less than $98 million or greater than $102 million, respectively (the “Net Cash Adjustment”), (iii) provided that each party would be obligated to pay the other party a termination fee in the event that such party’s stockholders do not approve the applicable transactions contemplated by the merger agreement requiring such stockholders’ approval and the agreement is terminated pursuant to the related termination right, whether or not such party later participates in an acquisition proposal, which we refer to herein as a “Naked No Vote,” and (iv) deleted the condition to MEI’s obligation to close the Potential Transaction based on the amount of Infinity’s net cash, such that only Infinity would have the benefit of such a condition (based on the amount of MEI’s net cash).

On December 26, 2022, WilmerHale and Morgan Lewis had a virtual meeting to discuss the terms of the merger agreement, after which Morgan Lewis sent a further revised draft of the merger agreement to WilmerHale. Among other changes, the revised draft removed the Net Cash Adjustment, removed the termination fees payable upon a Naked No Vote by such party’s stockholders, and, consistent with MEI’s earlier proposals, provided for a combined company board of directors consisting of eight members, with four members designated by MEI, three members designated by Infinity and one member, Sujay Kango, to be jointly designated.

 

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On December 28, 2022, after discussing the proposals reflected in Morgan Lewis’s latest draft of the merger agreement with WilmerHale, Infinity management directed WilmerHale to send a further revised draft of the merger agreement to Morgan Lewis which, among other things, reinserted the Net Cash Adjustment and reciprocal termination fees in the event of a termination for a Naked No Vote from Infinity’s prior draft, and accepted MEI’s proposal regarding the size and composition of the combined company board of directors.

On December 29, 2022, the MEI Transactions Committee held a virtual meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. At the meeting, among other items, the MEI Transactions Committee discussed unsolicited inquiries regarding other potential strategic and licensing alternatives that Torreya had received to date. There was also an analysis and consideration of the value to MEI’s stockholders of the possibility of winding up MEI’s operations and declaring a dividend of available cash to MEI’s stockholders. The MEI Transactions Committee agreed that none of the inquiries regarding other potential strategic or licensing alternatives had risen to the level appropriate for further consideration by the MEI Transactions Committee, and to continue to progress the Potential Transaction with Infinity.

On December 30, 2022, Infinity and MEI, along with representatives from WilmerHale, Morgan Lewis, Aquilo and Torreya, participated in a virtual meeting in order to attempt to resolve the remaining open issues between the parties as to the terms of the transaction.

On December 31, 2022, the MEI Transactions Committee held a meeting, together with members of MEI management and representatives of Morgan Lewis and Torreya. The MEI Transactions Committee had a discussion regarding certain material issues in the merger agreement, including the parties’ disagreement about whether the exchange ratio for the merger would be adjusted based on MEI’s net cash, the parties’ disagreement over what circumstances would result in payment of reciprocal termination fees and MEI’s other potential strategic and licensing alternatives. Following such discussion, the MEI Transactions Committee determined that the parties were at an impasse with respect to these issues, and that MEI should cease negotiations with Infinity regarding the Potential Transaction while it explored other potential strategic or licensing alternatives, including at the J.P. Morgan Conference following the expiration of the exclusivity period set forth in the Exclusivity Agreement.

On December 31, 2022, MEI in