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Subsequent Events
 3 Months Ended
Mar. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Sale of New Jersey Net Operating Losses
During April 2023, through the State of New Jersey's Technology Business Tax Certificate Transfer Program (the "Program"), the Company received $11.8 million as it completed the sale of approximately $139.3 million of its New Jersey State net operating losses (“NOLs”). The Program allows qualified technology and biotechnology businesses in New Jersey to sell unused amounts of NOLs and defined research and development tax credits, subject to a maximum lifetime benefit of $20.0 million. Under the Program, if the Company fails to use the net proceeds received from the Program for allowable expenditures or fails to maintain a headquarters or a base of operations in New Jersey during the five years following the closing date, the Company may be subject to the recapture of up to the face value of the tax benefits.
Merger Agreement
On April 28, 2023, the Company and Astellas entered into the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Astellas.
At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.001 per share, of the Company issued and outstanding as of immediately prior to the Effective Time (other than Excluded Shares (as defined in the Merger Agreement) and Dissenting Shares (as defined in the Merger Agreement)) will be cancelled and automatically converted into the right to receive cash in an amount equal to $40.00, without interest (the “Merger Consideration”) and subject to any withholding of taxes. The Merger Agreement requires Guarantor to guarantee the covenants, obligations (including payment obligations) and liabilities applicable to Astellas, Merger Sub or the surviving corporation, as applicable, under the Merger Agreement.
Consummation of the Merger is subject to customary closing conditions, including, without limitation, the absence of certain legal impediments, no material adverse effect having occurred since the signing of the Merger Agreement, the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other antitrust authority specified in the Merger Agreement, solely to the extent the approval of any such authority is required in connection with the Merger, and approval by the Company’s stockholders. The Company expects the Merger and the other transactions contemplated by the Merger Agreement to close in the third calendar quarter of 2023.
The Company has made customary representations and warranties in the Merger Agreement and has agreed to customary covenants regarding the operation of the business of the Company and its subsidiaries prior to the Effective Time. The Company is also subject to customary restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals, with customary exceptions to allow the board of directors of the Company to exercise its fiduciary duties.
The Merger Agreement contains certain termination rights for the Company and Astellas. Subject to certain limitations, the Company or Astellas may terminate the Merger Agreement if the Merger is not consummated by midnight Eastern Time, on October 27, 2023, subject to an automatic 90-day extension in the event that all conditions other than the required antitrust approvals have been obtained or waived as of such date and a second automatic 90-day extension thereafter in the event that all conditions other than the required antitrust approvals have been obtained or waived as of such extended date (the “End Date”).
Upon termination of the Merger Agreement, under specified circumstances, the Company will be required to pay Astellas a termination fee of approximately $222.4 million. Such circumstances include where the Merger Agreement is terminated (i) in connection with the Company accepting a Superior Offer (as defined in the Merger Agreement) approved by the Company’s board of directors, (ii) due to the Company’s board of directors’ change or withdrawal of, or failure to reaffirm, its recommendation of the Merger, or (iii) because the Company’s board of directors or the Company intentionally breach their non-solicit obligations under the Merger Agreement in any material respects. This termination fee will also be payable if the Merger Agreement is terminated because the Company’s stockholders did not vote to adopt the Merger Agreement, the Merger is not consummated before the End Date, or the Company breaches its representations, warranties or covenants in a manner that would cause the related closing conditions to not be met, and prior to any such termination, a proposal to acquire at least 50% of the Company’s stock or assets is communicated to the Company’s board of directors or publicly disclosed and within one year after the termination of the Merger Agreement the Company enters into an agreement for, or consummates, such a transaction, whether or not the consummated transaction was the one contemplated by such proposal.
At the Effective Time, each option to purchase shares of the Company (each, a “Company Option”) that is then outstanding and unexercised, whether or not vested and which has a per share exercise price that is less than the Merger Consideration (each, an “In the Money Option”), will be cancelled and converted into the right to receive a cash payment equal to (A) the excess of (x) the Merger Consideration over (y) the exercise price payable per share under such In the Money Option, multiplied by (B) the total number of shares subject to such In the Money Option immediately prior to the Effective Time (without regard to vesting). In addition, at the Effective Time, each Company Option other than an In the Money Option that is then outstanding and unexercised, whether or not vested, will be cancelled with no consideration payable in respect thereof. At the Effective Time, each then outstanding restricted stock unit with respect to shares of the Company (each, a “Company RSU”) will be canceled and the holder thereof will be entitled to receive a cash payment equal to the product of (x) the Merger Consideration and (y) the number of shares subject to such Company RSU. At the Effective Time, each then outstanding performance vesting restricted stock unit with respect to shares of the Company (each, a “Company PSU”) will be canceled and converted into a cash-based award, which will entitle the holder thereof to receive a cash payment equal to the product of (x) the Merger Consideration, and (y) the number of shares subject to such Company PSU, subject to the same terms and conditions (including vesting, forfeiture and acceleration provisions) that were applicable to the corresponding Company PSU immediately prior to the Effective Time.
The representations, warranties and covenants of the Company contained in the Merger Agreement have been made solely for the benefit of Astellas and Merger Sub. In addition, such representations, warranties and covenants (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by (a) subject to certain terms and conditions, matters specifically disclosed in the Company’s filings with the SEC prior to the date of the Merger Agreement and (b) confidential disclosures made to Astellas and Merger Sub in the disclosure letter delivered in connection with the Merger Agreement, (iii) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, and (iv) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as fact.
If the Merger is completed, the Company expects that its common stock will thereafter be removed from listing on the Nasdaq Global Select Market and from registration under Section 12(b) of the Securities Exchange Act of 1934, as amended, and the Company will cease to be a publicly traded company.
Bylaws Amendment
On April 28, 2023, the board of directors of the Company approved an amendment to the Company’s existing Amended and Restated Bylaws (the “Bylaws”) to add a new Article V, Section 9 forum selection provision (the “Forum Selection Amendment”).
The Forum Selection Amendment provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any current or former director, officer, stockholder, employee or agent of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any current or former director, officer, stockholder, employee or agent of the Company arising out of or relating to any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation of the Company or the Bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against the Company or any current or former director, officer, stockholder, employee or agent of the Company governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.