SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 1)¹

CymaBay Therapeutics, Inc.

(Name of Issuer)

Common Stock, $0.0001 par value

(Title of Class of Securities)

23257D103

(CUSIP Number)

ANDREW FREEDMAN, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

February 12, 2020

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ENGINE CAPITAL, L.P.
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			WC
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			DELAWARE
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					5,501,130
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					5,501,130
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			5,501,130
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			8.0%
	14	TYPE OF REPORTING PERSON
			PN

2

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ENGINE JET CAPITAL, L.P.
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			WC
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			DELAWARE
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					1,186,123
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					1,186,123
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			1,186,123
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			1.7%
	14	TYPE OF REPORTING PERSON
			PN

3

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ENGINE CAPITAL MANAGEMENT, LP
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			OO
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			DELAWARE
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					6,687,253
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					6,687,253
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			6,687,253
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			9.7%
	14	TYPE OF REPORTING PERSON
			OO

4

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ENGINE CAPITAL MANAGEMENT GP, LLC
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			OO
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			DELAWARE
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					6,687,253
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					6,687,253
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			6,687,253
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			9.7%
	14	TYPE OF REPORTING PERSON
			OO

5

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ENGINE INVESTMENTS, LLC
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			OO
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			DELAWARE
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					6,687,253
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					6,687,253
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			6,687,253
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			9.7%
	14	TYPE OF REPORTING PERSON
			OO

6

CUSIP No. 23257D103

	1	NAME OF REPORTING PERSON
			ARNAUD AJDLER
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☐
						(b) ☐
	3	SEC USE ONLY
	4	SOURCE OF FUNDS
			OO
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐
	6	CITIZENSHIP OR PLACE OF ORGANIZATION
			BELGIUM
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					6,687,253
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					- 0 -
PERSON WITH			9	SOLE DISPOSITIVE POWER
					6,687,253
			10	SHARED DISPOSITIVE POWER
					- 0 -
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
			6,687,253
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐
	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
			9.7%
	14	TYPE OF REPORTING PERSON
			IN

7

CUSIP No. 23257D103

The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.

Item 3. Source and Amount of Funds or Other Consideration.

Items 3 is hereby amended and restated to read as follows:

The Shares purchased by each of Engine Capital and Engine Jet were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases. The aggregate purchase price of the 5,501,130 Shares beneficially owned by Engine Capital is approximately $8,395,269, including brokerage commissions. The aggregate purchase price of the 1,186,123 Shares beneficially owned by Engine Jet is approximately $1,809,546, including brokerage commissions.

Item 4. Purpose of Transaction.

Item 4 is hereby amended to add the following:

On February 14, 2020, the Reporting Persons delivered a letter to the Issuer’s Board of Directors. The full text of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

Items 5(a) – (c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon 68,701,043 Shares outstanding, as of October 31, 2019, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2019.

A. Engine Capital

(a) As of the date hereof, Engine Capital directly owned 5,501,130 Shares.

Percentage: Approximately 8.0%

8

CUSIP No. 23257D103

(b) 1. Sole power to vote or direct vote: 5,501,130
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 5,501,130
4. Shared power to dispose or direct the disposition: 0

(c) The transactions in the Shares by Engine Capital during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

B. Engine Jet

(a) As of the date hereof, Engine Jet directly owned 1,186,123 Shares.

Percentage: Approximately 1.7%

(b) 1. Sole power to vote or direct vote: 1,186,123
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 1,186,123
4. Shared power to dispose or direct the disposition: 0

(c) The transactions in the Shares by Engine Jet during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

C. Engine Management

(a) Engine Management, as the investment manager of each of Engine Capital and Engine Jet, may be deemed to beneficially own the 6,687,253 Shares owned in the aggregate by Engine Capital and Engine Jet.

Percentage: Approximately 9.7%

(b) 1. Sole power to vote or direct vote: 6,687,253
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 6,687,253
4. Shared power to dispose or direct the disposition: 0

(c) Engine Management has not entered into any transactions in the Shares during the past sixty (60) days. The transactions in the Shares on behalf of each of Engine Capital and Engine Jet during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

9

CUSIP No. 23257D103

D. Engine GP

(a) Engine GP, as the general partner of Engine Management, may be deemed to beneficially own the 6,687,253 Shares owned in the aggregate by Engine Capital and Engine Jet.

Percentage: Approximately 9.7%

(b) 1. Sole power to vote or direct vote: 6,687,253
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 6,687,253
4. Shared power to dispose or direct the disposition: 0

(c) Engine GP has not entered into any transactions in the Shares during the past sixty (60) days. The transactions in the Shares on behalf of each of Engine Capital and Engine Jet during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

E. Engine Investments

(a) Engine Investments, as the general partner of each of Engine Capital and Engine Jet, may be deemed to beneficially own the 6,687,253 Shares owned in the aggregate by Engine Capital and Engine Jet.

Percentage: Approximately 9.7%

(b) 1. Sole power to vote or direct vote: 6,687,253
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 6,687,253
4. Shared power to dispose or direct the disposition: 0

(c) Engine Investments has not entered into any transactions in the Shares during the past sixty (60) days. The transactions in the Shares on behalf of each of Engine Capital and Engine Jet during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

F. Arnaud Ajdler

(a) Mr. Ajdler, as the managing partner of Engine Management, and the managing member of each of Engine GP and Engine Investments, may be deemed to beneficially own the 6,687,253 Shares owned in the aggregate by Engine Capital and Engine Jet.

Percentage: Approximately 9.7%

10

CUSIP No. 23257D103

(b) 1. Sole power to vote or direct vote: 6,687,253
2. Shared power to vote or direct vote: 0
3. Sole power to dispose or direct the disposition: 6,687,253
4. Shared power to dispose or direct the disposition: 0

(c) Mr. Ajdler has not entered into any transactions in the Shares during the past sixty (60) days. The transactions in the Shares on behalf of each of Engine Capital and Engine Jet during the past sixty (60) days are set forth in Schedule A and are incorporated herein by reference.

The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any securities of the Issuer that he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own.

Item 7. Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1 Letter to the Board of Directors, dated February 14, 2020.

11

CUSIP No. 23257D103

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: February 14, 2020

Engine Capital, L.P.
By:	Engine Investments, LLC General Partner
By:	/s/ Arnaud Ajdler
	Name:	Arnaud Ajdler
	Title:	Managing Member

Engine Jet Capital, L.P.
By:	Engine Investments, LLC General Partner
By:	/s/ Arnaud Ajdler
	Name:	Arnaud Ajdler
	Title:	Managing Member

Engine Capital Management, LP
By:	Engine Capital Management GP, LLC General Partner
By:	/s/ Arnaud Ajdler
	Name:	Arnaud Ajdler
	Title:	Managing Member

Engine Capital Management GP, LLC
By:	/s/ Arnaud Ajdler
	Name:	Arnaud Ajdler
	Title:	Managing Member

12

CUSIP No. 23257D103

Engine Investments, LLC
By:	/s/ Arnaud Ajdler
	Name:	Arnaud Ajdler
	Title:	Managing Member

/s/ Arnaud Ajdler

Arnaud Ajdler

13

CUSIP No. 23257D103

SCHEDULE A

Transactions in the Shares During the Past Sixty (60) Days

Nature of Transaction Amount of Securities Purchased/(Sold) Price Per Share($) Date of Purchase/Sale

Engine Capital, L.P.

Purchase of Common Stock	39,808	1.5500	02/03/2020
Purchase of Common Stock	41,131	1.5387	02/04/2020
Purchase of Common Stock	30,000	1.5592	02/07/2020
Purchase of Common Stock	43,963	1.5427	02/10/2020
Purchase of Common Stock	19,000	1.5482	02/11/2020
Purchase of Common Stock	18,950	1.5482	02/11/2020
Purchase of Common Stock	1,224,818	1.5000	02/12/2020

Engine JET Capital, L.P.

Purchase of Common Stock	8,584	1.5500	02/03/2020
Purchase of Common Stock	8,869	1.5387	02/04/2020
Purchase of Common Stock	4,086	1.5482	02/11/2020
Purchase of Common Stock	264,110	1.5000	02/12/2020

EX-99.1

Exhibit 99.1

Engine Capital LP

1345 Avenue of the Americas, 33rd Floor

New York, NY 10105

(212) 321-0048

February 14, 2020

CymaBay Therapeutics, Inc.

7575 Gateway Boulevard, Suite 110

Newark, CA 94560

Attention: Board of Directors

Dear Members of the Board:

Engine Capital LP, together with its affiliates (“Engine” or “we”), is the largest shareholder of CymaBay Therapeutics, Inc. (“CymaBay,” “CBAY” or the “Company”), with ownership of approximately 9.7% of the Company’s outstanding shares. CymaBay represents a significant investment for Engine. We invested in CBAY because we believe the Company is undervalued and there are opportunities readily available to CBAY’s Board of Directors (the “Board”) to significantly increase shareholder value.

For context, Engine is a value-oriented investment firm launched in July 2013. Since its launch, Engine has negotiated board representation or settlements at 17 public companies and added 27 highly qualified new board members to these companies. We have experience in the markets CymaBay operates in, including by virtue of our principal serving as a director of pharmaceutical company Recro Pharma, Inc., as well as other significant investments in several other biotech companies. As part of our due diligence process, we have had an opportunity to discuss CymaBay and its prospects with, among others, CBAY’s President and Chief Executive Officer, Sujal Shah, and CBAY’s Chair of the Nominating and Corporate Governance Committee, Kurt von Emster.

Since filing our initial Schedule 13D on December 12, 2019, many frustrated shareholders have reached out to us and we thought it would be helpful to share our views publicly for the benefit of the entire Board as well as other shareholders.

The Company’s recent decision to suspend development of Seladelpar was obviously an incredible disappointment. The Company now faces a new reality and we commend the Board and management team for moving aggressively to reduce CymaBay’s workforce by 60% in short order. Unfortunately, more has to be done to further reduce costs and conserve the Company’s primary asset - its cash. We are concerned by the elevated cash burn of the Company. In its recent update letter from January 29, 2020, CBAY implied $10 to $15 million of cash burn for general corporate purposes for the first 6 months of the year. This is simply too high. Based on similar exercises done at other pharma companies (in similar situations), we believe the appropriate semi-annual cash burn for a company with just over 20 employees should be between $5 and $7.5 million. We assume that the Company is also using some external experts to review data and discuss its findings with the FDA, which may explain some of the difference, but we are skeptical from the outside that this alone can justify these elevated costs. Shareholders have suffered immensely with CBAY’s stock down almost 85% over the past 12 months. At this point, everything should be on the table to reduce the cash burn, including senior management and Board members taking deep compensation cuts.

Given this elevated cash burn, time is of the essence and the Company needs to conclude its strategic review process as expeditiously as possible. Our hope is that the Company can work with the FDA to find an economical path forward for Seladelpar. If that is not possible, Engine strongly believes that CymaBay should simply liquidate and return cash to shareholders as quickly as possible. We believe that under this scenario, shareholders could receive north of $2 per share, resulting in a very good risk-adjusted return. The other alternative that the Board is likely considering is some type of transaction such as a reverse merger, a licensing agreement or an acquisition. Engine has reviewed the track record of such transactions in this space and it is abysmal. Most of these transactions end up destroying significant value over time. Given the frothy market and the current availability of capital, the risk of a transaction is even higher. There is significant risk of adverse selection as good assets should have no problem going public on their own.

We are concerned that, given the minimal insider ownership at CBAY, especially among the independent Board members, the Board is effectively “playing” with other people’s money and its incentives are not necessarily aligned with those of shareholders. Therefore, if the Board is inclined to try to beat the odds and pursue an acquisition, Engine would request two things:

1. We believe that any material transaction should be subject to shareholder approval, whether legally required or not. As mentioned earlier, the Board members own a de minimis amount of stock and have overseen significant value destruction so shareholders should have an opportunity to voice their opinions on any material transaction before it takes effect. In practice, if the deal is well received, the stock will go up and shareholders will approve the transaction. If the deal is poorly received, shareholders should be able to vote down the deal.

2. If the Board decides to pursue a transaction instead of a liquidation, it should be because the Board members are excited about the future prospects following the transaction. In that case, we believe the members of the Board should commit to making a significant personal investment in CBAY when legally permitted to do so. It is easy to be excited about a transaction when one has no “skin in the game.” If directors are unwilling to commit to making a material personal investment, then the Board shouldn’t recommend such a transaction to shareholders.

So far, our interactions with both Sujal and Kurt have been positive and we hope to continue to work constructively with the Board. However, be advised that we will not hesitate to take any action that we believe is necessary to protect the best interests of the Company’s shareholders.

Very truly yours,

/s/ Arnaud Ajdler

Arnaud Ajdler

Managing Member

Engine Capital L.P.