Organization and Description of the Business	3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of the Business	1. Organization and Description of the Business Landos Biopharma, Inc. (“Landos” or the “Company”) was incorporated in the state of Delaware in January 2017 and is a clinical-stage biopharmaceutical company focused on the development of oral therapeutics for patients with autoimmune diseases. The Company has several development programs, each discovered internally, targeting novel pathways at the interface of immunity and metabolism. Pending Merger On March 24, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Bespin Subsidiary, LLC, a Delaware corporation and a wholly owned subsidiary of Guarantor (the “Parent”), Bespin Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and solely for the limited purposes set forth therein, AbbVie Inc. (“AbbVie” or the “Guarantor”), providing for, among other things, our merger with Merger Sub (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. At the effective time of the Merger, or the Effective Time: i. each share of the Company’s common stock (a “Share”) outstanding immediately prior to the Effective Time, but excluding any Share: (i) owned by the Company or any of the Company’s wholly owned subsidiaries as treasury stock or otherwise, (ii) held directly or indirectly by AbbVie, Parent or Merger Sub or any other wholly owned subsidiary of AbbVie or (iii) issued and outstanding immediately prior to the Effective Time and that is held by a holder who has not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and is entitled to demand and properly demands appraisal of such Share, as applicable, will be converted automatically into the right to receive (A) $20.42 in cash (the “Closing Amount”), plus (B) one contractual contingent value right (a “CVR”), representing the right to receive a contingent payment of $11.14 in cash upon the achievement of a specified milestone as set forth in, and subject to the terms and conditions of, the Contingent Value Rights Agreement substantially in the form attached as Exhibit D to the Merger Agreement (the “CVR Agreement”), in each case, without interest and subject to any applicable withholding taxes; ii. each stock option to acquire Shares (“Company Option”) outstanding immediately prior to the Effective Time, whether vested or unvested, having an exercise price per Share that is less than or equal to the Closing Amount will be cancelled and converted into the right to receive (A) cash in an amount equal to the product of (x) the total number of Shares subject to such Company Option immediately prior to the Effective Time, multiplied by (y) the excess of (I) the Closing Amount over (II) the exercise price payable per Share under such Company Option and (B) one CVR for each Share subject to such Company Option, in each case, without interest and subject to any applicable withholding taxes; any Company Option outstanding immediately prior to the Effective Time, whether vested or unvested, having an exercise price per Share that is greater than the Closing Amount will be cancelled for no consideration and have no further force or effect; iii. each outstanding restricted stock unit award (“Company RSU”) outstanding immediately prior to the Effective Time will fully vest, be cancelled, and convert into the right to receive (A) a lump sum payment of cash in an amount equal to the product of (x) the Closing Amount multiplied by (y) the number of Shares subject to such Company RSU and (B) one CVR for each Share subject to such Company RSU, in each case, without interest and subject to any applicable withholding taxes; and iv. each warrant exercisable for Shares (“Company Warrant”) outstanding immediately prior to the Effective Time will be deemed to have been exercised in full in a “cashless exercise,” pursuant to the Warrant Agreement effective immediately prior to and contingent upon the closing of the Merger, and will be converted automatically into the right to receive (a) an amount in cash equal to the Closing Amount multiplied by (x) the total number of Shares underlying the Company Warrant as of immediately prior to the Effective Time, multiplied by (y)(A)(1) the Closing Sale Price (as defined in that certain Pre-Funded Warrant, the form of which is attached to the Securities Purchase Agreement (the “Warrant Agreement”)) per share of common stock as of the Trading Day (as defined in the Warrant Agreement) on the date immediately preceding the date on which the closing of the Merger actually occurs, or the Applicable Closing Price, minus (2) the Exercise Price (as defined in the Warrant Agreement) per Share of such Company Warrant, divided by (B) the Applicable Closing Price and (b) a number of CVRs equal to the total number of Shares underlying the Company Warrant as of immediately prior to the Effective Time. The transaction is not subject to a financing condition. In addition, Guarantor has provided a guarantee, pursuant to which Guarantor has agreed to guarantee Parent’s payments and obligations under the Merger Agreement and the CVR Agreement. The consummation of the Merger is subject to certain customary conditions, including: (i) receipt of approval of the Merger and adoption of the Merger Agreement by our stockholders; (ii) receipt of required regulatory approvals or clearances, if any, with respect to certain antitrust laws and (iii) the absence of any law or order prohibiting or making illegal the consummation of the Merger. The Merger Agreement includes a remedy of specific performance for the parties thereto. The Merger Agreement also contains certain termination rights for each of the Company and Parent and provides that, upon the termination of the Merger Agreement under certain specified circumstances, including (i) termination by the Company to accept, and enter into a definitive agreement with respect to, a superior proposal for an alternative transaction and (ii) termination by Parent due to a change in the recommendation of the Company’s board of directors with respect to the Merger Agreement, the Company will be required to pay a termination fee of $7,000,000. The termination fee will also be payable if (1) the Merger Agreement is terminated under certain circumstances and (2) a proposal (or intention to make a proposal) to acquire more than 50% of the Company’s stock or assets is publicly made or announced (and not subsequently withdrawn) and (3) the Company enters into a definitive agreement for, or completes, any transaction involving the acquisition of more than 50% of its stock or assets within twelve months of such termination. Reverse Stock Split In May 2023, the Company’s stockholders approved a reverse stock split at the annual meeting of stockholders, and subsequently, the Company effected a one-for-ten (1-for-10) reverse stock split (the “Reverse Stock Split”) of its outstanding common stock and a corresponding reduction in the total number of authorized shares of its common stock from 200,000,000 to 20,000,000. All references to common stock, pre-funded warrants to purchase common stock, options to purchase common stock, restricted stock units, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders of record who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. Liquidity As of March 31, 2024, the Company had cash and cash equivalents of $29.0 million, which it believes will be sufficient to fund its planned operations for at least one year from the issuance of these condensed consolidated financial statements, assuming the Merger is not consummated and the Company continues to operate as an independent entity. Since the Company’s inception in 2017, it has funded its operations through the issuance of convertible preferred stock and convertible promissory notes, the proceeds from its Initial Public Offering, the upfront payment from the license and collaboration agreement and the sale of pre-funded warrants in a private placement. As of March 31, 2024, the Company had an accumulated deficit of $164.3 million and, if the Merger is not consummated and the Company continues to operate as an independent entity, would expect to incur substantial operating losses for at least the next several years. As such, the Company would need to raise additional capital to initiate and complete its ongoing and planned clinical trials, to continue and expand its research and development operations that support its ongoing and planned discovery, development and clinical and regulatory activities and to adequately prepare for commercialization of its product candidates that may achieve regulatory approval in the future.

Organization and Description of the Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of the Business

1. Organization and Description of the Business

Landos Biopharma, Inc. (“Landos” or the “Company”) was incorporated in the state of Delaware in January 2017 and is a clinical-stage biopharmaceutical company focused on the development of oral therapeutics for patients with autoimmune diseases. The Company has several development programs, each discovered internally, targeting novel pathways at the interface of immunity and metabolism.

Pending Merger

On March 24, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Bespin Subsidiary, LLC, a Delaware corporation and a wholly owned subsidiary of Guarantor (the “Parent”), Bespin Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and solely for the limited purposes set forth therein, AbbVie Inc. (“AbbVie” or the “Guarantor”), providing for, among other things, our merger with Merger Sub (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. At the effective time of the Merger, or the Effective Time:

each share of the Company’s common stock (a “Share”) outstanding immediately prior to the Effective Time, but excluding any Share: (i) owned by the Company or any of the Company’s wholly owned subsidiaries as treasury stock or otherwise, (ii) held directly or indirectly by AbbVie, Parent or Merger Sub or any other wholly owned subsidiary of AbbVie or (iii) issued and outstanding immediately prior to the Effective Time and that is held by a holder who has not voted in favor of the adoption of the Merger Agreement or consented thereto in writing and is entitled to demand and properly demands appraisal of such Share, as applicable, will be converted automatically into the right to receive (A) $20.42 in cash (the “Closing Amount”), plus (B) one contractual contingent value right (a “CVR”), representing the right to receive a contingent payment of $11.14 in cash upon the achievement of a specified milestone as set forth in, and subject to the terms and conditions of, the Contingent Value Rights Agreement substantially in the form attached as Exhibit D to the Merger Agreement (the “CVR Agreement”), in each case, without interest and subject to any applicable withholding taxes;

ii.

each stock option to acquire Shares (“Company Option”) outstanding immediately prior to the Effective Time, whether vested or unvested, having an exercise price per Share that is less than or equal to the Closing Amount will be cancelled and converted into the right to receive (A) cash in an amount equal to the product of (x) the total number of Shares subject to such Company Option immediately prior to the Effective Time, multiplied by (y) the excess of (I) the Closing Amount over (II) the exercise price payable per Share under such Company Option and (B) one CVR for each Share subject to such Company Option, in each case, without interest and subject to any applicable withholding taxes; any Company Option outstanding immediately prior to the Effective Time, whether vested or unvested, having an exercise price per Share that is greater than the Closing Amount will be cancelled for no consideration and have no further force or effect;

iii.

each outstanding restricted stock unit award (“Company RSU”) outstanding immediately prior to the Effective Time will fully vest, be cancelled, and convert into the right to receive (A) a lump sum payment of cash in an amount equal to the product of (x) the Closing Amount multiplied by (y) the number of Shares subject to such Company RSU and (B) one CVR for each Share subject to such Company RSU, in each case, without interest and subject to any applicable withholding taxes; and

iv.

each warrant exercisable for Shares (“Company Warrant”) outstanding immediately prior to the Effective Time will be deemed to have been exercised in full in a “cashless exercise,” pursuant to the Warrant Agreement effective immediately prior to and contingent upon the closing of the Merger, and will be converted automatically into the right to receive (a) an amount in cash equal to the Closing Amount multiplied by (x) the total number of Shares underlying the Company Warrant as of immediately prior to the Effective Time, multiplied by (y)(A)(1) the Closing Sale Price (as defined in that certain Pre-Funded Warrant, the form of which is attached to the Securities Purchase Agreement (the “Warrant Agreement”)) per share of common stock as of the Trading Day (as defined in the Warrant Agreement) on the date immediately preceding the date on which the closing of the Merger actually occurs, or the Applicable Closing Price, minus (2) the Exercise Price (as defined in the Warrant Agreement) per Share of such Company Warrant, divided by (B) the Applicable Closing Price and (b) a number of CVRs equal to the total number of Shares underlying the Company Warrant as of immediately prior to the Effective Time.

The transaction is not subject to a financing condition. In addition, Guarantor has provided a guarantee, pursuant to which Guarantor has agreed to guarantee Parent’s payments and obligations under the Merger Agreement and the CVR Agreement.

The consummation of the Merger is subject to certain customary conditions, including: (i) receipt of approval of the Merger and adoption of the Merger Agreement by our stockholders; (ii) receipt of required regulatory approvals or clearances, if any, with respect to certain antitrust laws and (iii) the absence of any law or order prohibiting or making illegal the consummation of the Merger.

The Merger Agreement includes a remedy of specific performance for the parties thereto. The Merger Agreement also contains certain termination rights for each of the Company and Parent and provides that, upon the termination of the Merger Agreement under certain specified circumstances, including (i) termination by the Company to accept, and enter into a definitive agreement with respect to, a superior proposal for an alternative transaction and (ii) termination by Parent due to a change in the recommendation of the Company’s board of directors with respect to the Merger Agreement, the Company will be required to pay a termination fee of $7,000,000. The termination fee will also be payable if (1) the Merger Agreement is terminated under certain circumstances and (2) a proposal (or intention to make a proposal) to acquire more than 50% of the Company’s stock or assets is publicly made or announced (and not subsequently withdrawn) and (3) the Company enters into a definitive agreement for, or completes, any transaction involving the acquisition of more than 50% of its stock or assets within twelve months of such termination.

Reverse Stock Split

In May 2023, the Company’s stockholders approved a reverse stock split at the annual meeting of stockholders, and subsequently, the Company effected a one-for-ten (1-for-10) reverse stock split (the “Reverse Stock Split”) of its outstanding common stock and a corresponding reduction in the total number of authorized shares of its common stock from 200,000,000 to 20,000,000. All references to common stock, pre-funded warrants to purchase common stock, options to purchase common stock, restricted stock units, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders of record who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof.

Liquidity

As of March 31, 2024, the Company had cash and cash equivalents of $29.0 million, which it believes will be sufficient to fund its planned operations for at least one year from the issuance of these condensed consolidated financial statements, assuming the Merger is not consummated and the Company continues to operate as an independent entity. Since the Company’s inception in 2017, it has funded its operations through the issuance of convertible preferred stock and convertible promissory notes, the proceeds from its Initial Public Offering, the upfront payment from the license and collaboration agreement and the sale of pre-funded warrants in a private placement. As of March 31, 2024, the Company had an accumulated deficit of $164.3 million and, if the Merger is not consummated and the Company continues to operate as an independent entity, would expect to incur substantial operating losses for at least the next several years. As such, the Company would need to raise additional capital to initiate and complete its ongoing and planned clinical trials, to continue and expand its research and development operations that support its ongoing and planned discovery, development and clinical and regulatory activities and to adequately prepare for commercialization of its product candidates that may achieve regulatory approval in the future.