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A Canadian Domiciled Entity
QLT Inc. (NASDAQ:QLTI) (TSX:QLT) announced today that it has agreed to revised terms regarding its previously announced agreement to provide equity financing in the amount of US$45million in connection with the pending merger transaction between POZEN Inc. (Nasdaq:POZN)and Tribute Pharmaceuticals Canada Inc. (TSX VENTURE:TRX) (OTCQX:TBUFF). The revised terms were agreed to in connection with changes to the merger transaction announced earlier today by POZEN and Tribute.
Under the revised terms, QLT will provide $45 million of equity financing and, as a result of the merger transaction, will receive shares in Aralez Pharmaceuticals Inc. (“Aralez”), the Canadian parent company resulting from the POZEN – Tribute merger transaction. QLT will invest the US$45 million in Tribute immediately prior to closing of the transaction at a price per share equal to (a) the lesser of (i) $7.20, and (ii) a five percent (5%) discount off the five day volume weighted average price (“VWAP”) per share of POZEN common stock, calculated over the five trading days immediately preceding the date of closing, not to be less than $6.25, multiplied by (b) .1455 (the conversion ratio). In the event any of POZEN, Tribute or Aralez announce a material event (other than results of any shareholder meeting) during the ten day period immediately preceding closing, the VWAP lookback period will be reduced from five days to two days. Under the terms of the original share subscription agreement announced on June 8, 2015, QLT and the other co-investors had agreed to pay $7.20 per share of Aralez. The merger transaction and the equity financing are expected to close in the first quarter of 2016. Upon closing, Aralez is expected to trade on the NASDAQ and TSX.
As previously announced, QLT intends to distribute the Aralez shares that it receives from the investment to its shareholders by way of a reduction of the paid up capital on QLT’s common shares. In connection with that distribution, QLT shareholders will be given the opportunity to elect to receive, in lieu of those shares, up to an aggregate of $15 million in cash.
“We are pleased that Tribute and POZEN have reconfirmed their commitment to combine their strengths to create a commercial-stage, Canadian-domiciled, specialty pharmaceutical company led by an exceptional executive management team who has consistently created significant shareholder value at four public companies. QLT’s unique role in this merger has enabled us to lead a co-investment syndicate of leading healthcare investors, including Deerfield, Broadfin Capital LLC and JW Asset Management, LLC, in this compelling investment opportunity. We continue to believe that the investment in Aralez allows QLT the opportunity to return capital to our shareholders in a prudently tax efficient manner and also provides our shareholders with the creative option of either near term liquidity or participation in the exciting future of Aralez,” said Jason M. Aryeh, Chairman of QLT.
