BOSTON, Aug. 1, 2022
/PRNewswire/ -- Stealth BioTherapeutics Corp (Nasdaq: MITO), a
clinical-stage biotechnology company focused on the discovery,
development, and commercialization of novel therapies for diseases
involving mitochondrial dysfunction, announced today that it has
entered into a definitive Agreement and Plan of Merger (the "Merger
Agreement") with Stealth Parent Limited, an exempted company with
limited liability incorporated under the law of the Cayman Islands ("Parent"), and Stealth Merger
Sub Limited, an exempted company with limited liability
incorporated under the law of the Cayman
Islands and a wholly-owned subsidiary of Parent ("Merger
Sub"), to be acquired by a consortium of investors led by
Morningside Venture (I) Investments Ltd. for itself and on behalf
of its affiliates ("Morningside") and J. Wood Capital Advisors LLC
("J. Wood Capital") (the "Consortium") in an all-cash transaction.
Pursuant to the terms of the Merger Agreement, and subject to the
terms and conditions thereof, Merger Sub will merge with and into
the Company with the Company being the surviving company and
becoming a wholly-owned subsidiary of Parent (the "Merger").
Pursuant to the Merger Agreement, at the effective time of the
Merger (the "Effective Time"), each ordinary share, par value
US$0.0003 per share, of the Company
(each, a "Share") issued and outstanding immediately prior to the
Effective Time will be cancelled and cease to exist, in exchange
for the right to receive US$0.03125
in cash without interest (the "Per Share Merger Consideration"),
and each outstanding American Depositary Share of the Company (each
an "ADS," representing 12 Shares, and collectively, the "ADSs")
will be cancelled in exchange for the right to receive US$0.375 in cash without interest (less any ADS
cancellation fees not to exceed $0.05
per ADS) (the "Per ADS Merger Consideration"), except for (a)
Shares (including Shares represented by ADSs) beneficially owned by
Morningside and its affiliates, (b) Shares (including Shares
represented by ADSs) owned by Parent, Merger Sub or the Company (as
treasury shares, if any) or by any of their direct or indirect
subsidiaries, and (c) Shares that are held by a holder who has
validly exercised and not withdrawn or lost its right to dissent
from the Merger pursuant to Section 238 of the Companies Act of the
Cayman Islands, which will be cancelled and cease to exist and will
entitle the former holder thereof to receive payment of the fair
value of such dissenting shares in accordance with Section 238 of
the Companies Act of the Cayman Islands.
The Per ADS Merger Consideration represents (before taking into
account any ADS cancellation fees) a premium of 34.4% to the
closing price of the Company's ADSs on June
24, 2022, the last trading day prior to the Company's
announcement of its receipt of the original "going-private"
proposal, and a premium of 43.9% to the average closing price of
the Company's ADSs during the last 30 trading days prior to its
receipt of the original "going-private" proposal.
The Consortium intends to fund the Merger through cash
contributions from members of the Consortium.
The Company's Board, acting upon the unanimous recommendation of
a committee of independent and disinterested directors established
by the Board (the "Special Committee"), approved the Merger
Agreement and the Merger. The Special Committee negotiated the
terms of the Merger Agreement with the assistance of its
independent financial and legal advisors.
The Merger, which is currently expected to close during the
second half of 2022, is subject to customary closing conditions
including the approval of the Merger Agreement by an affirmative
vote of holders of Shares representing at least two-thirds of the
voting power of the Shares present and voting in person or by proxy
as a single class at a meeting of the Company's shareholders which
will be convened to consider the approval of the Merger Agreement
and the Merger. Morningside Venture (I) Investments Limited, Season
Pioneer Investments Limited and Equal Talent Investments Limited
have agreed to vote all of the Shares and ADSs they beneficially
own, which represent approximately 65% of the voting rights
attached to the total outstanding Shares of the Company as of the
date of the Merger Agreement, in favor of the authorization and
approval of the Merger Agreement and the Merger. If completed, the
Merger will result in the Company becoming a privately-held company
and its ADSs will no longer be listed on NASDAQ.
Houlihan Lokey Capital, Inc. is serving as financial advisor to
the Special Committee; Wilmer Cutler
Pickering Hale and Dorr LLP is serving as U.S. legal counsel
to the Special Committee and the Company and Walkers is serving as
Cayman Islands legal counsel to
the Special Committee and the Company.
Goodwin Procter LLP is serving as U.S. legal counsel to the
Consortium and Campbells LLP is serving as Cayman Islands legal counsel to the
Consortium.
Additional Information About the Merger
The Company
will furnish to the U.S. Securities and Exchange Commission (the
"SEC") a current report on Form 6-K regarding the Merger, which
will include as an exhibit thereto the Merger Agreement. All
parties desiring details regarding the Merger are urged to review
these documents, which will be available at the SEC's website
(http://www.sec.gov).
In connection with the Merger, the Company will prepare and mail
a Schedule 13E-3 Transaction Statement (the "Schedule 13E-3"). The
Schedule 13E-3 will be filed with the SEC. INVESTORS AND
SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
SCHEDULE 13E-3 AND OTHER MATERIALS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE COMPANY, THE MERGER, AND RELATED MATTERS. In addition to
receiving the Schedule 13E-3 by mail, shareholders also will be
able to obtain these documents, as well as other filings containing
information about the Company, the Merger, and related matters,
without charge from the SEC's website (http://www.sec.gov).
About Stealth BioTherapeutics
We are a clinical-stage
biotechnology company focused on the discovery, development, and
commercialization of novel therapies for diseases involving
mitochondrial dysfunction. Mitochondria, found in nearly every cell
in the body, are the body's main source of energy production and
are critical for normal organ function. Dysfunctional mitochondria
characterize a number of rare genetic diseases and are involved in
many common age-related diseases, typically involving organ systems
with high energy demands such as the eye, the neuromuscular system,
the heart and the brain. We believe our lead product candidate,
elamipretide, has the potential to treat ophthalmic diseases
entailing mitochondrial dysfunction, such as dry AMD, rare
neuromuscular disorders, such as primary mitochondrial myopathy and
Duchenne muscular dystrophy, and rare cardiomyopathies, such as
Barth syndrome. We are evaluating our second-generation
clinical-stage candidate, SBT-272, for rare neurological disease
indications, such as amyotrophic lateral sclerosis and
frontotemporal lobar dementia, following promising preclinical
data. We have optimized our discovery platform to identify novel
mitochondria-targeted compounds which may be nominated as
therapeutic product candidates or utilized as mitochondria-targeted
vectors to deliver other compounds to mitochondria.
Forward-looking Statements
This press release contains
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include those regarding Stealth BioTherapeutics'
expectations regarding the timing of the closing of the Merger and
the potential benefits thereof. Statements that are not historical
facts, including statements about Stealth BioTherapeutics' beliefs,
plans and expectations, are forward-looking statements. The words
"anticipate," "expect," "hope," "plan," "potential," "possible,"
"will," "believe," "estimate," "intend," "may," "predict,"
"project," "would" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Stealth BioTherapeutics
may not actually achieve the plans, intentions or expectations
disclosed in these forward-looking statements, and you should not
place undue reliance on these forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements as a result of known and unknown risks, uncertainties
and other important factors, including: the ability of the
parties to meet the closing conditions required to complete the
Merger on anticipated timing; the ability of the Consortium
to obtain financing for the transaction; Stealth BioTherapeutics'
ability to obtain additional funding and to continue as a going
concern; the impact of the COVID-19 pandemic; the ability to
successfully demonstrate the efficacy and safety of Stealth
BioTherapeutics' product candidates and future product candidates;
the preclinical and clinical results for Stealth BioTherapeutics'
product candidates, which may not support further development and
marketing approval; the potential advantages of Stealth
BioTherapeutics' product candidates; the content and timing of
decisions made by the FDA, the EMA or other regulatory authorities,
investigational review boards at clinical trial sites and
publication review bodies, which may affect the initiation, timing
and progress of preclinical studies and clinical trials of Stealth
BioTherapeutics product candidates; Stealth BioTherapeutics'
ability to obtain and maintain requisite regulatory approvals and
to enroll patients in its planned clinical trials; unplanned cash
requirements and expenditures; competitive factors; Stealth
BioTherapeutics' ability to obtain, maintain and enforce patent and
other intellectual property protection for any product candidates
it is developing; and general economic and market conditions. These
and other risks are described in greater detail under the caption
"Risk Factors" included in Stealth BioTherapeutics' most recent
Annual Report on Form 20-F filed with the Securities and Exchange
Commission ("SEC"), as well as in any future filings with the SEC.
Forward-looking statements represent management's current
expectations and are inherently uncertain. Except as required by
law, Stealth BioTherapeutics does not undertake any obligation to
update forward-looking statements made by us to reflect subsequent
events or circumstances.
Investor Relations for the Company
Kendall Investor
Relations
Adam Bero, Ph.D.
abero@kendallir.com
IR@StealthBT.com
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SOURCE Stealth BioTherapeutics Inc.