UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
JOUNCE THERAPEUTICS, INC.
(Name of Subject Company (Issuer))
CONCENTRA MERGER SUB, INC.
(Name of Filing Persons (Co-Offeror 1))
CONCENTRA BIOSCIENCES, LLC
(Name of Filing Persons (Parent of Co-Offeror 1))
TANG CAPITAL PARTNERS, LP
(Name of Filing Persons (Co-Offeror 2))
TANG CAPITAL MANAGEMENT, LLC
(Name of Filing Persons (Co-Offeror 3))
Common Stock, Par Value $0.001 Per Share
(Title of Class of Securities)
481116101
(CUSIP Number of Class of Securities)
Kevin Tang
Concentra Biosciences, LLC
4747 Executive Drive, Suite 210, San Diego, California 92121
Tel. (858) 281-5372
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copies to:
Ryan A. Murr
James J. Moloney
Gibson, Dunn & Crutcher LLP
555 Mission Street, 30th Floor
San Francisco, California 94105
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
☒ | third-party tender offer subject to Rule 14d-1. |
☐ | issuer tender offer subject to Rule 13e-4. |
☐ | going-private transaction subject to Rule 13e-3. |
☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer. ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
☐ | Rule 13d-1(d) (Cross-Border Third-Party Tender Offer) |
This Amendment No. 2 (this Amendment No. 2) amends and supplements the Tender Offer Statement on Schedule TO originally filed with the Securities and Exchange Commission (the SEC) on April 5, 2023, as amended by Amendment No. 1 thereto filed with the SEC on April 25, 2023 ( the Schedule TO), by Concentra Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Concentra Biosciences, LLC, a Delaware limited liability company (Parent). This Schedule TO relates to the offer (the Offer), to purchase all outstanding shares of common stock, $0.001 par value per share (Shares), of Jounce Therapeutics, Inc., a Delaware corporation (Jounce), at a price of $1.85 in cash per Share, net to the seller in cash, without interest and subject to any withholding of taxes (the Cash Consideration), plus one non-transferable contractual contingent value right per Share (each, a CVR, and each CVR together with the Cash Consideration, the Offer Price), all upon the terms and subject to the conditions described in the Amended and Restated Offer to Purchase, dated April 25, 2023 (the Offer to Purchase), as supplemented by Supplement No. 1 thereto filed with the SEC on April 25, 2023 (Supplement No. 1) and Supplement No. 2 thereto filed with the SEC on April 28, 2023 (Supplement No. 2 and together with Supplement No. 1, the Supplements), and in the related Letter of Transmittal, copies of which are attached hereto as exhibits (a)(1)(A) and (a)(1)(B), respectively. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of March 26, 2023 (together with any amendments or supplements thereto, the Merger Agreement), among Jounce, Parent and Purchaser, a copy of which is attached as Exhibit (d)(1) hereto and incorporated herein by reference with respect to Items 4 through 11 of this Schedule TO. Capitalized terms used but not otherwise defined herein have the meanings ascribed thereto in the Merger Agreement. The obligations of Parent and Purchaser under the Merger Agreement have been guaranteed by Tang Capital Partners, LP, a Delaware limited partnership (TCP) and sole member of Parent, pursuant to an equity commitment and guarantee letter, dated as of March 26, 2023, subject to the terms and conditions set forth therein (the Equity Commitment and Guarantee Letter). Tang Capital Management, LLC, a Delaware limited liability company (TCM), is the sole manager of Parent and the general partner of TCP. Accordingly, TCP and TCM are identified in this Schedule TO (as reflected above) as co-offerors. As co-offerors, TCP and TCM accept joint responsibility for the accuracy of the disclosures made in this Offer to Purchase.
All of the information set forth in the Offer to Purchase is incorporated by reference herein in response to Items 1 through 9 and Item 11 of this Amendment No. 2, except as otherwise set forth below. This Amendment should be read together with the Schedule TO. Capitalized terms used but not defined in this Amendment No. 2 have the meanings ascribed to them in the Schedule TO.
ITEM 1. | SUMMARY TERM SHEET. |
The information set forth in the section of the Offer to Purchase titled Summary Term Sheet and in Supplement No. 2 is incorporated herein by reference.
ITEM 4. | TERMS OF THE TRANSACTION. |
(a)(1)(i)-(viii), (x), (xii), (a)(2)(i)-(v), (vii) The information set forth in the Offer to Purchase and Supplement No. 2 is incorporated herein by reference.
ITEM 11. | ADDITIONAL INFORMATION. |
(c) The information set forth in the Offer to Purchase and Supplement No. 2 is incorporated herein by reference.
ITEM 12. | EXHIBITS. |
Index No. |
| |
(a)(1)(A)* | Offer to Purchase, dated April 5, 2023. | |
(a)(1)(B)* | Form of Letter of Transmittal. | |
(a)(1)(C)* | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
1
Previously filed. Filed herewith. INFORMATION REQUIRED BY SCHEDULE 13E-3. Not applicable. 2
SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and
correct. Dated: April 28, 2023 /s/ Kevin Tang /s/ Kevin Tang /s/ Kevin Tang /s/ Kevin Tang 3
Index
No.
(a)(1)(D)*
Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(E)*
Supplement to the Offer to Purchase, dated April 25, 2023.
(a)(1)(F)*
Amended and Restated Offer to Purchase, dated April 25, 2023.
(a)(1)(G)**
Supplement No. 2 to the Offer to Purchase, dated April 28, 2023.
(b)
Not applicable.
(d)(1)*
Agreement and Plan of Merger, dated March 26, 2023, by and among Jounce, Parent and Purchaser (incorporated herein by reference to Exhibit 2.1 to Form 8-K filed by Jounce on
March 27, 2023).
(d)(2)*
Mutual Confidentiality Agreement, dated March 15, 2023, by and between Jounce, TCP and Parent.
(d)(3)*
Form of Contingent Value Rights Agreement, by and between Parent, the Rights Agent and the Representative (incorporated herein by reference to Exhibit C of Exhibit 2.1 to Form 8-K filed by
Jounce on March 27, 2023).
(d)(4)*
Agreement and Plan of Merger, dated March 26, 2023, by and among Jounce, Parent and Purchaser (incorporated herein by reference to Exhibit 2.1 to Form 8-K filed by Jounce on
March 27, 2023).
(g)
Not applicable.
(h)
Not applicable.
107*
Filing Fee Table.
*
**
ITEM 13.
CONCENTRA MERGER SUB, INC.
By:
Name:
Kevin Tang
Title:
Chief Executive Officer
CONCENTRA BIOSCIENCES, LLC
By:
Name:
Kevin Tang
Title:
Chief Executive Officer
TANG CAPITAL PARTNERS, LP
By:
Name:
Kevin Tang
Title:
Manager of Tang Capital Management, LLC, General Partner of Tang Capital Partners, LP
TANG CAPITAL MANAGEMENT, LLC
By:
Name:
Kevin Tang
Title:
Manager
Exhibit (a)(1)(G)
Supplement No. 2 to Offer to Purchase
All Outstanding Shares of Common Stock
of
JOUNCE THERAPEUTICS, INC.
At
$1.85 per Share in Cash, Plus One Non-Transferable Contractual Contingent Value Right
for Each Share (CVR), Which Represents the Right to Receive One or More Payments in Cash,
Contingent upon Receipt of Proceeds from Disposition of CVR Products during the Disposition Period and
Occurrence of Certain Other Events Described in the CVR Agreement
by
CONCENTRA MERGER SUB, INC.
a wholly owned subsidiary of
CONCENTRA BIOSCIENCES, LLC
and
TANG CAPITAL PARTNERS, LP
and
TANG CAPITAL MANAGEMENT, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
6:00 P.M. EASTERN TIME ON MAY 3, 2023,
UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
Concentra Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Concentra Biosciences, LLC, a Delaware limited liability company (Parent), hereby supplements and amends its Offer to Purchase, dated April 5, 2023 (the Original Offer to Purchase) and supplements and amends its Amended and Restated Offer to Purchase, dated April 25, 2023 (the Amended and Restated Offer to Purchase). The Purchaser is offering to purchase all outstanding shares of common stock, par value $0.001 per share (Shares), of Jounce Therapeutics, Inc., a Delaware corporation (Jounce), at a price of $1.85 in cash per Share, net to the seller in cash, without interest and subject to any withholding of taxes (the Cash Consideration), plus one non-transferable contractual contingent value right per Share (each, a CVR, and each CVR together with the Cash Consideration, the Offer Price), all upon the terms and subject to the conditions described in (i) the Original Offer to Purchase, (ii) the Amended and Restated Offer to Purchase, (iii) the Supplement, dated April 25, 2023 (the First Supplement), and (iv) this Supplement No. 2 (the Second Supplement, and together with the First Supplement the Supplements) (such Original Offer to Purchase, as amended and restated by the Amended and Restated Offer to Purchase and as further amended and supplemented by the Supplements, the Offer to Purchase) and in the related Letter of Transmittal (together with any amendments or supplements thereto, the Letter of Transmittal) (which collectively constitute the Offer). The obligations of Parent under the Merger Agreement have been guaranteed by Tang Capital Partners, LP, a Delaware limited partnership (TCP) and sole member of Parent, pursuant to an equity commitment and guarantee letter, dated as of March 26, 2023, subject to the terms and conditions set forth therein (the Equity Commitment and Guarantee Letter). Tang Capital Management, LLC, a Delaware limited liability company (TCM), is the sole manager of Parent and the general partner of TCP. Accordingly, TCP and TCM are considered co-offerors in the Offer. As co-offerors, TCP and TCM accept joint responsibility for the accuracy of the disclosures made in this Second Supplement. Unless the context otherwise requires, capitalized terms used in this Second Supplement but not defined herein shall have the meanings ascribed to them in the Offer to Purchase.
This Second Supplement is being provided to Jounce stockholders to further clarify certain disclosures set forth in the Offer to Purchase and the First Supplement related to the CVR Payments described therein.
CVR Payments
As previously disclosed in the Offer to Purchase, the co-offerors are unable to provide any reliable estimate of the amount, if any, of Net Proceeds (as defined in the CVR Agreement), that may be payable to CVR holders following expiration of the Offer. However, the co-offerors note the following:
| Jounce performed a liquidation analysis on March 24, 2023 that assumed a range of liquidation scenarios regarding the potential cash distribution to the Companys stockholders in a liquidation based on certain assumptions regarding the Companys assets and liabilities (the Liquidation Analysis). The Liquidation Analysis was disclosed in Amendment No. 1 to Jounces Schedule 14D-9 Solicitation/Recommendation Statement filed with the Securities and Exchange Commission on April 24, 2023 (the 14D-9/A). For the purpose of disseminating to Jounce stockholders information that may be useful in making a decision to tender shares into the Offer, an excerpt of the 14D-9/A discussing the Liquidation Analysis and assumed value of the CVR is attached as Annex A. |
| on April 27, 2023, the closing price of Jounce common stock as reported on Nasdaq was $1.94 per share, which is $0.09 higher than the $1.85 per share of Cash Consideration in the Offer Price; |
| as such, the markets appear to ascribe a value of approximately $0.09 to each CVR; |
| Based on the markets valuing of Jounce common stock and CVR, economic and market conditions with respect to the life science industry overall, the factors presented by Jounce in the Liquidation Analysis, and the Co-Offerors experience in investing in and operating similarly sized and similarly situated life science companies, a range of between $0.00 and $0.18 per CVR is a reasonable estimate of value for the CVR consideration in the Offer Price. |
However, in making a decision to tender your shares in the Offer, you should understand that no assurances can be given that any amount(s) will be payable to CVR holders following the expiration of the Offer.
2
Annex A
(Excerpt from Jounces Schedule 14D-9 Solicitation/Recommendation Statement
filed with the Securities and Exchange Commission on April 24, 2023 regarding Liquidation Analysis)
Liquidation Analysis
Ms. Drapkin prepared a liquidation analysis that assumed a range of liquidation scenarios regarding the potential cash distribution to the Companys stockholders in a liquidation based on certain assumptions regarding the Companys assets and liabilities, as detailed in the table below. The liquidation analysis resulted in a range of approximately $94.4 million to $103.7 million in aggregate cash proceeds from a liquidation ($1.88 to $1.96 per share), not discounted to net present value, including approximately $85.0 million to $93.4 million ($1.60 to $1.76 per share) in near term cash proceeds from an initial distribution to stockholders and approximately $9.4 million to $10.4 million ($0.18 to $0.20 per share), not discounted to net present value, in potential cash proceeds from a potential subsequent distribution to stockholders, assuming the full 10% holdback is returned in the potential subsequent distribution and with per share amounts calculated assuming approximately 53 million fully diluted shares. Additionally, each scenario assumed the CVR offers zero value to the Companys stockholders. The timing and amount, if any, of the potential subsequent distribution in the liquidation scenarios would depend upon the actual expenses incurred, the timing of the resolution of any matters for which the Company would establish a reserve, the amount to be paid in satisfaction of such contingencies, and the Companys ability to otherwise convert its remaining assets to cash.
The liquidation analysis, prepared as of March 24, 2023, estimates liquidation proceeds at various time points, which would be dependent upon the period of time required to dispose of the Companys assets and complete the orderly wind-down of the Companys operations (in thousands except for per share figures, and with no adjustments for the time value of money):
Duration of Ongoing Public Company Obligations |
Professional Public Company Manager Alternative (Estimated) |
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6 months(1) | 12 months | 24 months | ||||||||||||||
Estimated Cash at May 31, 2023 | $ | 141,000 | $ | 141,000 | $ | 141,000 | $ | 141,000 | ||||||||
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Estimated Liabilities: |
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Lease Obligations |
$ | 11,900 | $ | 11,900 | $ | 11,900 | $ | 11,900 | ||||||||
Severance |
$ | 3,740 | $ | 3,740 | $ | 3,740 | $ | 3,740 | ||||||||
Clinical Trial Costs |
$ | 10,600 | $ | 11,000 | $ | 11,000 | $ | 11,000 | ||||||||
Transaction Expenses |
$ | 1,700 | $ | 1,700 | $ | 4,700 | $ | 1,700 | ||||||||
IP Maintenance and Asset Disposal Costs |
$ | 910 | $ | 910 | $ | 910 | $ | 910 | ||||||||
Other Committed Costs |
$ | 2,345 | $ | 2,345 | $ | 2,345 | $ | 2,345 | ||||||||
Estimated Operating Expenses through March 31, 2025 |
$ | 6,092 | $ | 9,985 | $ | 11,969 | $ | 12,750 | ||||||||
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$ | 37,287 | $ | 41,579 | $ | 46,564 | $ | 44,345 | |||||||||
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Estimated net cash for liquidation: |
$ | 103,714 | $ | 99,421 | $ | 94,436 | $ | 96,655 | ||||||||
Unknown liabilities contingency(2) |
$ | (10,371 | ) | $ | (9,942 | ) | $ | (9,444 | ) | $ | (9,666 | ) | ||||
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Estimated first distribution |
$ | 93,342 | $ | 89,479 | $ | 84,992 | $ | 86,990 | ||||||||
Estimated first distribution per share(3) |
$ | 1.76 | $ | 1.69 | $ | 1.60 | $ | 1.64 | ||||||||
Estimated potential final distribution per share(3)(4) |
$ | 0.20 | $ | 0.19 | $ | 0.18 | $ | 0.18 |
(1) | Assumes that the Companys ongoing clinical trials would be wound down as soon as practicable, including for patients benefiting from treatment. Under the remaining liquidation scenarios and the Transactions, clinical protocol compliance would be maintained so that patients benefiting from treatment may continue to receive treatment for up to 24 months. |
(2) | Assumes a 10% hold back of net cash for unknown liabilities. |
(3) | Assumes approximately 53.0 million fully diluted shares outstanding. |
(4) | Estimated potential final distribution per share figures are not discounted for net present value and assume the full amount of the 10% holdback is returned in the potential final distribution. |
A-1