On February 26, 2019, Alder BioPharmaceuticals, Inc. ("Alder") reported that it has entered into a common stock purchase agreement (the "Purchase Agreement") with Redmile Group, LLC and certain institutional and other accredited investors affiliated with or managed by Redmile Group, LLC (collectively, "Redmile") (Press release, Alder Biopharmaceuticals, FEB 26, 2019, View Source [SID1234533902]). The Purchase Agreement provides that, subject to the closing of the Offering (as defined in Item 8.01 below) and the satisfaction of other customary closing conditions, Redmile will purchase 1,739,130 shares of Alder’s common stock, par value $0.0001 per share ("Common Stock"), at a price per share of $11.50, which is equal to the price to the public in the Offering (the "Redmile Shares"). The issuance of the Redmile Shares will be made in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Underwriters (as defined in Item 8.01 below) will serve as placement agents for the placement of the Redmile Shares and receive a placement agent fee equal to a percentage of the total purchase price of the Redmile Shares, which percentage will be equal to the percentage discount the underwriters will receive on shares sold in the Offering. In the event that the Offering has not closed within 20 business days of the date of the Purchase Agreement, either Alder or Redmile may terminate the Purchase Agreement. The net proceeds to Alder from the sale of the Redmile Shares are expected to be approximately $18.8 million, after deducting placement agent fees. The Purchase Agreement requires Alder to enter into a registration rights agreement with Redmile upon the closing of the issuance of the Redmile Shares. Under the registration rights agreement, Alder will be required to register the Redmile Shares for resale under the Securities Act no later than the day after the expiration of Alder’s 60-day lock-up period following the date of the Underwriting Agreement (as defined in Item 8.01 below). The Purchase Agreement contains customary representations, warranties and agreements by Alder and Redmile.
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The Purchase Agreement is filed as Exhibit 10.1 to this report, and the description of the terms of the Purchase Agreement is qualified in its entirety by reference to such exhibit.
Redmile is affiliated with one of Alder’s directors, Jeremy Green, and is Alder’s largest stockholder. In connection with Alder’s January 2018 issuance of convertible preferred stock to Redmile, Alder entered into a registration rights agreement with Redmile. Under the registration rights agreement, Alder filed a prospectus supplement under its effective registration statement on Form S-3 (SEC File No. 333-216199), and is required to file, if needed, one or more additional registration statements, as permissible and necessary, for the resale of the shares of Common Stock issued or issuable upon conversion of the convertible preferred stock and a warrant to purchase an aggregate of 75,000 shares of convertible preferred stock that Alder may be required to issue to Redmile.