On February 10, 2020 McKesson Corporation (NYSE:MCK) reported the commencement of an exchange offer for the split-off of its wholly-owned subsidiary, PF2 SpinCo, Inc. ("SpinCo"), which will hold all of McKesson’s interest in Change Healthcare LLC ("Change Healthcare"), as part of McKesson’s previously announced agreement with Change Healthcare Inc. (Nasdaq:CHNG) ("Change") to merge SpinCo with and into Change (Press release, McKesson, FEB 10, 2020, View Source [SID1234554103]).

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"We are very pleased to launch the split-off of our investment in Change Healthcare. We have concluded that now is the appropriate time to distribute our remaining stake in Change Healthcare," said Brian Tyler, chief executive officer, McKesson. "We expect this exchange offer will continue to deliver value to McKesson shareholders by reducing our number of outstanding shares in a tax-efficient manner. This transaction better positions McKesson to focus on our core business and signifies another important step in McKesson’s transformation to become a simpler, more focused organization."

The exchange offer represents the next step in McKesson’s planned exit from its investment in Change Healthcare, which will be effected through a "Reverse Morris Trust" transaction. In the exchange offer, McKesson stockholders will have the opportunity to exchange their shares of McKesson common stock for shares of SpinCo common stock, which will be immediately converted into an equal number of shares of Change common stock upon completion of the proposed merger, in each case subject to certain customary terms and conditions. The exchange offer and merger are generally expected to be tax-free to participating McKesson stockholders for U.S. federal income tax purposes except to the extent of any cash received in lieu of fractional shares of Change common stock.

Details of the Exchange Offer:

Holders of McKesson common stock will have the opportunity to exchange some or all of their shares for SpinCo common stock at a 7.0% discount per-share value, subject to an upper limit (as described below).
The discount means that tendering stockholders are expected to receive approximately $107.53 of SpinCo common stock for every $100 of McKesson common stock tendered and accepted in the exchange offer.
The number of shares a McKesson stockholder can receive in the exchange offer is subject to an upper limit of 11.4086 shares of SpinCo common stock for each share of McKesson common stock tendered and accepted in the exchange offer.
If the upper limit is in effect, then the exchange ratio will be fixed at that limit and tendering stockholders will receive less than $107.53 of SpinCo stock for each $100 of McKesson common stock.
McKesson will offer 175,995,192 shares of SpinCo common stock in the exchange offer. The number of shares of McKesson common stock that will be accepted in the exchange offer will depend on the final exchange ratio, the number of shares of McKesson common stock tendered and whether the upper limit is in effect.
SpinCo common stock will not be transferred to participating stockholders following the exchange offer. Such participants will instead receive shares of Change common stock in the merger immediately following the completion of the exchange offer. No trading market currently exists or will exist for shares of SpinCo common stock.
The exchange offer is scheduled to expire at 11:59 p.m., New York City time, on March 9, 2020, unless the exchange offer is extended or terminated.
Holders of McKesson common stock may withdraw their tendered shares at any time before the expiration date of the exchange offer.
Participants in the McKesson Corporation 401(k) Retirement Savings Plan (the "McKesson 401(k) Plan") will receive special directions from the plan administrator of the McKesson 401(k) Plan and to allow sufficient time for the tender of shares by the trustee of the McKesson 401(k) Plan, plan participants must provide the requisite instructions as directed by 4:00 p.m., New York City time, on March 3, 2020, unless the exchange offer is extended or terminated.
Subject to the upper limit, the final exchange ratio used to determine the number of shares of SpinCo common stock that participating stockholders will receive for each share of McKesson common stock accepted in the exchange offer will be calculated by McKesson by reference to the simple arithmetic average of the daily volume–weighted average prices, on each of the three Valuation Dates (as defined below), of McKesson common stock and Change common stock on the New York Stock Exchange and The Nasdaq Global Select Market, respectively, during a period of three consecutive trading days (the "Valuation Dates") ending on and including the second trading day preceding the expiration date of the exchange offer. Based on an expiration date of March 9, 2020, the Valuation Dates are expected to be March 3, March 4 and March 5, 2020. Unless the exchange offer is extended or terminated, the final exchange ratio will be announced in a press release no later than 11:59 p.m., New York City time, on March 5, 2020, and the exchange offer will expire at 11:59 p.m., New York City time, on March 9, 2020, leaving two trading days between the date that the final exchange ratio is announced and the expiration of the exchange offer.

The final exchange ratio, as well as a daily indicative exchange ratio beginning at the end of the third day of the exchange offer period, will also be available at www.dfking.com/McKesson.

Immediately following the completion of the exchange offer, SpinCo will merge with and into Change, whereby the separate corporate existence of SpinCo will cease and Change will continue as the surviving company. In the merger, each share of SpinCo common stock will be converted into one share of Change common stock. Change will issue 175,995,192 shares of Change common stock in the merger.

The exchange offer will be subject to proration if the exchange offer is oversubscribed, and the number of shares accepted in the exchange offer may be fewer than the number of shares tendered.

If the exchange offer is consummated but not fully subscribed, or if the upper limit is in effect and not all of the shares of SpinCo common stock owned by McKesson are distributed pursuant to the exchange offer, the remaining shares of SpinCo common stock owned by McKesson will be distributed in a spin-off on a pro rata basis to McKesson stockholders whose McKesson common stock remains outstanding after the consummation of the exchange offer.

The transaction is subject to customary closing conditions, including required regulatory approvals. Change’s board of directors previously approved the Merger and the Merger Agreement prior to the execution of the Merger Agreement on December 20, 2016. On January 17, 2017, the stockholders of Change approved the Merger, the Merger Agreement and the transactions contemplated thereby.

Upon completion of the merger, approximately 51 percent of the outstanding shares of Change common stock are expected to be held by pre-merger holders of McKesson common stock, and approximately 49 percent of the outstanding shares of Change common stock are expected to be held by pre-merger holders of Change common stock.

The terms and conditions of the exchange offer are more fully described in a registration statement on Form S-4 and Form S-1, including a prospectus forming a part thereof, filed by SpinCo with the U.S. Securities and Exchange Commission (the "SEC") today and a tender offer statement on Schedule TO filed by McKesson with the SEC today.

For more information about the exchange offer, please visit www.dfking.com/McKesson or contact the information agent, D.F. King & Co., at 1-866-304-5477 (toll-free in the United States) and 1-212-269-5550 (outside of the United States).

In connection with the transactions, Goldman Sachs & Co. LLC is acting as financial advisor and Davis Polk & Wardwell LLP is acting as legal advisor to McKesson.

On February 10, 2020 Diverse Biotech, Inc. www.diversebiotech.com has reported it has been selected to present at the upcoming BIO CEO & Investor Conference in New York on February 11th. View Source (Press release, Diverse Biotech, FEB 10, 2020, View Source [SID1234554119])

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In addition, Diverse Biotech has announced that a paper regarding cannabinoid-related gene expression was accepted by the Journal of Applied Cell Biology. The paper should be published in the next 3-4 weeks.

"We are truly excited to continue to discuss our ground-breaking technology. In addition, the gene expression paper is tremendous because it highlights that a variety of cell lines including glioblastoma, pancreatic cancer, melanoma, actinic keratosis, squamous cell carcinoma, and normal skin – all express genes that suggest they will be responsive to exogenous cannabinoid treatment," said Stella Vnook, Diverse Biotech’s Chief Executive Officer.

On February 10, 2019 Intellia Therapeutics, Inc. (NASDAQ:NTLA), a leading genome editing company focused on developing curative therapeutics using CRISPR/Cas9 technology both in vivo and ex vivo, is presenting new data from two of its development programs at Keystone Symposia’s Engineering the Genome Conference, a joint meeting with the Emerging Cellular Therapies: Cancer and Beyond Conference, taking place Feb. 8-12, 2020, in Banff, Canada (Press release, Intellia Therapeutics, FEB 10, 2020, View Source [SID1234554086]). Intellia researchers are presenting data in support of the company’s lead engineered cell therapy development candidate, NTLA-5001 for the treatment of the hematological cancer, acute myeloid leukemia (AML). Intellia also is sharing preclinical results for its hereditary angioedema (HAE) program, which is Intellia’s third CRISPR/Cas9 development program, announced in January 2020.

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"Intellia continues to demonstrate strong progress across both our engineered cell therapy and in vivo pipelines," said Intellia President and Chief Executive Officer John Leonard, M.D. "We are observing very favorable preclinical data with our engineered T cells, and we are moving ahead with IND-enabling studies and manufacturing for NTLA-5001, to enable a regulatory submission in the first half of 2021.

"On the in vivo side, the data from our HAE development program reinforce the modularity of Intellia’s non-viral delivery genome editing platform and how it is enabling independent, single-dose therapies for multiple monogenic diseases. For HAE, we expect to nominate a development candidate in the first half of this year," continued Dr. Leonard.

New Data from Intellia’s Engineered Cell Therapy Development Program for AML

NTLA-5001, which is Intellia’s first engineered T cell therapy development candidate and is wholly owned, utilizes a T cell receptor (TCR)-directed approach to target the Wilms’ Tumor 1 (WT1) intracellular antigen for the treatment of AML. The company’s WT1-TCR T cell approach aims to develop a broadly applicable treatment for AML patients, regardless of mutational background of a patient’s leukemia.

The company is presenting data demonstrating that the selection of a natural, high-affinity TCR, in combination with CRISPR-enabled engineering and targeted insertion, results in an engineered T cell capable of specific and potent killing of primary AML blasts. Today’s presentation at Keystone builds on data previously presented last fall at the Annual Congress of the European Society of Gene and Cell Therapy (ESGCT).

The data being presented at the Keystone conference substantiate the advantages that a homogeneous T cell product developed through CRISPR engineering, like NTLA-5001, may have over traditional T cell engineering approaches. In particular, traditional T cell engineering methods typically result in a T cell product that carries two different TCRs, one endogenous and one transferred, which can pair in various combinations of alpha and beta chains and form mixed TCRs with unknown specificities. Intellia researchers are sharing today that the precise replacement of the endogenous TCR with the transgenic TCR (tgTCR) resulted in T cells with improved tgTCR expression levels and in 95% of edited T cells carrying exclusively the desired pairs of the tgTCR alpha and beta chains. This therapeutic TCR profile is expected to yield improved T cell product homogeneity, as researchers showed that Intellia’s T cell editing approach results in superior function of the engineered T cells toward WT1-positive targets in vitro. This therapeutic TCR profile is also expected to result in lower reactivity against unwanted targets on normal tissues that could lead to toxicities, including graft-versus-host disease (GvHD).

Researchers identified that the selected lead WT1 TCR exhibits high avidity (in the nM range) to its target epitope and shows tight epitope specificity. Being a natural TCR isolated from a healthy donor, it may have a lower cross-reactivity risk than many affinity-matured TCRs. Cells engineered with Intellia’s lead WT1 TCR also demonstrated no detectable cytotoxicity toward bone marrow CD34+ cells, which express WT1 at low levels. This is an advantage over current CAR-T cell approaches targeting CD33 or CD123 in AML, which have been shown to induce severe bone marrow toxicity.

Furthermore, the data demonstrate that specific and potent killing of WT1-positive primary AML blasts result from T cells expressing Intellia’s lead WT1 TCR when cocultured in vitro. This outcome was observed across multiple patient samples that harbor the frequent HLA-A*02:01 allele and that express different WT1 levels as well as AML characteristics. These data validate that the epitope targeted by the lead WT1 TCR, which is distinct from a previously evaluated RMF epitope, is presented efficiently and broadly by AML tumor cells that carry the correct human leukocyte antigen (HLA) restriction. Intellia’s lead WT1 TCR also has the potential to target WT1-positive solid tumors, such as ovarian cancer, glioblastoma, lung cancer and mesothelioma.

The company plans to submit an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) in the first half of 2021 for NTLA-5001 for the treatment of AML. Details on today’s presentations on WT1 TCR T cells, including data from ongoing collaborations with researchers at IRCCS Ospedale San Raffaele, Milan, at Keystone are as follows:

"Developing Next-Generation Engineered TCR-T Cells with CRISPR"
Presenter: Birgit Schultes, Ph.D., vice president, cell therapy, Intellia
Session: "Genome Editing as a Biology Discovery Tool"
Presentation date/time: Mon., Feb. 10, 2020, 8-11:15 a.m. MT
Location: Van Horne C

"Multiple Genome Editing of Early Differentiated T Cells for Cancer Immunotherapy"
Presenter: Chiara Bonini, M.D., Ph.D., deputy director of the Division of Immunology, Transplantation and Infectious Diseases at IRCCS Ospedale San Raffaele
Session: "Next Generation Immune Cell Engineering"
Presentation date/time: Mon., Feb. 10, 2020, 8-11:15 a.m. MT
Location: Van Horne A/B
First Data Presented on Potential CRISPR/Cas9-Based Therapy for HAE, Intellia’s Third Development Program

Researchers presented yesterday at the Keystone conference the company’s first dataset in support of Intellia’s development program for HAE. HAE is a rare genetic disorder characterized by recurring and unpredictable severe swelling attacks in various parts of the body, and is significantly debilitating or even fatal in certain cases. The disease is caused by increased levels of the bradykinin protein. Most patients with HAE have a C1 esterase inhibitor (C1-INH) protein deficiency, which normally prevents the unregulated release and buildup of bradykinin.

Intellia’s HAE treatment hypothesis involves knocking out the kallikrein B1 (KLKB1) gene to reduce kallikrein activity, which is involved in the biological pathway for release of bradykinin. Intellia expects this reduction to correlate with a decrease in bradykinin activity, thus, preventing the activation of endothelial cells that causes vascular leakage and angioedema in HAE patients. The data presented at the Keystone conference showed that the knockout of KLKB1 produces in non-human primates (NHPs) a 90% reduction in kallikrein activity, a level that translates to a therapeutically meaningful impact on HAE attack rates (Source: Banerji et al., NEJM, 2017). This kallikrein activity reduction was sustained for at least five months in an ongoing NHP study, in a highly reproducible manner observed across both rodent and NHP studies.

Similar to its lead in vivo program, for the treatment of transthyretin amyloidosis (ATTR), Intellia’s potential HAE therapy utilizes the company’s modular non-viral lipid nanoparticle (LNP) system to deliver CRISPR/Cas9. Intellia’s proprietary LNP-based delivery system includes two basic components: Cas9 messenger RNA (mRNA) and a guide RNA (gRNA). The gRNA is the only variable portion of the LNP delivery system and is the sole component that needs to be changed from the LNP-based delivery system that forms the foundation of NTLA-2001, Intellia’s development candidate for the treatment of ATTR for which the company intends to submit an IND application in mid-2020.

Intellia continues to evaluate several potential guide RNAs and expects to nominate a development candidate for HAE in the first half of 2020. Intellia’s KLKB1 HAE program is subject to an option by Regeneron to enter into a Co/Co agreement, in which Intellia would remain the lead party.

Yesterday’s short talk, titled "In Vivo Delivery of CRISPR/Cas9 to the Liver Using Lipid Nanoparticles Enables Gene Knockout Across Multiple Targets in Rodent and Non-Human Primates," was made by Jessica Seitzer, director, genomics, Intellia. These data included results from ongoing collaborations with researchers at Regeneron.

On February 10, 2020 Elorac, Inc., a biopharmaceutical company focused on developing best-in-class, innovative, proprietary drugs, reported that Scott Phillips, M.D., Sr. V.P. Scientific Affairs will present an update of its ongoing Phase III SPIRIT-2 trial evaluating the safety and efficacy of naloxone lotion for relief of pruritus (itching) associated with Cutaneous T-Cell Lymphoma ("CTCL") on February 12 at the 4th World Congress of Cutaneous Lymphomas in Barcelona (Press release, Elorac, FEB 10, 2020, View Source [SID1234554104]).

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SPIRIT-2 is a multi-center, randomized, double-blind, crossover study comparing naloxone lotion 0.5% to its vehicle. CTCL patients with moderate-to-severe pruritus for at least 1-month duration receive either naloxone 0.5% or vehicle daily for a 14-day treatment period (Treatment Period 1), and then following a wash-out period, the alternative study medication for a second 14-day treatment period (Treatment Period 2). The study is currently being conducted at 20 sites in the United States and is being expanded to include sites in Europe, Canada, Australia and Asia.

Elorac received Orphan Drug Designation for naloxone lotion from both FDA and the European Medicines Agency (EMA). Elorac also has Fast Track designation from FDA for this novel investigational new drug. Fast Track designation provides for earlier and more frequent interaction with FDA during a drug’s development, eligibility for receiving priority review and accelerated approval from FDA. Elorac holds worldwide marketing rights to naloxone lotion.

About Naloxone

Naloxone is an opiate antagonist with no agonist activity. Intravenous and subcutaneous formulations of naloxone are used to treat opiate overdoses, and naloxone is used orally in combination with buprenorphine to treat opiate dependence.

About Cutaneous T-Cell Lymphoma (CTCL)

CTCL affects approximately 30,000 patients in the United States, with an estimated 3,000 new cases diagnosed each year. During the course of this disease most patients will experience chronic intractable pruritus unresponsive to standard antipruritic agents (e.g., antihistamines and topical corticosteroids). In addition to a very detrimental impact on quality of life, chronic intractable pruritus has been associated with a doubling of the mortality rate for individuals with CTCL. There are currently no approved therapeutic treatment options for pruritus associated with CTCL.

On February 10, 2020 Sirtex Medical US Holdings, Inc. ("Sirtex"), a leading manufacturer of targeted liver cancer therapies, reported that the shareholders of OncoSec Medical, Inc. ("OncoSec") have approved, and the parties have closed, the strategic investment by and partnership with Sirtex and Grand Decade Developments Limited, a wholly owned subsidiary of China Grand Pharmaceutical and Healthcare Holdings Limited ("CGP") (Press release, Sirtex Medical, FEB 10, 2020, View Source [SID1234554120]). The signing of the strategic transaction was previously announced on October 10, 2019.

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As a result of the transaction, Sirtex acquired approximately 8.8% of the outstanding shares of common stock of OncoSec and will also support and assist OncoSec with pre-marketing activities for its TAVO and Visceral Lesion Applicator (VLA) products in exchange for low single-digit royalties. In addition, CGP acquired approximately 44% of the outstanding shares of common stock of OncoSec and entered into an exclusive license to OncoSec’s products in Greater China and other Asian countries in exchange for a royalty. More details of the transaction documents can be found in OncoSec’s filings with the U.S. Securities and Exchange Commission.

"Sirtex is excited to close this transaction with OncoSec and to assist in efforts to bring its innovative products to fight cancer to the market," said Kevin Smith, Chief Executive Officer of Sirtex. "OncoSec, CGP and Sirtex are committed to improving treatment outcomes for patients and this transaction demonstrates that shared commitment."