On August 11, 2021, ImmunoGen, Inc. (the "Company") reported that entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with RA Capital Healthcare Fund, L.P. (the "Investor"), pursuant to which the Company agreed to sell to the Investor a pre-funded warrant (the "Pre-Funded Warrant") to purchase up to an aggregate of 5,434,782 shares of the Company’s common stock, par value $0.01 per share ("Common Stock"), for aggregate consideration of $29,945,648.82, or $5.51 per share of Common Stock underlying the Pre-Funded Warrant, which, together with the per share exercise price, is equal to $5.52, the closing price of our Common Stock as reported on the Nasdaq Global Select Market on August 4, 2021, the date the Company and the Investor first discussed a potential investment (Filing, 8-K, ImmunoGen, AUG 11, 2021, View Source [SID1234586420]).
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The issuance and sale of the Pre-Funded Warrant under the Securities Purchase Agreement (and the shares of Common Stock issuable upon exercise of the Pre-Funded Warrant) are registered pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-251502).
The Securities Purchase Agreement contains certain representations, warranties, and covenants for the benefit of the parties to the Securities Purchase Agreement and should not be relied upon by any of our investors who are not parties to Securities Purchase Agreement, nor should any such investor rely upon any descriptions thereof as characterizations of the actual state of facts or condition. Such investors are not third-party beneficiaries under the Securities Purchase Agreement.
Pre-Funded Warrant
Pursuant to the Securities Purchase Agreement, the Company will issue the Pre-Funded Warrant to the Investor. The Pre-Funded Warrant entitles the Investor to purchase shares of Common Stock at an exercise price equal to $0.01 per share. The Pre-Funded Warrant will be exercisable at any time beginning on the date of issuance. The number of shares of the Company’s Common Stock issuable upon exercise of the Pre-Funded Warrant is subject to adjustment upon certain corporate events, including certain stock dividends and splits, combinations, reclassifications, and certain other events.
The Investor may exercise the Pre-Funded Warrant by delivering an exercise notice, completed and duly signed, and payment in cash of the exercise price for the number of shares of the Company’s Common Stock for which the Pre-Funded Warrant is being exercised. The Investor may also satisfy its obligation to pay the exercise price through a "cashless exercise," in which the Investor receives the net value of the Pre-Funded Warrant in shares of Common Stock determined according to the formula set forth in the Pre-Funded Warrant.
The Investor will not be entitled to exercise any portion of the Pre-Funded Warrant that, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the Investor (together with its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Investor for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended) to exceed 9.99% of the total number of then issued and outstanding shares of Common Stock, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrant. This threshold is subject to the Investor’s rights under the Pre-Funded Warrant to increase or decrease such percentage to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the Investor to the Company.