Contract analysis

I. Executive Summary The purpose of this memorandum is to assess the pre-merger notification filing requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, and to evaluate the substantive antitrust risks associated with the proposed acquisition by Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") of one hundred percent (100%) of the outstand

II. Background A. The Parties Penterra Pharmaceuticals Corp. Penterra is a specialty pharmaceutical company incorporated in the State of Delaware and publicly traded on the New York Stock Exchange under the ticker symbol "PPHR." The Company maintains its principal executive offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. Penterra is focused on the development and commercialization of therape

III. HSR Act Filing Requirements A. Overview of the Hart-Scott-Rodino Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, codified at 15 U.S.C. § 18a, establishes a federal pre-merger notification program requiring parties to certain acquisitions of voting securities, assets, or non-corporate interests to file notification forms with the FTC and the DOJ Antitrust Division and to observe a mandat

IV. Waiting Period and Timing Considerations A. Initial Waiting Period Following submission of the HSR notification forms by both parties, a mandatory waiting period commences during which the parties are prohibited from consummating the Transaction. The standard initial waiting period for a cash tender offer or merger is thirty (30) calendar days from the date on which both parties' notifications are filed. 15 U.S.C

V. Substantive Antitrust Analysis A. Relevant Product Markets The substantive antitrust analysis of a proposed merger begins with the identification of the relevant product market or markets in which the parties compete or could potentially compete. Under the FTC/DOJ Horizontal Merger Guidelines (2010, as revised 2023), a relevant product market is defined as the smallest group of products such that a hypothetical mo

1. Penterra's Product Portfolio. Penterra is a specialty pharmaceutical company with a diversified portfolio of marketed products and development-stage candidates in the oncology and immunology therapeutic areas. Penterra's commercialized oncology therapeutics include targeted therapies and immunotherapies indicated for the treatment of various solid and hematological malignancies. Its immunology products address a r

2. Caliston's Pipeline. Caliston is a clinical-stage biopharmaceutical company with no marketed products and no commercial revenue. Its entire business consists of its research and development pipeline, which is focused on novel kinase inhibitors for the treatment of solid tumors. The key assets in Caliston's pipeline are: • CLT-4019: Caliston's lead asset is a selective CDK4/6 inhibitor being developed for the treat

3. Overlap Assessment. Based on the information reviewed to date, we have identified no current product-market overlap between Penterra and Caliston. The key findings of our overlap assessment are as follows: No marketed product overlap. Penterra does not market any CDK4/6 inhibitors. Caliston has no marketed products at all. There is therefore no overlap in currently marketed products in any therapeutic category, in

VI. State Antitrust Considerations In addition to the federal HSR Act, we have considered whether any state-level antitrust filing requirements or substantive concerns may apply to the Transaction. Our assessment is as follows: No state-level pre-merger notification filing requirements are anticipated to apply to this Transaction. While certain states have enacted pre-merger notification statutes that are separate fr

VII. Merger Agreement Provisions — Antitrust Covenants Based on our antitrust analysis, we recommend that the definitive merger agreement include the following customary antitrust-related provisions: HSR Filing Obligation. The merger agreement should require both Penterra and Caliston to prepare and file their respective HSR notification forms with the FTC and the DOJ Antitrust Division within ten (10) business days

VIII. Recommendations and Next Steps Based on the analysis set forth in this memorandum, we make the following recommendations to the Special Committee:

1. HSR Filing Required. We confirm that a pre-merger notification filing under the HSR Act is required prior to consummation of the Transaction. Notification forms must be filed by Penterra (as the acquiring person) and by Caliston (as the acquired person), and potentially by certain Caliston UPE stockholders whose filings may be independently required. We recommend that the merger agreement expressly require both pa

2. Filing Timing. We recommend filing the HSR notification forms within five (5) to ten (10) business days after execution of the definitive merger agreement. To facilitate this timeline, we recommend commencing preparation of the HSR Forms — including the compilation of NAICS code data, revenue breakdowns, and Item 4(c)/4(d) document collections — in advance of signing, so that the forms can be substantially complet

3. Request Early Termination. We recommend submitting a request for early termination of the HSR waiting period contemporaneously with the filing. Although early termination is not currently being granted by the FTC, the request costs nothing to make and preserves the option in the event that the FTC resumes the practice before the filing is reviewed. In the cover letter accompanying the filing, we will highlight the

4. Filing Fee. Penterra should budget a filing fee of $250,000, based on the aggregate equity value of $925 million falling within the $500 million to $999.9 million tier of the current FTC fee schedule. If the total transaction value is determined to include the CVR component for fee calculation purposes, the applicable fee may increase to $400,000. We will confirm the applicable tier at the time of filing and advis

5. Coordinate with Whitfield Graves LLP. We recommend that Calderwood & Harkness LLP coordinate promptly with Kenneth Pratt at Whitfield Graves LLP, counsel to Caliston, regarding (a) Caliston's filing obligations under the HSR Act, (b) the identification of Caliston's ultimate parent entities and any independent filing obligations of significant Caliston stockholders, (c) the timing of Caliston's filing to ensure th

6. Monitor Regulatory Developments. We recommend that Calderwood & Harkness LLP continue to monitor FTC and DOJ enforcement trends in pharmaceutical mergers through the period between signing and closing. Specific areas of focus include (a) any changes in the FTC's early termination policy, (b) any new enforcement actions or consent orders in the oncology or CDK4/6 inhibitor space, (c) any revisions to the HSR filing

7. Overall Risk Assessment. Our overall assessment of the antitrust risk associated with this Transaction is low. We do not anticipate that the reviewing agency will issue a Second Request for additional information or bring a substantive challenge to the Transaction. The complementary, non-overlapping nature of the parties' product portfolios, the absence of any identifiable competitive overlap, the well-established

IX. Conclusion Based on our analysis, the proposed acquisition of Caliston BioSciences, Inc. by Penterra Pharmaceuticals Corp. requires a pre-merger notification filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Transaction clearly exceeds the applicable size-of-transaction threshold, and because the transaction value exceeds $445.5 million, the size-of-person test does not apply. Both Penter