Jonathan,
I am writing on behalf of our client, Penterra Pharmaceuticals Corp. ("Penterra"), in connection with the Stock Purchase Agreement, dated June 10, 2024 (the "Agreement"), among Penterra Pharmaceuticals Corp., Veridian Biosciences, Inc. ("Veridian"), the Sellers party thereto, and David Ng as Stockholder Representative. This email concerns the formal Deficiency Notice delivered by this firm on behalf of Penterra to Veridian on September 6, 2024 (the "Deficiency Notice").
Three business days have now elapsed since delivery of the Deficiency Notice, and we have not yet received a substantive response from Veridian or from Zalcourt Archer & Cole LLP. We are writing to follow up and to request your client's prompt attention to the matters set forth therein.
As you are aware, the Deficiency Notice addresses the following developments, among others: (i) the Marlowe Asset Management-2 Phase II interim data readout from the Data Monitoring Committee on August 14, 2024, which revealed a statistically significant increase in Grade ≥3 cytokine release syndrome in the VRD-4187 treatment arm (23.4%) versus the control arm (4.1%), seven treatment-related deaths in the VRD-4187 arm (3.6%) compared to one in the control arm (0.5%), and a non-statistically significant overall response rate differential (31.4% vs. 28.9%, p = 0.58); and (ii) the FDA's imposition of a partial clinical hold on VRD-4187 (IND 154832) on August 22, 2024. As set forth in the Deficiency Notice, it is Penterra's position that these developments, individually and in the aggregate, constitute a material adverse effect ("MAE") under Section 1.1 of the Agreement and give rise to the failure of the conditions to Buyer's obligation to close under Section 7.2(a) (bring-down of Sellers' representations and warranties) and Section 7.2(b) (absence of an MAE since the date of the Agreement).
We respectfully request that Veridian provide its substantive response to the Deficiency Notice at its earliest opportunity. Given the contractual framework and the parties' respective obligations under the Agreement, timely engagement on these matters is important.
Penterra remains willing to discuss the issues raised in the Deficiency Notice. Any such discussions, however, shall be without prejudice to Penterra's rights under the Agreement or otherwise.
Penterra expressly reserves all of its rights, remedies, and defenses under the Agreement, at law, and in equity, including without limitation the right to terminate the Agreement pursuant to Section 8.1(d) thereof based on the failure of Buyer's closing conditions that is not curable within thirty (30) days or prior to the Outside Date of December 10, 2024. Nothing in this email or in any discussions between the parties or their respective counsel shall constitute a waiver of any of Penterra's rights under the Agreement.
Please do not hesitate to contact me or Oliver Mackenzie if you or Rebecca would like to discuss.
Best regards,
Megan Chu Calderwood & Harkness LLP 200 Park Avenue, 42nd Floor New York, NY 10166 T: (212) 558-7240 E: mchu@calderwoodharkness.com
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