CALDERWOOD & HARKNESS LLP Attorneys at Law
200 Park Avenue, 42nd Floor New York, NY 10166
Oliver Mackenzie Partner Direct Dial: (212) 558-4731 Facsimile: (212) 558-4800 Email: omackenzie@calderwoodharkness.com
April 22, 2024
VIA ELECTRONIC FILING AND OVERNIGHT COURIER
Premerger Notification Office Bureau of Competition Federal Trade Commission 600 Pennsylvania Avenue NW Washington, DC 20580
Director of Operations Antitrust Division U.S. Department of Justice 950 Pennsylvania Avenue NW Washington, DC 20530
Re: Notification and Report Form Filed Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as Amended, and Rules Promulgated Thereunder (16 C.F.R. §§ 801–803)
Transaction: Proposed Acquisition by Penterra Pharmaceuticals Corp. of 100% of the Outstanding Capital Stock of Veridian Biosciences, Inc.
Dear Sir or Madam:
I. Introduction and Purpose of Filing
Calderwood & Harkness LLP respectfully submits this letter on behalf of its client, Penterra Pharmaceuticals Corp. ("Penterra" or the "Acquiring Person"), a corporation duly organized and existing under the laws of the State of Delaware, publicly traded on the Nasdaq Global Select Market under the ticker symbol "PPCA," with its principal executive offices located at 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540. This firm serves as outside corporate and transactional counsel to Penterra in connection with the transaction described herein.
The purpose of this letter is to transmit the Notification and Report Form (the "Notification") required to be filed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, and the rules and regulations promulgated thereunder at 16 C.F.R. Parts 801 through 803 (the "HSR Rules"). This filing is being made on behalf of Penterra as the Acquiring Person in connection with the proposed acquisition by Penterra of one hundred percent (100%) of the outstanding capital stock of Veridian Biosciences, Inc. ("Veridian" or the "Acquired Person"), a corporation organized under the laws of the State of Delaware, with its principal offices located at 550 Gateway Drive, Cambridge, Massachusetts 02142. This letter is being transmitted simultaneously to the Premerger Notification Office of the Bureau of Competition at the Federal Trade Commission and to the Director of Operations of the Antitrust Division at the U.S. Department of Justice.
In preparing and submitting the enclosed Notification, Calderwood & Harkness LLP has coordinated closely with Stonebridge HSW Antitrust Advisors LLP, which serves as antitrust counsel to Penterra. The primary contact at Stonebridge HSW is Martin Prumvane, Partner, whose office is located at 1440 New York Avenue NW, Suite 700, Washington, DC 20005. Mr. Prumvane and his team have provided antitrust analysis and guidance in connection with the Transaction and the preparation of all materials enclosed herewith.
II. Description of the Proposed Transaction
On or about June 10, 2024 — the currently anticipated date for execution of a definitive agreement — Penterra intends to enter into a Stock Purchase Agreement (the "Purchase Agreement") pursuant to which Penterra will acquire all of the issued and outstanding shares of capital stock of Veridian from Veridian's stockholders (the "Transaction"). The aggregate consideration to be paid by Penterra for the Transaction is Nine Hundred Million Dollars ($900,000,000) in cash, subject to customary purchase price adjustments for working capital, indebtedness, transaction expenses, and other items as may be set forth in the Purchase Agreement. No non-cash consideration, contingent value rights, earnout payments, or equity rollover arrangements are contemplated in connection with the Transaction at this time.
This Notification is being filed prior to the execution of the definitive Purchase Agreement, consistent with the requirements of the HSR Act that notification be filed and the applicable waiting period be observed prior to the consummation of a reportable acquisition. Penterra and Veridian have entered into an executed letter of intent, dated March 28, 2024, reflecting the material terms of the proposed Transaction, and the parties are currently engaged in the negotiation of the definitive Purchase Agreement and ancillary transaction documents. Penterra expects that the Transaction will be consummated promptly following the expiration or early termination of the applicable HSR Act waiting period and the satisfaction or waiver of all other customary closing conditions.
Veridian Biosciences, Inc. is a privately held, clinical-stage biotechnology company focused on the discovery and development of immuno-oncology therapeutics. Founded in 2016 and headquartered in Cambridge, Massachusetts, Veridian's pipeline includes three clinical-stage programs targeting novel checkpoint receptor pathways and tumor microenvironment modulation, with its lead candidate, VB-1042, currently in a Phase 2 clinical trial. Veridian does not currently have any marketed products, does not generate product revenue, and has not received marketing approval from the U.S. Food and Drug Administration or any comparable foreign regulatory authority for any product candidate. As of its most recently available financial statements, Veridian's operations are funded primarily through venture capital and institutional equity financing.
Penterra Pharmaceuticals Corp. is a publicly traded specialty pharmaceutical company with a market capitalization of approximately $14.2 billion as of the date hereof and fiscal year 2023 revenue of approximately $4.87 billion. Penterra's commercial portfolio spans three primary therapeutic areas: oncology, immunology, and rare diseases. Penterra maintains manufacturing operations in the United States and Ireland, and markets its products in more than forty countries worldwide. The proposed acquisition of Veridian is intended to complement and strengthen Penterra's immuno-oncology pipeline and to provide access to Veridian's proprietary platform technology for immune checkpoint modulation.
III. Filing Fee
Enclosed herewith is the applicable filing fee in the amount of Two Hundred Eighty Thousand Five Hundred Dollars ($280,500), calculated in accordance with the 2024 HSR Act filing fee schedule as set forth in 15 U.S.C. § 18a(b)(1)(B) and as adjusted by the Federal Trade Commission pursuant to the Merger Filing Fee Modernization Act of 2022. The filing fee has been calculated based on the aggregate total value of the Transaction of $900,000,000, which falls within the applicable filing fee tier for transactions valued at more than $500 million but less than $1 billion.
Payment of the filing fee is being made by wire transfer to the Federal Trade Commission in accordance with the instructions published by the Premerger Notification Office. Confirmation of the wire transfer is included among the enclosed materials. In the event that any additional filing fee is determined to be due as a result of any adjustment to the transaction value or any modification of the applicable fee schedule, Penterra will promptly remit any such additional amount upon notification.
IV. Enclosed Materials
The following materials are enclosed with and accompany this transmittal letter:
1. Notification and Report Form for Penterra Pharmaceuticals Corp. (as the Acquiring Person), together with all exhibits, appendices, attachments, and supporting schedules thereto, prepared in accordance with the instructions set forth in the Notification and Report Form and the HSR Rules.
2. Item 4(c) Documents: All documents responsive to Item 4(c) of the Notification and Report Form, consisting of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of Penterra (or, where applicable, any entity included within the Acquiring Person) for the purpose of evaluating or analyzing the proposed Transaction with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets. A privilege log has been prepared and is included to the extent that any otherwise responsive documents have been withheld on the basis of attorney-client privilege or work product protection, as permitted under applicable law and the HSR Rules.
3. Item 4(d) Documents: All documents responsive to Item 4(d) of the Notification and Report Form, consisting of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of Penterra (or, where applicable, any entity included within the Acquiring Person) evaluating or analyzing the proposed Transaction, including but not limited to documents relating to synergies, efficiencies, or strategic rationale, as described in the HSR Rules. A privilege log accompanies these documents to the extent that any otherwise responsive materials have been withheld on the basis of a recognized legal privilege.
4. Filing Fee in the amount of $280,500, transmitted by wire transfer to the Federal Trade Commission, with wire transfer confirmation enclosed.
5. Affidavit of Oliver Mackenzie, as authorized representative of the Acquiring Person, in support of the filing, executed in accordance with 16 C.F.R. § 803.5, attesting to the completeness and accuracy of the information contained in the Notification and the accompanying materials.
All documents submitted in response to Items 4(c) and 4(d) have been organized and labeled in accordance with the guidance provided by the Premerger Notification Office, and each document has been identified by Bates number for ease of reference. An index of all Item 4(c) and Item 4(d) documents is included as Appendix A to the Notification.
V. Acquired Person's Filing
It is the understanding of Penterra that Veridian Biosciences, Inc., through its outside counsel, Zalcourt Archer & Cole LLP, is separately and concurrently filing the Notification and Report Form on behalf of the Acquired Person in connection with the Transaction. The primary contact at Zalcourt Archer & Cole LLP for purposes of the Acquired Person's filing is:
Rebecca Whitmore, Partner Zalcourt Archer & Cole LLP One Federal Street, 30th Floor Boston, Massachusetts 02110 Telephone: (617) 912-3400 Facsimile: (617) 912-3499
Email: rwhitmore@lathamarchercole.com
Penterra's counsel and Veridian's counsel have coordinated regarding the timing of their respective filings to ensure that both the Acquiring Person's and the Acquired Person's Notifications are submitted simultaneously, thereby permitting the statutory waiting period to commence at the earliest practicable date. To the extent that the Commission or the Division requires any coordination between the parties' respective filings, the undersigned and Ms. Whitmore are available to facilitate such coordination promptly.
VI. Identification of Parties
For the convenience of the Commission and the Division, the following summary identifies the principal parties to the Transaction:
Acquiring Person / Ultimate Parent Entity:
Penterra Pharmaceuticals Corp. A Delaware corporation Employer Identification Number (EIN): 22-3847561 Nasdaq Global Select Market Ticker Symbol: PPCA Principal Executive Offices: 1100 Meridian Boulevard, Suite 400, Princeton, New Jersey 08540 Telephone: (609) 452-7100 Delaware Registered Agent: Capitol Corporate Services, Inc., 1675 South Ashbury Asset Advisors, Suite B, Dover, Delaware 19901
Penterra Pharmaceuticals Corp. is its own ultimate parent entity within the meaning of 16 C.F.R. § 801.1(a)(3). Penterra is a reporting company under the Securities Exchange Act of 1934, as amended, and files annual, quarterly, and current reports with the Securities and Exchange Commission. Penterra's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023, is publicly available and has been referenced in the preparation of the Notification.
Acquired Person / Entity Whose Voting Securities Are Being Acquired:
Veridian Biosciences, Inc. A Delaware corporation Employer Identification Number (EIN): 84-2193047 Principal Office: 550 Gateway Drive, Cambridge, Massachusetts 02142 Telephone: (617) 873-5500 Delaware Registered Agent: Tidewater Registered Agents LLC, 838 Walker Road, Suite 21-2, Dover, Delaware 19904
Veridian Biosciences, Inc. is a privately held corporation. Veridian does not have an ultimate parent entity within the meaning of the HSR Rules other than its individual and institutional stockholders, none of which individually holds fifty percent (50%) or more of the outstanding voting securities of Veridian. The principal stockholders of Veridian, based on information provided by Veridian and its counsel, are as follows:
• Crestline Ventures, LP — approximately 28.3% of outstanding voting securities
• Boreal Health Partners Fund III, LP — approximately 19.7% of outstanding voting securities
• Apex Growth Equity Fund II, LP — approximately 14.1% of outstanding voting securities
The remaining equity interests in Veridian are held by the company's founders, members of management, participants in the company's employee stock ownership plan, and other institutional and individual investors, none of whom individually holds more than ten percent (10%) of the outstanding voting securities. A complete capitalization table for Veridian, to the extent available and as provided by Veridian's counsel, has been included in the Notification.
VII. Request for Early Termination of the Waiting Period
Penterra respectfully requests early termination of the statutory waiting period applicable to the Transaction under 15 U.S.C. § 18a(b)(1) and 16 C.F.R. § 803.11. Penterra believes that early termination is warranted in this case for the following reasons:
(a) Veridian is a clinical-stage biotechnology company that does not currently have any products approved for marketing in the United States or any other jurisdiction. Veridian does not generate product revenue and has no commercial sales operations. Accordingly, the Transaction does not involve the acquisition of any marketed product or any existing revenue stream that could give rise to a horizontal competitive overlap between the parties' respective commercial product portfolios.
(b) While Penterra maintains a commercial presence in oncology, immunology, and rare diseases, its current product portfolio and clinical pipeline do not include any product candidates that directly compete with or are substitutes for Veridian's clinical-stage immuno-oncology programs. The Transaction is primarily a pipeline acquisition intended to expand Penterra's early- and mid-stage research capabilities in the immuno-oncology therapeutic area.
(c) The Transaction is not expected to result in any significant increase in market concentration in any relevant product or geographic market. A detailed antitrust risk assessment has been prepared in coordination with Stonebridge HSW Antitrust Advisors LLP, which has concluded that the Transaction does not raise competitive concerns that would warrant extended review.
(d) There are no known third-party complaints or objections to the Transaction that have been brought to the attention of Penterra or its counsel as of the date of this filing.
Penterra understands that the decision to grant early termination is within the sole discretion of the reviewing agency and that the submission of a request for early termination does not alter the statutory waiting period or any obligations of the filing parties thereunder. Notwithstanding this request, Penterra will not consummate the Transaction prior to the expiration or early termination of the applicable waiting period in full compliance with the HSR Act.
VIII. Contact Information for Communications
All communications, questions, requests for additional information, or other correspondence regarding this filing should be directed to the following individuals:
Primary Contact — Outside Transaction Counsel:
Oliver Mackenzie, Partner Calderwood & Harkness LLP 200 Park Avenue, 42nd Floor New York, New York 10166 Telephone: (212) 558-4731 Facsimile: (212) 558-4800
Email: omackenzie@calderwoodharkness.com
Antitrust Counsel to Penterra:
Martin Prumvane, Partner Stonebridge HSW Antitrust Advisors LLP 1440 New York Avenue NW, Suite 700 Washington, DC 20005 Telephone: (202) 661-8200 Facsimile: (202) 661-8299
Email: mhaldane@stonebridgehsw.com
In-House Contact — Penterra Pharmaceuticals Corp.:
Thomas F. Holbrook General Counsel & Secretary Penterra Pharmaceuticals Corp. 1100 Meridian Boulevard, Suite 400 Princeton, New Jersey 08540 Telephone: (609) 452-7155 Facsimile: (609) 452-7199
Email: tholbrook@penterapharma.com
Each of the above-named individuals is authorized to receive communications on behalf of the Acquiring Person in connection with this filing. Penterra respectfully requests that any initial communications be directed to Mr. Mackenzie or Mr. Prumvane in the first instance.
IX. Confidentiality Request
Penterra respectfully requests that all materials submitted in connection with this filing, including but not limited to the Notification and Report Form, the Item 4(c) and Item 4(d) documents, and any supplemental materials or correspondence, be treated as confidential to the fullest extent permitted under the HSR Act and applicable regulations. In particular, Penterra requests confidential treatment of all commercially sensitive information regarding Penterra's strategic plans, financial projections, valuation analyses, competitive assessments, pipeline development strategies, and business plans contained in or reflected by the Item 4(c) and Item 4(d) documents and any other materials submitted herewith.
This request is made pursuant to Section 7A(h) of the Clayton Act, 15 U.S.C. § 18a(h), which provides that any information or documentary material filed with the Commission or the Assistant Attorney General pursuant to the HSR Act shall not be made public, except as may be relevant to any administrative or judicial action or proceeding. This request is also made pursuant to 16 C.F.R. § 803.21 and any other applicable provisions of law governing the confidential treatment of information submitted to the Commission and the Division. Penterra further requests that, in the event any third party seeks access to the materials submitted herewith through a Freedom of Information Act request, judicial subpoena, or any other legal process, the Commission or the Division provide Penterra with advance notice and a reasonable opportunity to assert any applicable privileges or objections prior to any disclosure.
X. Closing
Penterra Pharmaceuticals Corp. and its counsel remain available to respond promptly and fully to any questions, comments, or requests for additional information that the Commission or the Division may have in connection with its review of the Transaction and the materials submitted herewith. Penterra is committed to cooperating fully with the reviewing agency throughout the pendency of the review process and will endeavor to provide any supplemental information, clarification, or documentation that may be required to facilitate a thorough and efficient evaluation of the Transaction.
Should the reviewing agency desire a voluntary briefing or presentation regarding the competitive landscape, the nature of the Transaction, or the parties' respective operations and product portfolios, Penterra and its counsel, including antitrust counsel at Stonebridge HSW Antitrust Advisors LLP, stand ready to arrange and participate in such a briefing at the convenience of the reviewing staff.
We appreciate the attention of the Commission and the Division to this filing and look forward to a prompt and efficient review.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Oliver Mackenzie Partner Calderwood & Harkness LLP 200 Park Avenue, 42nd Floor New York, New York 10166 Telephone: (212) 558-4731
Email: omackenzie@calderwoodharkness.com
cc: (via email and overnight courier)
Thomas F. Holbrook, General Counsel & Secretary, Penterra Pharmaceuticals Corp.
Natalie Reiner, Senior Vice President, Corporate Development, Penterra Pharmaceuticals Corp.
Martin Prumvane, Partner, Stonebridge HSW Antitrust Advisors LLP
Rebecca Whitmore, Partner, Zalcourt Archer & Cole LLP (counsel for the Acquired Person)
Enclosures:
1. Notification and Report Form (Acquiring Person — Penterra Pharmaceuticals Corp.), with all exhibits, appendices, and attachments
2. Item 4(c) Documents (with index and privilege log)
3. Item 4(d) Documents (with index and privilege log)
4. Filing Fee — $280,500 (wire transfer confirmation enclosed)
5. Affidavit of Oliver Mackenzie in Support of Filing