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Zymeworks' Board Rejects $1 Billion 'Unsolicited Acquisition Proposal' from All Blue Falcons FZE, Says it 'Substantially Undervalues' Company
Tuesday, May 24, 2022Company Profile | Follow Company
Zymeworks' Board Of Directors Unanimously Rejects Unsolicited, Non-Binding Proposal
Vancouver, BC, May 24, 2022--(T-Net)--Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing next-generation multifunctional biotherapeutics, today announced that its Board of Directors, after consultation with its financial and legal advisors, unanimously determined that the unsolicited, non-binding proposal from an activist shareholder, All Blue Falcons FZE, and its affiliates to purchase Zymeworks for $10.50 per share (US $773 Milion, CDN $992 Million) substantially undervalues Zymeworks and is not in the best interest of the Company and its shareholders.
Following a comprehensive review of the unsolicited, opportunistic, non-binding proposal, including independent analyses completed by external financial advisors engaged by Zymeworks, the Board of Directors has determined that the proposal significantly undervalues its prospects related to the Company's long-term business strategy and potential commercial opportunities.
In addition, the company says the non-binding proposal lacks credibility by offering no information regarding potential sources of funding or any details on their ability to consummate such a transaction.
As a result, the Board of Directors of Zymeworks has determined that it would not be appropriate to enter into discussions in response to the current proposal at a price of $10.50 per share.
"This non-binding, unsolicited activist proposal was timed opportunistically during a period of substantial market dislocation, and prior to several important near-term events for the Company expected in 2022. We are confident that the execution of our key strategic priorities has the potential to deliver greater value to our shareholders than the current inadequate and non-binding proposal," said Kenneth Galbraith, Chair & CEO of Zymeworks.
While the Company is under no obligation to respond to All Blue's proposal given its non-binding and informal nature, the Board feels that it is appropriate to provide this information to the market.
Lota Zoth, Zymeworks' Lead Independent Director, commented, "We welcome constructive engagement with, and input from, all of our shareholders. The Board remains fully committed to doing whatever is in the best interests of the Company and all shareholders."
Reflecting on Zymeworks' current strategic priorities, Mr. Galbraith said, "Since being appointed as Chair and CEO in January, we have moved quickly to reset and focus on key priorities, including improving our financial position, the formation of new partnerships and collaborations, accelerating enrollment of our two ongoing pivotal trials for zanidatamab, reporting data catalysts for both zanidatamab and ZW49, and showcasing new product candidates developed from our novel platforms. As discussed in our recent Q1 earnings call, we continue to make excellent progress towards our key strategic priorities for 2022 and 2023 and are confident our plan will create significant long-term value for all shareholders."
The Company's previously-announced key strategic priorities for 2022 and 2023 remain as follows:
Activist Background to the All Blue Proposal
In late January 2022, the company says All Blue sent a number of letters to the Board voicing its displeasures on various matters. Specifically, on January 24, All Blue expressed its displeasure regarding a rejected financing proposal presented by All Blue. This was followed by another letter on January 27, where All Blue expressed concern regarding the Company's public offering launched on January 26, which successfully closed on January 31, 2022, resulting in net proceeds to the Company of $107.5 million.
In a subsequent email following a meeting with members of the Board, All Blue called for Zymeworks directors to "immediately resign without delay" and threatened to initiate "a very public fight."
On April 28, 2022, the Company says it received an unsolicited, non-binding proposal from All Blue, which revealed its 5.9% stake in Zymeworks. The Board and management are disappointed that All Blue chose to publicly attack the Company while efforts to reinvigorate the Company are well underway, including completing recruitment of the HERIZON-BTC-01 study ahead of guidance, optimizing its operating expense structure to extend financial runway, and completing a comprehensive realignment of its workforce ahead of previous guidance.
Zymeworks says it looks forward to its continued engagement with its shareholders as it focuses on leading the emerging wave of novel multifunctional biologics development in oncology.
Advisors
Goldman Sachs & Co. LLC and MTS Health Partners, LP are serving as financial advisors, Blake, Cassels & Graydon LLP and Wilson Sonsini Goodrich & Rosati are acting as legal counsel, and Kingsdale Advisors is acting as strategic shareholder and communications advisor to Zymeworks.
About Zymeworks Inc.
Zymeworks is a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of next-generation multifunctional biotherapeutics. Zymeworks' suite of therapeutic platforms and its fully integrated drug development engine enable precise engineering of highly differentiated product candidates. Zymeworks' lead clinical candidate, zanidatamab, is a novel Azymetric™ HER2-targeted bispecific antibody currently being evaluated in multiple Phase 1, Phase 2, and pivotal clinical trials globally as a targeted treatment option for patients with solid tumors that express HER2. Zymeworks' second clinical candidate, ZW49, is a novel bispecific HER2-targeted antibody-drug conjugate currently in Phase 1 clinical development and combines the unique design and antibody framework of zanidatamab with Zymeworks' proprietary ZymeLink™ linker and cytotoxin. Zymeworks is also advancing a deep preclinical pipeline in oncology (including immuno-oncology agents) and other therapeutic areas. In addition, its therapeutic platforms are being leveraged through strategic partnerships with global biopharmaceutical companies.
Cautionary Note Regarding Forward-Looking Statements This press release includes "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities laws, or collectively, forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements that relate to Zymeworks' clinical development of its product candidates, related clinical trials, potential therapeutic effects of zanidatamab,Zymeworks' preclinical pipeline, and other information that is not historical information. [ MORE ] |
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