10. Background of the Offer; Past Contacts or Negotiations with POINT Background of the Offer
The following is a description of contacts between representatives of Lilly and POINT that resulted in the execution of the Merger Agreement and the agreements related to the Offer.
For a review of POINT’s additional activities, please refer to the Schedule 14D-9 that will be filed by POINT with the SEC and mailed to POINT stockholders.
In the ordinary course of business and to supplement its research and development activities, Lilly regularly evaluates business development opportunities, including strategic acquisitions and licensing and partnership opportunities.
From June 5, 2023 through June 8, 2023, representatives of POINT met with representatives of Lilly while attending a healthcare conference, during which representatives of Lilly indicated Lilly’s potential interest in the radiopharmaceuticals industry and Lilly’s interest in learning about POINT’s manufacturing capabilities and pipeline programs.
On June 15, 2023, POINT and Lilly entered into a confidentiality agreement, which agreement did not contain a standstill provision.
During June and July 2023, representatives of POINT and representatives of Lilly met and discussed POINT’s products and expertise in the radiopharmaceutical industry.
On August 10, 2023, Joe McCann, Chief Executive Officer of POINT, and Jacob Van Naarden, Executive Vice President of Lilly and President of Loxo@Lilly, held a meeting by videoconference, during which Mr. Van Naarden and Dr. McCann discussed Lilly’s continued interest in the radiopharmaceutical industry and POINT’s then-current capitalization.
On August 24, 2023, representatives of Lilly including Mr. Van Naarden and David Hyman, Lilly’s Chief Medical Officer, met with representatives of POINT, including Dr. McCann, Neil Fleshner, POINT’s Chief Medical Officer, Matthew Vincent, Senior Vice President, Business Development and Chris Horvath, Executive Vice President, Commercial, at POINT’s manufacturing facility in Indianapolis. At the end of the visit, Mr. Van Naarden and Dr. McCann met separately, during which Mr. Van Naarden delivered to Dr. McCann a non-binding written indication of interest to acquire all of the outstanding Shares of POINT for $12.00 per Share in cash (the “August 24 Proposal”, representing a 47% premium to POINT’s closing price on August 23, 2023. The August 24 Proposal expressly stated that Lilly did not require third-party financing and requested entry into an exclusivity period until September 29, 2023 for a targeted signing of a definitive agreement by the end of September.
On August 28, 2023, at the instruction of the POINT Board, Dr. McCann informed Mr. Van Naarden by videoconference that the August 24 Proposal did not represent sufficient value to pursue a transaction, but that POINT would permit Lilly to conduct further due diligence in order to improve its offer. Dr. McCann also informed Mr. Van Naarden that POINT would be open to pursuing Lilly’s targeted timeline of signing a definitive agreement by the end of September if a more attractive proposal were presented.
On September 1, 2023, POINT granted representatives of Lilly and its outside advisors access to a virtual data room containing due diligence materials. In addition to their review of the virtual data room, from September 1, 2023 through October 2, 2023, Lilly and its outside advisors participated in calls and meetings with POINT’s senior management and its representatives and outside advisors as part of Lilly’s due diligence investigation. Lilly’s confirmatory due diligence investigation continued through October 2, 2023.
On September 9, 2023, representatives of Kirkland & Ellis LLP, outside counsel to Lilly (“Kirkland & Ellis” provided the first draft of the Merger Agreement to Skadden, Arps, Slate, Meagher & Flom LLP, outside counsel to POINT (“Skadden”, which included customary “fiduciary out” provisions that provided POINT the ability to terminate the Merger Agreement and accept and enter into a definitive Merger Agreement with respect to an unsolicited Superior Company Proposal (as defined in the Merger Agreement) provided that POINT pays a termination fee.
During the period from September 9, 2023 through October 2, 2023, representatives of Skadden and Kirkland & Ellis discussed and exchanged drafts of the Merger Agreement and the corresponding disclosure schedules, including a proposal by POINT which set a termination fee of 3.25% of the total equity value for POINT implied by the transaction and a counterproposal by Lilly which set a termination fee of 4.50%.
On September 12, 2023, David Ricks, Lilly’s Chief Executive Officer; Mr. Van Naarden, Anat Ashkenazi, Lilly’s Chief Financial Officer; Adrienne Brown, Head of Corporate Business Development; Hallee Foster, Loxo@Lilly’s Associate Vice President of Business Development; and Edgardo Hernandez, Executive Vice President, Manufacturing and Operations, visited POINT’s manufacturing site in Indianapolis and held an in person meeting to discuss POINT’s clinical programs, broad platform capabilities, pipeline of future products and licensing partnerships. On September 12, 2023 and September 13, 2023, other representatives of Lilly also visited POINT’s manufacturing site in Indianapolis and toured POINT’s manufacturing facilities with representatives of POINT.
On September 15, 2023, representatives of Skadden, Kirkland & Ellis and Balch & Bingham LLP, POINT’s outside legal advisor specializing in nuclear law, had a meeting by teleconference to discuss the process for obtaining consent from the Nuclear Regulatory Commission to transfer POINT’s materials license.
On September 19, 2023, Mr. Van Naarden, Barry Taylor, Loxo@Lilly’s Chief Scientific Officer, and Ms. Foster, along with other representatives of Lilly, visited POINT’s site in Toronto, Canada, during which representatives of Lilly and POINT toured the POINT Institute for Radioligand Innovation and discussed POINT’s clinical programs, broad platform capabilities, pipeline of future products and licensing partnerships, with a representative of Centerview in attendance. Also at that meeting, Mr. Van Naarden delivered to Dr. McCann an updated verbal non-binding indication of interest to acquire all of the outstanding Shares of POINT for $12.50 per Share in cash.
Also on September 19, 2023, representatives of Skadden provided an initial draft of the disclosure schedules to representatives of Kirkland & Ellis.
Between September 20, 2023 and September 26, 2023, representatives of POINT, Lilly, Skadden, Kirkland & Ellis and Fox Rothschild LLP, POINT’s external IP counsel (“Fox Rothschild”, discussed due diligence matters related to POINT’s intellectual property.
On September 24, 2023, Dr. McCann and Mr. Van Naarden had a telephone conversation to discuss outstanding diligence items.
On September 26, 2023, Mr. Van Naarden and Dr. McCann had a dinner together in Indianapolis to review the status of diligence discussions and discuss any remaining open items.
On September 27, 2023, Mr. Van Naarden contacted Dr. McCann and confirmed the resolution of certain outstanding due diligence items and Lilly’s interest in moving quickly towards signing within the next week.
On September 28, 2023, representatives of Lilly, including Daniel Skovronsky, Lilly’s Executive Vice President and Chief Scientific and Medical Officer, and Travis Coy, Lilly’s Vice President and Head of Transactions and M&A, and representatives of POINT, including Dr. McCann, Dr. Fleshner and Justyna Kelly, POINT’s Chief Operating Officer, had a meeting at POINT’s manufacturing site in Indianapolis to discuss POINT’s broad platform capabilities and pipeline of future products.
Also on September 28, 2023, Lilly’s board of directors held a meeting during which it reviewed and approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger.
On September 29, 2023, Mr. Van Naarden called Dr. McCann to reiterate Lilly’s interest in consummating the transaction at $12.50 per Share in cash, as Mr. Van Naarden had previously verbally indicated to Dr. McCann on September 19, 2023.
Later on September 29, 2023, Dr. McCann, at the POINT Board’s instruction, contacted Mr. Van Naarden and conveyed the POINT Board’s counterproposal of $13.00 per Share. Later that evening, Mr. Van Naarden and Dr. McCann had a telephone conversation. During the conversation, Mr. Van Naarden shared that Lilly’s senior management had initially determined to offer $12.00 per Share as of September 28, 2023 and the morning of September 29, 2023, which Lilly could convey to POINT in a counterproposal. However, Mr. Van Naarden shared that Lilly’s senior management subsequently determined to offer a price of $12.50 per Share (the “September 29 Proposal”, and that Lilly would not likely be able to increase the price beyond $12.50 per Share. Dr. McCann responded that he did not have authorization to negotiate below $13.00 and would have to take the September 29 Proposal back to the POINT Board.
Also on September 29, 2023, representatives of Kirkland & Ellis sent representatives of Skadden a proposed form of the Tender and Support Agreement that Lilly requested to be executed by certain stockholders of the Company, with a collective beneficial ownership of approximately 15% of the outstanding Shares. From September 29, 2023 to September 30, 2023, representatives of Kirkland & Ellis and representatives of Skadden exchanged drafts of the form of Tender and Support Agreement.
On October 1, 2023, Mr. Van Naarden and Dr. McCann had a telephone call, during which Dr. McCann communicated to Mr. Van Naarden that the POINT Board authorized Dr. McCann to accept Lilly’s offer of $12.50 per Share. Mr. Van Naarden indicated Lilly’s desire to announce the execution of the Merger Agreement on either October 3, 2023 or October 5, 2023.
Also on October 1, 2023, Kirkland & Ellis sent Skadden a draft of the merger agreement, which included a 3.95% termination fee.
Also on October 2, 2023, POINT, Lilly and Purchaser executed the Merger Agreement, and Lilly, Purchaser and certain stockholders of POINT executed the Tender and Support Agreements.
Before the opening of trading on October 3, 2023, POINT, Lilly and Purchaser issued a joint press release announcing the execution of the Merger Agreement and the forthcoming commencement of a tender offer to acquire all the outstanding Shares for the Offer Price, and POINT filed a Current Report on Form 8-K.
On October 13, 2023, Purchaser commenced the Offer, and Lilly filed this Offer to Purchase.
, representing a 47% premium to POINT’s closing price on August 23, 2023. The August 24 Proposal expressly stated that Lilly did not require third-party financing and requested entry into an exclusivity period until September 29, 2023 for a targeted signing of a definitive agreement by the end of September.
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