SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Amendment No. 5)
Under Section 14(d)(4) of the Securities Exchange Act of 1934
Alder BioPharmaceuticals, Inc.
(Name of Subject Company)
(Name of Persons Filing Statement)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
(CUSIP Numberof Class of Securities)
James B. Bucher
Executive Vice President and General Counsel
11804 North Creek Parkway South
Bothell, Washington 98011
(Name, address, and telephone numbers of person authorized to receive notices and communications
on behalf of the persons filing statement)
Skadden, Arps, Slate, Meagher & Flom LLP
500 Boylston Street, 23rd Floor
Boston, Massachusetts 02116
Check the box if the filing relates solely to preliminary communications made before the commencement of atender offer.
This Amendment No. 5 (this Amendment) amends and supplements theSolicitation/Recommendation Statement on Schedule 14D-9 (as amended or supplemented from time to time, this Schedule 14D-9) filed by AlderBioPharmaceuticals, Inc. (Alder) with the Securities and Exchange Commission (the SEC) on September 23, 2019, relating to the tender offer by Violet Acquisition Corp., a Delaware corporation(Purchaser) and wholly owned subsidiary of Lundbeck LLC, a Delaware limited liability company (Payor) and a wholly owned subsidiary of H. Lundbeck A/S, a Danish aktieselskab (Lundbeck),to purchase all of the issued and outstanding shares of common stock, par value $0.0001 per share (the Shares), other than Excluded Shares (as defined in the Agreement and Plan of Merger, dated September 16, 2019, amongAlder, Lundbeck, Purchaser and Payor), of Alder for a purchase price of (i) $18.00 per Share, net to the seller in cash, without interest, plus (ii) one (1) contingent value right per Share, which represents the right to receive $2.00 perShare, net to the seller in cash, without interest, at the time provided in the Contingent Value Rights Agreement, and subject to any withholding of taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, filed byLundbeck, Payor and Purchaser with the SEC on September 23, 2019 (as amended or supplemented from time to time), and in the related Letter of Transmittal (as amended or supplemented from time to time).
Except to the extent specifically provided in this Amendment, the information set forth in this Schedule 14D-9remains unchanged. Capitalized terms used, but not otherwise defined, in this Amendment shall have the meanings ascribed to them in this Schedule 14D-9. This Amendment is being filed to reflect certainupdates as reflected below.
Thissupplemental information should be read in conjunction with this Schedule 14D-9 in its entirety. Alder believes that no supplemental disclosure is required under applicable laws and that this Schedule
|ITEM 4.|| |
THE SOLICITATION OR RECOMMENDATION
Item 4 of this Schedule 14D-9 is hereby amended and supplemented as follows:
The following paragraph replaces the third paragraph under the heading entitled Item 4. The Solicitation or RecommendationBackground ofthe Offer and the Merger on page 13 of this Schedule 14D-9:
Alder entered into
The following paragraph replaces the paragraph at the end of page 13 and thebeginning of page 14 of this Schedule 14D-9 under the heading entitled Item 4. The Solicitation or RecommendationBackground of the Offer and the Merger:
At a meeting held on March 27, 2019, the Alder Board, together with Alders management, reviewed these term sheets, taking intoconsideration various factors that could impact the potential partnership, including such counterpartys resources and reputation, the economic terms and the likelihood of a successful commercial launch of Eptinezumab. The Alder Boardconsidered various strategic alternatives, including multiple potential partnership arrangements. The Lundbeck term sheet was viewed by Alder as financially superior to the other four (4) and more comprehensive in terms of Lundbecksability to commercialize Eptinezumab globally, as other counterparties either did not have Lundbecks global reach or did not express an interest in global commercialization of Eptinezumab. Following discussions, the Alder Board directedmanagement to pursue the Ex-U.S. Partnership with Lundbeck.
The following bolded and italicized disclosure is added to the existing disclosure on page 27 of thisSchedule 14D-9 under the heading entitled Item 4. The Solicitation or RecommendationCertain Financial ProjectionsCase A, Case B, Case C:
Less: Change in
Less: Capital Expenditures
Unlevered Free Cash Flow ($ in millions)
The following disclosure is added immediately below the second paragraph on page 32 of this Schedule
Acorda Therapeutics, Inc.
Aimmune Therapeutics, Inc.
Ascendis Pharma A/S
Biohaven Pharmaceutical Holding Company Ltd.
Blueprint Medicines Corporation
Esperion Therapeutics, Inc.
Global Blood Therapeutics, Inc.
Intercept Pharmaceuticals, Inc.
Intra-Cellular Therapies, Inc.
Revance Therapeutics, Inc.
The Medicines Company
UroGen Pharma Ltd.
Selected companies with Enterprise Value/2021 Revenue multiples of greater than 30x were excluded from thesecalculations as outliers as indicated by NM.
The following disclosure is added immediately below the third paragraph on page 33 of this Schedule
|Implied 2021E||Implied 2022E|
Anacor Pharmaceuticals, Inc.
ZS Pharma, Inc.
|KYTHERA Biopharmaceuticals, Inc.||Allergan plc||7.3x||5.2x|
Auspex Pharmaceuticals, Inc.
|Teva Pharmaceutical Industries Ltd.||17.4x||11.0x|
Furiex Pharmaceuticals Inc.
|Forest Laboratories Inc.||6.9x||4.5x|
Clinical Data Inc.
|Forest Laboratories Inc.||2.8x||1.9x|
The following paragraphs replace the first and second full paragraphs on page 34 of this Schedule
Centerview derived the forecasted fully-taxed unlevered free cash flows of Alder, calculated based on EBIT during the period beginning onOctober 31, 2019, and ending on December 31, 2037 (which estimated EBIT are included in the Management Case Forecasts), and a cash tax rate of 21% after full utilization of federal net operating losses and credits (as set forth in theManagement Case Forecasts), and an implied terminal value of Alder, assuming that Alders unlevered free cash flows would decline in perpetuity after December 31, 2037, at a rate of free cash flow decline year-over-year of 80% (whichperpetuity decline rate was based on considerations that Centerview deemed relevant in its professional judgment and experience).
The unlevered free cash flows were then discounted to present values using a range ofdiscount rates from 11% to 13% using a mid-year convention. This range of discount rates was based on Centerviews analysis of Alders weighted average cost of capital using the Capital Asset PricingModel and based on considerations that Centerview deemed relevant in its professional judgment and experience, taking into account certain metrics including levered and unlevered betas for comparable group companies. In performing its discountedcash flow analysis, Centerview adjusted for (i) net present value of tax savings from usage of estimated federal net operating losses and R&D tax credits, as set forth in the Management Case Forecasts, of $160 million,(ii) estimated net cash of $360 million as of October 31, 2019, and (iii) an assumed $175 million equity raise in 2020 at $10.00 per Share, as set forth in the Management Case Forecasts, and the present value of theestimated costs associated with such equity raise set forth in the Management Case Forecasts. See Certain Financial Projections. Centerview then divided the results of each of the foregoing calculations by Aldersfully-diluted Shares outstanding, taking into account the expected dilution associated with the assumed equity raise.
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
|Dated: October 11, 2019||Alder BioPharmaceuticals, Inc.|
|Name:||James B. Bucher|
Executive Vice President and