Novelion Therapeutics Inc. (NASDAQ:NVLN) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01. Completion of Acquisition or Disposition of
Assets.
On November29, 2016, to the terms of the Agreement and Plan of
Merger, dated as of June14, 2016 (as amended, the Merger
Agreement), by and among QLT Inc. (QLT), Aegerion
Pharmaceuticals,Inc. (Aegerion) and Isotope Acquisition
Corp. (Merger Sub), Merger Sub merged with and into
Aegerion, with Aegerion continuing as the surviving corporation
and an indirect wholly-owned subsidiary of QLT (the
Merger). Following the Merger, QLT changed its name to
Novelion Therapeutics Inc. (Novelion).
The common shares without par value (Common Shares) of
Novelion commenced trading under the symbol NVLN on the NASDAQ
Global Select Market (NASDAQ) on November30, 2016 and on
the Toronto Stock Exchange on December1, 2016. The common stock
of Aegerion (the Aegerion Common Stock), which previously
traded under the symbol AEGR, has been delisted from NASDAQ.
As a result of the Merger, each outstanding share of Aegerion
Common Stock was converted into the right to receive 1.0256
Common Shares. The aggregate consideration delivered to the
former holders of Aegerion Common Stock in connection with the
Merger was approximately 30,301,442 Common Shares. Based on the
Common Shares outstanding and reserved for issuance as of
November29, 2016 and the Common Shares delivered as merger
consideration, there were approximately 92,653,562 Common Shares
outstanding immediately following the Merger, with an additional
27,078,332 shares reserved for issuance under equity plans, a
fully paid-up warrant issued to one of the Investors (as defined
below) under the Unit Subscription Agreement (as defined below)
and in relation to Aegerions 2.00% Convertible Senior Notes due
2019. Shareholders of QLT as of immediately prior to the Merger,
including the Investors under the Unit Subscription Agreement,
owned 68% of the outstanding Common Shares upon completion of the
Merger and stockholders of Aegerion as of immediately prior to
the Merger owned 32% of the outstanding Common Shares upon
completion of the Merger.
In connection with the Merger, outstanding in-the-money options
to acquire shares of Aegerion Common Stock held by Aegerion
option holders were exchanged for adjusted options to acquire
Common Shares and unvested restricted stock units with respect to
Aegerion Common Stock held by Aegerion restricted stock unit
holders were exchanged for restricted stock units in respect of
Common Shares.
As previously disclosed, Novelion also entered into that certain
Unit Subscription Agreement, dated June14, 2016, by and among QLT
and certain investors (the Investors) party thereto (as
amended, the Unit Subscription Agreement), to which the
Investors agreed to one or more equity commitments. Immediately
prior to the Merger, QLT issued 12,363,631 units to the Investors
to the Unit Subscription Agreement, each unit comprising one
Common Share (or a fully paid-up warrant to acquire one Common
Share), one DOJ/SEC Warrant and one ClassAction Warrant, each as
described below, at a purchase price per unit of US$1.76 and an
aggregate subscription price of US$21,760,000. The DOJ/SEC
Warrant is a warrant relating to the preliminary agreements in
principle of Aegerion with the Department of Justice (the
DOJ) and the Securities and Exchange Commission (the
SEC) and the ClassAction Warrant relates to the
ClassAction Litigation (as defined below) against Aegerion, each
as previously disclosed. The issuance of the units was completed
in reliance upon the exemption from the registration requirements
of the Securities Act of 1933, as amended, afforded by
Section4(a)(2), as a transaction by an issuer not involving a
public offering.
The foregoing description of the Merger Agreement, the Merger and
the Unit Subscription Agreement does not purport to be complete
and is qualified in its entirety by reference to the Merger
Agreement and the Unit Subscription Agreement, which are filed,
respectively, as Exhibits 2.1 and 10.1 to this Current Report on
Form8-K and are incorporated by reference into this Item 2.01.
Item 3.02. Unregistered Sales of Equity
Securities.
The information set forth in Item 2.01 of this Current Report on
Form8-K is incorporated by reference into this Item3.02.
Item 5.02. Departure of Directors or
Certain Officers; Appointment of Certain Officers;
Compensatory Arrangements of Certain
Officers.
Board of Directors
On November29, 2016, effective upon the consummation of the
Merger, Dr.John Kozarich and Mr.Jeffrey Meckler resigned from
their positions as directors of QLT. Their resignations were in
connection with the Merger and not the result of any
disagreement with QLT on any matter relating to QLTs
operations, policies or practices. Mr.Jason Aryeh, Dr.Geoffrey
Cox, Dr.Stephen Sabba and Mr.John Thomas continue to serve as
directors of Novelion.
Also effective on November29, 2016, Dr.Jorge Plutzky,
Mr.Sandford Smith, Mr.Donald Stern, Ms.Mary Szela and Ms.Anne
VanLent, each of whom served on the board of directors of
Aegerion prior to the Merger, and Mr.Kevin Kotler were
appointed to the board of directors of Novelion (the
Board).
Except for the provisions of the Merger Agreement to which QLT,
Aegerion and certain significant shareholders have rights to
designate members of the Board, there is no arrangement or
understanding between Mr.Kotler, Dr.Plutzky, Mr.Smith,
Mr.Stern, Ms.Szela or Ms.VanLent, respectively, and any other
person to which any of Mr.Kotler, Dr.Plutzky, Mr.Smith,
Mr.Stern, Ms.Szela or Ms.VanLent was appointed as a director.
Except as described herein, there are no existing or currently
proposed transactions to which Novelion or any of its
subsidiaries is a party in which any of Mr.Kotler, Dr.Plutzky,
Mr.Smith, Mr.Stern, Ms.Szela or Ms.VanLent has a direct or
indirect material interest. Mr.Kotler, Dr.Plutzky, Mr.Smith,
Mr.Stern and Ms.VanLent will be compensated for Board and
committee service in accordance with Novelions non-employee
director cash and equity-based compensation program. Ms.Szela
will not receive additional compensation for her service as a
director.
The Board appointed the following directors to serve on the
following committees of the Board:
Committee
Directors
Audit Committee
John Thomas (Chair), Anne VanLent and Stephen Sabba
Compensation Committee
Stephen Sabba (Chair), Kevin Kotler and Jorge Plutzky
Corporate Governance and Nominating Committee
Kevin Kotler (Chair), Jason Aryeh and John Thomas
Compliance Committee*
Donald Stern (Chair), Anne VanLent and Sandford Smith
*formed by the Board on December1, 2016
Executive Officers
On November29, 2016, Ms.Szela was appointed Chief Executive
Officer of Novelion. In this role, Ms.Szela will serve as
Novelions Principal Executive Officer. Biographical and other
information regarding Ms.Szela can be found in the definitive
joint proxy statement/prospectus dated October6, 2016 that
forms a part of a registration statement on FormS-4 initially
filed by QLT with the SEC on August8, 2016 under the section
entitled QLT Proposal No.2Election of Directors
Proposal.
Ms.Szela succeeds Dr.Cox, who has served as Interim Chief
Executive Officer of Novelion since October23, 2014. to the
terms of Dr.Coxs employment agreement, Dr.Cox will receive two
months base salary as severance and stock options to purchase
50,000 Common Shares.
Mr.Gregory Perry, 56, was appointed Chief Financial and
Administrative Officer of Novelion, effective November29, 2016
and will serve as Principal Financial Officer of Novelion.
Mr.Perry served as Aegerions Chief Financial and Administrative
Officer prior to the Merger and as Chief Financial Officer of
Eleven Biotherapeutics,Inc. from
January2014 until July2015, when he joined Aegerion as Chief
Financial Officer. Prior to joining Eleven Biotherapeutics,
Mr.Perryserved as the Interim Chief Financial Officer of InVivo
Therapeutics Holdings Corp. from September2013 until
December2013. Before joining InVivo, he served as the Executive
Vice President and Chief Financial Officer of ImmunoGen,Inc.
Mr.Perrycurrently serves on the board of directors of Merus
N.V. and previously served on the board of directors of Ocata
Therapeutics,Inc., prior to its acquisition by Astellas Pharma
Inc. in February2016. He received a B.A. from Amherst College.
Ms.Barbara Chan, 53, was appointed President and Chief
Accounting Officer of Aegerion, effective December1, 2016.
Ms.Chan will serve as the Principal Accounting Officer of
Novelion. Ms.Chan served as Aegerions Vice President, Chief
Accounting Officer prior to the Merger and held a series of
positions with PAREXEL International Corporation, most recently
as Senior Director, Worldwide Accounting Services, from
September2013 until May2016, when she joined Aegerion. Prior to
joining PAREXEL, Ms.Chan served as Director, Americas and Asia
Pacific Accounting at Nuance Communications,Inc. from June2011
through August2013. Ms.Chan holds B.S. and M.S. degrees from
Bentley College and is a Certified Public Accountant in
Massachusetts.
There is no arrangement or understanding between Ms.Szela,
Mr.Perry or Ms.Chan, respectively,and any other person to which
any of Ms.Szela, Mr.Perry or Ms.Chanwas appointed to their
positions with Novelion and Aegerion, respectively. Except as
described herein, there are no existing or currently proposed
transactions to which Novelion or any of its subsidiaries is a
party and in which Ms.Szela, Mr.Perry or Ms.Chanhas a direct or
indirect material interest. There are no family relationships
between Ms.Szela, Mr.Perry or Ms.Chan, respectively,and any of
the directors or officers of Novelion or any of its
subsidiaries.
Employment Arrangement with Mary
Szela
The terms of Ms.Szelas compensation for service as an officer
of Novelion and as an officer and employee of Novelion Services
USA,Inc., an indirect wholly-owned subsidiary of Novelion
(Novelion Services), have not yet been determined.
Novelion Services is currently compensating Ms.Szela in
accordance with the terms of her employment agreement with
Aegerion, which is filed as Exhibit10.1 to Aegerions Current
Report on Form8-K filed with the SEC on January11, 2016.
Employment Arrangement with Gregory
Perry
On November28, 2016, Mr.Perry entered into an employment
agreement with Novelion Services (thePerry Employment
Agreement). to the terms of the Perry Employment Agreement,
Mr.Perry will receive an annual base salary of US$450,000 and
is eligible to receive an annual target bonus of up to 50% of
his base salary. Subject to his continued employment, Mr. Perry
also will receive a retention bonus of US$200,000 on December
31, 2016. If Novelion Services terminates Mr.Perrys employment
without Cause or Mr.Perry resigns for Good Reason (as each term
is defined in the Perry Employment Agreement), Mr.Perry will be
eligible for (i)payment of his accrued but unpaid base salary,
any unpaid or unreimbursed expenses and any accrued but unused
vacation through the date of termination, (ii)continued payment
of his base salary for 12 months following the termination
date, (iii)payment at the end of the 12-month severance period
of any cash retention bonus awarded to him prior to termination
of his employment, and (iv)continued coverage under Novelion
Services benefit plans for up to 12 months (collectively, the
Perry Severance Benefits). Further, if within 18 months
following the occurrence of certain corporate transactions,
Mr.Perrys employment is (a)terminated by Novelion Services for
any reason (other than as a result of his death or disability
or a with Cause termination that occurs for certain specified
reasons) or (b)terminated by Mr.Perry with Good Reason, then
Mr.Perry will be eligible to receive, in addition to the Perry
Severance Benefits, acceleration of the vesting of 50% of
Mr.Perrys then outstanding unvested equity awards.
In addition, to the Perry Employment Agreement, Novelion
Services will (i)provide to Mr.Perry an allowance for certain
housing and commuting costs for a limited period, (ii)reimburse
Mr.Perry for reasonable commuting expenses between Boston,
Massachusetts and Canada, including air travel, (iii)offset any
tax liability of Mr.Perry associated with such housing and
commuting allowance and commuting expense reimbursements and
associated with the duties of his employment in Canada and
(iv)reimburse Mr.Perry for incurrence of fees for tax and
financial planning, including tax consultation in connection
with performing duties of employment in Canada, up to US$20,000
on an annual basis, subject to Novelion Services receipt of
appropriate documentation and substantiation of the same.
Employment Arrangement with Barbara
Chan
Ms.Chan will continue to be compensated in accordance with the
terms of her offer letter agreement with Aegerion, which
provides that Ms.Chan will receive an annual base salary of
US$265,000 and is eligible to receive an annual target bonus of
up to 30% of her base salary.
Novelion 2016 Equity Incentive Plan
In connection with the Merger, the QLT 2000 Incentive Stock
Plan was amended to increase the maximum number of Common
Shares issuable under the plan by 12,000,000 Common Shares, to
23,800,000 Common Shares and to change in the name of the plan
to the Novelion 2016 Equity Incentive Plan (the Novelion
Plan). The amendments were approved by shareholders of QLT
at a special meeting held on November7, 2016. On December1, the
Board approved additional amendments to the Novelion Plan,
subject to the approval of the Toronto Stock Exchange, to
permit the Compensation Committee of the Board to delegate to
an executive officer or officers of Novelion certain
authorities and duties with respect to grants to non-executive
officer employees under the Novelion Plan. The foregoing
description of amendments to the Novelion Plan does not purport
to be complete and is qualified in its entirety by reference to
the Novelion Plan, which was filed as Exhibit99.4 to the
Registration Statement on FormS-8 filed by Novelion with the
SEC on December5, 2016 and is incorporated by reference into
this Item 5.02.
Item 5.03. Amendments to Articles of
Incorporation or Bylaws.
On November29, 2016, following the consummation of the Merger,
QLT filed a Notice of Alteration altering its Notice of
Articles and obtained a certificate of name change reflecting
the change of the legal name of QLT to Novelion Therapeutics
Inc. The foregoing description of amendments to Novelions
Notice of Articles does not purport to be complete and is
qualified in its entirety by reference to the Notice of
Articles of Novelion, which is filed as Exhibit3.1 to this
Current Report on Form8-K and is incorporated by reference into
this Item 5.03.
Item 8.01. Other Events.
A copy of the press release announcing the consummation of the
Merger and related transactions was filed as Exhibit99.1 to the
Current Report on Form8-K filed by Novelion with the SEC on
November29, 2016 and is incorporated by reference into this
Item 8.01.
On December5, 2016, subject to applicable regulatory approvals,
Novelions Board approved a 1-for-5 share consolidation of its
Common Shares (the Share Consolidation). If approved by
the Toronto Stock Exchange, the Share Consolidation is expected
to take effect at 5:00p.m. eastern time on December16, 2016. At
the effective time of the Share Consolidation, each Common
Share issued and outstanding immediately before the effective
time of the Share Consolidation will be automatically converted
into one-fifth of one Common Share. The Share Consolidation
will affect all shareholders uniformly and will not affect any
shareholders percentage ownership interest in Novelion or
proportionate voting power, except for minor changes and
adjustments resulting from the treatment of fractional shares.
No fractional shares will be issued in connection with the
Share Consolidation and any fractional shares that would have
otherwise been issued will be rounded down to the nearest whole
number. Shareholders will not receive cash in lieu of
fractional shares. Immediately following the effective time of
the Share Consolidation, Novelion is expected to have
approximately 18,530,700 Common Shares issued and outstanding.
On December2, 2016, Aegerion entered into a Memorandum of
Understanding (the Memorandum of Understanding) to
memorialize an agreement in principle to settle all claims of
participating class members with prejudice and without any
liability or wrongdoing attributed to Aegerion in the class
actions consolidated in the lawsuit KBC Asset Management
NV, et al. v. Aegerion Pharmaceuticals,Inc., et al., Civil
Action No.1:14-CV-10105-MLW, pending in the United States
District Court for the District of Massachusetts (the
ClassAction Litigation). The ClassAction Litigation is
more fully described in Aegerions Quarterly Report on Form10-Q
filed with the SEC on November4, 2016.
The Memorandum of Understanding provides for an aggregate
settlement payment by or on behalf of Aegerion of
US$22,250,000, which includes all plaintiffs attorneys fees and
expenses, as well as any other class notice and administrative
fees related to the resolution of the ClassAction Litigation.
The settlement includes the dismissal of all claims against
Aegerion and the named individuals in the ClassAction
Litigation without any liability or wrongdoing attributed to
them. It is expected that US$22,000,000 of the settlement will
be funded with insurance
proceeds and that US$250,000 will be funded from cash on hand.
The settlement described in the Memorandum of Understanding
remains subject to further documentation, court approval, and
other customary conditions, including Aegerions right to
terminate the settlement in the event an agreed-upon percentage
of class members do not participate.
If and when the settlement is finalized on the terms described
above, the ClassAction Warrants that were issued by Novelion to
its shareholders preceding the closing of the Merger will cease
to be exercisable for additional Common Shares. The outstanding
DOJ/SEC Warrants will not be affected.
A copy of the press release announcing the Share Consolidation
and the Memorandum of Understanding is filed as Exhibit99.2 to
this Current Report on Form8-K and is incorporated by reference
into this Item 8.01.
Safe Harbor for Forward-Looking
Statements
This Current Report on Form8-K contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and
uncertainties. All forward-looking statements included in this
report are based upon information available to Novelion as of
the date of this report and expectations and assumptions
underlying such statements are inherently subject to
uncertainties, risks and changes that are difficult to predict.
These forward-looking statements are not guarantees of future
performance and actual results could differ materially from
those expressed or implied in such statements. A variety of
factors could cause or contribute to such differences,
including risks and uncertainties detailed from time to time in
Novelions filings with the SEC. Except as required by law,
Novelion assumes no obligation to, and does not intend to,
update these forward-looking statements, whether as a result of
new information, future events or otherwise.
Item 9.01. Financial Statements and
Exhibits.
(a)Financial Statements of Business Acquired.
The audited consolidated financial statements of Aegerion as of
December31, 2015 and 2014, and for the three years ended
December31, 2015, as well as the unaudited consolidated
financial statements of Aegerion as of and for the nine months
ended September30, 2016 and 2015, are filed, respectively, as
Exhibits99.3 and 99.4 to this Current Report on Form8-K.
(b)Pro Forma Financial Information.
Unaudited pro forma condensed combined financial statements of
Novelion and Aegerion as of and for the nine months ended
September30, 2016 and the year ended December31, 2015 are filed
as Exhibit99.5 to this Current Report on Form8-K.
(d)Exhibits.
ExhibitNo.
Description
2.1
Agreement and Plan of Merger, dated as of June14, 2016,
and Amendment No.1 thereto, dated as of September1, 2016,
by and among Aegerion Pharmaceuticals,Inc., QLT Inc. and
Isotope Acquisition Corp. (incorporated by reference to
Annex A to the Joint Proxy Statement/Prospectus
forming a part of QLT Inc.s Amendment No.1 to
Registration Statement on FormS-4 filed with the SEC on
September12, 2016).
3.1
Notice of Articles, dated as of November29, 2016.
10.1
Unit Subscription Agreement, dated as of June14, 2016, by
and among QLT Inc., Deerfield International Master Fund,
L.P., Deerfield Partners, L.P., Broadfin Healthcare
Master Fund,Ltd., JW Partners LP, JW Opportunities Fund,
LLC, The K2 Principal Fund L.P., Healthcare Value
Partners, L.P., Tiger Legatus Capital Management, LLC,
Sarissa Capital Domestic Fund LP, Sarissa Capital
Offshore Master Fund LP, Armistice Capital Master
Fund,Ltd. and Jason Aryeh, as amended as applied to
Broadfin Healthcare Master Fund,Ltd. on September9, 2016.
10.2
Aegerion Pharmaceuticals,Inc. 2006 Stock Option and Grant
Plan, as amended, and forms of agreement thereunder
(incorporated by reference to Exhibit10.1 to Aegerions
Registration Statement on FormS-1, as amended, initially
filed with the SEC on August10, 2010).
10.3
Aegerion Pharmaceuticals,Inc. 2010 Stock Option and
Incentive Plan (incorporated by reference to Exhibit10.2
to Aegerions Registration Statement on FormS-1, as
amended, initially filed with the SEC on August10, 2010).
10.4
Aegerion Pharmaceuticals,Inc. Amended and Restated
Inducement Award Stock Option Plan, and form of option
agreement thereunder (incorporated by reference to
Exhibit10.1 to Aegerions Current Report on Form8-K filed
with the SEC on September23, 2015).
10.5
Novelion 2016 Equity Incentive Plan (incorporated by
reference to Exhibit99.4 to Novelions Registration
Statement on FormS-8 filed with the SEC on December5,
2016).
10.6
Employment Agreement, dated November28, 2016, by and
between Novelion Services USA,Inc. and Gregory Perry.
10.7
Offer Letter to Barbara Chan from Aegerion
Pharmaceuticals,Inc., dated May25, 2016.
23.1
Consent of Ernst Young LLP, independent registered public
accounting firm of Aegerion.
99.1
Press Release, dated November29, 2016 (incorporated by
reference to Exhibit99.1 to QLTs Current Report on
Form8-K filed with the SEC on November29, 2016).
99.2
Press Release, dated December5, 2016.
99.3
Audited Consolidated Financial Statements of Aegerion
Pharmaceuticals,Inc. as of and for the year ended
December31, 2015 (incorporated by reference to Aegerions
Annual Report on Form10-K filed with the SEC on March15,
2016).
99.4
Unaudited Consolidated Financial Statements of Aegerion
Pharmaceuticals,Inc. as of and for the nine months ended
September30, 2016 (incorporated by reference to Aegerions
Quarterly Report on Form10-Q filed with the SEC on
November4, 2016).
99.5
Pro Forma Financial Statements of QLT Inc. and Aegerion
Pharmaceuticals,Inc. as of and for the nine months ended
September30, 2016 and the year ended December31, 2015
(incorporated by reference to Exhibit99.1 to QLTs Current
Report on Form8-K filed with the SEC on November22,
2016).
About Novelion Therapeutics Inc. (NASDAQ:NVLN)
Novelion Therapeutics Inc, formerly QLT Inc., is a Canada-based biopharmaceutical company. The Company is engaged in development of new standards of care for individuals living with rare diseases. The Company is focused on advancing its portfolio of rare disease therapies by investing in science and clinical development. The Company holds a portfolio of products through its subsidiary, Aegerion Pharmaceuticals, Inc., a biopharmaceutical company dedicated to the development and commercialization of innovative therapies for patients with debilitating rare diseases. The Company’s portfolio of products include MYALEPT and JUXTAPID. The Company is also developing zuretinol acetate for the treatment of inherited retinal disease caused by underlying mutations in RPE65 or LRAT genes. Novelion Therapeutics Inc. (NASDAQ:NVLN) Recent Trading Information
Novelion Therapeutics Inc. (NASDAQ:NVLN) closed its last trading session up +0.06 at 1.86 with 228,497 shares trading hands.
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