BOSTON, June 27,
2022 /PRNewswire/ -- Stealth BioTherapeutics
Corp (Nasdaq: MITO), a clinical-stage biotechnology company focused
on the discovery, development, and commercialization of novel
therapies for diseases involving mitochondrial dysfunction,
announced today that its Board of Directors (the "Board") has
received a preliminary non-binding proposal letter dated
June 24, 2022 (the "Proposal Letter")
from Morningside Venture (I) Investments Ltd. for itself and on
behalf of its affiliates ("Morningside") and J. Wood Capital
Advisors LLC ("J. Wood Capital") to acquire all outstanding
ordinary shares (the "Shares") of the Company not already
beneficially owned by Morningside, including Shares represented by
American Depositary Shares of the Company (the "ADSs", each
representing 12 Shares), in a going-private transaction (the
"Proposed Transaction") for US$0.026
in cash per Share and US$0.313 in
cash per ADS. A copy of the Proposal Letter is attached hereto as
Exhibit A. The Board previously formed a committee of three
independent directors (the "Special Committee"), consisting of Mr.
Kevin McLaughlin, Dr. Francis Chen, and Dr. Lou Lange to, among other authority delegated to
the Special Committee, evaluate all strategic alternatives
available to the Company. The Special Committee expects to retain a
financial advisor to assist with its evaluation of the Proposed
Transaction or any alternative transaction the Company may pursue.
Consistent with the powers granted by the Board, the Special
Committee will evaluate the Proposed Transaction and all other
strategic alternatives available to the Company.
The Board and the Special Committee caution holders of the
Company's Shares, including Shares represented by ADSs, and others
considering trading the Company's securities that no decisions have
been made with respect to the Proposed Transaction or any
alternative transaction that the Company may pursue. There can be
no assurance that any definitive agreement will be executed
relating to the Proposed Transaction or that any alternative
transaction will be received, approved or consummated. The Company
does not undertake any obligation to provide any updates with
respect to any transaction, except as required under applicable
law.
About Stealth BioTherapeutics
We are a clinical-stage biotechnology company focused on the
discovery, development, and commercialization of novel therapies
for diseases involving mitochondrial dysfunction. Mitochondria,
found in nearly every cell in the body, are the body's main source
of energy production and are critical for normal organ function.
Dysfunctional mitochondria characterize a number of rare genetic
diseases and are involved in many common age-related diseases,
typically involving organ systems with high energy demands such as
the eye, the neuromuscular system, the heart and the brain. We
believe our lead product candidate, elamipretide, has the potential
to treat ophthalmic diseases entailing mitochondrial dysfunction,
such as dry AMD, rare neuromuscular disorders, such as primary
mitochondrial myopathy and Duchenne muscular dystrophy, and rare
cardiomyopathies, such as Barth syndrome. We are evaluating our
second-generation clinical-stage candidate, SBT-272, for rare
neurological disease indications, such as amyotrophic lateral
sclerosis and frontotemporal lobar dementia, following promising
preclinical data. We have optimized our discovery platform to
identify novel mitochondria-targeted compounds which may be
nominated as therapeutic product candidates or utilized as
mitochondria-targeted vectors to deliver other compounds to
mitochondria.
Forward-looking Statements
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. Such forward-looking statements include those regarding
Stealth BioTherapeutics' and the Special Committee's plans to
evaluate the Proposed Transaction, any alternative transaction
received by the Special Committee and other strategic alternatives.
Statements that are not historical facts, including statements
about Stealth BioTherapeutics' beliefs, plans and expectations, are
forward-looking statements. The words "anticipate," "expect,"
"hope," "plan," "potential," "possible," "will," "believe,"
"estimate," "intend," "may," "predict," "project," "would" and
similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Stealth BioTherapeutics may not actually
achieve the plans, intentions or expectations disclosed in these
forward-looking statements, and you should not place undue reliance
on these forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements as a result of known
and unknown risks, uncertainties and other important factors,
including: Stealth BioTherapeutics' ability to obtain additional
funding and to continue as a going concern; the impact of the
COVID-19 pandemic; the ability to successfully demonstrate the
efficacy and safety of Stealth BioTherapeutics' product candidates
and future product candidates; the preclinical and clinical results
for Stealth BioTherapeutics' product candidates, which may not
support further development and marketing approval; the potential
advantages of Stealth BioTherapeutics' product candidates; the
content and timing of decisions made by the FDA, the EMA or other
regulatory authorities, investigational review boards at clinical
trial sites and publication review bodies, which may affect the
initiation, timing and progress of preclinical studies and clinical
trials of Stealth BioTherapeutics product candidates; Stealth
BioTherapeutics' ability to obtain and maintain requisite
regulatory approvals and to enroll patients in its planned clinical
trials; unplanned cash requirements and expenditures; competitive
factors; Stealth BioTherapeutics' ability to obtain, maintain and
enforce patent and other intellectual property protection for any
product candidates it is developing; and general economic and
market conditions. These and other risks are described in greater
detail under the caption "Risk Factors" included in Stealth
BioTherapeutics' most recent Annual Report on Form 20-F filed with
the Securities and Exchange Commission ("SEC"), as well as in any
future filings with the SEC. Forward-looking statements represent
management's current expectations and are inherently uncertain.
Except as required by law, Stealth BioTherapeutics does not
undertake any obligation to update forward-looking statements made
by us to reflect subsequent events or circumstances.
Investor Relations
Kendall Investor Relations
Adam Bero, Ph.D.
abero@kendallir.com
IR@StealthBT.com
Exhibit A
Morningside Venture (I) Investments Limited
c/o THC Management Services S.A.M.
2nd Floor, Le Prince De Galles
3-5 Avenue Des Citronniers
MC 98000, Monaco
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J. Wood Capital Advisors LLC
1820 Calistoga Road
Santa Rosa, CA 95404
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June 24, 2022
The Board of Directors (the "Board")
Stealth BioTherapeutics Corp
c/o Intertrust Corporate Services (Cayman) Limited
One Nexus Way, Camana Bay
Grand Cayman
KY1-9005 Cayman Islands
Dear Directors:
Morningside Venture (I) Investments Limited, for itself or on
behalf of its affiliates (collectively, "Morningside") and J. Wood
Capital Advisors LLC ("J. Wood Capital" and together with
Morningside, "we"), are pleased to submit this joint preliminary
non-binding proposal to acquire all outstanding ordinary shares
(the "Ordinary Shares"), including Ordinary Shares represented by
American depository shares ("ADSs", each representing 12 Ordinary
Shares), of Stealth BioTherapeutics Corp (the "Company") that are
not already beneficially owned by Morningside in a going private
transaction (the "Transaction").
Our proposed purchase price for each Ordinary Share is
US$0.026 and for each ADS is
US$0.313 in cash. We believe that our
proposal provides an attractive opportunity for the Company's
shareholders. Our proposed purchase price represents a premium of
approximately 11.7% to the closing trading price of the ADSs on the
date hereof and a premium of 20% to the 30 trading day average
closing price.
Morningside currently beneficially owns approximately 65% of the
total issued and outstanding Ordinary Shares. Subject to approval
by the Company's board of directors and shareholders, we expect
that the Transaction may be effected via a merger at the proposed
purchase price.
The principal terms and conditions upon which we are prepared to
pursue the Transaction are set forth below.
1. Purchase Price. We propose to acquire all of the
outstanding Ordinary Shares and ADSs, other than those beneficially
owned by us, at a purchase price equal to US$0.026 per Ordinary Share and US$0.313 per ADS in cash.
2. Financing. We intend to finance the Transaction
with cash on hand and will not require debt financing to consummate
the Transaction. With respect to the Company's ongoing capital
requirements following the closing of the Transaction, we
anticipate consummating a private placement from certain co-
investors familiar to us contemporaneous with the closing of the
Transaction. Such private placement would not be a condition to our
obligation to close the Transaction.
3. Due Diligence. We are prepared to move
expeditiously to complete the proposed Transaction as soon as
practicable and will not require broad due diligence given our
knowledge of the Company. We will request targeted confirmatory due
diligence with respect to matters that directly bear on the
execution of the Transaction, which we will be able to complete
expeditiously. We have engaged Goodwin Procter LLP and Campbells
LLP as our legal counsel.
4. Definitive Documentation. We are prepared to
promptly negotiate and finalize the definitive agreements (the
"Definitive Agreements") providing for the Transaction. We expect
that such Definitive Agreements with respect to the Transaction
will contain limited representations, warranties, covenants and
conditions given Morningside's knowledge of the Company.
5. Process. We believe that the Transaction
provides significant value to the Company's shareholders and a
superior degree of speed and certainty to consummate the
Transaction, which allows the Company's shareholders to de-risk
their investment and obtain liquidity at a compelling premium. In
considering this proposal, you should be aware that we are
interested only in pursuing the Transaction and we do not intend to
sell our stake in the Company to any third party.
6. Confidentiality. Morningside will, as required
by law, timely file an amendment to its Schedule 13D to disclose
this proposal. We trust you will agree with us that it is in our
mutual interests to ensure that we proceed in a confidential
manner, unless otherwise required by law, until we have executed
Definitive Agreements or terminated our discussions.
7. No Binding Commitment. This proposal is not a
binding offer, agreement or an agreement to make a binding offer.
This letter is our preliminary indication of interest and does not
contain all matters upon which agreement must be reached in order
to consummate the proposed Transaction, nor does it create any
binding rights or obligations in favor of any person. A binding
commitment will result only from the execution of Definitive
Agreements, and then will be on the terms and conditions provided
in such documentation.
In closing, we would like to express our commitment to working
together to bring this proposed Transaction to a successful and
timely conclusion. Should you have any questions regarding this
proposal, please do not hesitate to contact us. We look forward to
hearing from you.
Sincerely,
For and behalf
of
Morningside Venture (I) Investments Limited
/s/ Jill Marie Franklin
Name: Jill Marie Franklin
Title: Authorized Signatory
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For and behalf of
Morningside Venture (I) Investments Limited
/s/ Frances Anne Elizabeth Richard
Name: Frances Anne Elizabeth Richard
Title: Authorized Signatory
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J. Wood Capital
Advisors LLC
/s/ Jason Wood
Name: Jason Wood
Title: CEO
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SOURCE Stealth BioTherapeutics Inc.