- Amended Statement of Ownership: Solicitation (SC 14D9/A)
June 18 2009 - 4:29PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange
Act of 1934
(Amendment
No. 3)
IDM
PHARMA, INC.
(Name of Subject Company)
IDM
PHARMA, INC.
(Name of Person Filing
Statement)
Common Stock, par value $0.01 per share
(Title of Class of
Securities)
449394105
(CUSIP Number of Class of
Securities)
Timothy P. Walbert
President and Chief Executive Officer
IDM Pharma, Inc.
9 Parker, Suite 100
Irvine, CA 92618
(949) 470-4751
(Name, Address and Telephone
Number of Person Authorized to Receive
Notices and Communications
on Behalf of the Persons Filing Statement)
With copies to:
L. Kay Chandler, Esq.
COOLEY GODWARD KRONISH LLP
4401 Eastgate Mall
San Diego, CA 92121-9109
(858) 550-6000
|
Barbara L. Borden, Esq.
COOLEY GODWARD KRONISH LLP
4401 Eastgate Mall
San Diego, CA 92121-9109
(858) 550-6000
|
o
Check the box
if the filing relates solely to preliminary communications made before the
commencement of a tender offer.
This
Amendment No. 3 to the Schedule 14D-9 (this
Amendment
No. 3
) amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission (
SEC
) on May 26,
2009, as amended and supplemented by Amendment No. 1 to the Schedule 14D-9
filed with the SEC on May 29, 2009 and Amendment No. 2 to the
Schedule 14D-9 filed with the SEC on June 2, 2009 (as amended from time to
time, the
Schedule 14D-9
) by IDM
Pharma, Inc., a Delaware corporation (the
Company
).
The Schedule 14D-9 relates to the tender offer by Jade Subsidiary Corporation,
a Delaware corporation (
Offeror
)
and wholly owned subsidiary of Takeda America Holdings, Inc., which is a
New York corporation (
Takeda
America
) and wholly owned subsidiary of Takeda Pharmaceutical
Company Limited, a corporation organized under the laws of Japan, to purchase
all of the outstanding
shares of common stock, par value $0.01 per share
(the
Shares
) of the Company
at a price of $2.64 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 26, 2009 (the
Offer
to Purchase
), and in the related Letter of Transmittal (the
Letter of Transmittal
, and
together with the Offer to Purchase, the
Offer
),
copies of which are filed as Exhibits (a)(1)(A) and (a)(1)(B) to
the Schedule 14D-9, respectively.
All references to the Offer
to Purchase, the Letter of Transmittal and the Offer include any amendments or
supplements to the Offer to Purchase and the Letter of Transmittal,
respectively.
All capitalized terms used in this Amendment No. 3
without definition have the meanings ascribed to them in the Schedule 14D-9.
The
information in the Schedule 14D-9 is incorporated into this Amendment No. 3
by reference to all of the applicable items in the Schedule 14D-9, except that
such information is hereby amended and supplemented to the extent specifically
provided in this Amendment No. 3.
Item 4.
The Solicitation or
Recommendation.
Item 4
(
The
Solicitation or Recommendation
) of the Schedule 14D-9 is
hereby amended and supplemented by inserting the following on page 15 of
the Schedule 14D-9 after the second full paragraph under the heading
Background of the Offer.
:
The Company initially
selected JMP as its financial advisor due in large part to JMPs reputation as
a specialty advisor for small-to-mid size life sciences companies, and over
time the Company elected to continue that relationship because of JMPs
familiarity with IDM and its products.
Item 4
(
The
Solicitation or Recommendation
) of the Schedule 14D-9 is
hereby amended and supplemented by amending and restating the fifth full
paragraph on page 16 of the Schedule 14D-9 under the heading
Background of the Offer.
as follows:
On November 17, 2008, IDMs board of directors conducted a
telephonic meeting and was informed the CHMP had issued a positive opinion
recommending marketing authorization for MEPACT in Europe for the treatment of
patients with non-metastatic, resectable osteosarcoma. During this meeting, JMP
discussed the status of the strategic process and identity of potentially
interested strategic partners that management discussed with JMP. The Board
also discussed IDMs alternative of remaining an independent public company to
pursue the commercialization of MEPACT in Europe and the continuing operation
of its business, including managements estimate of the need for approximately
$18 million to $23 million in additional financing assuming successful
commercialization of MEPACT in Europe, the prospects for the Company obtaining
financing on terms that were favorable to stockholders considering the Companys
market capitalization and the condition of capital markets, the risks and
uncertainties associated with commercialization of MEPACT in Europe and the
alternative of pursuing the sale of the Company. The Board considered, both at this meeting
and at subsequent meetings during the strategic review process that, while
financing remained a potential strategic alternative, it would likely be highly
dilutive to the existing stockholders and, therefore, would not be the best
alternative for the stockholders. At the conclusion of this meeting,
the board of directors authorized
management and JMP to resume the process of contacting potential parties for a
strategic transaction.
Item 4
(
The
Solicitation or Recommendation
) of the Schedule 14D-9 is
hereby amended and supplemented by amending and restating the third bullet on page 23
of the Schedule 14D-9 under the heading
Reasons
for the Recommendation of the Companys Board of Directors.
as
follows:
2
·
The
IDM board of directors believe that, after a thorough review of strategic
alternatives and discussions with IDMs financial advisors, the value offered
to the stockholders in the Offer and the Merger is more favorable to the IDM
stockholders than the potential value that might be realized by stockholders
from strategic alternatives reasonably available to IDM, considering the
financing that would be required to continue as a going concern and to
commercialize MEPACT in Europe on a stand-alone basis, prospects for raising
such capital on reasonable terms, market conditions and ongoing risks and
uncertainties relating to the commercialization of MEPACT in Europe, including
market penetration, pricing and reimbursement risks that may impact ultimate
sales volumes and profitability of MEPACT, risks relating to IDMs ability to
obtain marketing approval of MEPACT in the United States and other risks and
uncertainties relating to the business (including the risk factors set forth in
the Companys Quarter Report on Form 10-Q for the quarter ended March 31,
2009);
Item 4
(
The
Solicitation or Recommendation
) of the Schedule 14D-9 is
hereby amended and supplemented by inserting the following on page 25 of
the Schedule 14D-9 after the fourth sentence on the first paragraph under the
heading
Financial Projections.
:
The projections did not
include any estimates of the financial performance or expenses for MEPACT in
the U.S. due to the substantial risks and uncertainties related to when, if
ever, the Company might receive FDA approval for MEPACT. Additionally, and likely because of these
substantial risks and uncertainties, the Company was informed by each of
Takeda, Company B and Company A discussed above under Background of the Offer
that their final bids for the Company did not place any value on the U.S.
market for MEPACT.
Item 4
(
The
Solicitation or Recommendation
) of the Schedule 14D-9 is
hereby amended and supplemented by amending and restating the second and third
full paragraphs and the two tables contained therein on page 26 of the
Schedule 14D-9 under the heading
Financial
Projections.
as follows:
The base
case projections included the following estimates of the Companys future
financial performance related to MEPACT in Europe:
|
|
Projected
|
|
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
|
|
(unaudited, amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
|
$
|
|
|
$
|
14
|
|
$
|
31
|
|
$
|
62
|
|
$
|
70
|
|
$
|
72
|
|
$
|
75
|
|
$
|
78
|
|
$
|
82
|
|
$
|
85
|
|
$
|
88
|
|
$
|
48
|
|
$
|
25
|
|
Cost
of Goods Sold
|
|
1
|
|
3
|
|
6
|
|
11
|
|
13
|
|
13
|
|
13
|
|
14
|
|
14
|
|
15
|
|
13
|
|
7
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit (Loss)
|
|
(1
|
)
|
11
|
|
25
|
|
51
|
|
57
|
|
59
|
|
62
|
|
65
|
|
67
|
|
70
|
|
75
|
|
41
|
|
21
|
|
Operating
Expenses
|
|
22
|
|
18
|
|
18
|
|
23
|
|
25
|
|
25
|
|
25
|
|
25
|
|
25
|
|
26
|
|
27
|
|
21
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
|
(23
|
)
|
(8
|
)
|
7
|
|
27
|
|
32
|
|
35
|
|
36
|
|
40
|
|
42
|
|
44
|
|
48
|
|
20
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
(23
|
)
|
(8
|
)
|
5
|
|
19
|
|
22
|
|
24
|
|
26
|
|
28
|
|
29
|
|
31
|
|
34
|
|
14
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
(23
|
)
|
(7
|
)
|
7
|
|
28
|
|
33
|
|
35
|
|
37
|
|
41
|
|
43
|
|
45
|
|
49
|
|
20
|
|
4
|
|
The upside
case projections included the following estimates of the Companys future
financial performance related to MEPACT in Europe:
3
|
|
Projected
|
|
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
|
|
(unaudited,
amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
|
$
|
|
|
$
|
16
|
|
$
|
37
|
|
$
|
74
|
|
$
|
84
|
|
$
|
87
|
|
$
|
90
|
|
$
|
94
|
|
$
|
98
|
|
$
|
102
|
|
$
|
106
|
|
$
|
58
|
|
$
|
30
|
|
Cost
of Goods Sold
|
|
1
|
|
3
|
|
6
|
|
12
|
|
14
|
|
14
|
|
14
|
|
15
|
|
15
|
|
16
|
|
14
|
|
8
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit (Loss)
|
|
(1
|
)
|
13
|
|
31
|
|
62
|
|
70
|
|
73
|
|
76
|
|
79
|
|
83
|
|
86
|
|
92
|
|
50
|
|
26
|
|
Operating
Expenses
|
|
22
|
|
18
|
|
19
|
|
25
|
|
27
|
|
27
|
|
28
|
|
27
|
|
28
|
|
29
|
|
30
|
|
22
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income (Loss)
|
|
(23
|
)
|
(5
|
)
|
11
|
|
37
|
|
43
|
|
46
|
|
48
|
|
52
|
|
54
|
|
57
|
|
62
|
|
27
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
(23
|
)
|
(5
|
)
|
8
|
|
26
|
|
30
|
|
32
|
|
34
|
|
37
|
|
38
|
|
40
|
|
43
|
|
19
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
(23
|
)
|
(5
|
)
|
12
|
|
38
|
|
44
|
|
47
|
|
49
|
|
53
|
|
56
|
|
58
|
|
63
|
|
28
|
|
8
|
|
Item 8.
Additional
Information.
Item 8
(
Additional Information
) of the
Schedule 14D-9 is hereby amended and supplemented by inserting the following on
page 40 of the Schedule 14D-9 after the last paragraph under the heading
Legal Proceeding.
:
As
disclosed in the Schedule 14D-9 originally filed with the SEC on May 26,
2009 as amended and supplemented by Amendment No. 1 to the Schedule 14D-9
filed with the SEC on May 29, 2009, Richard Hartman and Bryan Burnett (
Plaintiffs
) filed a class-action
lawsuit in the Superior Court of the State of California, Orange County (Civil
Action Case No 30-2009-00270784 (the
Action
))
on May 22, 2009 against the Company, each member of the Companys board of
directors including its President and Chief Executive Officer, Takeda America
and the Offeror (
Defendants
). On May 27,
2009, Plaintiffs filed an Amended Complaint, which alleges that (1) the
defendants breached their fiduciary duties, and/or aided and abetted the breach
of fiduciary duties, owed to the Companys stockholders in connection with the
Offer, (2) the Company failed to disclose certain information to its
stockholders in connection with the Offer and (3) the consideration being
offered pursuant to the Offer is inadequate. With their Amended Complaint,
Plaintiffs seek, on behalf of a putative class of public stockholders of the
Company (the
Class
), injunctive relief
enjoining the Offer, or, in the event the Offer has been consummated prior to
the courts entry of final judgment, they seek rescission of the Offer or
rescissory damages. The Amended Complaint also seeks an accounting for all
damages and an award of costs, including a reasonable allowance for attorneys
and experts fees and expenses.
Defendants believe
that the Amended Complaint is entirely without merit and that they have valid
defenses to all claims. Nevertheless,
and despite their belief that they ultimately would have prevailed in the
defense of Plaintiffs claims, to
minimize the costs associated with this litigation, on June 18, 2009,
Defendants entered into a memorandum of understanding (
MOU
)
with Plaintiffs providing for the settlement of all claims in the Action. Under
the MOU, and subject to court approval and further definitive documentation,
Plaintiffs and the Class settle and release, against Defendants and their
affiliates and agents, all claims in the Action and any potential claim related
to the Merger Agreement, to any disclosures leading up to the Merger, or to the
transactions contemplated by the Merger Agreement, including without limitation
the Offer and the Merger. Pursuant to the terms of the MOU, the Company will
provide additional supplemental disclosures to its Schedule 14D-9 (such
disclosures being set forth above). The Company believes that the supplemental
disclosures are not required to be disclosed under federal securities laws or
under state law and are not material as a matter of law or in the context of a
stockholders decision to tender Shares into and accept the Offer. Defendants
have also agreed not to oppose any fee application by Plaintiffs counsel that
does not exceed $250,000. The settlement, including the payment by the Company
or any successor thereto of any such attorneys fees, is also contingent upon,
among other things, the Merger becoming effective under Delaware law. In the
event that the settlement is not approved and such conditions are not
satisfied, Defendants will continue to vigorously defend against the
allegations in the Amended Complaint.
As disclosed in
Amendment No. 2 to the Schedule 14D-9 originally filed with the SEC
on June 2, 2009, on May 29, 2009, a class-action lawsuit was filed in
the Superior Court of the State of California, Orange County (Case No. 30-2009-00272055),
against the Company, each member of the Companys board of directors including
its President and Chief Executive Officer, Takeda America and Offeror. The
action was brought by Young Chang, who claims to be a stockholder of the
Company, on his own behalf, and seeks certification as a class action on behalf
of
4
all the Companys
stockholders, except the defendants and their affiliates. The complaint
contains the same allegations as those asserted in the Action, described above
(Civil Action Case No 30-2009-00270784) i.e., that the defendants breached
their fiduciary duties, and/or aided and abetted the breach of fiduciary
duties, owed to Company stockholders in connection with the Offer and the
Merger, including with respect to the Offer Price and other terms of the Merger
Agreement and the process by which the Merger Agreement was approved by the
Companys board of directors. The complaint seeks injunctive relief enjoining
the Offer and the Merger and a declaration that the Offer and the Merger were
entered into in breach of the fiduciary duties of the defendants and rescinding
and invalidating the Merger Agreement or other agreements defendants entered
into in connection with the Offer and the Merger. The complaint also
demands defendants be directed to exercise their fiduciary duties to obtain a
transaction that is in the best interest of Company stockholders, the
imposition of a constructive trust, in favor of plaintiff and the class, upon
any benefits improperly received by defendants, and an award of costs and
disbursements, including a reasonable allowance for attorneys and experts
fees. On June 18, 2009, the plaintiff voluntarily dismissed his complaint
without prejudice. The Company believes the plaintiffs allegations lack merit
and should he seek to reassert these or similar claims, the Company will
vigorously contest the matter.
5
SIGNATURE
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.
|
IDM Pharma, Inc.
|
|
|
|
By:
|
/s/
Robert
J. De Vaere
|
|
Name:
|
Robert J. De
Vaere
|
|
Title:
|
Senior
Vice President, Finance and Administration and Chief Financial Officer
|
Dated: June 18, 2009
|
|
|
6
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