INTRODUCTORY NOTE
As previously disclosed, on January 5, 2019, Loxo Oncology, Inc. (“Loxo Oncology”), Eli Lilly and Company, an Indiana
corporation (“Lilly”), and Bowfin Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Lilly (“Purchaser”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to
the terms of the Merger Agreement, on January 17, 2019, Purchaser commenced a tender offer (the “Offer”) to purchase all of the outstanding shares of Loxo Oncology common stock, par value $0.0001 per share (the “Shares”), at
a purchase price of $235.00 per Share (the “Offer Price”), net to the seller in cash, without interest and less any applicable tax withholding.
The Offer expired as scheduled at one minute past 11:59 p.m., Eastern time, on February 14, 2019 (the “Expiration Date”) and
was not extended. Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), advised Lilly and the Purchaser that, as of the Expiration Date, a total of 26,043,820 Shares had been validly tendered and not properly
withdrawn pursuant to the Offer, which tendered Shares represented approximately 84.6% of the aggregate number of then issued and outstanding Shares. Accordingly, the minimum tender condition in the Merger Agreement that the Shares validly tendered
(and not validly withdrawn) prior to the expiration of the Offer, when added to the Shares then owned by Lilly, Purchaser or any other subsidiary of Lilly, represent a majority of Shares outstanding as of immediately following the consummation of
the Offer, is satisfied. Purchaser has accepted for payment all Shares that were validly tendered and not properly withdrawn pursuant to the Offer.
Following consummation of the Offer, Lilly completed its acquisition of Loxo Oncology by consummating the merger of Purchaser with and into
Loxo Oncology (the “Merger”), without a meeting of stockholders of Loxo Oncology in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (“Delaware Law”), with Loxo Oncology surviving the
Merger as a wholly-owned subsidiary of Lilly (the “Surviving Corporation”).
At the effective time of the Merger (the
“Effective Time”), each Share then issued and outstanding (other than (i) Shares owned by Loxo Oncology or Loxo Oncology’s subsidiary immediately prior to the Effective Time, (ii) Shares owned by Lilly, Purchaser or any
other subsidiary of Lilly at the commencement of the Offer and owned by Lilly, Purchaser or any other subsidiary of Lilly immediately prior to the Effective Time or (iii) Shares held by any stockholder who is entitled to demand and properly
demands appraisal of such Shares pursuant to, and who complies in all respects with, Section 262 of the DGCL and who, as of the Effective Time, has neither effectively withdrawn nor lost its rights to such appraisal and payment under the DGCL
with respect to such Shares) was automatically converted into the right to receive cash in an amount equal to the Offer Price, without interest and less any applicable tax withholding (the “Per Share Merger Consideration”). As a result of
the Merger, Loxo Oncology became a wholly-owned subsidiary of Lilly.
Pursuant to the terms of the Merger Agreement, immediately prior to
the Effective Time, by virtue of the Merger and without any action on the part of any holder of any outstanding stock option (other than rights under Loxo Oncology’s 2014 Employee Stock Purchase Plan), each stock option that is outstanding,
whether vested or unvested, was terminated and canceled and each holder of such stock option is entitled to receive an amount of cash determined by multiplying (i) the excess, if any, of the Per Share Merger Consideration over the exercise
price per share of Shares underlying such stock option by (ii) the number of Shares subject to such stock option.
The aggregate cash
consideration paid by Lilly in the Offer and the Merger was approximately $8.0 billion, excluding related transaction fees and expenses. Lilly and Purchaser funded the consideration paid to stockholders and holders of outstanding stock options
in the Offer and pursuant to the Merger through Lilly’s cash on hand and borrowings at prevailing effective rates under Lilly’s commercial paper program.
The foregoing description of the Merger Agreement and related transactions does not purport to be complete and is qualified in its entirety by
reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to Loxo Oncology’s Current Report on Form
8-K,
filed with the U.S. Securities and Exchange Commission (the
“SEC”) on January 7, 2019 and is incorporated herein by reference. All capitalized terms used herein and not otherwise defined have the meaning given to such terms in the Merger Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure under the Introductory Note and Item 3.01 is incorporated herein by reference.