TetraLogic sold its SMAC mimetic program, including their clinical stage asset birinapant, and their topical HDAC inhibitor, remetinostat (SHAPE), to Medivir for a purchase price of $12m payable in cash at closing plus milestone payments of up to $153m based on the development and commercialization of TetraLogic’s product candidates by Medivir subject to certain conditions and limitations described in the Asset Purchase Agreement for the Sale and additional earn-out payments based on annual net sales of birinapant, subject to certain conditions and limitations described in the Asset Purchase Agreement for the Sale as follows:
the Company will be entitled to 5% of annual net sales from $0 to $500,000,000;
the Company will be entitled to 7.5% of annual net sales from $500,000,000 to $1,000,000,000; and
the Company will be entitled to 10% of annual net sales above $1,000,000,000.
Medivir also assumed certain assumed liabilities.
The transaction was approved by the holders of TetraLogic’s outstanding convertible debt and by a vote of TetraLogic’s stockholders holding a majority of the shares eligible to vote, at a stockholders’ meeting held on December 29, 2016.
Under its agreement with the holders of Senior Notes, the Company will use the $12m cash proceeds received at closing of the Sale to redeem $12m in aggregate principal amount of the Senior Notes then outstanding.
The holders of the Senior Notes have also agreed to extend the maturity date of the Senior Notes to June 15, 2024 and to receive interest payments in additional Senior Notes in lieu of cash.
The Company has voluntarily delisted its Common Stock, from The Nasdaq Global Market and deregistered its Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended.
In connection with the completion of the Sale, Mr. J. Kevin Buchi, Dr. Mary Ann Gray, Mr. Michael Kishbauch, Mr. Paul Schmitt and Dr. Andrew Pecora each resigned as a member of the Board of Directors of the Company, effective December 30, 2016.
The resignation was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Additionally, effective December 30, 2016, Mr. J. Kevin Buchi resigned as chief executive officer of the Company, Mr. Richard Sherman resigned as senior vice president, secretary and general counsel of the Company, Mr. Patrick Hutchison resigned as chief financial officer and treasurer of the Company and Dr. Tony Meehan resigned as chief operating officer of the Company.
In connection with their resignation, each officer entered into a settlement and release agreements pursuant to which each received a lump sum settlement in the aggregate amount previously disclosed in the Company’s Form 8-K filed on November 14, 2016.