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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Material
Soliciting Material under §240.14a-12
Myovant Sciences Ltd.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee paid previously with preliminary materials.
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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MERGER PROPOSAL – YOUR VOTE IS VERY IMPORTANT
January 23, 2023
Dear Shareholder:
You are cordially invited to attend a special general meeting of shareholders of Myovant Sciences Ltd. (“Myovant”) on March 1, 2023, at 10:00 a.m., United Kingdom local time, at the offices of Vistra UK Limited, 7th Floor, 50 Broadway, London SW1H 0DB, United Kingdom.
At the special general meeting, you will be asked to consider and vote upon a proposal to adopt and approve an Agreement and Plan of Merger, dated as of October 23, 2022 (as it may be amended from time to time in accordance with its terms, the “Merger Agreement”), and a related Statutory Merger Agreement (the “Statutory Merger Agreement”) by and among Myovant, Sumitovant Biopharma Ltd., a Bermuda exempted company limited by shares (“Sumitovant”), Zeus Sciences Ltd., a Bermuda exempted company limited by shares and a wholly owned subsidiary of Sumitovant (“Merger Sub”) and, solely with respect to Article IX and Annex A of the Merger Agreement, Sumitomo Pharma Co., Ltd., a company organized under the laws of Japan (“SMP”). Pursuant to the Merger Agreement and the Statutory Merger Agreement, Merger Sub will merge with and into Myovant (the “Merger”), with Myovant continuing as the surviving company following the Merger as a wholly owned subsidiary of Sumitovant. If the Merger is completed, and upon the satisfaction of the conditions set forth in the Merger Agreement and the consummation of the transactions contemplated by the Statutory Merger Agreement, holders of common shares of Myovant, par value $0.000017727 per share (the “Myovant common shares”) (other than Myovant common shares held by (i) holders who are entitled to and properly demand an appraisal of their Myovant common shares pursuant to the Companies Act 1981 of Bermuda, as amended (the “Bermuda Companies Act”), (ii) Sumitovant or (iii) Myovant or its wholly owned subsidiaries) immediately prior to the effective time of the Merger will be entitled to receive $27.00 per share in cash, without interest and less any applicable withholding taxes (the “per share merger consideration”).
Pursuant to rules of the U.S. Securities and Exchange Commission (the “SEC”), you also will be asked to vote at the special general meeting on a non-binding, advisory proposal to approve specified compensation that may become payable to Myovant’s named executive officers in connection with the completion of the Merger (the “Compensation Proposal”) as described in the proxy statement.
The proposed Merger is a “going-private” transaction under the rules of the SEC. As of January 17, 2023, Sumitovant beneficially owned approximately 51.5% of the outstanding Myovant common shares. If the Merger is completed, Myovant will become a privately held company, wholly owned by Sumitovant. Sumitovant is a wholly owned subsidiary of SMP, and SMP and Sumitovant are affiliates of Sumitomo Chemical Co., Ltd.
The board of directors of Myovant (the “Myovant Board”) formed a special committee (the “Special Committee”) consisting solely of independent directors serving on the audit committee of the Myovant Board to, among other things, (i) review and consider whether it would be appropriate and desirable for Myovant to enter into a potential transaction with Sumitovant, (ii) develop, assess and negotiate the terms of a potential transaction with Sumitovant and alternatives thereto and (iii) make a recommendation to the full Myovant Board as to whether Myovant should enter into such potential transaction.
The Myovant Board (other than Adele Gulfo, Myrtle Potter and Shigeyuki Nishinaka, Sumitovant’s designees serving on the Myovant Board, who recused themselves from determinations related to a potential transaction with Sumitovant and SMP due to their affiliation with Sumitovant and/or SMP), acting upon the unanimous recommendation of the Special Committee, (i) determined that the per share merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determined that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement (as defined below) are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Securities Exchange Act of

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1934, as amended), (iii) approved and declared advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement and (iv) subject to the right of the Special Committee and the Myovant Board (acting upon the recommendation of the Special Committee) to change their recommendations in certain circumstances specified in the Merger Agreement, determined to recommend that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of such holders for such purpose (the “Merger Proposal”).
The Special Committee and the Myovant Board acting upon the unanimous recommendation of the Special Committee each recommends that you vote “FOR” the Merger Proposal, “FOR” the Compensation Proposal and “FOR” the adjournment of the special general meeting, if necessary or appropriate (as determined by Myovant after consultation in good faith with Sumitovant), to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal (the “Adjournment Proposal”).
The accompanying proxy statement describes the Merger Agreement, the Statutory Merger Agreement, the Merger, and the other transactions and agreements contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and provides specific information concerning the special general meeting. In addition, you may obtain information about Myovant from its other SEC filings. We urge you to read the entire proxy statement, including the annexes to this proxy statement and other documents to which it refers as incorporated by reference, as well as the related Schedule 13E-3, including the exhibits thereto, carefully, as it sets forth the details of the Merger Agreement and other important information related to the Merger.
In considering the recommendations of the Special Committee and the Myovant Board, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of Myovant’s shareholders generally, as further described in the accompanying proxy statement.
Your vote is very important, regardless of the number of Myovant common shares you own. The Merger cannot be completed unless the Merger Proposal is approved by the affirmative vote of the holders of (i) a majority of the issued and outstanding Myovant common shares entitled to vote on the Merger Proposal and voting at the special general meeting (such vote, the “General Shareholder Approval”) and (ii) a majority of the outstanding Myovant common shares held by Myovant’s shareholders other than Sumitovant or its affiliates (the “Minority Shareholders”) (such vote, the “Minority Shareholder Approval” and together with the General Shareholder Approval, the “Required Shareholder Approval”). As a result of the voting standard for the Minority Shareholder Approval, if you fail to vote or abstain from voting on the Merger Proposal, the effect will be the same as a vote “AGAINST” the Merger Proposal.
Sumitovant has agreed to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal and all other proposals presented at the special general meeting pursuant to a voting and support agreement that was entered into between Myovant and Sumitovant concurrently with the execution of the Merger Agreement (the “Sumitovant Voting Agreement”). If Sumitovant votes in compliance with the terms of the Sumitovant Voting Agreement, the General Shareholder Approval will be obtained, but such vote will have no effect on the Minority Shareholder Approval.
If you are a record holder of Myovant common shares, you will find enclosed a proxy card and a postage-paid envelope in which to return the card by mail. Whether or not you plan to attend the special general meeting, please sign, date and return your enclosed proxy card, or vote via the Internet or over the phone, as soon as possible so that your shares can be voted at the special general meeting in accordance with your instructions.
If you hold your Myovant common shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your Myovant common shares. If you do not instruct your

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broker, bank or other nominee to vote on your behalf, your Myovant common shares will not be voted, which will have the same effect as voting “AGAINST” the Merger Proposal. In addition, if you hold your Myovant common shares in “street name” and you submit voting instructions to your broker, bank or other nominee, your instructions must be received by the broker, bank or other nominee prior to the deadline set forth in the information from your broker, bank or other nominee on how to submit voting instructions.
If you have any questions or need assistance voting your shares, please contact our proxy solicitation agent:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (877) 750-0537
Banks and Brokers may call collect: (212) 750-5833
Thank you for your cooperation and we look forward to the successful completion of the Merger.
Sincerely yours,
 
 
 
/s/ Mark Guinan
/s/ David Marek
 
 
Mark Guinan
Chairman of the Special Committee
David Marek
Principal Executive Officer
Neither the SEC nor any state securities commission has approved or disapproved of the Merger, passed upon the merits or fairness of the Merger, or passed upon the adequacy or accuracy of the disclosure in the accompanying proxy statement. Any representation to the contrary is a criminal offense.
The accompanying proxy statement is dated January 23, 2023, and, together with the enclosed form of proxy card, is first being mailed to Myovant’s shareholders on January 24, 2023.

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NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
To Be Held On: March 1, 2023
To the shareholders of Myovant Sciences Ltd.:
NOTICE IS HEREBY GIVEN that a Special General Meeting of Shareholders of Myovant Sciences Ltd. (“Myovant”) will be held on March 1, 2023, at 10:00 a.m., United Kingdom local time, at the offices of Vistra UK Limited, 7th Floor, 50 Broadway, London SW1H 0DB, United Kingdom to consider and vote upon:
(1)
a proposal to adopt and approve an Agreement and Plan of Merger, dated as of October 23, 2022 (as it may be amended from time to time in accordance with its terms, the “Merger Agreement”) and a related Statutory Merger Agreement (the “Statutory Merger Agreement”), by and among Myovant, Sumitovant Biopharma Ltd., a Bermuda exempted company limited by shares (“Sumitovant”), Zeus Sciences Ltd., a Bermuda exempted company limited by shares and a wholly owned subsidiary of Sumitovant (“Merger Sub”) and, solely with respect to Article IX and Annex A of the Merger Agreement, Sumitomo Pharma Co., Ltd., a company organized under the laws of Japan (“SMP”), and the transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, including a merger, pursuant to which Merger Sub will merge with and into Myovant (the “Merger”), with Myovant continuing as the surviving company following the Merger as a wholly owned subsidiary of Sumitovant (the “Merger Proposal”);
(2)
a non-binding, advisory proposal to approve specified compensation that may become payable to Myovant’s named executive officers in connection with the completion of the Merger (the “Compensation Proposal”); and
(3)
a proposal to approve an adjournment of the special general meeting, if necessary or appropriate (as determined by Myovant after consultation in good faith with Sumitovant), to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal (the “Adjournment Proposal”).
Your vote is very important, regardless of the number of Myovant common shares you own. The Merger cannot be completed unless the Merger Proposal is approved by the affirmative vote of holders of (i) a majority of the issued and outstanding common shares of Myovant, par value $0.000017727 per share (the “Myovant common shares”), entitled to vote on the Merger Proposal and voting at the special general meeting (such vote, the “General Shareholder Approval”) and (ii) a majority of the outstanding Myovant common shares held by Myovant’s shareholders other than Sumitovant or its affiliates (the “Minority Shareholders”) (such vote, the “Minority Shareholder Approval” and together with the General Shareholder Approval, the “Required Shareholder Approval”). As a result of the voting standard for the Minority Shareholder Approval, if you fail to vote or abstain from voting on the Merger Proposal, the effect will be the same as a vote “AGAINST” the Merger Proposal.
Sumitovant has agreed to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal and all other proposals presented at the special general meeting pursuant to a voting and support agreement that was entered into between Myovant and Sumitovant concurrently with the execution of the Merger Agreement (the “Sumitovant Voting Agreement”). If Sumitovant votes in compliance with the terms of the Sumitovant Voting Agreement, the General Shareholder Approval will be obtained, but such vote will have no effect on the Minority Shareholder Approval.
The Compensation Proposal will be approved if holders of a majority of the issued and outstanding Myovant common shares entitled to vote on the Compensation Proposal and voting at the special general meeting vote in favor of the Compensation Proposal. Approval of the Compensation Proposal is not a condition

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to the completion of the Merger. If you fail to vote or abstain from voting on the Compensation Proposal, your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of the Compensation Proposal.
The Adjournment Proposal will be approved if holders of a majority of the issued and outstanding Myovant common shares present, in person or by proxy, and entitled to vote at the special general meeting vote in favor of the Adjournment Proposal. Approval of the Adjournment Proposal is not a condition to the completion of the Merger. If you fail to vote, your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of the Adjournment Proposal. If you abstain from voting on the Adjournment Proposal, the effect will be the same as a vote “AGAINST” the Adjournment Proposal.
Only Myovant shareholders of record as of the close of business on January 20, 2023 (the “record date”), are entitled to notice of the special general meeting and to vote at the special general meeting or at any adjournment or postponement thereof. A quorum of shareholders representing, in person or by proxy, a majority of the issued and outstanding Myovant common shares entitled to vote at the special general meeting as of the record date is required to conduct business and vote on the proposals at the special general meeting.
A special committee (the “Special Committee”) consisting solely of independent directors serving on the audit committee of the board of directors of Myovant (“Myovant Board”) and the Myovant Board (other than Adele Gulfo, Myrtle Potter and Shigeyuki Nishinaka, Sumitovant’s designees serving on the Myovant Board, who recused themselves from determinations related to a potential transaction with Sumitovant and SMP due to their affiliation with Sumitovant and/or SMP), acting at the unanimous recommendation of the Special Committee, have determined the fair value of the Myovant common shares to be the per share merger consideration, i.e., $27.00 per Myovant common share.
Any holder of Myovant common shares who does not vote in favor of the Merger Proposal and who is not satisfied that they have been offered fair value for their Myovant common shares will have the right to seek appraisal of the fair value of such holder’s Myovant common shares, but only if such holder complies with all the requirements of Section 106 of the Companies Act 1981 of Bermuda, as amended (the “Bermuda Companies Act”), which is the appraisal rights statute applicable to Bermuda companies and which is summarized in the accompanying proxy statement and reproduced in its entirety in Annex D to the accompanying proxy statement. The accompanying proxy statement constitutes notice to you from Myovant of the availability of appraisal rights under the Bermuda Companies Act.
The Special Committee and the Myovant Board acting upon the unanimous recommendation of the Special Committee each recommends that you vote “FOR” the Merger Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.
By order of the Special Committee and the Board of Directors of Myovant Sciences Ltd.
/s/ Matthew Lang

Matthew Lang
General Counsel and Corporate Secretary
January 23, 2023

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SUMMARY TERM SHEET
This Summary Term Sheet, together with the section of this proxy statement entitled “Questions and Answers About the Special General Meeting and the Merger” beginning on page 12, highlights certain information in this proxy statement but may not contain all of the information that may be important to you. To understand the Merger more fully and for a more complete description of the legal terms of the Merger, you should carefully read this entire proxy statement, the annexes to this proxy statement and the documents that we refer to in this proxy statement, as well as the related Schedule 13E-3, including the exhibits thereto. Each item in this Summary Term Sheet includes a page reference directing you to a more complete description of that topic. You may obtain any additional information referred to in this proxy statement without charge by following the instructions under the caption “Where You Can Find Additional Information” beginning on page 136. The Merger Agreement is attached as Annex A to this proxy statement. We encourage you to read the Merger Agreement, which is the legal document that governs the Merger, carefully and in its entirety.
Except as otherwise specifically noted in this proxy statement, “Myovant,” the “surviving company,” “we,” “our,” “us” and similar words refer to Myovant Sciences Ltd., including, in certain cases, our subsidiaries. Throughout this proxy statement, we refer to: Sumitomo Pharma Co., Ltd. as “SMP”; Sumitovant Biopharma Ltd. as “Sumitovant”; Zeus Sciences Ltd. as “Merger Sub”; and SMP, Sumitovant and Merger Sub collectively as the “Purchaser Filing Persons,” and we refer to SMP and its controlled affiliated entities, including Sumitovant, and Merger Sub (but in all instances excluding Myovant and its subsidiaries), collectively as the “Sumitomo Pharma Group,” and we refer to the Sumitomo Pharma Group together with Sumitomo Chemical Co., Ltd. (“Sumitomo Chemical”), as the “Sumitomo Group.” In addition, throughout this proxy statement we also refer to the Agreement and Plan of Merger, dated October 23, 2022, by and among Myovant, Sumitovant, Merger Sub, and solely with respect to Article IX and Annex A thereof, SMP, as it may be amended from time to time in accordance with its terms, as the “Merger Agreement”; and we refer to the related Statutory Merger Agreement contemplated to be executed and delivered by Myovant, Sumitovant and Merger Sub, as the “Statutory Merger Agreement.”
The Special General Meeting
The special general meeting of shareholders (the “special general meeting”) will be held at 10:00 a.m., United Kingdom local time, on March 1, 2023, at the offices of Vistra UK Limited, 7th Floor, 50 Broadway, London SW1H 0DB, United Kingdom. Directions to the special general meeting may be found by visiting https://www.vistra.com/locations/emea/united-kingdom#London. Information on how to vote in person at the special general meeting is discussed below. At the special general meeting, shareholders will be asked to consider and vote upon:
a proposal to adopt and approve the Merger Agreement and the related Statutory Merger Agreement and the transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, including a merger, pursuant to which Merger Sub will merge with and into Myovant (the “Merger”), with Myovant continuing as the surviving company following the Merger as a wholly owned subsidiary of Sumitovant (the “Merger Proposal”);
a non-binding, advisory proposal to approve specified compensation that may become payable to Myovant’s named executive officers in connection with the completion of the Merger (the “Compensation Proposal”); and
a proposal to approve an adjournment of the special general meeting, if necessary or appropriate (as determined by Myovant after consultation in good faith with Sumitovant), to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal (the “Adjournment Proposal”).
For more information, please see the section entitled “The Special General Meeting” beginning on page 81.
Record Date and Quorum
Holders of record of the common shares of Myovant, par value $0.000017727 per share (the “Myovant common shares”), as of the close of business on January 20, 2023 (the “record date”), are entitled to receive notice of and to vote at the special general meeting. On the record date, 97,235,316 Myovant common shares were issued and outstanding.
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The presence at the special general meeting of holders of Myovant common shares representing, in person or by proxy, a majority of the issued and outstanding Myovant common shares entitled to vote at the meeting as of the record date will constitute a quorum, permitting Myovant to conduct its business at the special general meeting.
For more information, please see the section entitled “The Special General Meeting—Record Date and Quorum” beginning on page 81.
Required Votes
Merger Proposal
The Merger cannot be completed unless the Merger Proposal is approved by the affirmative vote of the holders of (i) a majority of the issued and outstanding Myovant common shares entitled to vote on the Merger Proposal and voting at the special general meeting (such vote, the “General Shareholder Approval”) and (ii) a majority of the outstanding Myovant common shares held by Myovant’s shareholders other than Sumitovant or its affiliates (the “Minority Shareholders”) (such vote, the “Minority Shareholder Approval” and together with the General Shareholder Approval, the “Required Shareholder Approval”). As a result of the voting standard for the Minority Shareholder Approval, if you fail to vote or abstain from voting on the Merger Proposal, the effect will be the same as a vote “AGAINST” the Merger Proposal. Pursuant to the voting and support agreement entered into between Myovant and Sumitovant concurrently with the execution of the Merger Agreement (the “Sumitovant Voting Agreement”), Sumitovant has agreed to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the approval of the Merger Proposal and all other proposals being presented at the special general meeting. If Sumitovant votes in compliance with the terms of the Sumitovant Voting Agreement, the General Shareholder Approval will be obtained, but such vote will have no effect on the Minority Shareholder Approval.
For more information, please see the section entitled “Proposal 1: The Merger Proposal—Required Vote” beginning on page 86.
Compensation Proposal
The Compensation Proposal requires the affirmative vote of holders of a majority of the issued and outstanding Myovant common shares entitled to vote on such matter and voting at the special general meeting in accordance with Myovant’s Fifth Amended and Restated Bye-Laws (the “Bye-Laws”). If you fail to vote or abstain from voting on the Compensation Proposal, your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of such proposal.
For more information, please see the section entitled “Proposal 2: Non-Binding, Advisory Vote on Merger-Related Executive Compensation—Required Vote” beginning on page 124.
Adjournment Proposal
The Adjournment Proposal requires approval by the holders of a majority of the issued and outstanding Myovant common shares present, in person or by proxy, and entitled to vote on such matter at the special general meeting. If you fail to vote, your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of the Adjournment Proposal. If you abstain from voting on the Adjournment Proposal, the effect will be the same as a vote “AGAINST” the Adjournment Proposal.
For more information, please see the section entitled “Proposal 3: Adjournment Proposal—Required Vote” beginning on page 125.
The Parties to the Merger
Myovant Sciences Ltd.
Myovant is a biopharmaceutical company that aspires to redefine care for women and men through purpose-driven science, empowering medicines, and transformative advocacy worldwide. Founded in 2016, Myovant has executed multiple successful Phase 3 clinical trials across hormone-sensitive oncology and women’s health leading to multiple regulatory approvals in the United States and Europe. Myovant and/or its collaboration
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and commercialization partners have been commercializing ORGOVYX®, MYFEMBREE® and RYEQO® since the respective approvals for these drug products. Myovant and/or its collaboration and commercialization partners continue to submit regulatory filings to seek approval for additional indications of its lead products as well as continue further development of pipeline assets. Sumitovant, a wholly owned subsidiary of SMP, is Myovant’s majority shareholder. For more information about Myovant, please see the section entitled “The Parties to the Merger—Myovant Sciences Ltd.” beginning on page 85.
Sumitomo Pharma Co., Ltd.
SMP is a pharmaceutical company in Japan, operating globally in major pharmaceutical markets, including Japan, the U.S., China, and other Asian countries with about 7,000 employees worldwide. For more information about SMP, please see the section entitled “The Parties to the Merger—Sumitomo Pharma Co., Ltd.” beginning on page 85.
Sumitovant Biopharma Ltd.
Sumitovant, a Bermuda exempted company limited by shares, is a global biopharmaceutical company with its principal place of business in London. Sumitovant is a wholly owned subsidiary of SMP. For more information about Sumitovant, please see the section entitled “The Parties to the Merger—Sumitovant Biopharma Ltd.” beginning on page 85.
Zeus Sciences Ltd.
Zeus Sciences Ltd. is a newly formed Bermuda exempted company limited by shares and a wholly owned direct subsidiary of Sumitovant and was formed solely for the purpose of engaging in the Merger and other related transactions. For more information about Zeus Sciences Ltd., please see the section entitled “The Parties to the Merger—Zeus Sciences Ltd.” beginning on page 85.
The Merger Proposal
You are being asked to consider and vote upon a proposal to adopt and approve the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement.
The Merger Agreement provides that subject to the terms and conditions set forth in the Merger Agreement and the Statutory Merger Agreement, at the time the Merger becomes effective, each common share of Myovant, par value $0.000017727 per share (each, a “Myovant common share”) that is issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Myovant common shares held by (i) holders who are entitled to and properly demand an appraisal of their Myovant common shares pursuant to Section 106 of the Companies Act of 1981 of Bermuda, as amended (the “Bermuda Companies Act”) (as further described below, “Dissenting Holders”), (ii) Sumitovant or (iii) Myovant or its direct or indirect wholly owned subsidiaries), will be cancelled and automatically cease to exist, and each holder of such cancelled Myovant common shares will be entitled to receive $27.00 per share in cash, without interest and less any applicable withholding taxes (the “per share merger consideration”).
In addition, any holder of Myovant common shares who does not vote in favor of the Merger Proposal and who is not satisfied that they have been offered fair value for their Myovant common shares will have the right to seek appraisal of the fair value of such holder’s Myovant common shares, but only if such holder complies with all the requirements of Section 106 of the Bermuda Companies Act, which is the appraisal rights statute applicable to Bermuda companies and which is summarized in the section entitled “Rights of Appraisal” beginning on page 122 and reproduced in its entirety in Annex D to this proxy statement. Any such holder who complies with the appraisal requirements shall have the right to receive the per share merger consideration and, to the extent that the appraised value of such holder’s Myovant common shares exceeds the per share merger consideration for their Myovant common shares, the excess.
If the Merger is consummated, Myovant will become a privately held company, wholly owned by Sumitovant. Sumitovant is a wholly owned subsidiary of SMP, and SMP and Sumitovant are affiliates of Sumitomo Chemical.
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For more information, please see the section entitled “Proposal 1: The Merger Proposal” beginning on page 86.
When the Merger Becomes Effective
The closing of the Merger (the “Closing”) will take place on a date to be specified by Myovant and Sumitovant, which will be no later than the seventh business day after all of the conditions to the Merger are satisfied or, to the extent permitted by law, waived, other than those conditions that by their nature are to be satisfied at the Closing (so long as such conditions are reasonably capable of being satisfied), but subject to the satisfaction or waiver of those conditions (such date, the “Closing Date”).
For more information, please see the section entitled “The Merger Agreement—Closing; Effective Time of the Merger” beginning on page 87.
Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger
At a meeting held on October 23, 2022, the board of directors of Myovant (the “Myovant Board”) (other than the three directors designated by Sumitovant and/or SMP pursuant to the Investor Rights Agreement (as defined below) (the “Sumitomo Directors”), who at the time of the October 23, 2022 meeting were Adele Gulfo, Myrtle Potter and Shigeyuki Nishinaka and who recused themselves from determinations related to a potential transaction with Sumitovant and SMP due to their affiliation with Sumitovant and/or SMP), acting upon the unanimous recommendation of the Special Committee (the “Special Committee”) consisting solely of independent directors serving on the audit committee of the Myovant Board (the “Audit Committee”), (i) determined that the per share merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determined that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”)), (iii) approved and declared advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and (iv) subject to the right of the Special Committee and the Myovant Board (acting upon the recommendation of the Special Committee) to change their recommendations in certain circumstances specified in the Merger Agreement, determined to recommend that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose.
For more information, please see the section entitled “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger” beginning on page 34.
Opinion of Financial Advisor to the Special Committee
Goldman Sachs & Co. LLC (“Goldman Sachs”) delivered its oral opinion to the Special Committee, subsequently confirmed in writing, that, as of October 23, 2022, and based upon and subject to the factors and assumptions set forth therein, the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement, was fair, from a financial point of view, to such holders.
The full text of the written opinion of Goldman Sachs, dated October 23, 2022, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C. The summary of Goldman Sachs’ opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Special Committee in its consideration of the Merger. Goldman Sachs’ opinion is not a recommendation as to how any holder of Myovant common shares should vote with respect to the Merger or any other matter. Pursuant to an engagement letter, dated April 29, 2022, among Myovant, the Special
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Committee and Goldman Sachs, Myovant has agreed to pay Goldman Sachs a transaction fee of $38.9 million, with the possibility of an additional fee, payable at the sole discretion of the Special Committee, of 0.5% of the aggregate consideration paid, all of which is contingent upon consummation of the Merger.
For additional information regarding the opinion delivered by Goldman Sachs to the Special Committee, please see the section entitled “Special Factors—Opinion of Financial Advisor to the Special Committee” beginning on page 43.
Purposes and Reasons of the Purchaser Filing Persons for the Merger
Under the U.S. Securities and Exchange Commission (the “SEC”) rules governing “going-private” transactions, including Rule 13e-3 under the Exchange Act, the Purchaser Filing Persons are deemed to be “affiliates” of Myovant and engaged in a “going-private” transaction, and therefore, may be required to disclose its purposes and reasons for the Merger to Myovant’s “unaffiliated security holders” as defined under Rule 13e-3 under the Exchange Act. The Purchaser Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, the Purchaser Filing Persons are not making any recommendation to any Minority Shareholder as to how that shareholder should vote on any proposal, and the views of each of the Purchaser Filing Persons should not be construed as a recommendation to any Minority Shareholder as to how such shareholder should vote. The Purchaser Filing Persons have interests in the Merger that are different from those of the Minority Shareholders.
For the Purchaser Filing Persons, the purpose of the Merger is to enable (i) Sumitovant to acquire 100% ownership and control of Myovant in a transaction in which holders of Myovant common shares (other than Myovant common shares held by (a) Dissenting Holders, (b) Sumitovant or (c) Myovant or its wholly owned subsidiaries) immediately prior to the effective time will receive $27.00 per Myovant common share, and (ii) the Purchaser Filing Persons to own 100% of the equity interests in Myovant after the Merger.
The Purchaser Filing Persons believe that after the Merger is consummated, Myovant should have greater operating flexibility and more efficient access to capital, which should support Myovant’s long-term growth and profitability. If that happens, the Purchaser Filing Persons (and not the Minority Shareholders) will benefit from any resulting increase in the value of Myovant. Accordingly, the Purchaser Filing Persons have decided to undertake to pursue the Merger at this time for the reasons described above, among others.
For a more complete discussion of the reasons of the Purchaser Filing Persons for the Merger, please see the section entitled “Special Factors—Purposes and Reasons of the Purchaser Filing Persons for the Merger” beginning on page 53.
Position of the Purchaser Filing Persons as to Fairness of the Merger
The Purchaser Filing Persons believe that the Special Committee, which negotiated the terms and conditions of the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, including the Merger, with the assistance of the independent financial advisor and legal counsel selected and retained by the Special Committee, represented the interests of the Minority Shareholders. While the members of the Purchaser Filing Persons are represented by the Sumitomo Directors on the Myovant Board, the Merger was negotiated and approved by the Special Committee. The Sumitomo Directors are not members of the Special Committee and did not participate in the deliberations of the Special Committee regarding, or receive advice from the Special Committee’s independent legal or financial advisors as to, the substantive and procedural fairness of the Merger to the Minority Shareholders. The Sumitomo Directors, in their capacity as members of the Myovant Board, also recused themselves from determinations related to a potential transaction with Sumitovant and SMP due to their affiliation with Sumitovant and/or SMP. The Purchaser Filing Persons did not undertake, or engage a financial advisor to undertake, any valuation or other independent analysis for the purpose of assessing the fairness of the Merger or the per share merger consideration to the Minority Shareholders.
However, the Purchaser Filing Persons believe, based on the knowledge and analysis by the Purchaser Filing Persons of available information regarding Myovant and the factors considered by, and the analysis and resulting conclusions of, the Special Committee described in the section entitled “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger” (which
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analysis and resulting conclusions the Purchaser Filing Persons adopt based on the Purchaser Filing Persons’ review thereof subsequent to the execution of the Merger Agreement), that the Merger is substantively and procedurally fair to the Minority Shareholders.
For a more complete discussion of the Purchaser Filing Persons’ position as to the fairness of the Merger, please see the section entitled “Special Factors—Position of the Purchaser Filing Persons as to Fairness of the Merger” beginning on page 55.
Treatment of Myovant Equity Awards
Myovant Options
Each option to purchase Myovant common shares granted under the Myovant Sciences Ltd. 2016 Equity Incentive Plan and the Myovant Sciences Ltd. 2020 Inducement Plan (as amended, the “Equity Plans”) that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, and that has an exercise price per Myovant common share that is less than $27.00 will be cancelled and converted into the right to receive a cash payment for each Myovant common share that is subject to such option equal to the difference between $27.00 and the per share exercise price of such option (without interest and less any applicable withholding taxes). Each option to purchase Myovant common shares granted under the Equity Plans that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, and that has an exercise price per Myovant common share that is equal to or greater than $27.00 will be cancelled without payment.
Restricted Share Units and Performance Share Units
Each then-outstanding time-based restricted share unit granted under the Equity Plans (each, a “Myovant RSU”), except for the Myovant RSUs granted to non-executive directors (other than Dr. Nishinaka) described in the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger—Restricted Share Units and Performance Share Units” beginning on page 70, that has not been settled in Myovant common shares prior to the effective time will be cancelled and converted into the right to receive, in respect of each such Myovant RSU, a cash payment equal to $27.00 multiplied by the number of Myovant common shares subject to such Myovant RSU immediately prior to the effective time (without interest and less any applicable withholding taxes). Each then-outstanding restricted share unit subject to performance-based vesting conditions granted under the Equity Plans (each, a “Myovant PSU”) that has not been settled in Myovant common shares prior to the effective time will be cancelled and converted into the right to receive, in respect of each such Myovant PSU, a cash payment equal to $27.00 multiplied by the number of Myovant common shares subject to such Myovant PSU (deeming performance goals as being satisfied) immediately prior to the effective time (without interest and less any applicable withholding taxes).
For more information regarding the options, Myovant RSUs and Myovant PSUs and their treatment, please see the section entitled “The Merger Agreement—Treatment of Myovant Equity Awards” beginning on page 88.
Treatment of Myovant Warrants
To the extent any of the Myovant warrants (as defined in the section entitled “The Merger Agreement—Treatment of Myovant Warrants” beginning on page 90) we issued to Hercules Capital, Inc. (“Hercules”) on October 16, 2017 and March 26, 2018 to purchase an aggregate of 73,710 Myovant common shares have not been exercised in full prior to the effective time, the Myovant warrants will be deemed to have been automatically exercised in full with respect to any remaining Myovant common shares subject to purchase thereunder pursuant to the net exercise provisions set forth in the Myovant warrants. As a result of such automatic net exercise, the holder of each Myovant warrant will receive a number of Myovant common shares equal to the quotient of (i) the product of (A) the number of Myovant common shares then subject to purchase pursuant to such Myovant warrant and (B) the difference between the per share merger consideration and the then-effective exercise price of such Myovant warrant, divided by (ii) the per share merger consideration. Following such automatic net exercise, at the effective time, each Myovant common share received by the holder of a Myovant warrant will be treated the same as the other Myovant common shares that are issued and outstanding immediately prior to the effective time.
For more information regarding these warrants and their treatment, please see the section entitled “The Merger Agreement—Treatment of Myovant Warrants” beginning on page 90.
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Interests of Myovant’s Directors and Executive Officers in the Merger
In considering the unanimous recommendation of the Special Committee and the recommendation of the Myovant Board acting at the unanimous recommendation of the Special Committee that you vote to approve the Merger Proposal, you should be aware that, aside from their interests as shareholders of Myovant, our directors and executive officers may have interests in the Merger that are different from, or in addition to, those of other shareholders of Myovant generally. In particular, the Sumitomo Directors are members of the Myovant Board who have been designated to serve by Sumitovant and/or pursuant to its right to designate such directors as set forth in the Bye-Laws and the Investor Rights Agreement, dated December 27, 2019, by and among Myovant, Sumitovant and SMP (the “Investor Rights Agreement”). For more information regarding the Investor Rights Agreement, please see the section entitled “Other Important Information Regarding Myovant Sciences Ltd.—Transactions Between Myovant and the Purchaser Filing Persons” beginning on page 116. Interests of our directors and executive officers that may be different from or in addition to the interests of Myovant’s shareholders include:
equity awards granted by us to our directors and executive officers under the Equity Plans that are outstanding immediately prior to the effective time will be cancelled pursuant to the terms of the Merger Agreement, and such directors and executive officers will receive cash payments in exchange for such equity awards in connection with the Merger;
Myovant’s executive officers have entered into individual agreements that provide for certain (i) change in control protections and/or (ii) severance protections upon a termination by Myovant other than for cause or by the executive with good reason (as such terms are defined in the applicable agreement) (each such termination, a “qualifying termination”), and the parties have agreed to treat the consummation of the Merger as a “change in control” (or similar term) of Myovant for purposes of determining severance entitlements under Myovant’s benefit plans and employee agreements;
to the extent not paid prior to consummation of the Merger, Myovant’s executive officers will receive their annual bonus payments on the regular annual bonus payment date (subject to such executive officer’s continued employment through such regular annual bonus payment date), based on performance goals established by Myovant at the beginning of the fiscal year ending on March 31, 2023 (“fiscal year 2022”) and accounting for partial attainment of performance goals consistent with historical practice (but not discretionarily reduced for individual performance factors unless determined by Myovant’s Principal Executive Officer and the compensation committee of the Myovant Board (the “Compensation Committee”)); provided, however, that Myovant’s executive officers who incur a termination of employment under circumstances that entitle the executive officer to severance prior to the regular payment date of the annual bonus for Myovant’s fiscal year 2022 will receive prorated target annual bonus payments, as provided by the Merger Agreement as soon as practicable following such date of termination;
except as otherwise determined by Sumitovant and notified in writing to Myovant at least five business days prior to the effective time, the directors of Merger Sub immediately prior to the effective time will be the directors of the surviving company following the effective time;
except as otherwise determined by Sumitovant and notified in writing to Myovant at least five business days prior to the effective time, Myovant’s officers as of immediately prior to the effective time will become the initial officers of the surviving company at the effective time; and
our directors and executive officers are entitled to continued indemnification and insurance coverage under the Merger Agreement and Myovant’s constitutional documents.
These interests are discussed in more detail in the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger” beginning on page 69. The Special Committee was aware of the different or additional interests described herein and considered those interests along with other matters in recommending and/or approving, as applicable, the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement.
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U.S. Federal Income Tax Consequences of the Merger
The receipt of cash in exchange for Myovant common shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder (as defined in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 76) who receives cash in the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) such U.S. Holder’s adjusted tax basis in the Myovant common shares exchanged therefor. Subject to the discussion in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger—Consequences to U.S. Holders—Passive Foreign Investment Company Considerations” beginning on page 77, such gain or loss will generally constitute capital gain or loss and will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the Myovant common shares exchanged is more than one year as of the completion of the Merger. A non-U.S. Holder (as defined in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 76) will generally not recognize gain or loss under U.S. federal income tax laws unless you have certain connections to the United States. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of Myovant common shares for cash pursuant to the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or foreign tax laws). For more information, please see the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 76.
No Solicitation; No Change in Myovant Recommendation
Pursuant to the Merger Agreement, Myovant agreed to be subject to certain customary non-solicitation provisions, whereby, among other things, Myovant agreed not to, agreed to cause each of its subsidiaries and its and their respective directors, officers and employees not to, and agreed to direct its and subsidiaries’ other representatives not to, directly or indirectly, initiate, solicit, propose, knowingly encourage or knowingly facilitate any inquiry or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an alternative acquisition proposal (it being understood and agreed that ministerial acts that are not otherwise prohibited by the Merger Agreement (such as answering unsolicited phone calls and informing persons of the provisions summarized in this section or contacting any person making an alternative acquisition proposal solely to ascertain facts or clarify terms and conditions) will not be deemed to “solicit,” “encourage” or “facilitate” for purposes of, or otherwise constitute a violation of, the non-solicitation provisions included in the Merger Agreement). However, following the date of the Merger Agreement and until the receipt of the General Shareholder Approval at the special general meeting, Myovant will be able to respond to and engage in discussions of certain acquisition proposals, subject to certain conditions, if Myovant receives a bona fide written acquisition proposal that did not arise from a breach in any material respect of Myovant’s obligations not to solicit acquisition proposals or engage in discussions regarding acquisition proposals, and the Myovant Board (acting at the recommendation of the Special Committee) or the Special Committee determines in good faith (after consultation with outside legal counsel and financial advisors) that such alternative acquisition proposal constitutes or would reasonably be expected to lead to a superior proposal (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change in Myovant Recommendation”).
The non-solicitation provisions are described in more detail in the section entitled “The Merger Agreement—No Solicitation; No Change in Myovant Recommendation” beginning on page 96.
Conditions to the Merger
The obligations of Myovant, Sumitovant and Merger Sub to consummate the Merger are subject to the satisfaction or, to the extent permitted by applicable law, waiver, at or prior to the Closing, of certain customary conditions, including (i) the receipt of the General Shareholder Approval and the Minority Shareholder Approval, (ii) the absence of any law or order from a governmental entity that is in effect and restrains, enjoins or otherwise prohibits the consummation of the Merger, (iii) expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (iv) the accuracy of the representations and warranties of the parties, subject to certain materiality qualifiers, (v) compliance in all material respects by the parties with their respective obligations under the Merger Agreement and (vi) with respect to the obligations of Sumitovant and Merger Sub, the absence of any fact, circumstance, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect (as defined in the Merger Agreement and in the section entitled “The Merger
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Agreement—Representations and Warranties” beginning on page 90). The applicable waiting period under the HSR Act expired at 11:59 p.m., Eastern Time, on January 2, 2023.
Waiver of any condition by Myovant is permitted at the direction of and will only be valid if approved by the Special Committee.
Additional information regarding the conditions to the Merger are described in more detail in the section entitled “The Merger Agreement—Conditions to the Merger” beginning on page 103.
Termination
The Merger Agreement may be terminated by mutual written consent of Myovant (provided that such termination has been approved by the Special Committee) and Sumitovant at any time prior to the effective time, whether before or after receipt of the General Shareholder Approval. Either Myovant (acting at the recommendation of the Special Committee) or Sumitovant may also terminate the Merger Agreement if, among other situations:
the Merger is not consummated on or before 5:00 p.m., Pacific Time, on May 31, 2023 (the “End Date”); provided that the End Date may be extended by the mutual consent of Myovant and Sumitovant; provided, further that a party cannot terminate the Merger Agreement for such failure if its action or failure to fulfill any provision of the Merger Agreement or the Sumitovant Voting Agreement proximately causes the failure of the Merger to close by the End Date;
an applicable law or order from a governmental entity of competent jurisdiction that prevents, makes illegal or prohibits the consummation of the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement is in effect and becomes final and non-appealable; provided that a party cannot terminate the Merger Agreement if its action or failure to fulfill any provision of the Merger Agreement proximately caused such law or order or the failure to remove such law or order from a governmental entity;
the Minority Shareholder Approval is not obtained at the special general meeting or at any due adjournment or postponement thereof at which a vote on the Merger was taken; provided that a party cannot terminate the Merger Agreement for such failure to obtain the Minority Shareholder Approval if its material breach of the Merger Agreement proximately caused, or resulted in, such failure; or
the other party has breached any of its representations, warranties, covenants or agreements contained in the Merger Agreement or if any representation or warranty of the other party has become untrue, in a way that results in the failure to satisfy a condition to the completion of the Merger, and such breach has not been cured within the earlier of (i) 20 business days after written notice by the other party informing the breaching party of such breach and (ii) one day prior to the End Date; provided that the party seeking to terminate is not then in breach of its own obligations, which breach would result in the failure to satisfy a condition to the completion of the Merger, and, in the case of Sumitovant, any material breach of the Sumitovant Voting Agreement.
Myovant (acting at the recommendation of the Special Committee) may also terminate the Merger Agreement (i) prior to the receipt of the General Shareholder Approval, in order to enter into a definitive written agreement providing for a superior proposal, so long as Myovant (a) has not breached in any material respect any of its obligations under the Merger Agreement with respect to such superior proposal and (b) prior to or concurrently with such termination, pays Sumitovant the termination fee (as defined below) or (ii) if the General Shareholder Approval has not been obtained at a duly convened meeting of Myovant’s shareholders or any due adjournment or postponement thereof at which a vote on the Merger was taken.
Additional information regarding the situations pursuant to which the Merger Agreement can be terminated are described in more detail in the section entitled “The Merger Agreement—Termination” beginning on page 103.
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Termination Fee
Myovant will be required to pay to Sumitovant a termination fee of $55,250,000 (the “termination fee”) in the event that:
Myovant (acting at the recommendation of the Special Committee) terminates the Merger Agreement prior to obtaining the General Shareholder Approval to enter into an agreement providing for a superior proposal;
Sumitovant terminates the Merger Agreement prior to the special general meeting because (i) the Special Committee made an adverse recommendation change (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change in Myovant Recommendation” beginning on page 96) to its recommendation that Myovant’s shareholders adopt and approve the Merger, (ii) the Special Committee fails to recommend rejection of any intervening third-party tender or exchange offer within 10 business days of such offer, or (iii) after the public disclosure of an alternative acquisition proposal, the Special Committee fails to publicly reaffirm its recommendation to adopt and approve the Merger Agreement within the earlier of 10 business days of Sumitovant requesting the same and two business days prior to the End Date; or
(i) prior to the termination of the Merger Agreement in accordance with its terms, a third party makes an alternative acquisition proposal to Myovant, the Special Committee or Myovant’s shareholders (prior to the special general meeting), (ii) following such proposal, the Merger Agreement is terminated by (x) Myovant or Sumitovant because the Merger has not been completed by the End Date or the Minority Shareholder Approval has not been obtained (provided that such failure to obtain the Minority Shareholder Approval was not proximately caused by or the result of a material breach of the Merger Agreement by the other party) or (y) Sumitovant following a breach by Myovant of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, and such breach has not been timely cured (as specified in the Merger Agreement); provided that Sumitovant is not then in breach of any of its obligations contained in the Merger Agreement, which breach would result in the failure to satisfy a condition to the completion of the Merger, or in breach of the Sumitovant Voting Agreement in any material respect, and (iii) within 12 months following such termination and with the approval of a majority of the independent directors of the Myovant Board, Myovant consummates an alternative acquisition proposal or enters into a definitive agreement with respect to an alternative acquisition proposal and such alternative acquisition proposal is consummated (whether or not consummated within such 12 month period).
If Myovant fails to pay the termination fee as and when due to Sumitovant, Myovant will also be obligated to pay any reasonable costs and expenses incurred by Sumitovant and its affiliates in connection with any legal action to enforce the Merger Agreement that results in a judgment against Myovant for the termination fee, together with interest on the amount of any unpaid termination fee and the costs or expenses incurred by Sumitovant and its affiliates at the prime rate set forth in the Wall Street Journal on the date that such termination fee was required to be paid.
For more information, please see the section entitled “The Merger Agreement—Termination Fees and Limited Expense Reimbursement; Limitations on Liability” beginning on page 104.
Guaranty by SMP
In order to induce Myovant to enter into the Merger Agreement, SMP agreed, pursuant to the Merger Agreement, to irrevocably guarantee to Myovant the due and punctual payment of all amounts payable by Sumitovant or Merger Sub under the Merger Agreement, in each case, as and when due.
Voting and Support Agreement
As a condition to Myovant’s willingness to enter into the Merger Agreement and to proceed with the transactions contemplated thereby, including the Merger, Sumitovant entered into the Sumitovant Voting Agreement with Myovant on October 23, 2022. Pursuant to the Sumitovant Voting Agreement and consistent with the Merger Agreement, Sumitovant agreed to be present for the purposes of quorum and to vote, or cause to be voted, all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal and each of the other transactions and documents relating thereto of which approval of Myovant’s shareholders is solicited, in each case, at any meeting of Myovant’s
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shareholders held during the term of the Merger Agreement and at any permitted adjournment or postponement thereof (which includes the special general meeting). Sumitovant also granted Myovant an irrevocable proxy to appear, cause to be counted, vote, and to exercise all voting and consent rights of Sumitovant with respect to Myovant common shares beneficially owned by Sumitovant with respect to the Merger Proposal and each of the other transactions and documents related thereto of which approval of Myovant’s shareholders is solicited.
For more information regarding the Sumitovant Voting Agreement, please see the section entitled “Voting and Support Agreement” beginning on page 107. A copy of the Sumitovant Voting Agreement is attached to this proxy statement as Annex B.
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL GENERAL MEETING AND THE MERGER
The following questions and answers address briefly some questions you may have regarding the special general meeting, the Merger Agreement, the Statutory Merger Agreement, and the Merger. These questions and answers may not address all questions that may be important to you as a shareholder of Myovant. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, as well as the related Schedule 13E-3, including the exhibits thereto.
Q:
Why am I receiving this proxy statement?
A:
On October 23, 2022, Myovant entered into the Merger Agreement providing for the Merger of Merger Sub with and into Myovant, with Myovant surviving the Merger as a wholly owned subsidiary of Sumitovant. If the Merger is completed, Myovant will become a privately held company, wholly owned by Sumitovant. Sumitovant is a wholly owned subsidiary of SMP, and SMP and Sumitovant are affiliates of Sumitomo Chemical. The Special Committee and the Myovant Board are furnishing this proxy statement and form of proxy card to the holders of Myovant common shares in connection with the solicitation of proxies in favor of the Merger Proposal, the Compensation Proposal and the Adjournment Proposal. This proxy statement includes information that we are required to provide to you under the SEC rules and is designed to assist you in voting on the matters presented at the special general meeting. Myovant shareholders of record as of the record date may attend the special general meeting and are entitled and requested to vote on the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.
Q:
When and where will the special general meeting be held?
A:
The special general meeting of shareholders will be held at 10:00 a.m., United Kingdom local time, on March 1, 2023, at the offices of Vistra UK Limited, 7th Floor, 50 Broadway, London SW1H 0DB, United Kingdom. Directions to the special general meeting may be found by visiting https://www.vistra.com/locations/emea/united-kingdom#London. Information on how to vote in person at the special general meeting is discussed below.
Q:
Who can vote at the special general meeting?
A:
Only shareholders of record at the close of business on January 20, 2023, or the record date, will be entitled to vote at the special general meeting. On the record date, there were 97,235,316 Myovant common shares issued and outstanding and entitled to vote at the special general meeting.
Shareholder of Record
If, on the record date, your Myovant common shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are a shareholder of record. As a shareholder of record, you may vote at the special general meeting or vote by proxy. Whether or not you plan to attend the special general meeting, we urge you to submit your proxy or voting instructions as soon as possible. For more information, please see our response to the question “How do I vote?” below beginning on page 13.
Beneficial Owner Who Owns in Street Name
If, on the record date, your Myovant common shares were held, not in your name, but rather through a broker, bank or other nominee, then you are the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by that organization. The organization holding your Myovant common shares is considered to be the shareholder of record for purposes of voting at the special general meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account. You are also invited to attend the special general meeting, but in order to vote your shares in person at the special general meeting you must obtain and submit a valid “legal proxy” from your broker, bank or other nominee. In addition, if you hold your Myovant common shares in “street name” and you submit voting instructions to your broker, bank or other nominee, your instructions
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must be received by the broker, bank or other nominee prior to the deadline set forth in the information from your broker, bank or other nominee on how to submit voting instructions. For more information, please see our response to the question “When and where will the special general meeting be held?” beginning on page 12.
Q:
What am I voting on?
A:
You will be asked to vote on the following proposals:
the Merger Proposal;
the Compensation Proposal; and
the Adjournment Proposal.
For more information, please see the sections entitled “Proposal 1: The Merger Proposal” beginning on page 86, “Proposal 2: Non-Binding, Advisory Vote on Merger-Related Executive Compensation—The Compensation Proposal” beginning on page 124 and “Proposal 3: Adjournment Proposal” beginning on page 125.
Q:
How do I vote?
A:
On each proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” The procedures for voting are described below.
Shareholder of Record
Your vote must be received by 11:59 p.m., Eastern Time, on February 27, 2023, to be counted. If you are eligible to vote at the special general meeting and are a shareholder of record, you may cast your vote in any of four ways:
To vote in person, come to the special general meeting and we will give you a ballot when you arrive.
To vote using a proxy card, which is enclosed with these proxy materials, simply complete, sign and date the proxy card and return it promptly in the postage-paid envelope provided with the proxy card.
To vote over the telephone, dial the toll-free number listed on your enclosed proxy card using a touch-tone phone and follow the recorded instructions. You will be asked to provide your vote control number from the proxy card.
To vote over the Internet, go to the website indicated on your enclosed proxy card to complete an electronic proxy card. You will be asked to provide your vote control number from your proxy card.
Beneficial Owner Who Owns in Street Name
If you are a beneficial owner of Myovant common shares registered in the name of your broker, bank or other nominee, you should have received a notice containing a voting instruction from that organization rather than from Myovant. Simply follow the voting instructions in the notice to ensure that your vote is counted. You may vote by telephone or over the Internet as instructed by your broker, bank or other nominee. To vote in person at the special general meeting, you must obtain and submit a valid “legal proxy” from your broker, bank or other nominee. Follow the voting instructions from your broker, bank or other nominee included with these proxy materials, or contact your broker, bank or other nominee to request a voting instruction form. In addition, if you hold your Myovant common shares in “street name” and you submit voting instructions to your broker, bank or other nominee, your instructions must be received by the broker, bank or other nominee prior to the deadline set forth in the information from your broker, bank or other nominee on how to submit voting instructions.
Q:
How many votes do I have?
A:
On each matter to be voted upon, you have one vote for each Myovant common share you owned as of the close of business on the record date.
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Q:
How many votes are needed to approve each proposal?
A:
Merger Proposal
The General Shareholder Approval and the Minority Shareholder Approval are both required to approve the Merger Proposal. As a result of the voting standard for the Minority Shareholder Approval, if you fail to vote (including if you do not submit a validly executed proxy or attend the special general meeting to vote your Myovant common shares, or if you fail to instruct your broker, bank or other nominee how to vote your Myovant common shares) or if you abstain from voting on the Merger Proposal, the effect will be the same as a vote “AGAINST” the Merger Proposal. Pursuant to the Sumitovant Voting Agreement and consistent with the Merger Agreement, Sumitovant has agreed to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the approval of the Merger Proposal and all other proposals presented at the special general meeting. If Sumitovant votes in compliance with the terms of the Sumitovant Voting Agreement, the General Shareholder Approval will be obtained, but such vote will have no effect on the Minority Shareholder Approval.
Compensation Proposal
The Compensation Proposal requires approval by the holders of a majority of the issued and outstanding Myovant common shares entitled to vote on such matter and voting at the special general meeting. For the Compensation Proposal, only votes “FOR” or “AGAINST” will be counted as a vote cast. If you fail to vote (including if you do not submit a validly executed proxy or attend the special general meeting to vote your Myovant common shares, or if you fail to instruct your broker, bank or other nominee how to vote your Myovant common shares) or if you abstain from voting on the Compensation Proposal, your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of such proposal.
Adjournment Proposal
The Adjournment Proposal requires approval by the holders of a majority of the issued and outstanding Myovant common shares present, in person or by proxy, and entitled to vote on such matter at the special general meeting. If you fail to vote (including if you do not submit a validly executed proxy or attend the special general meeting to vote your Myovant common shares, or if you fail to instruct your broker, bank or other nominee how to vote your Myovant common shares), your Myovant common shares will not be counted in determining, and will have no effect on, the outcome of the Adjournment Proposal. If you abstain from voting on the Adjournment Proposal, the effect will be the same as a vote “AGAINST” the Adjournment Proposal.
Q:
With respect to the non-binding, advisory proposal to approve the Compensation Proposal, why am I being asked to cast a non-binding, advisory vote to approve specified compensation that may become payable to the named executive officers of Myovant in connection with the Merger?
A:
SEC rules require us to seek a non-binding, advisory vote with respect to certain categories of compensation that may be provided to named executive officers in connection with the Merger.
Q:
What will happen if Myovant shareholders do not approve the Compensation Proposal?
A:
Approval of the Compensation Proposal is not a condition to the completion of the Merger. This vote is an advisory vote and will not be binding on Myovant. Therefore, if the Merger Proposal is approved by the General Shareholder Approval and the Minority Shareholder Approval and the Merger is completed, the payments that are the subject of the vote may become payable to the named executive officers regardless of the outcome of such vote.
Q:
What is the quorum requirement?
A:
A quorum of shareholders is necessary to conduct business at the special general meeting. A quorum will be present if holders of Myovant common shares representing a majority of the issued and outstanding Myovant common shares entitled to vote at the special general meeting as of the record date are present or
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represented by proxy at the special general meeting. Your Myovant common shares will be counted toward the quorum only if you submit a validly executed proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote at the special general meeting. Abstentions will be counted toward the quorum requirement.
Q:
What if I do not vote?
A:
If you are a record holder and you sign and return your proxy card without indicating how to vote on any particular proposal, the Myovant common shares represented by your proxy will be voted as recommended by the Special Committee and the Myovant Board (acting upon the unanimous recommendation of the Special Committee) with respect to that proposal. Unless a Myovant shareholder of record checks the box on his, her or its proxy card to withhold discretionary authority, the applicable proxy holders may use their discretion to vote on other matters relating to the special general meeting, as applicable.
For purposes of the special general meeting, an abstention occurs when a Myovant shareholder of record attends the special general meeting and does not vote or returns a proxy with an “abstain” instruction.
1)
Merger Proposal: As a result of the voting standard for the Minority Shareholder Approval, an abstention or failure to vote will have the same effect as a vote cast “AGAINST” the Merger Proposal.
2)
Compensation Proposal: An abstention will not count as a vote cast “FOR” or “AGAINST” such proposal. If a Myovant shareholder is not present at the special general meeting and does not respond by proxy, it will have no effect on the vote count for the Compensation Proposal (assuming a quorum is present).
3)
Adjournment Proposal: An abstention will have the same effect as a vote cast “AGAINST” the Adjournment Proposal. If a Myovant shareholder is not present at the special general meeting and does not respond by proxy, it will have no effect on the vote count for the Adjournment Proposal (assuming a quorum is present).
Q:
If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?
A:
No. In accordance with the rules of the New York Stock Exchange (the “NYSE”), banks, brokers and other nominees who hold Myovant common shares in “street name” for their customers do not have discretionary authority to vote those shares with respect to the Merger Proposal, the Compensation Proposal or the Adjournment Proposal. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owners of those shares, they are not permitted to vote those shares with respect to any of the proposals to be voted upon at the special general meeting. As a result, if you hold your Myovant common shares in “street name” and you do not provide voting instructions, your Myovant common shares will (i) not be counted for purposes of determining whether a quorum is present at the special general meeting, (ii) assuming a quorum is present, have the same effect as a vote “AGAINST” the Merger Proposal with respect to the Minority Shareholder Approval, and (iii) assuming a quorum is present, have no effect on the Merger Proposal with respect to the General Shareholder Approval, the Compensation Proposal or the Adjournment Proposal.
Q:
What will Myovant’s shareholders receive in the Merger?
A:
If the Merger is completed, holders of Myovant common shares (other than Myovant common shares held by (i) Dissenting Holders, (ii) Sumitovant or (iii) Myovant or its wholly owned subsidiaries) will be entitled to receive $27.00 in cash, without interest and less any applicable withholding taxes, for each Myovant common share they hold immediately prior to the effective time, and any such Myovant common shares will cease to exist, and each holder of such Myovant common shares will have no other rights with respect thereto as of the effective time.
Q:
What will holders of Myovant options, Myovant RSUs and Myovant PSUs receive in the Merger?
A:
Each option to purchase Myovant common shares granted under the Equity Plans that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, and that has an exercise
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price per Myovant common share that is less than $27.00 will be cancelled and converted into the right to receive a cash payment for each Myovant common share that is subject to such option equal to the difference between $27.00 and the per share exercise price of such option (without interest and less any applicable withholding taxes). Each option to purchase Myovant common shares granted under the Equity Plans that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, and that has an exercise price per Myovant common share that is equal to or greater than $27.00 will be cancelled without payment. Each Myovant RSU, except for the Myovant RSUs granted to non-executive directors (other than Dr. Nishinaka) described in the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger—Restricted Share Units and Performance Share Units” beginning on page 70, that has not been settled in Myovant common shares prior to the effective time will be cancelled and converted into the right to receive, in respect of each such Myovant RSU, a cash payment equal to $27.00 multiplied by the number of Myovant common shares subject to such Myovant RSU immediately prior to the effective time (without interest and less any applicable withholding taxes). Each Myovant PSU that has not been settled in Myovant common shares prior to the effective time will be cancelled and converted into the right to receive, in respect of each such Myovant PSU, a cash payment equal to $27.00 multiplied by the number of Myovant common shares subject to each such Myovant PSU (deeming performance goals as being satisfied) immediately prior to the effective time (without interest and less any applicable withholding taxes). Immediately following the effective time, there will be no stock options to purchase Myovant common shares, Myovant RSUs or Myovant PSUs outstanding, and the former holders thereof will only be entitled to receive the amounts set forth above.
Q:
How does the per share merger consideration compare to the market price of the Myovant common shares prior to the announcement of the Merger?
A:
The per share merger consideration represents (i) a premium of approximately 50.3% to the closing price per Myovant common share on September 30, 2022 (the last trading day prior to the public announcement of Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96), (ii) a premium of approximately 48.4% to the 30-calendar day volume weighted average price (“VWAP”) per Myovant common share through September 30, 2022 (which was $18.19) and (iii) a premium of approximately 13.1% to the 52-week high trading price of the Myovant common shares as of September 30, 2022 (which was $23.87).
Q:
Why are the Special Committee and the Myovant Board proposing the Merger?
A:
The Special Committee and the Myovant Board (other than the Sumitomo Directors, who recused themselves), acting at the unanimous recommendation of the Special Committee, have determined that the terms and conditions of the Merger Agreement, the Statutory Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interest of Myovant and its shareholders, and that the $27.00 per share merger consideration constitutes fair value for each Myovant common share. To review the reasons for the proposed Merger in greater detail, see “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger” beginning on page 34.
Q:
How does the Special Committee and the Myovant Board recommend that I vote?
A:
The Special Committee and the Myovant Board acting at the unanimous recommendation of the Special Committee each recommends that our shareholders vote:
FOR” the Merger Proposal;
FOR” the Compensation Proposal; and
FOR” the Adjournment Proposal.
You should read the section entitled “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger” beginning on page 34 for a discussion
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of the factors that the Special Committee and the Myovant Board considered, respectively, in deciding to recommend and adopt and approve the Merger Agreement, the Statutory Merger Agreement, the Merger and the other the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement. Please also see the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger” beginning on page 69.
Q:
Do any of Myovant’s directors or executive officers have interests in the Merger that may be different from, or in addition to, those of Myovant shareholders?
A:
Yes. Myovant’s directors and executive officers may have interests in the Merger that may be different from, or in addition to, the interests of Myovant shareholders. See the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger” beginning on page 69. The members of the Special Committee and the Myovant Board were aware of and considered these interests, among other matters, in evaluating the Merger Agreement, the Statutory Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement and in recommending that Myovant shareholders approve the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.
Q:
Will Sumitovant and its affiliates vote their shares in favor of the Merger Proposal at the special general meeting?
A:
Yes. Pursuant to the Sumitovant Voting Agreement and consistent with the Merger Agreement, Sumitovant agreed to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal and each of the other transactions and documents relating thereto of which approval of Myovant’s shareholders is solicited, in each case, at any meeting of the Myovant shareholders held during the term of the Merger Agreement and at any permitted adjournment or postponement thereto (which includes the special general meeting). The foregoing voting obligations will terminate in the event that the Special Committee effects an adverse recommendation change to its recommendation that Myovant’s shareholders vote in favor of the Merger Proposal. As of January 17, 2023, Sumitovant is the record or beneficial owner of approximately 50,041,181 Myovant common shares, representing approximately 51.5% of the voting power of the Myovant common shares entitled to vote at the special general meeting. For a discussion of Sumitovant’s obligation to vote all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal, please see the section entitled “Voting and Support Agreement” beginning on page 107.
Q:
What effects will the Merger have on Myovant common shares?
A:
The Myovant common shares are currently registered under the Exchange Act and are listed on the NYSE under the symbol “MYOV.” If the Merger is consummated, Myovant will become a privately held company as a wholly owned subsidiary of Sumitovant, and there will be no public market for the Myovant common shares. After the Merger, the Myovant common shares will cease to be listed on the NYSE, and price quotations with respect to sales of Myovant common shares in the public market will no longer be available. In addition, registration of the Myovant common shares under the Exchange Act will be terminated.
For more information, please see the section entitled “Special Factors—Certain Effects of the Merger” beginning on page 61.
Q:
Who will own Myovant after the Merger?
A:
After the Merger, Myovant will be a wholly owned subsidiary of Sumitovant. Sumitovant is a wholly owned subsidiary of SMP, and SMP and Sumitovant are affiliates of Sumitomo Chemical.
Q:
When will the Merger be consummated?
A:
The Merger will be consummated on the Closing Date, which will be no later than the seventh business day after all of the conditions to the Merger are satisfied or, to the extent permitted by applicable law, waived, subject to the receipt of the required approvals from Myovant shareholders and certain other closing
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conditions. However, Myovant cannot predict the actual date on which the Merger will be consummated, or whether it will be consummated, because the Merger is subject to factors beyond Myovant’s control. See the section entitled “The Merger AgreementConditions to the Merger” beginning on page 103.
Q:
What are the conditions to consummation of the Merger?
A:
In addition to approval of the Merger Proposal by Myovant shareholders, consummation of the Merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver of a number of other conditions. See the section entitled The Merger Agreement—Conditions to the Merger beginning on page 103.
Q:
What will happen if the Merger is not consummated?
A:
If the Merger is not consummated for any reason, Myovant’s shareholders will not receive any payment for their Myovant common shares in connection with the Merger. Instead, Myovant will remain a public company and the Myovant common shares will continue to be listed and traded on the NYSE. Under certain specified circumstances, Myovant will be required to pay Sumitovant the termination fee if the Merger Agreement is terminated. For more information on the circumstances under which Myovant would be required to pay the termination fee, please see the section entitled “The Merger Agreement—Termination Fees and Limited Expense Reimbursement; Limitations on Liability” beginning on page 104.
Q:
What do I need to do now?
A:
We urge you to read this proxy statement carefully, including its annexes and the documents to which it refers as incorporated by reference, as well as the related Schedule 13E-3, including the exhibits thereto, which have been filed with the SEC, and to consider how the Merger affects you. For more information, please see the section entitled “Where You Can Find Additional Information” beginning on page 136. Once you have reviewed the relevant materials, please ensure that your Myovant common shares are voted at the special general meeting by following the instructions set forth in our response to the question “How do I vote?” beginning on page 13.
Q:
What is the deadline for voting my shares if I do not attend the special general meeting?
A:
Shareholder of Record
Your proxy must be received by telephone or the Internet by 11:59 p.m., Eastern Time, on February 27, 2023, in order for your shares to be voted at the special general meeting. If you choose to submit your proxy by mailing a proxy card, your proxy card must be completed, signed, dated and returned in the enclosed postage-paid reply envelope or otherwise filed with our Corporate Secretary no later than 11:59 p.m. Eastern Time, on February 27, 2023. Whether or not you plan to attend the special general meeting, please sign, date and return your enclosed proxy card, or vote via the Internet or over the phone, as soon as possible so that your shares can be voted at the special general meeting in accordance with your instructions.
Beneficial Owner Who Owns in Street Name
Please comply with the deadlines included in the voting instructions provided by the broker, bank or other nominee that holds your shares. If you hold your Myovant common shares in “street name” and you submit voting instructions to your broker, bank or other nominee, your instructions must be received by the broker, bank or other nominee prior to the deadline set forth in the information from your broker, bank or other nominee on how to submit voting instructions.
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Q:
Can I change or revoke my vote after submitting my proxy?
A:
Shareholder of Record
Yes. You can change your vote or revoke your proxy at any time before the polls close at the special general meeting. If you are the record holder of your Myovant common shares, you may change your vote or revoke your proxy in any one of the following ways:
You may properly submit a new proxy by Internet, telephone or mail. Please see our response to the question “How do I vote?” beginning on page 13. Please note that if you want to revoke your proxy by mailing a new proxy card to Myovant or by sending a written notice of revocation to Myovant, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by Myovant two days before the special general meeting.
You may send a written notice that you are revoking your proxy to Myovant Sciences Ltd., Attn: Corporate Secretary, at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
You may attend and vote at the special general meeting. However, simply attending the special general meeting will not, by itself, revoke your proxy.
Unless you attend and vote at the special general meeting, your latest submitted proxy will be the one that is counted.
Beneficial Owner Who Owns in Street Name
If your Myovant common shares are held by your broker, bank or other nominee, you should follow the voting instructions provided by your broker, bank or other nominee to change or revoke your vote. If you hold your Myovant common shares in “street name” and you submit voting instructions to your broker, bank or other nominee, your instructions must be received by the broker, bank or other nominee prior to the deadline set forth in the information from your broker, bank or other nominee on how to submit voting instructions.
Q:
Should I send in my stock certificates or other evidence of ownership now?
A:
No. After the Merger is completed, if you are a shareholder of record, you will be sent a letter of transmittal with detailed written instructions for exchanging your Myovant common shares for the per share merger consideration. If your Myovant common shares are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the per share merger consideration. Do not send in any certificate or evidence of ownership now.
Q:
What happens if I sell my Myovant common shares before completion of the Merger?
A:
If you sell your Myovant common shares, you will have transferred your right to receive the per share merger consideration in the Merger. In order to receive the per share merger consideration, you must hold your Myovant common shares through the effective time.
Q:
Will I have to pay taxes on the per share merger consideration I receive in exchange for my Myovant common shares?
A:
The receipt of cash in exchange for Myovant common shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder of Myovant common shares who receives cash in the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) such U.S. Holder’s adjusted tax basis in the Myovant common shares exchanged therefor. Such gain or loss will generally constitute capital gain or loss and will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the Myovant common shares exchanged is more than one year as of the Closing Date. However, if we are, or, at any time prior to the Merger, were, a passive foreign investment company, the U.S. federal income tax consequences to the U.S. Holders could be different than described in the prior sentence, as more fully described below in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 76. A non-U.S. Holder will generally not recognize gain or loss under U.S. federal income tax laws
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unless you have certain connections to the United States, as more fully described below in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 76. You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of Myovant common shares for cash pursuant to the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or foreign tax laws).
Q:
If I do not favor the approval of the Merger Proposal, what are my appraisal rights under Bermuda law?
A:
If (i) you are a shareholder of record of Myovant as of the close of business on January 20, 2023, the record date, (ii) you do not vote your Myovant common shares in favor of the Merger Proposal and (iii) you are not satisfied that you have been offered fair value for your Myovant common shares, you will have the right under Section 106(6) of the Bermuda Companies Act to apply to the Supreme Court of Bermuda for an appraisal of the fair value of your shares within one month from the giving of notice convening the special general meeting. The notice of the special general meeting accompanying this proxy statement constitutes such notice. The right to make this demand is known as “appraisal rights.” Shareholders of Myovant who wish to exercise their appraisal rights must: (i) not vote affirmatively in favor of the Merger Proposal and (ii) apply to the Supreme Court of Bermuda to appraise the fair value of such holder’s Myovant common shares within the requisite one-month period of the giving of the notice of the meeting at which the Merger Proposal will be voted upon. For additional information regarding appraisal rights, please see the section entitled “Rights of Appraisal” beginning on page 122, as well as the complete text of the applicable sections of the Bermuda Companies Act attached to this proxy statement as Annex D.
Q:
What does it mean if I receive more than one set of proxy materials?
A:
If you receive more than one set of proxy materials, your Myovant common shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy card or voting instruction form in each set of proxy materials to ensure that all of your shares are voted.
Q:
How can I find out the results of the voting at the special general meeting?
A:
Preliminary voting results will be announced at the special general meeting. In addition, final voting results will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days (as determined pursuant to Form 8-K) after the special general meeting.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
Myovant has retained Innisfree M&A Incorporated (“Innisfree”), a proxy solicitation firm, to assist it in the solicitation of proxies for the special general meeting and will pay Innisfree (i) a fee of approximately $30,000 and (ii) in the event of significant shareholder opposition or in the event a third party publicly announces an offer to acquire at least a majority of Myovant common shares, mutually agreed upon appropriate fees for such services, depending on the circumstances, plus a success fee equal to 50% of all fees paid under clause (i) and (ii) if the Required Shareholder Approval is obtained, as well as reimbursement of out-of-pocket expenses. In addition, Myovant has agreed to indemnify Innisfree against certain liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting materials to beneficial owners and will be reimbursed for their reasonable out-of-pocket expenses incurred in sending proxy materials to beneficial owners.
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Q:
Who can help answer my other questions?
A:
If you have more questions about the Merger, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please contact Innisfree.

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll free: (877) 750-0537
Banks and Brokers may call collect: (212) 750-5833
If your broker, bank or other nominee holds your shares, you can also call your broker, bank or other nominee for additional information.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement, and the documents incorporated by reference in this proxy statement, contains forward-looking statements, including under the headings, among others, “Summary Term Sheet,” “Questions and Answers About the Special General Meeting and the Merger,” “The Special General Meeting,” “Special Factors,” and “Other Important Information Regarding Myovant Sciences Ltd.,” and often in statements identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plan,” “will,” “may,” “look forward,” “intend,” “guidance,” “future” or similar expressions. Because these statements reflect Myovant’s current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Forward-looking statements in this proxy statement, the annexes to this proxy statement and other documents to which it refers as incorporated by reference, as well as the related Schedule 13E-3, including the exhibits thereto, include statements regarding the Merger and other transactions contemplated by the Merger Agreement and the Statutory Merger Agreement. Factors that could cause actual results of Myovant to differ materially from those contemplated or implied by the statements in this proxy statement, including the annexes to this proxy statement and other documents to which it refers as incorporated by reference, as well as the related Schedule 13E-3, including the exhibits thereto, include negative effects from the pendency of the Merger and other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement; the risk that required Myovant shareholder approvals of the Merger will not be obtained or that such approvals will be delayed or conditioned beyond current expectations; the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; the inability to complete the Merger because, among other reasons, conditions to the closing of the Merger may not be satisfied or waived; uncertainty as to the timing of completion of the Merger; potential adverse effects or changes to relationships with customers, employees, suppliers or other parties resulting from the announcement or completion of the Merger; risks related to the disruption of management time from ongoing business operations due to the Merger and possible difficulties in maintaining customer, supplier, key personnel and other strategic relationships; litigation relating to the Merger that has been or could be instituted against Myovant, Sumitovant or their respective directors or officers, including the effects of any outcomes related thereto, such as an injunction against or delay of the completion of the Merger and substantial costs to Myovant or its directors or officers, including any costs associated with the indemnification of directors and officers; the possibility of unexpected costs and liabilities related to the Merger; possible disruptions from the Merger that could harm Myovant’s or Sumitovant’s business, including current plans and operations; failure to realize contemplated benefits from the Merger; and incurrence of significant costs in connection with the Merger. Investors should note that many factors, as more fully described under the caption “Risk Factors” and elsewhere in Myovant’s Form 10-K, Form 10-Q and Form 8-K filings with the SEC and as otherwise enumerated herein, could affect Myovant’s future financial results and could cause actual results to differ materially from those expressed in such forward-looking statements. The forward-looking statements in this proxy statement, and the documents incorporated by reference in this proxy statement, are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause Myovant’s actual results to differ materially from expected and historical results. These risks are not exhaustive. New risk factors emerge from time to time and it is not possible for Myovant’s management to predict all risk factors, nor can Myovant assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not place undue reliance on any forward-looking statements in this proxy statement, and the documents incorporated by reference in this proxy statement, which speak only as of the date hereof, and, except as required by law, Myovant undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements.
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SPECIAL FACTORS
The following, together with the summary of the Merger Agreement set forth under the section entitled “The Merger Agreement,” is a description of the material aspects of the Merger. While we believe that the following description covers the material aspects of the Merger, the description may not contain all of the information that is important to you. We encourage you to read carefully this entire document, including the Merger Agreement attached to this proxy statement as Annex A, for a more complete understanding of the Merger. The following description is subject to, and is qualified in its entirety by reference to, the Merger Agreement (including all exhibits thereto). You may obtain additional information without charge by following the instructions set forth in the section entitled “Where You Can Find Additional Information.”
Background of the Merger
On October 31, 2019, SMP, Roivant Sciences Ltd. (“Roivant”), then the holder of 40,765,599 Myovant common shares (approximately 45.5% of the outstanding Myovant common shares as of such date), and certain of their affiliates entered into a definitive transaction agreement (the “Roivant Transaction Agreement”) governing a strategic alliance (the “Strategic Alliance”) involving the acquisition by SMP of Roivant’s interests in certain pharmaceutical companies, including the Myovant common shares owned by Roivant immediately prior to the closing of the transactions contemplated by the Roivant Transaction Agreement (the “Roivant Closing”).
On December 27, 2019, pursuant to the Roivant Transaction Agreement, Roivant contributed to Sumitovant, then a wholly owned subsidiary of Roivant, all of the Myovant common shares owned by Roivant (including an additional 4,243,005 Myovant common shares (or approximately 4.7% of the outstanding Myovant common shares as of such date)) (the “top up shares”) that were acquired by Roivant from a third party prior to the Roivant Closing to ensure that SMP would indirectly own a majority of Myovant’s outstanding common shares upon the Roivant Closing. Immediately following such contribution, Roivant transferred all of the outstanding equity interests of Sumitovant to SMP. As a result of these transactions, SMP, through its ownership of Sumitovant, became the indirect beneficial owner of a majority of the outstanding Myovant common shares.
In connection with SMP’s and Sumitovant’s acquisition of such Myovant common shares from Roivant, on December 27, 2019:
Myovant and SMP entered into a $400 million unsecured revolving debt financing agreement with SMP as the lender (the “Loan Agreement”);
Myovant, Sumitovant and SMP entered into the Investor Rights Agreement containing, among other things, (i) protections for Myovant’s minority shareholders for so long as SMP and its controlled affiliates (including Sumitovant) beneficially own 50% or more of the total number of votes entitled to be cast at elections of Myovant’s directors and (ii) a right for SMP and its controlled affiliates (including Sumitovant) to designate the three Sumitomo Directors to the Myovant Board, which directors are currently Myrtle Potter, Adele Gulfo and Shigeyuki Nishinaka. The minority shareholder protections included in the Investor Rights Agreement include a standstill provision (the “Standstill Provision”) prohibiting any member of the Sumitomo Group from making a tender offer, exchange offer, merger proposal or other offer the effect of which (if completed) would increase SMP’s beneficial ownership to over 60% of the outstanding voting power of Myovant or acquiring all or substantially all of Myovant’s assets (an “Acquisition Transaction”) unless such Acquisition Transaction is effected in accordance with specified requirements, including (i) approval by a majority of the common shares held by shareholders other than SMP and its affiliates and (ii) if the Acquisition Transaction occurs on or prior to December 27, 2022, approval by a majority of the members then serving on the Audit Committee (each of whom is independent and not affiliated with SMP or its affiliates); and
Roivant, Sumitovant and SMP entered into a share return agreement (the “Share Return Agreement”) pursuant to which SMP agreed, among other things, to return to Roivant the number of top up shares that would result in SMP beneficially owning in excess of 55% of the outstanding Myovant common shares, with such beneficial ownership measured as of March 1 of each calendar year.
For additional information regarding the Loan Agreement, the Investor Rights Agreement and certain other agreements between Myovant and its subsidiaries, on the one hand, and the Sumitomo Group and its affiliates, on the other hand, please see the section entitled “Other Important Information Regarding Myovant Sciences Ltd.—Transactions Between Myovant and the Purchaser Filing Persons.”
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From the Roivant Closing through September 28, 2021, Sumitovant acquired additional Myovant common shares in the open market under a securities purchase plan entered into by Sumitovant on March 13, 2020, and a securities purchase plan entered into by Sumitovant on May 14, 2021 (the “2021 10b5-1 Trading Plan”) in each case with Citigroup Global Markets, Inc. (“CGMI”) pursuant to Rule 10b5-1 and Rule 10b-18 under the Exchange Act.
Since the Roivant Closing, members of Myovant’s management team and representatives of Sumitovant have met periodically to discuss Myovant’s business and operations, developments related to Myovant’s products and other matters.
In addition, Myovant’s management and the Myovant Board, including the Sumitomo Directors, have regularly reviewed and assessed strategic opportunities and alternatives and Myovant’s operations, performance, prospects and strategy in light of current and anticipated business and economic conditions, as well as developments in the biotechnology and pharmaceutical sectors, with a view towards enhancing shareholder value. Such opportunities and alternatives include, among other things, remaining as a stand-alone entity, potential acquisitions of other companies or businesses in the industry in which Myovant operates, joint ventures and other strategic alliances and other transactions. Separately, SMP and Sumitovant, as beneficial owners of a majority of the outstanding Myovant common shares, reviewed their investment in Myovant on a continuing basis based on various factors, including, without limitation, the contractual restrictions in the Investor Rights Agreement (including the Standstill Provision), Myovant’s financial position, results of operations, conditions in the securities market and general economic and industry conditions.
On April 8, 2020, Myovant, Myovant Sciences, Inc. and Sumitovant entered into a Nondisclosure and Common Interest Agreement (as amended, modified or supplemented from time to time, in accordance with its terms, the “Nondisclosure and Common Interest Agreement”), pursuant to which the parties agreed to share certain confidential information.
On May 18, 2020, Myovant and Sumitovant entered into a consulting agreement (the “Consulting Agreement”), which was amended on November 9, 2020, pursuant to which Sumitovant agreed to provide consulting services to Myovant to support Myovant in commercial planning, commercial launch activities and implementation. The term of the Consulting Agreement expired on March 31, 2021.
On February 2, 2022, Sumitovant, Myovant, Myovant Sciences GmbH and Myovant Sciences, Inc. entered into a Services and Information Sharing Agreement (the “Information Sharing Agreement”), pursuant to which, among other things, Myovant agreed, for so long as Sumitovant, together with its affiliates, is a majority owner of Myovant, to supply certain information summarizing material aspects of Myovant’s business to Sumitovant, and with reasonable advanced notice, give Sumitovant and its representatives the reasonable opportunity to discuss such information with Myovant’s senior management. For additional information regarding the Information Sharing Agreement, please see section entitled “Other Important Information Regarding Myovant Sciences Ltd.—Transactions Between Myovant and the Purchaser Filing Persons.”
On April 4, 2022, Sumitovant and SMP submitted a letter to the Audit Committee requesting access to conduct due diligence on Myovant’s business in connection with Sumitovant’s and SMP’s evaluation of the possibility of submitting a proposal to acquire the remaining common shares of Myovant that Sumitovant did not already own, and stating that it had retained J.P. Morgan Securities LLC (“J.P. Morgan”) as its financial advisor and Sullivan & Cromwell LLP (“Sullivan & Cromwell”) as its counsel. In the letter, Sumitovant and SMP also noted that if they determined to make a proposal, such proposal and any possible transaction following such proposal would comply with the requirements set forth in the Investor Rights Agreement, including that the proposal would be subject to the affirmative approval by a majority of the independent directors comprising the Audit Committee and a non-waivable condition requiring the approval of Myovant shareholders holding a majority of the Myovant common shares not owned by Sumitovant.
On April 6, 2022, Sumitovant and SMP provided the Audit Committee with a list of high priority requests for materials and information, and also requested that Myovant grant Sumitovant and its affiliates and advisors permission to use previously provided information in connection with their due diligence review.
Also on April 6, 2022, Myovant and Pfizer Inc. (“Pfizer”) received a deficiencies letter from the U.S. Food and Drug Administration (the “FDA”) regarding their supplemental New Drug Application (“sNDA”) for MYFEMBREE®, for the management of moderate to severe pain associated with endometriosis in pre-menopausal women.
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On April 15, 2022, the Audit Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Cooley LLP (“Cooley”), counsel to Myovant, in attendance, to discuss the requests received from Sumitovant and SMP and the appropriate response. Following this discussion, the Audit Committee authorized Mark Guinan, Chairman of the Audit Committee, to contact Myrtle Potter, in her capacity as Chief Executive Officer of Sumitovant, to discuss narrowing the scope of Sumitovant’s and SMP’s requests, in an effort to minimize the diversion of management time and attention that would need to be devoted to the diligence process prior to receiving a potential proposal and preliminary indication of value for Myovant from Sumitovant and SMP.
On April 18, 2022, as authorized by the Audit Committee, Mr. Guinan spoke with Ms. Potter regarding the list of high priority diligence requests that Sumitovant and SMP had provided on April 6. Mr. Guinan communicated that the members of the Audit Committee had not made a determination about whether it was an opportune time for Myovant to consider strategic alternatives such as a possible transaction with Sumitovant and SMP and, accordingly, wished to limit the amount of Myovant management’s time and attention that would potentially be devoted to the diligence process prior to receiving a preliminary indication of value for Myovant, noting that Sumitovant already had significant knowledge about Myovant through its information and access rights pursuant to the Information Sharing Agreement and designees serving on the Myovant Board. Ms. Potter indicated the items requested by Sumitovant and SMP were necessary to evaluate whether they would pursue a possible transaction with Myovant, but expressed a willingness to narrow the scope of the requests at that stage. Ms. Potter also indicated that Sumitovant and SMP were not in a position to provide a preliminary indication of value with respect to a possible transaction until Sumitovant progressed its diligence.
On April 20, 2022, the Audit Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Cooley and Conyers Dill and Pearman Limited (“Conyers”), Bermuda counsel to Myovant. At the meeting, Mr. Guinan updated the other members of the Audit Committee on his discussion with Ms. Potter on April 18 regarding Sumitovant’s list of high priority diligence requests. Conyers reviewed directors’ duties under Bermuda law. The members of the Audit Committee also discussed the engagement of a financial advisor to provide advice with respect to matters relating to a possible transaction with Sumitovant and SMP. Following discussion of these matters, based on, among other things, Goldman Sachs’ qualifications, experience and reputation, the Audit Committee authorized management to seek a proposal from Goldman Sachs to serve as financial advisor to the independent directors serving on the Audit Committee and to obtain relationship disclosure from Goldman Sachs with respect to Sumitovant and SMP to be presented to the Audit Committee.
On April 28, 2022, the Myovant Board held a meeting by teleconference, with members of Myovant’s management in attendance to, among other things, consider the formation of a special committee consisting of the three independent directors serving on the Audit Committee to oversee matters relating to a possible proposal from Sumitovant and SMP. Following discussion, the Myovant Board (a) approved the formation of the Special Committee, consisting of Mr. Guinan, Terrie Curran and Nancy Valente, M.D. (the three independent directors serving on the Audit Committee), with Mr. Guinan serving as the Chairman of the Special Committee, and (b) empowered the Special Committee to (i) review and evaluate any proposal from Sumitovant or its affiliates in order to make a recommendation to the Myovant Board regarding whether Myovant should seek to engage in a potential transaction with Sumitovant, (ii) if determined that Myovant should seek to engage in a potential transaction with Sumitovant, develop and negotiate the terms and make a recommendation to the full Myovant Board regarding whether Myovant should enter into such potential transaction, (iii) identify, review and evaluate available alternatives to a potential transaction with Sumitovant, including remaining a separate company, and (iv) recommend to the Myovant Board what further actions, if any, should be taken with respect to a potential transaction with Sumitovant or any alternative thereto. The resolutions of the Myovant Board authorizing the formation of the Special Committee provided that the Myovant Board would not recommend, authorize or approve any transaction with Sumitovant unless the Special Committee recommended such transaction.
Immediately following the board meeting on April 28, 2022, the Special Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Cooley in attendance. The Special Committee discussed the engagement of a financial advisor and counsel for the Special Committee. Following discussion (including review of the proposed forms of engagement letters with such advisors and disclosures regarding any potential conflicts of interest such advisors may have with respect to a potential transaction involving Sumitovant), the Special Committee determined such advisors were not disqualified from
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being engaged by the Special Committee by virtue of any potential conflicts of interest with respect to a potential transaction with Sumitovant and SMP and approved the engagement of Goldman Sachs, Cooley and Conyers. The Special Committee also discussed the list of high priority diligence requests received from Sumitovant and SMP, and reviewed the feedback that had already been provided to Sumitovant by Mr. Guinan prior to the meeting as well as a proposed response letter from the Special Committee to Sumitovant regarding the diligence requests. Following such discussion, the Special Committee approved the proposed response letter and authorized Mr. Guinan to deliver an executed copy of the letter to Sumitovant on behalf of the Special Committee.
On April 29, 2022, the Special Committee and Myovant executed an engagement letter for Goldman Sachs to serve as financial advisor to the Special Committee. The Special Committee’s decision to engage Goldman Sachs was based on, among other things, Goldman Sachs’ qualifications, experience and reputation, including Goldman Sachs’ extensive experience in the pharmaceutical and biotechnology industries, and the Special Committee’s determination, based on disclosures provided by Goldman Sachs on April 23, 2022 with respect to any material relationships with either Sumitovant or SMP, that Goldman Sachs did not have any material conflicts.
On April 29, 2022, Sumitovant and SMP provided the Special Committee with a revised list of high priority requests for materials and information it sought as part of its due diligence process and evaluation of whether to pursue a potential proposal to acquire the remaining shares of Myovant that Sumitovant did not already own.
On May 5, 2022, the Audit Committee held a meeting, after which the members of the Special Committee (whose members are identical to those of the Audit Committee) discussed the status of the high priority diligence requests and a potential response.
On May 21, 2022, Mr. Guinan, on behalf of the Special Committee, sent a letter to Yuichiro Haruyama, then-current Chief Financial Officer of Sumitovant, in response to Sumitovant’s letters provided on April 4, 2022 and April 6, 2022, regarding the possibility of Sumitovant and SMP submitting a potential acquisition proposal and related diligence requests. The letter informed Sumitovant that after carefully considering Sumitovant’s requests, it was not clear to the Special Committee that it was an opportune time for Myovant to consider strategic alternatives such as a potential transaction with Sumitovant and, accordingly, that the Special Committee wished to limit the amount of Myovant management’s time and attention that would potentially be devoted to the diligence process, including because Sumitovant already had significant knowledge about Myovant. The letter also stated that the Special Committee had no desire to hinder Sumitovant’s consideration of a possible proposal and was therefore willing to respond to a subset of the information requests provided by Sumitovant. The responses to that subset of the information requests were provided to Sumitovant along with the letter, and the Special Committee further authorized management to provide additional due diligence information to Sumitovant and SMP. The letter also noted that the Special Committee was permitting Sumitovant and its affiliates and advisors to use information previously provided to Sumitovant for purposes of conducting due diligence on Myovant’s business in connection with Sumitovant’s and SMP’s ongoing review of whether to pursue a possible transaction.
Following Mr. Guinan’s May 21 letter, between May 21, 2022 and the execution of the Merger Agreement on October 23, 2022, Myovant’s management provided due diligence information to Sumitovant and its advisors at the direction of the Special Committee as part of an ongoing process.
On June 28, 2022, the Special Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Goldman Sachs and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) in attendance. Prior to representatives of Goldman Sachs and Skadden joining the meeting, the Special Committee determined to retain Skadden to serve as counsel to the Special Committee, based on, among other things, Skadden’s qualifications, experience and reputation and the absence of conflicts on the part of Skadden. While the Special Committee did not believe that Cooley was disqualified from acting as its legal counsel by virtue of any potential conflicts of interest related to Cooley’s prior or ongoing representation of Myovant, the Special Committee determined to retain Skadden as legal counsel for the potential transaction with Sumitovant and SMP based on Skadden’s qualifications, experience and reputation in providing legal advice in connection with situations involving the type of transaction that Sumitovant and SMP indicated they were considering. Representatives of Goldman Sachs and Myovant’s management reviewed information provided to Sumitovant as part of its ongoing due diligence process. Myovant’s management also reviewed preliminary
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illustrative financial projections for Myovant that were prepared by management at the request of the Special Committee (the “Initial Projections”), based on the original preliminary five-year projections that had been presented by management to the Myovant Board earlier in the year as part of Myovant’s regular long-range planning process, and key assumptions underlying those projections. The Initial Projections assumed, among other things, FDA approval of Myovant’s and Pfizer’s sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women.
On July 7, 2022, the Special Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Goldman Sachs and Skadden in attendance. The Special Committee discussed the Initial Projections prepared by Myovant’s management that were previously presented by Goldman Sachs to the Special Committee on June 28 and the assumptions underlying those projections, and provided feedback to management regarding the Initial Projections and underlying assumptions.
On July 26, 2022, the Special Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Goldman Sachs, Skadden and Cooley in attendance. Representatives of Goldman Sachs provided an update on the information provided to Sumitovant in connection with its ongoing due diligence process, and informed the Special Committee that J.P. Morgan, at the direction of Sumitovant and SMP, had advised them that if Sumitovant and SMP were to proceed to make a proposal they would only do so after Myovant and Pfizer received a decision from the FDA regarding their sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women. Myovant’s management and representatives of Cooley reviewed information to assist the Special Committee in evaluating the loss of patent exclusivity assumptions used in the Initial Projections. Management and the advisors reviewed the underlying assumptions used in the Initial Projections prepared by Myovant’s management, including with respect to the assumed exclusivity periods associated with Myovant’s patent portfolio. After discussion, the Special Committee provided feedback to management and Goldman Sachs regarding potential revisions to such underlying assumptions.
On August 2, 2022, Mr. Guinan, on behalf of the Special Committee, circulated to Myovant’s senior management a memorandum regarding certain guidelines for management in connection with the potential receipt of a proposal from Sumitovant and SMP, including guidelines with respect to the confidentiality of the Special Committee process and any interactions between Myovant’s senior management and Sumitovant and/or SMP in connection with a possible transaction. Thereafter, senior management acknowledged that they would comply with the guidelines set forth in the memorandum.
On August 3, 2022, the Special Committee held a meeting by videoconference, with members of Myovant’s management and representatives of Goldman Sachs and Skadden in attendance. Representatives of management and Goldman Sachs reviewed management’s revised preliminary illustrative financial projections, which had been updated to reflect revisions made following the July 7, 2022 and July 26, 2022 meetings and did not change thereafter (the “Revised Projections”) and the underlying assumptions, and representatives of Goldman Sachs reviewed preliminary illustrative financial analyses based on such projections, including certain sensitivity analyses. The Revised Projections assumed, among other things, FDA approval of Myovant’s and Pfizer’s sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women.
On August 5, 2022, Myovant and Pfizer publicly announced receipt of FDA approval of Myovant’s and Pfizer’s sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women.
On August 12, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. The Special Committee discussed the Revised Projections prepared by Myovant’s management and the preliminary illustrative financial analyses, including sensitivity analyses, performed by Goldman Sachs.
On August 22, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Representatives of Goldman Sachs updated the Special Committee on communications with representatives of J.P. Morgan regarding Sumitovant’s evaluation of whether to pursue a possible transaction, including with respect to due diligence information. Representatives of Goldman Sachs also reviewed the Revised Projections as well as certain sensitivity analyses prepared by Goldman Sachs as requested by the Special Committee at the August 12 meeting, and recent changes in market conditions and the trading price of Myovant common shares. The Special Committee instructed representatives of Goldman Sachs to use the Revised Projections prepared by Myovant’s management in Goldman Sachs’ analyses. Representatives of Skadden reviewed legal matters, including an overview of certain terms typically included in merger agreements
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involving a minority buyout of a public company by a majority shareholder. The Special Committee also discussed with representatives of Goldman Sachs and Skadden the possibility of conducting outreach to potential third parties other than Sumitovant in advance of receiving a proposal from Sumitovant, during which discussion the Special Committee considered, among other things, the risk that Sumitovant and SMP would be unwilling to support a sale of Myovant to a third party which could make any outreach futile, the likelihood that few parties other than one of Myovant’s current commercial partners would be interested in a transaction and the potential negative impact on Myovant and its relationships with third parties if such outreach were to become known, that the Special Committee could determine to reach out to third parties at a later time, and the expectation that any merger agreement that might ultimately be entered into with Sumitovant would be expected to allow the Special Committee to consider unsolicited inbound acquisition proposals that might be made. Following discussion, the Special Committee determined not to reach out to third parties at that time.
On September 15, 2022, the Special Committee held an in person meeting (which Mr. Guinan joined by videoconference), with David Marek, Myovant’s Principal Executive Officer, Uneek Mehra, Myovant’s Principal Financial Officer and Matthew Lang, Myovant’s General Counsel and Corporate Secretary, and representatives of Goldman Sachs and Skadden in attendance by videoconference. Representatives of Goldman Sachs provided an update to the Special Committee on their interactions with J.P. Morgan, including regarding due diligence and the evaluation process being conducted by Sumitovant and SMP of a possible transaction. Representatives of Skadden provided an overview of the types of interim operating restrictions that would be expected to apply to Myovant’s business operations between the signing and closing of a possible transaction with Sumitovant and of employee retention considerations to protect Myovant’s business against disruption and loss of employees during the period between the signing and closing of a possible transaction. The Special Committee requested management to work with Skadden to prepare a recommendation for the Special Committee regarding a possible employee retention proposal if Sumitovant and SMP were to make a proposal.
Also on September 15, 2022, the Myovant Board held a regularly scheduled in person meeting, with management in attendance (with certain participants in attendance by videoconference). During the meeting, management presented to the Myovant Board a financial update based on year-to-date results, which included an update on projected fiscal year 2022 ORGOVYX® revenues, which were likely to be lower than reflected in the projections for fiscal year 2022 ORGOVYX® revenues previously provided by management to the Myovant Board.
On September 16, 2022 and September 26, 2022, representatives of Goldman Sachs and J.P. Morgan held calls to discuss the status of due diligence and the process being conducted by Sumitovant and SMP to evaluate whether to pursue a possible transaction with Myovant. Following the September 26 call, J.P. Morgan provided an updated list of high priority diligence requests to Goldman Sachs on behalf of Sumitovant and SMP.
After the close of trading on September 30, 2022, Ms. Potter contacted Mr. Guinan to communicate that the special committee of the board of directors of Sumitovant had met earlier that day and intended to provide a proposal letter (the “proposal letter”) and that Sullivan & Cromwell would be delivering a draft of the Merger Agreement. Shortly thereafter, Ms. Potter delivered the proposal letter containing a non-binding proposal to acquire all of the Myovant common shares not already owned by Sumitovant for $22.75 per share in cash, reflecting a 26.7% premium to Myovant’s last closing price per share of $17.96. In the proposal letter, Sumitovant and SMP stated that they were only interested in acquiring additional Myovant common shares and not interested in selling any of the Myovant common shares that Sumitovant owned or supporting any alternative sale, merger or similar transaction involving Myovant. The proposal letter further noted that, consistent with the Investor Rights Agreement, the proposed transaction would be subject to the approval of the Audit Committee and a non-waivable condition requiring the approval of Myovant’s shareholders holding a majority of Myovant’s outstanding common shares that are not owned by Sumitovant. Sumitovant also stated that in compliance with its obligations under Section 13(d) of the Exchange Act, Sumitovant would be required to promptly file an amendment to its Schedule 13D to reflect the contents of the proposal letter. Later in the evening on September 30, 2022, Sullivan & Cromwell provided an initial draft of the Merger Agreement to Skadden.
After receipt of the proposal letter and draft of the Merger Agreement, the Special Committee held a meeting by videoconference on October 1, 2022, with representatives of Goldman Sachs and Skadden in attendance. The Special Committee received an update on communications with Sumitovant and its advisors and discussed the proposal letter, including the offer price and other terms of the proposal. Representatives of Goldman Sachs presented financial analyses to the Special Committee based on Myovant’s management projections that the Special Committee had previously instructed representatives of Goldman Sachs to use in its
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analyses, and representatives of Skadden reviewed certain legal considerations relating to the proposal and provided an overview of the terms of the draft Merger Agreement received from Sullivan & Cromwell. Following evaluation and discussion of the offer price and other terms of Sumitovant’s and SMP’s proposal, the Special Committee unanimously determined that Sumitovant’s and SMP’s proposal significantly undervalued Myovant and, therefore, was not in the best interests of Myovant or its shareholders. The Special Committee determined not to engage further on Sumitovant’s due diligence requests or the draft Merger Agreement based on Sumitovant’s and SMP’s proposal and instructed the Goldman Sachs representatives to inform the J.P. Morgan representatives of the Special Committee’s determination.
Following the Special Committee’s meeting on October 1, 2022, representatives of Goldman Sachs communicated to representatives of J.P. Morgan that the Special Committee determined that Sumitovant’s and SMP’s proposal significantly undervalued Myovant and was not in the best interests of Myovant or its shareholders. Representatives of Goldman Sachs also informed representatives of J.P. Morgan that the Special Committee had determined not to engage with Sumitovant on its further due diligence or negotiation of the draft Merger Agreement.
On October 2, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Representatives of Goldman Sachs provided an update on their interactions with representatives of J.P. Morgan, noting that J.P. Morgan had not provided any revised proposal from Sumitovant and SMP and that Sumitovant and SMP expected to issue a press release later that day to the effect that they had submitted a non-binding proposal to acquire all of the Myovant common shares not already owned by Sumitovant for $22.75 per share in cash. The Special Committee, together with representatives of Goldman Sachs and Skadden, discussed Myovant’s communications plan in response to Sumitovant’s and SMP’s expected press release and authorized Myovant’s management to issue a press release as discussed at the meeting. The Special Committee discussed with representatives of Goldman Sachs and Skadden the possibility of conducting outreach to potential third parties other than Sumitovant after public announcement of Sumitovant’s and SMP’s proposal to determine if any third parties had interest in a potential transaction with Myovant, and following discussion, the Special Committee determined not to do so at that time, noting the considerations regarding third party outreach discussed at the August 22 meeting of the Special Committee and the fact that the public announcement of Sumitovant’s and SMP’s proposal would put any potential bidders on notice of the opportunity to come forward with a proposal if they were interested.
On October 2, 2022, Sumitovant and SMP issued a press release disclosing that it had made a proposal on September 30, 2022 to acquire Myovant’s outstanding common shares not already owned by Sumitovant for $22.75 per share in cash. Myovant also issued a press release announcing the receipt of Sumitovant’s and SMP’s proposal and the Special Committee’s unanimous determination that such proposal significantly undervalued Myovant and, therefore, was not in the best interests of Myovant or its shareholders.
On October 3, 2022, Sumitovant filed an amendment to its Schedule 13D with the SEC, disclosing that it had made a proposal on September 30, 2022 to acquire Myovant’s outstanding common shares not already owned by Sumitovant for $22.75 per share in cash and attaching a copy of the proposal letter.
On October 3, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. At the request of the Special Committee, representatives of Goldman Sachs provided an update on the trading in Myovant’s common shares following the public announcement of Sumitovant’s and SMP’s proposal and discussed certain potential next steps with respect to Sumitovant’s and SMP’s proposal.
On October 4, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. At the request of the Special Committee, representatives of Goldman Sachs provided an update on the trading in Myovant’s common shares following the public announcement of Sumitovant’s and SMP’s proposal. Representatives of Goldman Sachs also discussed certain investor communications that had occurred since October 3. The Special Committee discussed with its advisors potential next steps with respect to Sumitovant and SMP under different scenarios.
On October 5, 2022, representatives of Goldman Sachs and representatives of a third party (“Company A”), a large pharmaceutical company, discussed the public announcement and Company A informed Goldman Sachs that it was evaluating a possible transaction with Myovant.
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Also on October 5, 2022, representatives of J.P. Morgan, at the request of Sumitovant and SMP, contacted representatives of Goldman Sachs to inquire whether, if Sumitovant and SMP were able to confirm that they would be willing to make a proposal at least at or near recent trading prices of Myovant’s common shares (which closed at $25.48 per share on October 4, 2022), it would be possible for the parties to proceed with further due diligence and negotiation of the Merger Agreement and other transaction documents. Representatives of J.P. Morgan indicated that once due diligence and merger agreement negotiations were substantially complete, Sumitovant and SMP would expect to be in a position, subject to receipt of internal governance approvals and the results of due diligence, to make an improved proposal for a possible transaction that they would be prepared to negotiate to reach a final agreement that could be supported by the Special Committee. Representatives of Goldman Sachs noted to representatives of J.P. Morgan that they would report this discussion to the Special Committee, but that any willingness to provide further due diligence and commence merger agreement negotiations should not be interpreted to mean that the price indicated by J.P. Morgan would be acceptable to the Special Committee.
Following the discussion between representatives of J.P. Morgan and Goldman Sachs on October 5, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Representatives of Goldman Sachs reported on a call they had with representatives of Company A, noting that Company A was evaluating a potential transaction with Myovant, but that Company A did not believe it likely that it would propose a transaction given that Sumitovant and SMP had publicly stated that Sumitovant was not willing to sell its Myovant shares and would not support an alternative merger, consolidation or similar transaction with a third party involving Myovant. Representatives of Goldman Sachs also reported on discussions with representatives of J.P. Morgan, noting Sumitovant’s and SMP’s proposal to move forward with their further due diligence and commence negotiations of the Merger Agreement and other transaction documents if Sumitovant and SMP would confirm their willingness to make an improved proposal at or near recent trading prices of Myovant’s common shares. Following discussion, the Special Committee determined to permit Sumitovant and SMP to continue due diligence and commence merger agreement negotiations, subject to Sumitovant and SMP confirming their understanding that they would need to increase their proposed price significantly beyond the current trading price in order to obtain the Special Committee’s ultimate support of any transaction. The Special Committee authorized representatives of Goldman Sachs to convey to representatives of J.P. Morgan, for negotiation purposes, that Sumitovant should be looking to provide value near $30.00 per share, which representatives of Goldman Sachs did later that day.
On October 6, 2022, representatives of J.P. Morgan confirmed to representatives of Goldman Sachs that Sumitovant and SMP acknowledged Myovant’s desired value improvement in accordance with the Special Committee’s condition to providing additional due diligence and commencing merger agreement negotiations and that Sumitovant’s and SMP’s ability to provide such desired value improvement for a transaction would depend on the outcome of its due diligence findings.
On October 7, 2022, representatives of Myovant began providing additional responses to Sumitovant’s due diligence requests.
Also on October 7, 2022, Skadden sent a revised draft Merger Agreement and an initial draft Sumitovant Voting Agreement to Sullivan & Cromwell.
On October 11, 2022, Sullivan & Cromwell sent Skadden revised drafts of the Merger Agreement and the Sumitovant Voting Agreement.
Also on October 11, 2022, Company A informed representatives of Goldman Sachs that after carefully considering the opportunity for a potential transaction with Myovant and discussing the opportunity internally, Company A had determined that it would not submit a proposal for a transaction with Myovant. Thereafter, representatives of Goldman Sachs informed the Chairman of the Special Committee of this fact.
Between October 12, 2022 and October 19, 2022, representatives of Skadden and Sullivan & Cromwell had various calls and discussed potential revisions to the drafts of the Merger Agreement and the Sumitovant Voting Agreement, and exchanged drafts of each document, resolving a number of issues related to the conditions to Closing, Myovant’s representations and warranties and interim operating covenants, the provisions related to the Special Committee’s ability to consider alternative proposals, and Sumitovant’s required efforts to obtain any necessary approvals.
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On October 17, 2022, the Special Committee held a meeting by videoconference, with Mr. Marek and representatives of Goldman Sachs and Skadden in attendance. At the request of the Special Committee, Mr. Marek discussed the need for employee retention to ensure business continuity during the period between signing and closing of a transaction and reviewed management’s proposal for employee retention in connection with any possible transaction with Sumitovant and SMP if recommended by the Special Committee. At the request of the Special Committee, Mr. Marek exited the meeting, and representatives of Skadden reviewed key business and legal issues in the latest draft of the Merger Agreement provided by Sullivan & Cromwell in connection with Sumitovant’s and SMP’s proposal. Representatives of Goldman Sachs discussed with the Special Committee that Company A had determined not to submit a proposal for a transaction with Myovant.
On October 19, 2022, the Myovant Board held a meeting by videoconference, during which the directors discussed, among other things, not making the regular and automatic annual grant of stock options pursuant to the Non-Executive Director Compensation Plan to non-executive directors that were scheduled to be made on October 21, 2022 in light of the ongoing discussions between Myovant and Sumitovant. The Myovant Board discussed that such stock option grant could be replaced by a restricted stock unit grant with equivalent value to be determined at a later Myovant Board meeting (which could be valued at the transaction price if a transaction were recommended by the Special Committee and approved by the Myovant Board (other than the Sumitomo Directors)). Following the Myovant Board meeting, the Compensation Committee resolved that the regular and automatic annual grant of stock options pursuant to the Non-Executive Director Compensation Plan to such non-executive directors would not be made on October 21, 2022.
On October 19, 2022, Ms. Potter, Mr. Guinan and representatives of Skadden and Sullivan & Cromwell had a call to discuss most of the remaining open issues, apart from the price per share payable as merger consideration, with respect to the Merger Agreement and the Sumitovant Voting Agreement, including, among other things, regarding (i) certain compensation and benefits matters, including with respect to employee retention and severance protections, (ii) post-Closing employee compensation and benefits matters, and (iii) the amount of the termination fee payable in the event of certain terminations of the Merger Agreement. The amount of the price per share payable in the Merger and the size of the proposed termination fee remained unresolved following the call.
Following the call on October 19, 2022, Sullivan & Cromwell sent revised drafts of the Merger Agreement and the Sumitovant Voting Agreement to Skadden. Between October 19, 2022 and October 23, 2022, Skadden and Sullivan & Cromwell exchanged drafts of the Merger Agreement and the Sumitovant Voting Agreement and finalized the terms of such agreements.
On October 20, 2022, the board of directors of SMP (the “SMP Board”) held a meeting by videoconference, with representatives of Sullivan & Cromwell and J.P. Morgan in attendance. During such meeting, the SMP Board (i) reviewed the terms of the draft Merger Agreement and the Sumitovant Voting Agreement, as well as Sumitovant’s diligence findings regarding Myovant, (ii) conditionally approved the delivery of a subsequent offer to Myovant of up to a per share price of $27.00 and (iii) approved the entry into the Merger Agreement by Sumitovant and SMP, subject to final approval by the board of directors of Sumitovant (the “Sumitovant Board”).
On October 21, 2022, representatives of J.P. Morgan contacted representatives of Goldman Sachs to convey a revised oral proposal from Sumitovant and SMP to acquire the outstanding Myovant common shares not already owned by Sumitovant for $25.25 per share in cash, which represented a $2.50 per share increase from Sumitovant’s and SMP’s initial offer price of $22.75, and reflected a 40.6% premium to Myovant’s closing price per share prior to the public disclosure of the initial proposed offer (the “Undisturbed Stock Price”).
On the morning of October 21, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Representatives of Goldman Sachs provided an update on discussions with representatives of J.P. Morgan, noting that representatives of J.P. Morgan had communicated, on behalf of Sumitovant and SMP, an increased proposal of $25.25 per share to acquire the outstanding shares of Myovant not already owned by Sumitovant. At the request of the Special Committee, Mr. Marek joined the meeting and provided management’s perspectives on the proposal and then exited the meeting. The Special Committee discussed Sumitovant’s and SMP’s proposal and the financial analyses previously presented to the Special Committee and authorized Goldman Sachs to respond to J.P. Morgan indicating that the Special Committee was unwilling to accept Sumitovant’s and SMP’s offer of $25.25 per share
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and that Sumitovant and SMP would need to significantly increase their offer price for the Special Committee to support a transaction. Following the Special Committee’s meeting on October 21, 2022, representatives of Goldman Sachs communicated the Special Committee’s message to representatives of J.P. Morgan.
Later on October 21, 2022, representatives of J.P. Morgan contacted representatives of Goldman Sachs by telephone to convey a revised proposal from Sumitovant and SMP to acquire the outstanding Myovant common shares not already owned by Sumitovant for $26.25 per share in cash, which represented a $1.00 per share increase from the $25.25 per share proposal made by Sumitovant and SMP earlier that day, and reflected a 46.2% premium to the Undisturbed Stock Price. The J.P. Morgan representatives indicated that this price reflected Sumitovant’s and SMP’s views of Myovant’s fundamental value and that Sumitovant and SMP had limited ability to increase their proposal from that price.
Following receipt of Sumitovant’s and SMP’s updated proposal on October 21, 2022, the Special Committee met again by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Representatives of Goldman Sachs informed the Special Committee of Sumitovant’s and SMP’s latest proposal to acquire the outstanding shares of Myovant not already owned by Sumitovant for $26.25 per share, and that representatives of J.P. Morgan indicated that Sumitovant and SMP had limited ability to increase their offer price above $26.25 per share. The Special Committee then discussed, together with representatives of Goldman Sachs and Skadden, Sumitovant’s and SMP’s revised proposal in the context of Goldman Sachs’ financial analyses and the underlying assumptions. At the request of the Special Committee, Mr. Marek joined the meeting to provide management’s perspectives on the proposal, following which he exited the meeting. Following discussion, the Special Committee, for purposes of negotiation, authorized representatives of Goldman Sachs to inform representatives of J.P. Morgan, among other things, of the request for a higher offer price approaching $30.00 per share and that further negotiation of price, if any, should be communicated between Mr. Guinan and Ms. Potter directly. Shortly after the Special Committee meeting, representatives of Goldman Sachs relayed this message as instructed by the Special Committee to representatives of J.P. Morgan.
Also on October 21, 2022, Sullivan & Cromwell provided to Skadden a version of SMP’s facility commitment letter, dated as of October 21, 2022 (the “Facility Commitment Letter”), with terms relating to the aggregate commitment amount, interest rates and mandatory prepayment redacted.
On October 22, 2022, Ms. Potter called Mr. Guinan and conveyed a further updated proposal to acquire the outstanding Myovant common shares not already owned by Sumitovant for $26.75 per share in cash, which represented a $0.50 per share increase from the $26.25 per share proposal made by Sumitovant and SMP on the previous day. Mr. Guinan indicated that he did not believe that the Special Committee would be supportive of a transaction at that price, to which Ms. Potter indicated that $27.00 per share was the best and final price she was able to offer.
Also on October 22, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. At the meeting, Mr. Guinan informed the Special Committee of Sumitovant’s and SMP’s latest proposal to acquire the outstanding shares of Myovant not already owned by Sumitovant for $26.75 per share. Mr. Guinan also informed the Special Committee that Ms. Potter indicated that $27.00 was the highest price Sumitovant and SMP would propose, which represented a 50.3% premium to the Undisturbed Stock Price. Representatives of Goldman Sachs reviewed its financial analyses. Following discussion, the Special Committee, for purposes of negotiation, determined to request a purchase price of $28.50 per share and authorized Mr. Guinan to convey to Ms. Potter the Special Committee’s counter-proposal of at least $28.50 per share.
Later on October 22, 2022, Mr. Guinan called Ms. Potter and conveyed the Special Committee’s counter-proposal that Sumitovant and SMP increase their offer to at least $28.50 per share. Ms. Potter indicated that she did not have authorization to offer above $27.00 per share, but would communicate the Special Committee’s request for at least $28.50 per share to Sumitovant and SMP.
Later in the evening on October 22, 2022, Ms. Potter called Mr. Guinan to inform him that $27.00 per share was Sumitovant’s and SMP’s best and final offer and that the transaction would not move forward if the Special Committee required a higher price than $27.00 per share. Mr. Guinan noted that he would report that to the Special Committee and would speak with Ms. Potter the following morning.
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On the morning of October 23, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs and Skadden in attendance. Mr. Guinan updated the Special Committee on his discussion with Ms. Potter, noting that Ms. Potter informed Mr. Guinan that $27.00 per share was Sumitovant’s and SMP’s best and final offer and that the transaction would not move forward if the Special Committee requested a higher price than $27.00 per share. Representatives of Goldman Sachs reviewed its financial analyses of the $27.00 per share proposal. At the request of the Special Committee, Messrs. Marek and Mehra joined the meeting and reviewed an update on projected fiscal year 2022 ORGOVYX® revenues based on year-to-date results that was previously reviewed by management with the Myovant Board at its September 15 board meeting and responded to questions from the Special Committee members, following which they exited the meeting. The Special Committee, together with representatives of Goldman Sachs, discussed the possible impact of the updated ORGOVYX® performance on future years’ sales, and representatives of Goldman Sachs reviewed a sensitivity analysis regarding the potential impact on valuation of the ORGOVYX® update and the potential impact on Myovant’s overall projections. Following discussion, and taking into account, among other things, the indication that $27.00 per share was Sumitovant’s and SMP’s best and final offer and the financial analyses reviewed by Goldman Sachs, the Special Committee determined that it would be supportive of Sumitovant’s and SMP’s latest proposal of $27.00 per share, and authorized Mr. Guinan to convey this message to Ms. Potter.
Following the Special Committee meeting on October 23, 2022, Mr. Guinan contacted Ms. Potter and informed her that the Special Committee would support Sumitovant’s and SMP’s latest proposal of $27.00 per share. During this discussion, Ms. Potter agreed to Mr. Guinan’s proposal of a termination fee of approximately 1.9% of the total equity value of Myovant at the transaction price. Later that day, Sullivan & Cromwell sent a revised draft of the Merger Agreement that included the agreed termination fee amount.
Later in the day on October 23, 2022, the Special Committee held a meeting by videoconference, with representatives of Goldman Sachs, Skadden and Conyers in attendance. Representatives of Conyers provided an overview of the duties of the Special Committee members under Bermuda law and discussed the application of such duties to the Special Committee’s consideration of the proposed transaction with Sumitovant and SMP. Representatives of Skadden reviewed the terms and conditions of the proposed Merger Agreement and the Sumitovant Voting Agreement to be entered into in connection with the proposed transaction with Sumitovant and SMP. Representatives of Goldman Sachs reviewed their financial analyses of the proposed transaction. The Special Committee members, with the assistance of Goldman Sachs and Skadden, discussed Sumitovant’s and SMP’s latest proposal and the terms and conditions of the proposed transaction. Representatives of Goldman Sachs delivered to the Special Committee an oral opinion, which was confirmed by delivery of a written opinion dated October 23, 2022, to the effect that, as of that date, and based upon and subject to the assumptions, procedures, factors, qualifications, limitations and other matters set forth in such written opinion, the $27.00 per share cash merger consideration that would be paid to the holders of Myovant common shares (other than Sumitovant and its affiliates) in the proposed transaction was fair from a financial point of view to such holders. Following discussion, the Special Committee unanimously (i) determined that the per share merger consideration constitutes fair value for each common share in accordance with the Bermuda Companies Act; (ii) determined that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act); and (iii) recommended that the Myovant Board (a) declare advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, (b) adopt the Merger Agreement and the Statutory Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and (c) subject to the right of the Myovant Board (acting upon the recommendation of the Special Committee) and the Special Committee to change their recommendations in certain circumstances specified in the Merger Agreement, recommend that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose.
Following the conclusion of the Special Committee meeting on October 23, 2022, the Myovant Board held a meeting by videoconference, with Mr. Lang and representatives of Goldman Sachs, Skadden and Conyers in attendance. Prior to the meeting, the Sumitomo Directors waived notice of the meeting and were not in attendance. A representative of Conyers reviewed the directors’ duties in connection with the proposed
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transaction. Representatives of Skadden provided an overview of the terms of the Merger Agreement and the Sumitovant Voting Agreement. Mr. Guinan provided a report of the Special Committee’s evaluation of the proposed transaction, including the various proposals made by Sumitovant and SMP prior to the latest revised proposal and the Special Committee’s recommendation with respect to the Merger Agreement and the proposed transaction. Representatives of Skadden reviewed the resolutions for approval of the transaction that were provided to the directors in advance of the meeting and, following this review, the Myovant Board, based upon the Special Committee’s recommendation, (i) determined that the per share merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determined that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act), (iii) approved and declared advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and (iv) subject to the right of the Myovant Board (acting upon the recommendation of the Special Committee) and the Special Committee to change their recommendations in certain circumstances specified in the Merger Agreement, recommended that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose. The Myovant Board (other than the Sumitomo Directors) also unanimously determined that in lieu of the regular and automatic annual grant of stock options pursuant to the Non-Executive Director Compensation Plan to non-executive directors, each non-executive director (other than Dr. Nishinaka) would be granted an award of Myovant RSUs pursuant to the 2016 Equity Incentive Plan with a grant value equal to $266,200, with each such grant valued at the per share merger consideration (provided that the number of Myovant RSUs subject to each grant shall be rounded down to the nearest share). These Myovant RSUs, which were granted on October 26, 2022, shall (x) vest in full on the earlier to occur of (i) October 26, 2023 and (ii) the date that is one day prior to Myovant’s 2023 annual shareholder meeting, subject in each case to such non-executive director providing continuous service to Myovant through such date, or (y) to the extent these Myovant RSUs have not vested as of the effective time, vest pro rata based on the number of days such non-executive director has served since October 26, 2022, and the vested Myovant RSUs shall cancelled in exchange for the Myovant RSU consideration as set forth in the section entitled “The Merger Agreement—Treatment of Myovant Equity Awards—Restricted Share Units and Performance Share Units,” and the unvested Myovant RSUs shall be cancelled without payment as of the effective time.
Also on October 23, 2022, the Sumitovant Board met and approved the entry into the Merger Agreement by Sumitovant and SMP and the entry into the Sumitovant Voting Agreement by Sumitovant.
Following the conclusion of the board meeting on October 23, 2022, Myovant, Sumitovant and SMP executed the Merger Agreement and the Sumitovant Voting Agreement, and issued a joint press release announcing the transaction.
Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger
The Special Committee
On October 23, 2022, the Special Committee adopted resolutions by unanimous vote of its members at a meeting duly called (i) determining that the per share merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determining that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act); and (iii) recommending that the Myovant Board (a) declare advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, (b) adopt the Merger Agreement and the Statutory Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement and (c) subject to the right of the Myovant Board (acting upon the
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recommendation of the Special Committee) and the Special Committee to change their recommendations in certain circumstances specified in the Merger Agreement, recommend that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose.
In the course of reaching its determination and making its recommendation, the Special Committee considered a number of potentially positive factors, including, but not limited to, the following (which factors are not necessarily presented in order of relative importance):
Compelling and Fair Value. The Special Committee members believe that the per share merger consideration represents compelling and fair value for Myovant common shares based on the Special Committee’s overall knowledge and understanding, and information obtained by the Special Committee (including from Myovant management and the Special Committee’s independent financial advisor), regarding Myovant’s business, operations, assets and liabilities, current, historical and prospective business, financial condition, results of operations, strategy and competitive position, as well as industry trends, long-term strategic goals and opportunities, including the potential impact of those factors on the trading price of Myovant common shares (which cannot be quantified numerically).
Premium to Market Price. The Special Committee considered the current and historical trading prices of Myovant common shares, including the relationship of the $27.00 per share merger consideration to the recent and historical trading prices of Myovant common shares, including that the per share merger consideration represents:
a premium of approximately 50.3% to the closing price per Myovant common share on September 30, 2022 (the last trading day prior to the public announcement of Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96);
a premium of approximately 48.4% to the 30-calendar day VWAP per Myovant common share through September 30, 2022 (which was $18.19); and
a premium of approximately 13.1% to the 52-week high trading price per Myovant common share as of September 30, 2022 (which was $23.87).
Per Share Merger Consideration. The Special Committee considered:
that the per share merger consideration consists solely of cash, which provides certainty of value and immediate liquidity at Closing to the Minority Shareholders, particularly in light of the relatively limited trading volume of the Myovant common shares, without the long-term business and execution risk associated with Myovant’s long-term plans; and
the fact that all of the Minority Shareholders will be entitled to receive the same per share merger consideration.
Special Committee’s Negotiations. The Special Committee considered its extensive negotiations with Sumitovant, and the fact that, during the course of such negotiations, Sumitovant raised the value of the per share merger consideration offered four times, from $22.75, to $25.25, to $26.25, to $26.75 and finally to $27.00 (representing a total increase of 18.7%), which Sumitovant indicated was its best and final offer for Myovant and which the Special Committee believed, after such negotiations with Sumitovant and its representatives, was the highest price per share obtainable from Sumitovant for the outstanding Myovant common shares not already owned by Sumitovant.
Financial Analyses and Opinion of Goldman Sachs. The Special Committee considered the financial analyses and the oral opinion of Goldman Sachs, subsequently confirmed by delivery of its written opinion, dated October 23, 2022 (which financial analyses and opinion were adopted by the Special Committee), that, as of the date of such opinion, and based upon and subject to the limitations, qualifications and assumptions set forth therein, the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below in the section entitled “Special Factors—Opinion of Financial Advisor to the Special Committee” and the full text of the opinion, which is attached as Annex C to this proxy statement.
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Potential Benefits of Business Combination. The Special Committee considered that the transaction provides benefits for Myovant in addition to the attractive value to Myovant shareholders, including:
the likelihood that the Merger will reduce development and commercialization risk for Myovant by allowing Myovant to leverage the resources and expertise of Sumitovant and its affiliates to swiftly drive the development and commercialization of ORGOVYX® and MYFEMBREE®;
that the Merger represents an opportunity to combine the expertise, platforms and resources of both Myovant and Sumitovant to address unmet needs in women’s health and prostate cancer; and
the potential risks associated with remaining as a separate public company with a majority shareholder and possible alternative business strategies instead of consummating the Merger.
Low Likelihood of Alternative Transactions. The Special Committee considered:
the fact that Sumitovant owns a majority of the outstanding Myovant common shares, and communicated to the Special Committee in its publicly filed, initial non-binding proposal letter delivered on September 30, 2022 that Sumitovant, in its capacity as a majority shareholder of Myovant, is interested only in acquiring Myovant common shares not already owned by Sumitovant and that in such capacity, Sumitovant has no interest in selling any Myovant common shares it owns, nor would Sumitovant support any alternative sale, merger or similar transaction involving Myovant, which could discourage the making of a competing acquisition proposal; and
the absence of other strategic alternatives available to Myovant that would provide comparable or superior value to Myovant shareholders, based in part on the Special Committee’s determination, following consultation with its independent financial advisor and taking into account the fact that Sumitovant’s proposal had been publicly announced and that thereafter no third party had submitted a proposal to acquire Myovant prior to the execution of the Merger Agreement (including the fact that Company A, after considering the opportunity for a transaction with Myovant and discussing it with the Special Committee’s independent financial advisor, had determined to not submit a proposal for a transaction with Myovant).
Timing Considerations. The Special Committee considered:
the timing of the Merger and the risk that if Myovant does not accept Sumitovant’s offer now, it may not have another opportunity to do so or to pursue an opportunity offering the same or better value and certainty to Myovant’s shareholders in the future; and
the fact that the standstill restrictions that apply to Sumitovant pursuant to the Investor Rights Agreement would expire on December 27, 2022, and that, following such expiration, Sumitovant could acquire the remaining Myovant common shares it does not already own with only the requisite shareholder approvals and without the approval of the independent directors serving on the Audit Committee, which could decrease Myovant’s negotiating power and could result in the consideration and/or terms of such transaction being less favorable to Myovant and its shareholders than the per share merger consideration and the terms and conditions of the Merger Agreement.
Certainty of Closing. The Special Committee took into account its belief that the Merger has a high likelihood of being completed in a timely manner based on, among other things, (i) the reputation, acquisition experience and financial resources of Sumitovant and its ability to complete an acquisition transaction involving the Myovant common shares that Sumitovant does not already own, (ii) the limited number and nature of the conditions to the completion of the Merger, including the fact that there is no financing condition, (iii) Sumitovant entering into the Sumitovant Voting Agreement and (iv) Myovant’s ability, pursuant to the Merger Agreement, to pursue remedies that include specific performance and equitable relief to prevent breaches of the Merger Agreement by Sumitovant and to specifically enforce the terms of the Merger Agreement.
Terms of the Transaction Documents. The Special Committee considered the terms of the Merger Agreement and other transaction documents, including the review by the Special Committee with its independent financial advisor and legal counsel of, and advice received from such advisor and counsel on, the structure of the contemplated transactions and financial and other terms of the Merger
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Agreement and the other agreements entered into in connection with the Merger, including with respect to deal protection, conditionality, termination rights and the likelihood of consummating the Merger (including with respect to obtaining required shareholder approvals and required HSR approval).
Ability to Respond to Certain Unsolicited Alternative Proposals. The Special Committee considered that the Merger Agreement gives the Special Committee the right to respond to, furnish information and negotiate with respect to unsolicited alternative proposals from third parties in certain circumstances described in the Merger Agreement and to change its recommendation to Myovant’s shareholders to vote in favor of the adoption and approval of the Merger Agreement if a superior proposal is available or in response to an intervening event (as defined in the section below entitled “The Merger Agreement—No Solicitation; No Change in Myovant Recommendation”).
Myovant Termination Rights. The Special Committee considered that Myovant would be permitted, under certain circumstances described in the Merger Agreement, to terminate the Merger Agreement in order to enter into an agreement with respect to a superior proposal after giving Sumitovant the opportunity to match the superior proposal and upon payment of the termination fee equal to $55,250,000 (which is approximately 1.9% of the total equity value of Myovant at the transaction price).
Termination Fee. The Special Committee believes that the termination fee of $55,250,000 that could become payable by Myovant pursuant to the Merger Agreement in the event the Merger Agreement is terminated under certain circumstances described in the Merger Agreement is reasonable and would not likely deter third parties from making alternative acquisition proposals that would be more favorable to Myovant’s shareholders than the Merger.
No Financing Condition. The Special Committee considered the fact that Sumitovant has financing in place to fund the aggregate per share merger consideration and any transaction expenses, that SMP has irrevocably guaranteed the due and punctual payment obligations of Sumitovant and Merger Sub under the Merger Agreement and that Sumitovant’s and Merger Sub’s obligations to complete the Merger and pay the aggregate per share merger consideration are not conditioned on Sumitovant or Merger Sub obtaining financing.
Sumitovant Voting Agreement. The Special Committee considered the fact that Sumitovant entered into the Sumitovant Voting Agreement, pursuant to which Sumitovant has agreed, among other things, to vote or cause to be voted all of the Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger Proposal and all of the other proposals presented at the special general meeting.
Appraisal Rights. The Special Committee considered the availability of appraisal rights to shareholders of Myovant who do not vote in favor of the Merger, which rights provide eligible shareholders with the opportunity to have Bermuda courts determine the fair value of their shares.
Employee Considerations. The Special Committee believes that treatment of equity awards held by management and employees, the treatment of the transaction as a “Change in Control” under Myovant’s severance arrangements and the ability to adopt an employee retention plan approved by the Special Committee will reduce the risk of attrition of key employees during the pre-Closing period, which will help ensure continuity of Myovant’s business during the period prior to closing under the Merger Agreement (thereby reducing risk of non-consummation), and could reduce the risk to Myovant if the Merger Agreement is terminated.
Procedural Safeguards. The Special Committee considered the following procedural safeguards implemented in an effort to ensure the fairness of the Merger and the transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement and to permit the Special Committee to represent the interests of the Minority Shareholders:
the Special Committee consists solely of directors of Myovant who are independent directors not affiliated with Sumitovant and who are not officers or employees of Myovant, and who are independent and disinterested with respect to the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement,
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and the Special Committee was advised by an independent legal counsel and an independent financial advisor in its review, evaluation and negotiation of the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement;
the resolutions of the Myovant Board forming the Special Committee and authorizing the Special Committee to oversee matters relating to a potential transaction with Sumitovant and any alternatives thereto, including, without limitation, (i) evaluating any proposal from Sumitovant with respect to a potential transaction and any alternatives thereto in order to make a recommendation to the Myovant Board as to whether Myovant should seek into engage in the potential transaction with Sumitovant and (ii) if determined that Myovant should seek to engage in the potential transaction, developing, assessing and negotiating the terms of the potential transaction with Sumitovant and making a recommendation to the full Myovant Board as to whether Myovant should enter into such potential transaction, and the fact that the Myovant Board was not permitted to approve any transaction with Sumitovant unless recommended by the Special Committee;
the provisions of the Investor Rights Agreement, including the standstill restrictions, which provide additional protections to the Minority Shareholders in connection with any business combination transaction between Myovant and Sumitovant, including the requirement that any such business combination transaction be approved by the independent directors serving on the Audit Committee and by a majority of Myovant’s outstanding voting shares not owned by Sumitovant or its affiliates; and
the fact that Sumitovant’s proposal was conditioned on approval by the three independent directors serving on the Audit Committee and the approval of Myovant’s shareholders holding a majority of the outstanding Myovant common shares not owned by Sumitovant or its affiliates.
In the course of reaching its determinations and making its recommendations, the Special Committee also considered the following countervailing factors concerning the Merger Agreement, the Statutory Merger Agreement and the Merger:
General Transaction Risks. The Special Committee considered the risks involved with the Merger, including the risk that the Merger may not be completed because one or more of the conditions to Closing (including HSR clearance) would not be satisfied, and the effect that failing to complete the Merger may have on the business, financial results and share price of Myovant, or on the perceptions of Myovant among investors, customers, employees and other stakeholders.
No Shareholder Participation in Future Growth or Earnings. The Special Committee considered the fact that Myovant will no longer exist as a separate public company and Myovant’s shareholders will forego any potential future increase in its value as a separate public company that might result from its possible growth and future prospects.
Impact of Announcement on Myovant. The Special Committee considered the possible negative effects of the Merger and public announcement of the Merger on Myovant’s business, financial performance, operating results and share price and Myovant’s relationships with customers, suppliers, distributors, commercial partners, management and employees.
No Solicitation. The Special Committee considered the fact that the Merger Agreement (i) precludes Myovant from actively soliciting competing acquisition proposals (as described in the section entitled “The Merger Agreement—No Solicitation; No Change in Myovant Recommendation”) and (ii) obligates Myovant (or its successor) to pay Sumitovant the termination fee of $55,250,000 in connection with a termination of the Merger Agreement under certain circumstances, which could discourage the making of a competing acquisition proposal or adversely impact the price offered in such a proposal.
Pre-Closing Covenants. The Special Committee considered the fact that the Merger Agreement imposes restrictions on the conduct of Myovant’s business in the pre-Closing period, which may adversely affect Myovant’s business in the event the Merger is not completed (including by delaying or preventing Myovant from pursuing business opportunities that may arise or precluding actions that would be advisable if Myovant were to remain a separate public company).
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Management Attention. The Special Committee considered the risk that the contemplated transactions may divert management focus and resources from operating Myovant’s business, as well as other strategic opportunities.
Expenses. The Special Committee considered the substantial transaction expenses to be incurred in connection with the Merger (including that Myovant may become obligated to pay Sumitovant a termination fee of $55,250,000 in connection with a termination of the Merger Agreement under certain circumstances specified in the Merger Agreement) and the negative impact of such expenses on Myovant’s cash reserves and operating results should the Merger not be completed.
Tax Consequences. The Special Committee considered the fact that the per share merger consideration consists solely of cash and will therefore be taxable to Myovant shareholders who are subject to taxation for U.S. federal income tax purposes.
Litigation. The Special Committee considered the risk of potential litigation relating to the Merger that could be instituted against Myovant and/or its directors and officers, and the potential effects of any outcomes related thereto, including potential management distraction and expenses that could result from such litigation.
Director and Officer Interests. The Special Committee considered the fact that Myovant’s directors and executive officers may have interests in the Merger that may be deemed to be different from, or in addition to, those of Myovant’s other shareholders generally, as described in the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger.”
The Special Committee did not specifically consider the liquidation value or the net book value of Myovant in its evaluation of the Merger because of its belief that neither liquidation value nor net book value presents a meaningful valuation for Myovant and its business, as Myovant’s value is derived from the cash flows anticipated to be generated from its continuing operations, including revenues Myovant is projected to realize from the commercialization of its drug products and candidates, rather than from the value of assets that might be realized in a liquidation or from net book value which is significantly influenced by historical costs. Further, the Special Committee did not consider liquidation value in evaluating the Merger because of its belief that Myovant remains a viable going concern and that any prospective acquirer of Myovant, including Sumitovant, would continue to operate Myovant as a going concern following the consummation of such transaction. Neither the Special Committee nor Goldman Sachs conducted a separate going-concern valuation of Myovant because the financial analyses presented by Goldman Sachs, as more fully described in the sections titled “Special Factors—Opinion of Financial Advisor to the Special Committee,” contained financial analyses of the cash flows anticipated to be generated by Myovant’s continuing operations as a going concern, as reflected in the Revised Projections, and the Special Committee believed these analyses to be appropriate to illustrate the value of Myovant as a going concern. The Special Committee considered the purchase prices of Myovant common shares paid in previous purchases of Myovant common shares as described under “Transactions in Common Shares—Transactions in Common Shares by the Purchaser Filing Persons During the Past Two Years.” The then-current market price of Myovant common shares on September 30, 2022 (the last trading day prior to the public announcement of Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96), as well as the majority of the historical market closing prices of Myovant common shares in the last two years, were lower than the per share merger consideration. The Special Committee therefore considered these to be positive factors and potential benefits of the Merger. Myovant is not aware of any firm offers made by any unaffiliated person, other than the Purchaser Filing Persons, during the past two years for (i) the merger or consolidation of Myovant with or into another company, or vice versa; (ii) the sale or other transfer of all or any substantial part of the assets of Myovant; or (iii) a purchase of Myovant’s securities that would enable the holder to exercise control of Myovant.
The Special Committee notes that the opinion delivered by Goldman Sachs addresses the fairness, from a financial point of view, to the Minority Shareholders, including the director and officer shareholders of Myovant who are affiliates of Myovant. These director and officer shareholders are treated in the same way with respect to their Myovant common shares as the unaffiliated security holders in connection with the Merger, and such director and officer shareholders will receive the same per share merger consideration for their Myovant common shares as the unaffiliated security holders. In addition, the Goldman Sachs opinion expressly states that Goldman
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Sachs did not express any opinion as to the fairness of the amount or nature of any other compensation to be paid or payable to any of the officers, directors or employees of Myovant, or class of such persons, in connection with the Merger, whether relative to the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement or otherwise. Therefore, the Special Committee believes there is no material distinction between the fairness of the Merger to the unaffiliated security holders and the Minority Shareholders and does not believe the inclusion of these director and officer shareholders as being encompassed in the universe of Minority Shareholders affects the Special Committee’s ability to rely on the opinion of Goldman Sachs as one of the many factors on which the Special Committee determined that the Merger is fair to the unaffiliated security holders.
After taking into account all of the factors set forth above, as well as others, the Special Committee concluded that the risks, uncertainties, restrictions and potentially negative factors associated with the Merger were outweighed by the potential benefits of the Merger to Myovant’s shareholders.
The above discussion of the information and factors considered by the Special Committee is not intended to be exhaustive, but indicates the material matters considered. In reaching its determination and recommendation, the Special Committee did not quantify, rank or assign any relative or specific weight to any of the foregoing factors, and individual members of the Special Committee may have considered various factors differently. The Special Committee did not undertake to make any specific determination as to whether any specific factor, or any particular aspect of any factor, supported or did not support its ultimate recommendation. Moreover, in considering the information and factors described above, individual members of the Special Committee may have given differing weights to differing factors. The Special Committee based its recommendation on the totality of the information presented.
The Myovant Board
At a meeting held on October 23, 2022, the Myovant Board (which for purposes of this section means other than the Sumitomo Directors, who waived notice of, and recused themselves from, the Myovant Board meeting, and abstained from voting on matters relating to the proposed transaction with Myovant), acting upon the unanimous recommendation of the Special Committee, adopted resolutions by vote of its members (i) determining that the per share merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determining that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act), (iii) declaring advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, (iv) adopting the Merger Agreement and the Statutory Merger Agreement and approving the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and (v) subject to the right of the Myovant Board (acting upon the recommendation of the Special Committee) and the Special Committee to change their recommendations in certain circumstances specified in the Merger Agreement, recommending that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose.
The Myovant Board considered and relied upon the analyses and the unanimous recommendation of the Special Committee (which analyses and unanimous recommendation were adopted by the Myovant Board) as set forth in the section above entitled “—The Special Committee” in arriving at this determination and recommendation. In considering the Special Committee’s analyses and recommendation, the Myovant Board reviewed and discussed information with respect to Myovant’s financial condition, results of operations, businesses, competitive position and business strategy, on a historical and prospective basis, as well as current industry, economic and market conditions and trends, and discussed the Special Committee’s recommendation
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with the members of the Special Committee and the independent financial advisor and legal counsel of the Special Committee. The following are the material factors that supported the Myovant Board’s determination and recommendation, in addition to the factors set forth in the section above entitled “—The Special Committee”:
Special Committee Recommendation. The Myovant Board considered and relied upon the analyses and the unanimous recommendation of the Special Committee (which analyses and unanimous recommendation were adopted by the Myovant Board) as set forth in the section above entitled “—The Special Committee.”
Procedural Safeguards. The Myovant Board considered the following procedural safeguards implemented in an effort to ensure the fairness of the Merger and the transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement to permit the Special Committee to represent the interests of the Minority Shareholders:
the Special Committee consists solely of directors of Myovant who are independent directors not affiliated with Sumitovant and who are not officers or employees of Myovant, and who are independent and disinterested with respect to the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and the Special Committee was advised by an independent legal counsel and an independent financial advisor in its review, evaluation and negotiation of the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement;
the resolutions of the Myovant Board forming the Special Committee and authorizing the Special Committee to oversee matters relating to a potential transaction with Sumitovant and any alternatives thereto, including, without limitation, (i) evaluating any proposal from Sumitovant with respect to a potential transaction and any alternatives thereto in order to make a recommendation to the Myovant Board as to whether Myovant should seek into engage in the potential transaction with Sumitovant and (ii) if determined that Myovant should seek to engage in the potential transaction, developing, assessing and negotiating the terms of the potential transaction with Sumitovant and making a recommendation to the full Myovant Board as to whether Myovant should enter into such potential transaction, and the fact that the Myovant Board was not permitted to approve any transaction with Sumitovant unless recommended by the Special Committee;
the provisions of the Investor Rights Agreement, including the standstill restrictions, which provide additional protections to the Minority Shareholders in connection with any business combination transaction between Myovant and Sumitovant, including the requirement that any such business combination transaction be approved by the independent directors serving on the Audit Committee and by a majority of Myovant’s outstanding voting shares not owned by Sumitovant or its affiliates; and
the fact that Sumitovant’s proposal was conditioned on approval by the independent directors serving on the Audit Committee and the approval of Myovant’s shareholders holding a majority of the outstanding Myovant common shares not owned by Sumitovant or its affiliates.
Special Committee’s Negotiations. The Myovant Board considered the Special Committee’s negotiations with Sumitovant, and the fact that, during the course of such negotiations, Sumitovant raised the value of the per share merger consideration offered four times, from $22.75, to $25.25, to $26.25, to $26.75 and finally to $27.00 (representing a total increase of 18.7%), which Sumitovant indicated was its best and final offer for Myovant and which the Myovant Board believed, after such negotiations with Sumitovant and its representatives, was the highest price per share obtainable from Sumitovant for the outstanding Myovant common shares not already owned by Sumitovant.
Special Committee’s Process. The Myovant Board considered the fact that the Special Committee held 19 meetings with its independent financial advisor and legal counsel to discuss and evaluate the
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transaction with Sumitovant, other alternatives to the transaction and other matters related thereto and was advised by a nationally recognized independent financial advisor and a nationally recognized independent legal counsel, and that each member of the Special Committee was actively engaged in the process on a continuous and regular basis.
Financial Analyses and Opinion of Goldman Sachs. The Myovant Board considered the financial analyses and the oral opinion of Goldman Sachs as delivered to the Special Committee, subsequently confirmed by delivery of its written opinion, dated October 23, 2022 (which financial analyses and opinion were adopted by the Special Committee), that, as of the date of such opinion, and based upon and subject to the limitations, qualifications and assumptions set forth therein, the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below in the section entitled “Special Factors—Opinion of Financial Advisor to the Special Committee” and the full text of the opinion, which is attached as Annex C to this proxy statement.
In considering the recommendations of the Special Committee and the Myovant Board (acting upon the unanimous recommendation of the Special Committee), Myovant’s shareholders should be aware that Myovant’s directors and executive officers may have interests with respect to the contemplated transactions that may be in addition to, or that may be different from, the interests of the Minority Shareholders generally, as described in the section entitled “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger.” The members of the Special Committee and the Myovant Board were aware of these interests and considered them, among others, in reaching their determinations to adopt the Merger Agreement and the Statutory Merger Agreement and approve the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and to make their recommendations to the Myovant Board and Myovant’s shareholders, as applicable.
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Opinion of Financial Advisor to the Special Committee
Opinion of Goldman Sachs & Co. LLC
Goldman Sachs rendered its opinion to the Special Committee that, as of October 23, 2022, and based upon and subject to the factors and assumptions set forth therein, the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.
The full text of the written opinion of Goldman Sachs, dated October 23, 2022, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C. The summary of Goldman Sachs’ opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs provided advisory services and its opinion for the information and assistance of the Special Committee in its consideration of the Merger. Goldman Sachs’ opinion is not a recommendation as to how any holder of Myovant common shares should vote with respect to the Merger or any other matter.
In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:
the Merger Agreement;
Annual Reports on Form 10-K of Myovant for the five fiscal years ended March 31, 2022;
certain other communications from Myovant to its shareholders;
Quarterly Reports on Form 10-Q of Myovant;
certain publicly available research analyst reports for Myovant; and
certain internal financial analyses and forecasts for Myovant, including assumed probabilities associated with certain future events contemplated by such forecasts, and certain analyses related to the expected utilization by Myovant of certain net operating loss carryforwards and research and development credit carryforwards of Myovant, each as prepared by the management of Myovant and approved for Goldman Sachs’ use by the Special Committee.
Goldman Sachs also held discussions with members of the senior management of Myovant regarding their assessment of the past and current business operations, financial condition and future prospects of Myovant; reviewed the reported price and trading activity for Myovant common shares; compared certain financial and stock market information for Myovant with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent minority squeeze out transactions, including in the biopharmaceutical industry; and performed such other studies and analyses, and considered such other factors, as Goldman Sachs deemed appropriate.
For purposes of rendering this opinion, Goldman Sachs, with the Special Committee’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, Goldman Sachs, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the Special Committee’s consent that the Revised Projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the Special Committee. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of Myovant or any of its subsidiaries and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the expected benefits of the Merger in any way meaningful to its analysis. Goldman Sachs has also assumed that the Merger will be consummated on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.
Goldman Sachs’ opinion does not address the underlying business decision of Myovant to engage in the Merger or the relative merits of the Merger as compared to any strategic alternatives that may be available to Myovant; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness, from a financial point of view, to the Minority Shareholders, as of the date of the opinion, of the $27.00 in cash per share merger consideration to be paid to such holders pursuant to the Merger Agreement. Goldman Sachs’ opinion
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does not express any view on, and does not address, any other term or aspect of the Merger Agreement or the Merger or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger, including the fairness of the Merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of Myovant; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Myovant, or class of such persons, in connection with the Merger, whether relative to the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement or otherwise. Goldman Sachs’ opinion was necessarily based on economic, monetary market and other conditions, as in effect on, and the information made available to it as of the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. In addition, Goldman Sachs does not express any opinion as to the prices at which Myovant common shares will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on Myovant, Sumitovant or the Merger, or as to the impact of the Merger on the solvency or viability of Myovant or Sumitovant or the ability of Myovant or Sumitovant to pay their respective obligations when they come due. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.
Summary of Financial Analyses
The following is a summary of the material financial analyses delivered by Goldman Sachs to the Special Committee in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before October 21, 2022, the last trading day before the public announcement of the Merger, and is not necessarily indicative of current market conditions.
Historical Stock Trading Analysis. Goldman Sachs analyzed the consideration to be paid to the holders of Myovant common shares pursuant to the Merger Agreement in relation to (i) the closing price per Myovant common share on September 30, 2022, the last trading day before public announcement of Sumitovant’s initial non-binding proposal to acquire Myovant, (ii) the VWAP per Myovant common share for the preceding 30-calendar day period ended September 30, 2022, and (iii) the high closing price per Myovant common share for the 52-week period ended September 30, 2022.
This analysis indicated that the price per Myovant common share to be paid to the Minority Shareholders pursuant to the Merger Agreement represented:
a premium of approximately 50.3% to the closing price per Myovant common share on September 30, 2022 (the last trading day prior to the public announcement of Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96);
a premium of approximately 48.4% to the 30-calendar day VWAP per Myovant common share through September 30, 2022 (which was $18.19); and
a premium of approximately 13.1% to the 52-week high trading price per Myovant common share as of September 30, 2022 (which was $23.87).
Illustrative Discounted Cash Flow Analysis. Using the Revised Projections, Goldman Sachs performed an illustrative discounted cash flow analysis on Myovant. Using a mid-year convention and discount rates ranging from 12.0% to 14.0%, reflecting estimates of Myovant’s weighted average cost of capital (“WACC”), Goldman Sachs discounted to present value as of June 30, 2022 (i) estimates of unlevered free cash flow for Myovant for the second, third and fourth quarters of fiscal year 2022 and the fiscal year ending March 31, 2024 (“fiscal year 2023”) through the fiscal year ending March 31, 2037 (“fiscal year 2036”) as reflected in the Revised Projections and (ii) a range of illustrative terminal values for Myovant, which were calculated by applying perpetuity growth rates ranging from (60.0%) to (100.0%) to a terminal year estimate of the free cash flow to be generated by Myovant, as reflected in the Revised Projections. Goldman Sachs derived such discount rates by application of the Capital Asset Pricing Model, which requires certain company-specific inputs, including Myovant’s target capital structure weightings, the cost of
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long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for Myovant, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs utilizing its professional judgment and experience, taking into account the Revised Projections and market expectations regarding long-term real growth of gross domestic product and inflation. In addition, using a discount rate of 13.0%, reflecting an estimate of Myovant’s WACC, Goldman Sachs discounted to present value as of June 30, 2022 the estimated benefits of Myovant’s net operating losses (“NOLs”) for fiscal year 2023 through fiscal year 2036, as reflected in the Revised Projections. Goldman Sachs derived a range of illustrative enterprise values for Myovant by adding the ranges of present values it derived as described above and reflecting Myovant’s net cash balance of $0 as of June 30, 2022. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of Myovant, as provided by the management of Myovant and approved for Goldman Sachs’ use by the Special Committee, to derive a range of illustrative present values per Myovant common share ranging from $25.59 to $30.74.
Premia Analyses. Goldman Sachs reviewed and analyzed, using publicly available information, the acquisition premia in acquisition transactions announced during the time period from January 1, 2012 through October 21, 2022, involving a public company in the biopharmaceutical industry as the target in a minority squeeze out transaction where the disclosed enterprise value for the transaction was over $500 million. For the entire period, using publicly available information, Goldman Sachs calculated the median premium of the final price paid in the selected transactions relative to the target’s last undisturbed closing stock price prior to public announcement of the initial bid of the acquirer. This analysis indicated a high, median and low premium, rounded to the nearest tenth, of 102.6%, 59.5% and 41.1%, respectively, across the period. Using this analysis, Goldman Sachs applied a reference range of illustrative premiums of 41.1% to 102.6% to the undisturbed closing price per Myovant common share of $17.96 as of September 30, 2022, and calculated a range of implied equity values per Myovant common share of $25.34 to $36.39. The following table presents the analyzed transactions:
Announcement Date
Target
Acquiror
Enterprise Value
($ in millions)
Final Bid
per Share
1-Day
Premium(1)
November 12, 2020
Urovant Sciences Ltd.
Sumitovant Biopharma Ltd.
$681.0
$ 16.25
102.6%
October 5, 2020
Eidos Therapeutics, Inc.
BridgeBio Pharma, Inc.
$1,651.6
$73.26
41.1%
August 31, 2020
Akcea Therapeutics, Inc.
Ionis Pharmaceuticals, Inc.
$500.0
$18.15
59.5%
(1)
Based on the undisturbed stock price prior to the transaction announcement; Eidos Therapeutics, Inc. / BridgeBio Pharma, Inc. final offer premia was based on the undisturbed stock price prior to the final offer due to the length of the negotiation process.
Goldman Sachs also reviewed and analyzed, using publicly available information, the acquisition premia in acquisition transactions announced during the time period from January 1, 2012 through October 21, 2022, involving a public company as the target in a minority squeeze out transaction where the disclosed enterprise value for the transaction was over $1 billion. For the entire period, using publicly available information, Goldman Sachs calculated the median premium of the final price paid in the selected transactions relative to the target’s last undisturbed closing stock price prior to public announcement of the initial bid of the acquirer. This analysis indicated a high, median and low premium, rounded to the nearest tenth, of 45.3%, 37.4% and 15.2%, respectively, across the period. Using this analysis, Goldman Sachs applied a reference range of illustrative premiums of 15% to 45% to the undisturbed closing price per Myovant common share of $17.96 as of September 30, 2022, and calculated a range of implied equity values per Myovant common share of $20.65 to $26.04. The following table presents the analyzed transactions:
Announcement Date
Target
Acquiror
Enterprise Value
($ in millions)
Final Bid
per Share
1-Day
Premium(1)
October 5, 2020
Eidos Therapeutics, Inc.
BridgeBio Pharma, Inc.
$ 1,651.6
$73.26
41.1%
February 21, 2020
AVX Corporation
Kyocera Corporation
$ 1,046.1
$21.75
44.6%
May 22, 2019
International Speedway Corporation
NASCAR Holdings, Inc.
$ 1,128.4
$45.00
15.2%
June 19, 2018
Foundation Medicine, Inc.
Roche Holdings, Inc.
$ 2,260.9
$ 137.00
28.7%
March 1, 2018
AmTrust Financial
Services, Inc.
Evergreen Parent L.P.
$ 1,327.5
$14.75
45.3%
December 17, 2012
Clearwire Corporation
Sprint Nextel Corporation
$ 3,329.8
$2.97
33.8%
(1)
Based on the undisturbed stock price prior to the transaction announcement; Eidos Therapeutics, Inc. / BridgeBio Pharma, Inc. final offer premia was based on the undisturbed stock price prior to the final offer due to the length of the negotiation process.
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The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Myovant, Sumitovant or the contemplated Merger.
Goldman Sachs prepared these analyses for purposes of Goldman Sachs providing its opinion to the Special Committee as to the fairness from a financial point of view of the $27.00 in cash per share merger consideration to be paid to the Minority Shareholders pursuant to the Merger Agreement. These analyses do not purport to be appraisals, nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Myovant, Sumitovant, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecasts.
The per share merger consideration was determined through negotiations between Sumitovant and the Special Committee. Goldman Sachs provided advice to the Special Committee during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the Special Committee or that any specific amount of consideration constituted the only appropriate consideration for the Merger.
As described in the section above entitled “—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger,” Goldman Sachs’ opinion to the Special Committee was one of many factors taken into consideration by the Special Committee in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex C.
Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of Myovant, Sumitovant, any of their respective affiliates and third parties, including Sumitomo Chemical, the parent company of SMP, and its affiliates or any currency or commodity that may be involved in the transaction contemplated by the Merger Agreement. Goldman Sachs acted as financial advisor to the Special Committee in connection with, and participated in certain of the negotiations leading to, the Merger. Goldman Sachs has provided certain financial advisory and/or underwriting services to Myovant and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as Myovant’s financial advisor in connection with the licensing of ORGOVYX® commercialization rights in certain territories in May 2022. During the two-year period ended October 23, 2022, Goldman Sachs has recognized compensation from Myovant for financial advisory and/or underwriting services provided by its Investment Banking Division to Myovant and/or to its affiliates of approximately $5 million. During the two-year period ended October 23, 2022, the Investment Banking Division of Goldman Sachs has not been engaged by Sumitovant or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may in the future provide financial advisory and/or underwriting services to Myovant, Sumitovant, SMP and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation.
The Special Committee selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. Pursuant to a letter agreement dated April 29, 2022, the Special Committee engaged Goldman Sachs to act as its financial advisor in connection with the Merger. The engagement letter among Myovant, the Special Committee and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date
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of announcement, at approximately $38.9 million, with the possibility of an additional fee, payable at the sole discretion of the Special Committee, of 0.5% of the aggregate consideration paid, all of which is contingent upon consummation of the Merger. In addition, Myovant has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.
Other Written Presentations by Goldman Sachs
In addition to the presentation made to the Special Committee on October 23, 2022 described above under “—Opinion of Goldman Sachs & Co. LLC,” Goldman Sachs also made various preliminary presentations to the Special Committee on June 28, 2022, August 3, 2022, August 22, 2022, October 1, 2022, October 21, 2022 and October 22, 2022. Copies of the written preliminary presentations and a copy of the presentation made to the Special Committee on October 23, 2022 have been filed as exhibits to the Schedule 13E-3 filed with the SEC in connection with the proposed Merger. These written preliminary presentations and the presentation made to the Special Committee on October 23, 2022 will be available to any interested shareholder of Myovant (or any representative of a shareholder who has been so designated in writing) to inspect and copy at Myovant’s principal executive offices during regular business hours.
None of the various preliminary presentations to the Special Committee, alone or together, constitute, or form the basis for, an opinion of Goldman Sachs. Information contained in the various preliminary presentations is substantially similar to the information provided in Goldman Sachs’ oral and written presentation to the Special Committee on October 23, 2022, as described above under “—Opinion of Goldman Sachs & Co. LLC.” A summary of the written preliminary presentations is provided below. The following summary, however, does not purport to be a complete description of the written preliminary presentations or of the preliminary financial analyses performed by Goldman Sachs.
The June 28, 2022 materials presented to the Special Committee contained, among other information, a summary of the Initial Projections then provided by Myovant management, which were updated and superseded by the Revised Projections, a summary of certain publicly available research analyst reports for Myovant and a review of process considerations. The Initial Projections assumed, among other things, FDA approval of Myovant’s and Pfizer’s sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women.
The August 3, 2022 materials presented to the Special Committee contained, among other information:
a summary of the Revised Projections, then provided by Myovant management, which updated and superseded the Initial Projections; the Revised Projections also assumed, among other things, FDA approval of Myovant’s and Pfizer’s sNDA for MYFEMBREE® for use in the treatment of endometriosis in pre-menopausal women;
a summary of certain publicly available research analyst reports for Myovant;
a preliminary historical stock trading analysis similar to that described above under “—Summary of Financial Analyses—Historical Stock Trading Analysis”;
a preliminary illustrative discounted cash flow analysis similar to that described above under “—Summary of Financial Analyses—Illustrative Discounted Cash Flow Analysis”; and
a preliminary premia analysis of similar precedent biotechnology transactions similar to that described above under “—Summary of Financial Analyses—Premia Analyses,” using the price per Myovant common share at the time.
The August 22, 2022 materials presented to the Special Committee contained, among other information, a comparison of select inputs and assumptions for the Revised Projections to publicly available analyst research reports and a preliminary illustrative discounted cash flow analysis similar to that described above under “—Summary of Financial Analyses—Illustrative Discounted Cash Flow Analysis,” but providing sensitivities based on differing assumptions.
The October 1, 2022 materials presented to the Special Committee contained, among other information, the following preliminary analyses:
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a preliminary historical stock trading analysis similar to that described above under “—Summary of Financial Analyses—Historical Stock Trading Analysis”;
preliminary premia analyses of similar precedent biotechnology transactions and transactions over $1 billion similar to those described above under “—Summary of Financial Analyses—Premia Analyses”; and
a preliminary illustrative discounted cash flow analysis of Myovant similar to that described above under “—Summary of Financial Analyses—Illustrative Discounted Cash Flow Analysis.”
The October 21, 2022 materials presented to the Special Committee contained, among other information, the same preliminary historical stock trading analysis, preliminary premia analyses of similar precedent transactions and preliminary illustrative discounted cash flow analysis, in each case as was presented to the Special Committee on October 23, 2022.
The October 22, 2022 materials presented to the Special Committee contained, among other information, a review of Sumitovant’s October 1 proposal, October 21 proposals and October 22 proposals and the same preliminary historical stock trading analysis, preliminary premia analyses of similar precedent transactions and preliminary illustrative discounted cash flow analysis, in each case as was presented to the Special Committee on October 23, 2022.
The preliminary financial analyses in these preliminary presentations were based on market, economic and other conditions as they existed as of the dates of the respective presentations as well as other information that was available at those times. Accordingly, the results of the financial analyses differed due to changes in those conditions. Finally, Goldman Sachs continued to refine various aspects of its financial analyses with respect to Myovant until October 23, 2022.
Summary of Presentations Provided by J.P. Morgan
Sumitovant retained J.P. Morgan as its financial advisor in connection with its consideration of the transactions contemplated by the Merger Agreement. Sumitovant selected J.P. Morgan as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transactions contemplated by the Merger Agreement. In this capacity, representatives of J.P. Morgan provided Sumitovant with certain financial advisory services. Although J.P. Morgan generally acted as financial advisor to Sumitovant, J.P. Morgan was not requested to provide, and did not provide, to Sumitovant, any other Purchaser Filing Person, Myovant, the holders of any class of securities, creditors or other constituencies of any Purchaser Filing Person or Myovant, or any other person (i) any report, opinion or appraisal as to the fairness, from a financial point of view or otherwise, of the transactions contemplated by the Merger Agreement, the per share merger consideration or any other term or aspect of any of the foregoing, (ii) any other valuation of any of the Purchaser Filing Persons or Myovant for the purpose of assessing the fairness of the per share merger consideration to any such person or (iii) any advice as to the underlying decision by any Purchaser Filing Person to engage in the transactions contemplated by the Merger Agreement. Because J.P. Morgan was not requested to, and did not, deliver a fairness opinion in connection with the transactions contemplated by the Merger Agreement, J.P. Morgan did not perform financial analyses with a view towards those analyses supporting a fairness opinion. At various times during the course of J.P. Morgan’s engagement as financial advisor to Sumitovant, representatives of J.P. Morgan discussed with Sumitovant various considerations with respect to the transactions contemplated by the Merger Agreement, including what financial analyses would be helpful to Sumitovant, and J.P. Morgan produced various financial analyses during the course of its engagement.
The discussion materials prepared by representatives of J.P. Morgan for use in discussions with Sumitovant (the “J.P. Morgan Discussion Materials”) have been filed as exhibits to the Schedule 13E-3 filed with the SEC in connection with the transactions contemplated by the Merger Agreement. The Schedule 13E-3, including the J.P. Morgan Discussion Materials, may be examined at, and copies may be obtained from, the SEC in the manner described under “Where You Can Find Additional Information.” The information in the J.P. Morgan Discussion Materials is subject to, among other things, the assumptions made, procedures followed, matters considered, and limitations, qualifications and other conditions contained therein and is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such materials. The J.P. Morgan Discussion Materials are not intended to be and do not constitute a
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recommendation to any Purchaser Filing Person, Myovant, or any other entity with respect to the transactions contemplated by the Merger Agreement, or any other matter. The J.P. Morgan Discussion Materials do not constitute, and are not intended to represent, any view, opinion, report or appraisal as to the fairness, from a financial point of view or otherwise, of the transactions contemplated by the Merger Agreement or the per share merger consideration to any Purchaser Filing Person, the Myovant shareholders or any other person.
Below is a summary of the J.P. Morgan Discussion Materials, which is qualified in its entirety by the full contents of the J.P. Morgan Discussion Materials. The below summary presents the material analyses conducted by J.P. Morgan and provided to Sumitovant, as well as the material assumptions made, procedures followed, matters considered and limitations, qualifications and other conditions to the J.P. Morgan Discussion Materials, but does not purport to be a complete description of the financial analyses or data presented by J.P. Morgan or the underlying assumptions made, procedures followed, matters considered, and limitations, qualifications and other conditions contained therein, nor does the order of analyses or materials represent relative importance or weight given to those analyses or materials by J.P. Morgan. The J.P. Morgan Discussion Materials were not appraisals of the business of Myovant or the actual value that may be received in connection with the transaction, and did not take into account the potential effects of the transaction. The preparation of financial analyses is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, financial analyses are not readily susceptible to summary description. J.P. Morgan considered the results of all analyses undertaken and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Considering the summaries set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying these analyses, could create a misleading or incomplete view of the J.P. Morgan Discussion Materials.
The J.P. Morgan Discussion Materials were provided solely for the benefit of Sumitovant for its information and assistance in connection with its consideration of the transactions contemplated by the Merger Agreement. The J.P. Morgan Discussion Materials do not themselves convey rights or remedies upon the holders of any class of securities, creditors or other constituencies of any Purchaser Filing Person, Myovant or any other person (other than Sumitovant).
In connection with the J.P. Morgan Discussion Materials, J.P. Morgan reviewed, among other things, certain publicly available historical business and financial information concerning Myovant, certain publicly available information about select prior going-private merger transactions and certain non-public information regarding the business and prospects of Myovant prepared by management of Myovant and approved for J.P. Morgan’s use by Sumitovant. J.P. Morgan also reviewed certain financial analyses and forecasts concerning Myovant prepared by Sumitovant and approved for J.P. Morgan’s use by Sumitovant, which were solely based on then-publicly available business and financial information about Myovant. J.P. Morgan assumed and relied, without independent verification, upon the accuracy and completeness of such information. J.P. Morgan also considered such other factors as J.P. Morgan deemed appropriate.
J.P. Morgan assumed with the consent of Sumitovant that the financial analyses and forecasts for Myovant prepared by the management of Myovant were reasonably prepared on a basis reflecting the best currently available estimates and judgment of the management of Myovant, and that the financial analyses prepared by Sumitovant were reasonably prepared on a basis reflecting the best currently available estimates and judgment of Sumitovant, in each case as of the date of the analysis or forecast. With respect to any financial forecasts, projections, other estimates and other forward-looking information provided to or otherwise obtained by J.P. Morgan from public sources, data suppliers and other third parties, J.P. Morgan assumed that such forecasts, projections, other estimates and information were reasonably prepared on bases reflecting the best currently available estimates and judgments of the preparer as to, and were a reasonable and reliable basis upon which to evaluate, the matters covered thereby. J.P. Morgan expressed no view as to any of the foregoing financial forecasts, projections, other estimates and other forward-looking information or the assumptions on which they were based. No representation or warranty, express or implied, was made by J.P. Morgan in relation to the accuracy or completeness of the information presented in the J.P. Morgan Discussion Materials or their suitability for any particular purpose.
J.P. Morgan expressed no view, opinion, representation, guaranty or warranty (in each case, express or implied) regarding the reasonableness or achievability of any financial forecasts, projections, other estimates or other forward-looking information provided to, obtained or otherwise reviewed by, or discussed with,
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J.P. Morgan, or the assumptions upon which they are based. J.P. Morgan did not conduct, and were not provided with, any independent valuation or appraisal of any assets or liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of Myovant or any other company or business, nor did J.P. Morgan make any physical inspection of the properties or assets of Myovant or any other company or business. J.P. Morgan did not express any view with respect to accounting, tax, regulatory, legal or similar matters and relied, with Sumitovant’s consent, upon the assessments of representatives of Myovant as to such matters.
J.P. Morgan expressed no opinion as to the prices at which Myovant common shares will trade at any time, or as to the potential effects of volatility in the credit, financial and stock markets on the Purchaser Filing Persons, Myovant or the transactions contemplated by the Merger Agreement, or as to the impact of the transactions contemplated by the Merger Agreement on the solvency or viability of the Purchaser Filing Persons or Myovant or the ability of the Purchaser Filing Persons or Myovant to pay their respective obligations when they come due. The matters considered by J.P. Morgan in their financial analyses and reflected in the J.P. Morgan Discussion Materials were necessarily based on various assumptions, including assumptions concerning general business, economic and capital markets conditions and industry-specific and company-specific factors as in effect on, and information made available to J.P. Morgan as of the date of such J.P. Morgan Discussion Materials. Many such conditions are beyond the control of the Purchaser Filing Persons, Myovant and J.P. Morgan. Accordingly, the financial analyses included in the J.P. Morgan Discussion Materials are inherently subject to uncertainty, and neither of J.P. Morgan nor any other person assumes responsibility if future results are different from those forecasted. Furthermore, it should be understood that subsequent developments may affect the views expressed in the J.P. Morgan Discussion Materials and that J.P. Morgan do not have any obligation to update, revise or reaffirm their financial analyses or the J.P. Morgan Discussion Materials based on circumstances, developments or events occurring after the date of such J.P. Morgan Discussion Materials. With respect to the financial analyses performed by J.P. Morgan in the J.P. Morgan Discussion Materials, such financial analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses. While none of the selected precedent transactions used in the precedent minority squeeze-out analysis are identical to the transactions contemplated by the Merger Agreement and while none of the selected companies involved in such transactions are identical or directly comparable to Myovant, the transactions were selected because they involved publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of Myovant based on the familiarity of J.P. Morgan with the biopharmaceutical industry. Such financial analyses do not purport to be reports, appraisals or to reflect the prices at which shares or other securities or financial instruments of or relating to the Myovant common shares may trade or otherwise be transferable at any time.
The J.P. Morgan Discussion Materials are not, and should not be viewed as, a recommendation with respect to any matter pertaining to the transactions contemplated by the Merger Agreement. The terms of the transactions contemplated by the Merger Agreement, including the per share merger consideration, were determined solely through negotiations between the parties to the Merger Agreement. The J.P. Morgan Discussion Materials did not address the relative merits of the transactions contemplated by the Merger Agreement or any other transactions contemplated in connection with the transactions contemplated by the Merger Agreement compared to other business strategies or transactions that may have been considered by the management of the Purchaser Filing Persons.
September 27 Materials
On September 27, 2022, at Sumitovant’s request, representatives of J.P. Morgan provided Sumitovant with discussion materials (the “September 27 materials”) containing a summary of recent Myovant stock price performance, as well as preliminary financial analyses of the range of illustrative per Myovant common share values implied by Myovant’s 52-week high and low closing share prices, certain precedent minority squeeze-out premiums, wall street price targets and a discounted cash follow analysis. The 52-week trading price had ranged from $23.87 (11/03/2021) to $7.78 (05/09/2022). The September 27 materials included a summary of the premiums paid in 19 U.S. all-cash minority squeeze-out transactions announced between March 2010 and June 2022. The transactions analyzed were:
Date
Target
Acquiror
06/21/22
Convey Health Solutions Holdings
TPG Capital LP
06/02/22
Sprague Resources LP
Brookfield Asset Management / Hartree Partners
05/25/22
StoneMor Partners LP
Axar Capital Management LP
11/09/21
Independence Holding Co.
Geneve Corp.
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Date
Target
Acquiror
08/24/21
Santander Consumer USA
Banco Santander SA / Santander Holdings USA
03/08/21
Immunovant Inc.
Roivant Sciences Ltd.
11/12/20
Urovant Sciences Ltd.
Sumitovant Biopharma, Inc.
08/31/20
Akcea Therapeutics
Ionis Pharmaceuticals
08/19/20
Hudson Ltd.
Dufry AG
02/21/20
AVX Corp.
Kyocera Corp.
05/09/19
EMC Insurance Group Inc.
Employers Mutual Casualty Co.
06/19/18
Foundation Medicine Inc.
Roche Holdings AG
09/06/16
Federal-Mogul Holdings Corp.
Icahn Enterprises L.P.
07/26/16
National Interstate Corp.
American Financial Group Inc.
03/09/16
Crown Media Holdings Inc.
Hallmark Cards Inc.
09/16/13
Cornerstone Therapeutics Inc.
Chiesi Farmaceutici S.p.A
03/01/13
Sauer-Danfoss Inc.
Danfoss A/S
04/21/11
CNA Surety Corporation
CNA Financial Corporation
03/21/10
CNX Gas Corp.
CONSOL Energy Inc.
The median and average premium paid relative to the undisturbed price one day prior to first public offer in these transactions were 47.2% and 54.8%, respectively. Applying premiums of 20% and 65% against the then-current market price of $16.82, implied a premiums paid range of $20.00 to $28.00 (rounded to the nearest $0.50). The September 27 materials also showed that, in the precedent minority squeeze-out transactions, an acquiror increased its final offer an average of 15.6% above its initial offer. The discounted cash flow analysis prepared based on the Sumitovant management projections (as defined in the section entitled “Special Factors—Projected Financial Information—SMP Financial Information and Projections”) indicated an illustrative range per Myovant common share of $22.50 (using a 12.25% discount rate) to $29.50 (using an 8.25% discount rate) (rounded to the nearest $0.50).
The September 27 materials also include a summary of Myovant’s pro forma capitalization at illustrative per Myovant common share offer prices ranging from $20.00 to $30.00. The analysis indicated the premiums implied by such illustrative offer prices to Myovant’s then-current per Myovant common share price of $16.82, to Myovant’s 52-week high and low closing share price, and to Myovant’s VWAP over the trailing 30, 60 and 90 trading days. The table below has a summary of this analysis:
 
Price per
share
Range of Premiums/
(Discounts)
relative to
$20.00 to $30.00
Closing price on September 23, 2022
$16.82
19%–78%
30-day VWAP
$18.05
11%–66%
60-day VWAP
$16.91
18%–77%
90-day VWAP
$15.94
25%–88%
52-Week High
$23.87
(16%)–26%
52-Week Low
$7.78
157%–286%
October 23 Materials
On October 23, 2022, at Sumitovant’s request, representatives of J.P. Morgan provided Sumitovant with discussion materials (the “October 23 materials”) containing a summary of recent Myovant stock price performance, certain precedent minority squeeze-out premiums, and an illustrative final proposal value per Myovant common share of $27.00. The undisturbed price was $17.96 (09/30/2022), the undisturbed calendar year high was $20.44 (09/12/2022) and the undisturbed 52-week high was $23.87 (11/03/2021). The October 23 materials included a summary of the premiums paid in 19 U.S. all-cash minority squeeze-out transactions announced between March 2010 and June 2022. The transactions analyzed were:
Date
Target
Acquiror
06/21/22
Convey Health Solutions Holdings
TPG Capital LP
06/02/22
Sprague Resources LP
Brookfield Asset Management / Hartree Partners
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Date
Target
Acquiror
05/25/22
StoneMor Partners LP
Axar Capital Management LP
11/09/21
Independence Holding Co.
Geneve Corp.
08/24/21
Santander Consumer USA
Banco Santander SA / Santander Holdings USA
03/08/21
Immunovant Inc.
Roivant Sciences Ltd.
11/12/20
Urovant Sciences Ltd.
Sumitovant Biopharma, Inc.
08/31/20
Akcea Therapeutics
Ionis Pharmaceuticals
08/19/20
Hudson Ltd.
Dufry AG
02/21/20
AVX Corp.
Kyocera Corp.
05/09/19
EMC Insurance Group Inc.
Employers Mutual Casualty Co.
06/19/18
Foundation Medicine Inc.
Roche Holdings AG
09/06/16
Federal-Mogul Holdings Corp.
Icahn Enterprises L.P.
07/26/16
National Interstate Corp.
American Financial Group Inc.
03/09/16
Crown Media Holdings Inc.
Hallmark Cards Inc.
09/16/13
Cornerstone Therapeutics Inc.
Chiesi Farmaceutici S.p.A
03/01/13
Sauer-Danfoss Inc.
Danfoss A/S
04/21/11
CNA Surety Corporation
CNA Financial Corporation
03/21/10
CNX Gas Corp.
CONSOL Energy Inc.
The median and average premium paid relative to the undisturbed price one day prior to announcement in these transactions were 47.2% and 54.8%, respectively. The October 23 materials also showed that, in the precedent minority squeeze-out transactions, an acquiror increased its final offer an average of 15.6% above its initial offer. The October 23 materials also include a summary of Myovant’s pro forma capitalization at illustrative per Myovant common share offer prices ranging from $22.75 to $27.00. The analysis indicated the premiums implied by such illustrative offer prices to Myovant’s then-current per Myovant common share price of $24.54, to Myovant’s undisturbed common share price of $17.96, to Myovant’s 52-week high and low closing share prices, and to Myovant’s VWAP from the day Sumitovant submitted its initial non-binding proposal and over the trailing 30, 60 and 90 trading days. The table below has a summary of this analysis:
 
Price per
share
Range of Premiums/
(Discounts) relative to
$22.75 to $27.00
Closing price on October 21, 2022
$24.54
(7%)–10%
Undisturbed price
$17.96
27%–50%
VWAP from proposal
$24.66
(8%)–9%
30-day VWAP
$18.09
26%–49%
60-day VWAP
$17.38
31%–55%
90-day VWAP
$16.23
40%–66%
52-Week High
$23.87
(5%)–13%
52-Week Low
$7.78
192%–247%
Miscellaneous
As described above, J.P. Morgan was not asked to, and did not, render any opinion, report or appraisal as to the fairness, from a financial point of view or otherwise, of the transactions contemplated by the Merger Agreement or the per share merger consideration to the Purchaser Filing Persons, Myovant, the holders of any class of securities, creditors or other constituencies of the Purchaser Filing Persons or Myovant. The J.P. Morgan Discussion Materials were one of many factors taken into consideration by Sumitovant in its deliberations in connection with the transactions contemplated by the Merger Agreement.
J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of these analyses as a whole, could create an incomplete view of the processes underlying the analyses. As a result, any potential indications of valuation resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In preparing the J.P. Morgan
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Discussion Materials, J.P. Morgan did not attribute any particular weight to any analyses or factors considered and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support the analysis set forth in the J.P. Morgan Discussion Materials. Rather, J.P. Morgan considered the totality of the factors and analyses performed in preparing the J.P. Morgan Discussion Materials. Moreover, J.P. Morgan’s analyses are not and do not purport to be reports, appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected transactions referred to in the above summaries is identical to the transactions contemplated by the Merger Agreement and no company used in the aforementioned analyses as a comparison is directly comparable to Myovant. However, the transactions were chosen because they involve transactions that, for purposes of the analysis of J.P. Morgan, may be considered similar to the transactions contemplated by the Merger Agreement. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Myovant.
J.P. Morgan did not recommend any specific merger consideration to the Purchaser Filing Persons or that any specific amount constituted the only appropriate merger consideration for the transactions contemplated by the Merger Agreement.
J.P. Morgan and its respective affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. J.P. Morgan and its respective affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests, or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Purchaser Filing Persons, Myovant and any of their respective affiliates and third parties, including affiliates of the holders of Myovant common stock, or any currency or commodity that may be involved in the transactions contemplated by the Merger Agreement, for the accounts of J.P. Morgan and their respective affiliates, employees and customers.
By letter agreement, dated February 18, 2022 (the “J.P. Morgan Engagement Letter”), Sumitovant engaged J.P. Morgan to act as its financial advisor in connection with the transactions contemplated by the Merger Agreement. Pursuant to the J.P. Morgan Engagement Letter, J.P. Morgan will receive a fee from Sumitovant of approximately $10 million if the transactions contemplated by the Merger Agreement are consummated. In addition, Sumitovant has agreed to indemnify J.P. Morgan for certain liabilities arising out of J.P. Morgan’s engagement and to reimburse J.P. Morgan for certain of their expenses. During the two years prior to the execution of the Merger Agreement, J.P. Morgan and its affiliates have had other commercial or investment banking relationships with Sumitovant, for which J.P. Morgan and its affiliates have received fees of approximately $350,000. During the two years prior to the execution of the Merger Agreement, J.P. Morgan and its affiliates have had commercial or investment banking relationships with Myovant, for which J.P. Morgan and its affiliates have received fees of approximately $250,000. In the ordinary course of business, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Purchaser Filing Persons, Myovant, other parties involved in the transactions contemplated by the Merger Agreement, and their respective affiliates, as applicable, for their own account or for the account of their customers and, accordingly, may at any time hold a long or short position or otherwise effect transactions in such securities or financial instruments.
Purposes and Reasons of the Purchaser Filing Persons for the Merger
Under the SEC rules governing “going-private” transactions, including Rule 13e-3 under the Exchange Act, the Purchaser Filing Persons are deemed to be “affiliates” of Myovant and engaged in a “going-private” transaction, and therefore, may be required to disclose its purposes and reasons for the Merger to Myovant’s “unaffiliated security holders” as defined under Rule 13e-3 under the Exchange Act. The Purchaser Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, the Purchaser Filing Persons are not making any recommendation to any Minority Shareholder as to how that shareholder should vote on any proposal, and the views of each of the Purchaser Filing Persons should not be construed as a recommendation to any Minority Shareholder as to how such shareholder should vote. The Purchaser Filing Persons have interests in the Merger that are different from those of the Minority Shareholders.
If the Merger is completed, Myovant will become a wholly owned subsidiary of Sumitovant. As a result, the Myovant common shares will cease to be listed on the NYSE or publicly traded and will be deregistered under
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the Exchange Act. Except as otherwise determined by Sumitovant and notified in writing to Myovant at least five business days prior to the effective time, upon completion of the Merger (i) the board of directors of Merger Sub immediately prior to the effective time will become the board of directors of Myovant and (ii) the officers of Myovant immediately prior to the effective time will remain in place as the officers of Myovant following completion of the Merger.
For the Purchaser Filing Persons, the purpose of the Merger is to enable (i) Sumitovant to acquire 100% ownership and control of Myovant in a transaction in which holders of Myovant common shares (other than Myovant common shares held by (a) Dissenting Holders, (b) Sumitovant or (c) Myovant or its wholly owned subsidiaries) will receive $27.00 per Myovant common share, and (ii) the Purchaser Filing Persons to own 100% of the equity interests in Myovant after the Merger. In this regard, the Purchaser Filing Persons will bear the risks and rewards of such ownership in Myovant after the Merger, including any future earnings and growth of Myovant as a result of improvements to Myovant’s operations, synergies that may result from the Merger, acquisitions of other businesses, successful commercialization of ORGOVYX®, MYFEMBREE® and RYEQO®, as well as the successful clinical development and regulatory approval of other product candidates and other benefits of operating Myovant.
The Purchaser Filing Persons determined that the structuring of the transaction as a merger in which the Minority Shareholders receive $27.00 in cash for each Myovant common share is preferable to other transaction structures as it provides the holders of Myovant common shares (other than Myovant common shares held by (a) Dissenting Holders, (b) Sumitovant or (c) Myovant or its wholly owned subsidiaries) with immediate liquidity for their Myovant common shares through their receipt of the per share merger consideration, which represents a premium of approximately 50% to the closing price per Myovant common share on September 30, 2022 (the last trading day prior to Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96) and a premium of approximately 55% to the 60-calendar day VWAP per Myovant common share through September 30, 2022 (which was $17.38). Conversely, as a result of the Merger, the Minority Shareholders will no longer have an opportunity to participate in any future benefits associated with the ownership of the Myovant common shares, including the receipt of any dividends from Myovant in the future and participation in any potential appreciation in the trading price of the Myovant common shares beyond the per share merger consideration. The Minority Shareholders’ receipt of cash in exchange for their Myovant common shares pursuant to the Merger generally will be a taxable transaction for U.S. federal income tax purposes to the Minority Shareholders who are U.S. Holders.
In addition, the Purchaser Filing Persons believe that structuring the transaction in such a manner is preferable to other alternative transaction structures because it (i) will enable the Purchaser Filing Persons to directly acquire all of the outstanding shares of Myovant not beneficially owned by them at the same time, (ii) will allow Myovant to cease to be a public reporting company, reducing management time and attention spent on those activities, as well as operating costs, (iii) will allow the Purchaser Filing Persons to control and determine investment strategies, reduce commercial and execution risk in connection with the development and commercialization of ORGOVYX® and MYFEMBREE® and other future drug candidates, and (iv) is consistent with recent precedent transactions. Because the transaction structure is consistent with the objectives of the Purchaser Filing Persons and with market practice, the Purchaser Filing Persons did not pursue or propose an alternative transaction structure.
In deciding to pursue the Merger, the Purchaser Filing Persons considered and took into account various risks and other factors that potentially could adversely affect them. These included the possibility that the Merger could result in the loss of key employees of Myovant or otherwise disrupt Myovant’s business operations. The Purchaser Filing Persons also considered that its directors, officers and other employees would expend considerable time and effort in negotiating, implementing and completing the Merger, and in doing so their time would be diverted from other important business opportunities and operational matters. The Purchaser Filing Persons recognized that it would incur significant transaction costs and expenses in connection with the Merger, regardless of whether the Merger is completed. There is a risk that the Merger may not be completed despite the Purchaser Filing Persons’ efforts, including in the event that the approval by a majority of the outstanding Myovant common shares held by the Minority Shareholders is not obtained. Although each of the Purchaser
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Filing Persons believes that there will be significant opportunities associated with their investment in Myovant, the Purchaser Filing Persons realize that there are also substantial risks (including the risks and uncertainties relating to the prospects of Myovant and as described in this paragraph) and that such opportunities may not be fully realized on the expected timeframe or at all.
The Purchaser Filing Persons believe that after the Merger is consummated, Myovant should have greater operating flexibility and more efficient access to capital, which should support Myovant’s long-term growth and profitability, including due to (i) the reduction in expenses resulting from Myovant ceasing to be a public company, (ii) the ability of the Purchaser Filing Persons to efficiently provide certain administrative functions to Myovant and (iii) greater operational flexibility for Myovant to pursue alternatives than it would have as a public company, including the ability to pursue transactions without focusing on the reaction of the market or of the Minority Shareholders to such transactions or the collective risk tolerance of such Minority Shareholders as it relates to such transactions. If that happens, the Purchaser Filing Persons (and not the Minority Shareholders) will benefit from any resulting increase in the value of Myovant. Accordingly, the Purchaser Filing Persons have decided to undertake to pursue the Merger at this time for the reasons described above.
If the Merger is not completed for any reason, SMP, Sumitovant and their affiliates reserve the right, subject to the Investor Rights Agreement, to acquire additional Myovant common shares through private purchases, market transactions, tender or exchange offers or otherwise on terms and at prices that may be more or less favorable than those provided in the Merger Agreement, or, subject to any applicable legal restrictions, to dispose of any or all Myovant common shares acquired by them. In the event that the Merger is not completed, then the Investor Rights Agreement will remain in place in accordance with its terms.
Position of the Purchaser Filing Persons as to Fairness of the Merger
Under the SEC rules governing “going-private” transactions, including Rule 13e-3 under the Exchange Act, the Purchaser Filing Persons are deemed to be “affiliates” of Myovant and engaged in a “going-private” transaction and, therefore may be required to disclose its beliefs as to the fairness of the Merger to Myovant’s “unaffiliated security holders” as defined under Rule 13e-3 under the Exchange Act. Each Purchaser Filing Person is making the statements included in this section of this proxy statement solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, no Purchaser Filing Person is making any recommendation to any Minority Shareholder as to how that shareholder should vote on any proposal, and the views of each of Purchaser Filing Persons should not be construed as a recommendation to any Minority Shareholder as to how such shareholder should vote. Each Purchaser Filing Person has interests in the Merger that are different from those of the Minority Shareholders.
The Purchaser Filing Persons believe that the Special Committee, which negotiated the terms and conditions of the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, including the Merger, with the assistance of the independent financial advisor and legal counsel selected and retained by the Special Committee, represented the interests of the Minority Shareholders. While the members of the Purchaser Filing Persons are represented by the Sumitomo Directors on the Myovant Board, the Merger was negotiated and approved by the Special Committee. The Sumitomo Directors are not members of the Special Committee and did not participate in the deliberations of the Special Committee regarding, or receive advice from the Special Committee’s independent legal or financial advisors as to, the substantive and procedural fairness of the Merger to the Minority Shareholders. The Sumitomo Directors, in their capacity as members of the Myovant Board, also recused themselves from determinations related to a potential transaction with Sumitovant and SMP due to their affiliation with Sumitovant and/or SMP. The Purchaser Filing Persons did not undertake, or engage a financial advisor to undertake, any valuation or other independent analysis for the purpose of assessing the fairness of the Merger or the per share merger consideration to the Minority Shareholders.
However, the Purchaser Filing Persons believe, based on the knowledge and analysis by the Purchaser Filing Persons of available information regarding Myovant and the factors considered by, and the analysis and resulting conclusions of, the Special Committee described in the section entitled “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger” (which analysis and resulting conclusions the Purchaser Filing Persons adopt, based on Purchaser Filing Persons’ review thereof subsequent to the execution of the Merger Agreement), that the Merger is substantively and procedurally fair to the Minority Shareholders.
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In particular, the Purchaser Filing Persons considered the following substantive factors, among others, which are not presented in any relative order of importance:
the current and historical market prices of the Myovant common shares, and the fact that the $27.00 per share merger consideration represents (i) a premium of approximately 50% to the closing price of the Myovant common shares on September 30, 2022 (the last trading day prior to Sumitovant’s initial non-binding proposal to acquire the remaining Myovant common shares that Sumitovant does not already own, on which date the closing price was $17.96), and (ii) a premium of approximately 55% based on the 60-calendar day VWAP of the Myovant common shares through September 30, 2022 (which was $17.38);
the per share merger consideration is all cash, which provides immediate certainty of value and liquidity to the Minority Shareholders, since such shareholders are able to realize the $27.00 per share merger consideration for each of their Myovant common shares;
the Special Committee received an opinion from Goldman Sachs, dated October 23, 2022, as to the fairness, from a financial point of view and as of such date to the Minority Shareholders of the $27.00 per share merger consideration to be paid to such holders in connection with the Merger, which opinion was based upon and subject to the factors and assumptions set forth therein as more fully described in the section entitled “Special Factors—Opinion of Financial Advisor to the Special Committee,” notwithstanding that the opinion of Goldman Sachs was provided for the information and assistance of the Special Committee and none of the Purchaser Filing Persons are entitled to, and did not, rely on such opinion;
the Merger will eliminate the Minority Shareholders’ exposure to the various risks and uncertainties related to continued ownership of Myovant common shares, which include among others:
exposure to risks and uncertainties relating to the successful commercialization of ORGOVYX® and MYFEMBREE®, as well as the successful clinical development and regulatory approval of other product candidates;
exposure to market, economic and other risks that arise from owning shares in a public company;
any potential decline in the market prices of the Myovant common shares that may result from a general economic slowdown;
other fluctuations in the value of the Myovant common shares based on general economic, business and industry conditions throughout the world;
potential volatility in the price of the Myovant common shares as a result of future developments beyond Myovant’s control, including government or regulatory action, and changes in tax laws, interest rates and general market conditions;
potential impacts on the price and trading volumes of the Myovant common shares caused by analyst recommendations and expectations and market sentiment; and
the other risk factors disclosed in Myovant’s most recent SEC filings.
Sumitovant’s and Merger Sub’s obligations to complete the Merger and pay the aggregate per share merger consideration pursuant to the Merger Agreement are not conditioned on their obtaining financing; and
SMP has agreed to irrevocably guarantee to Myovant the due and punctual payment of all amounts payable by Sumitovant or Merger Sub under the Merger Agreement, including Sumitovant’s and Merger Sub’s obligation to fund the aggregate per share merger consideration that is payable to the Minority Shareholders.
In addition, the Purchaser Filing Persons considered the following procedural factors, which are not presented in any relative order of importance:
under the Investor Rights Agreement, the Purchaser Filing Persons are subject to various restrictions on their ability to influence or control the Myovant Board, including a contractual restriction, until
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December 27, 2022, requiring the Purchaser Filing Persons to obtain the approval of Myovant’s Audit Committee before making or publicly announcing a proposal for a merger, which gave the Audit Committee the authority to pursue, or decline to pursue, negotiations with the Purchaser Filing Persons relating to a sale of Myovant, including the Merger;
the Myovant Board established the Special Committee comprised solely of independent directors who are not affiliated with the Purchaser Filing Persons and who are not officers or employees of Myovant, and who are independent and disinterested with respect to the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, to consider the Purchaser Filing Persons’ proposal and to negotiate with the Purchaser Filing Persons;
the Special Committee was advised by experienced and qualified outside legal counsel and financial advisor, consisting of Skadden, as its legal counsel, Conyers, as its Bermuda legal counsel, and Goldman Sachs, as its financial advisor;
the authorization of the Special Committee to, among other things, (i) review and consider whether it would be appropriate and desirable for Myovant to enter into a potential transaction with Sumitovant, (ii) develop, assess and negotiate the terms of a potential transaction with Sumitovant and alternatives thereto and (iii) make a recommendation to the full Myovant Board as to whether Myovant should enter into such potential transaction;
the Sumitovant Board and the Purchaser Filing Persons were advised by experienced and qualified outside legal counsel and financial advisor, consisting of Sullivan & Cromwell, as legal counsel, and J.P. Morgan, as financial advisor;
the Merger is conditioned on the approval by the holders of at least a majority of the outstanding Myovant common shares held by the Minority Shareholders, in addition to the approval of the holders of at least a majority of the aggregate voting rights of the issued and outstanding Myovant common shares entitled to vote and voting at the special general meeting;
the Merger Agreement allows the Special Committee, subject to specific limitations and requirements set forth in the Merger Agreement, to withdraw its recommendation in favor of the Merger Proposal in response to a superior proposal or intervening event, subject to Myovant paying the Purchaser Filing Persons the termination fee of $55,250,000 in the case of an actual termination of the Merger Agreement;
the Special Committee was deliberative in its process to determine whether the Merger was fair to, and in the best interests of, Myovant and its shareholders (including the Minority Shareholders) and to analyze, evaluate and negotiate the terms of the Merger;
the Purchaser Filing Persons did not participate in or have any influence on the deliberative process of, or the conclusions reached by, the Special Committee or the negotiating positions of the Special Committee;
the Purchaser Filing Persons’ obligation to consummate the Merger is not conditioned on any financing being obtained by the Purchaser Filing Persons, which increases the likelihood that the Merger will be consummated and that the Minority Shareholders will receive the per share merger consideration of $27.00;
at the request of the Special Committee, Sumitovant entered into the Sumitovant Voting Agreement pursuant to which and consistent with the Merger Agreement, Sumitovant is required to vote all Myovant common shares that it or its affiliates (other than Myovant and its subsidiaries) beneficially own in favor of the Merger, with such obligation being applicable even if the Purchaser Filing Persons no longer wish to consummate the Merger, which increases the likelihood that the Merger will be consummated and that the Minority Shareholders will receive the per share merger consideration of $27.00;
the per share merger consideration resulted from extensive negotiations between the Special Committee and the Purchaser Filing Persons and their respective advisors;
the Myovant Board (other than the Sumitomo Directors, who recused themselves from determinations related to a potential transaction with Sumitovant due to their affiliation with Sumitovant and/or SMP), acting upon the unanimous recommendation of the Special Committee, (i) determined that the per share
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merger consideration constitutes fair value for each Myovant common share in accordance with the Bermuda Companies Act, (ii) determined that the terms of the Merger Agreement, the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement are fair to and in the best interests of Myovant and its shareholders (including “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act), (iii) approved and declared advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, and (iv) subject to the right of the Special Committee and the Myovant Board (acting upon the recommendation of the Special Committee) to change their recommendations in certain circumstances specified in the Merger Agreement, determined to recommend that Myovant’s shareholders vote in favor of the adoption and approval of the Merger Agreement and the Statutory Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Statutory Merger Agreement and the Sumitovant Voting Agreement, at a duly held meeting of Myovant’s shareholders for such purpose; and
the Minority Shareholders who do not vote for the Merger and who comply with certain procedural requirements will be entitled, after completion of the Merger, to exercise statutory appraisal rights under Bermuda law.
In the course of reaching their determination as to the fairness of the Merger to the Minority Shareholders, the Purchaser Filing Persons also considered a variety of risks and other countervailing factors related to the Merger Agreement and the Merger, including the following:
the fact that the Minority Shareholders will have no ongoing equity participation in Myovant following the Merger and that those Minority Shareholders will (i) cease to participate in Myovant’s future earnings or growth, if any, (ii) not benefit from increases, if any, in the value of the Myovant common shares and (iii) not benefit from any potential sale to a third party in the future, including any of the foregoing that may result from a successful launch and commercialization of ORGOVYX® and MYFEMBREE®;
the risk that the Merger might not be completed in a timely manner or that the Merger might not be consummated at all as a result of a failure to satisfy the conditions contained in the Merger Agreement, and the fact that a failure to complete the Merger could negatively affect the trading price of Myovant or could result in significant costs and disruptions to Myovant’s normal business;
the restrictions on the conduct of Myovant’s business prior to the completion of the proposed Merger, which may delay or prevent Myovant from undertaking business opportunities that may arise and certain other actions it might otherwise take with respect to the operations of Myovant pending completion of the Merger;
the fact that the Merger is conditioned upon the approval of at least a majority of the outstanding Myovant common shares held by the Minority Shareholders, which reduces the certainty that the Merger will be completed;
the fact that litigation may occur in connection with the Merger and any such litigation may result in significant costs and a diversion of management focus;
the risk, if the Merger is not consummated, that the pendency of the Merger could adversely affect the relationship of Myovant and its subsidiaries with their respective employees, suppliers, agents and others with whom they have business dealings;
the fact that Sumitovant, in making its proposal to engage in the Merger, indicated that it is not interested in considering or participating in any transaction involving a sale of its Myovant common shares and that Sumitovant’s current beneficial ownership of the outstanding Myovant common shares, which is approximately 51.5% as of January 17, 2023, would discourage the making of a competing acquisition proposal from third parties;
the fact that the Merger Agreement provides that, during the period from the date of the Merger Agreement until the effective time of the Merger, Myovant is subject to certain restrictions on its
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ability to solicit alternative acquisition proposals from third parties and to provide non-public information to third parties and to engage in negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions;
the fact that Myovant has incurred and will continue to incur significant transaction costs and expenses in connection with the potential transaction, regardless of whether the Merger is consummated;
the risk related to amounts that may be payable by Myovant upon the termination of the Merger Agreement, including the termination fee of $55,250,000, and the process required to terminate the Merger; and
the fact that the receipt of per share merger consideration in exchange for each Myovant common share pursuant to the Merger generally will be taxable to U.S. Holders (as defined below in the section entitled “—U.S. Federal Income Tax Consequences of the Merger”) of Myovant common shares.
The Purchaser Filing Persons did not consider net book value, which is an accounting concept, for purposes of determining the substantive fairness of the Merger to the Minority Shareholders because the Purchaser Filing Persons believed that net book value is neither indicative of Myovant’s market value nor its value as a going concern, but rather an indicator of historical costs.
In addition, the Purchaser Filing Persons did not conduct a going-concern valuation of the Myovant common shares for purposes of determining the substantive fairness of the Merger to the Minority Shareholders because, following the Merger, Myovant will have a significantly different capital structure and because the Purchaser Filing Persons believe that the trading price of Myovant common shares at any given time represents the best available indicator of Myovant’s going-concern value at that time, so long as the trading price at that time is not impacted by speculation regarding the likelihood of a potential transaction.
Moreover, the Purchaser Filing Persons did not consider the liquidation value of Myovant in determining the substantive fairness of the Merger to the Minority Shareholders because (i) of their belief that liquidation sales generally result in proceeds substantially less than the sales of a going concern, (ii) of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, (iii) they considered Myovant to be a viable going concern and (iv) the Purchaser Filing Persons anticipate that Myovant’s operations will continue to be conducted substantially as they currently are being conducted.
Finally, the Purchaser Filing Persons did not consider the purchase prices of Myovant common shares paid by the Purchaser Filing Persons in previous purchases of Myovant common shares during the two years preceding the signing of the Merger Agreement in determining the substantive fairness of the Merger to the Minority Shareholders because they did not consider those prices to represent the best available indicator of Myovant’s pre-Merger value but rather to be indicative of historical prices, as described above.
In making their determination as to the substantive fairness of the Merger to the Minority Shareholders, the Purchaser Filing Persons were not aware of any firm offers having been received by Myovant from anyone other than the Purchaser Filing Persons in the two years preceding the signing of the Merger Agreement for (i) the merger or consolidation of Myovant with another company, (ii) the sale or transfer of all or any substantial part of Myovant’s assets or (iii) a purchase of Myovant’s securities that would enable the holder to exercise control of Myovant.
The foregoing discussion of the information and factors considered and given weight by the Purchaser Filing Persons in connection with the fairness of the Merger is not intended to be exhaustive but includes all factors considered by the Purchaser Filing Persons that they believe to be material. The Purchaser Filing Persons did not find it practicable to, and did not, quantify or otherwise assign relative weights to the individual factors considered in reaching their conclusions as to the fairness of the Merger. Rather, the fairness determinations were made after consideration of all of the foregoing factors as a whole. The Purchaser Filing Persons believe these factors provide a reasonable basis upon which to form their position regarding the fairness of the Merger to the Minority Shareholders. This position should not, however, be construed as a recommendation to any Minority Shareholder to approve the Merger Agreement. The Purchaser Filing Persons make no recommendation as to how the Minority Shareholders of Myovant should vote their shares relating to the Merger. The Purchaser Filing Persons attempted to negotiate the terms of a transaction that would be most favorable to them, and not to the Minority Shareholders, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such Minority Shareholders.
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Sources and Amounts of Funds or other Consideration
The consummation of the Merger is not conditioned upon the Purchaser Filing Persons obtaining the proceeds of any financing.
Myovant and the Purchaser Filing Persons estimate that the total amount of funds necessary to complete the Merger to be approximately $1.7 billion as of the date of this proxy statement, assuming no exercise of dissenters’ rights by shareholders of Myovant (the “Aggregate Consideration”). This amount includes the cash to be paid to the Minority Shareholders and to the holders of various equity-based compensation awards and warrants, the repayment of certain existing indebtedness of Myovant, as well as the related costs and expenses as more fully described in the section entitled “Special Factors—Fees and Expenses,” in connection with the Merger.
The Aggregate Consideration will be funded through a combination of proceeds from debt financing and cash on hand of SMP, which will be funded in turn to Sumitovant to pay the Aggregate Consideration.
Acquisition Debt Financing
SMP has obtained debt financing on the terms and conditions set forth in the Facility Commitment Letter, pursuant to which the Sumitomo Mitsui Banking Corporation (“SMBC”) has provided commitments in respect of a senior unsecured term loan facility in an aggregate amount of the JPY equivalent of US$1.7 billion (the “Facility”), the proceeds of which will be used, together with cash on hand of SMP, for the purpose of financing (i) the Aggregate Consideration, (ii) the repayment of certain existing indebtedness of Myovant and its subsidiaries and (iii) fees and expenses incurred in connection therewith.
Terms of the Facility
Interest Rate. The Facility will bear interest at a rate equal to JPY TIBOR (“Tokyo Interbank Offered Rate”) for a one-month term plus 0.60% per annum; provided that (i) if JPY TIBOR for a one-month term is less than zero, it shall be deemed to be zero and (ii) interest will be calculated on the basis of a 365-day year and actual number of days elapsed.
Maturity. The Facility will mature, and all obligations thereunder will become due and payable, on the date that is 12 months after the date of the initial funding of the Facility (such date, the “Drawdown Date”).
Conditions Precedent. The initial funding of the Facility is subject to satisfaction (or waiver) of certain conditions, among other things, (a) SMBC having received certain documentation and information about SMP and its subsidiaries mutually agreed to be required by regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, (b) certain specified representations set forth in the Facility Commitment Letter being true and correct in all material respects as of the Drawdown Date, (c) there being no material breach of any provision of any definitive documentation governing the terms of the Merger or the Facility, as applicable, by any party thereto (other than SMBC), (d) no certain specified events of default are continuing, (e) all conditions precedent set out in the Merger Agreement have been (or will, on the Closing Date, be) satisfied or, to the extent permitted by applicable law, waived, (f) it not being illegal for SMBC to perform any of its obligations as contemplated by the definitive documentation governing the terms of the Facility or to fund its participation under the Facility and (g) SMBC’s receipt of customary officer’s certificates from SMP.
The foregoing summary of the Facility does not purport to be complete and is qualified in its entirety by reference to the Facility Commitment Letter.
Plans for Myovant After the Merger
Following the completion of the Merger, the Purchaser Filing Persons will own 100% of the equity interests of Myovant. The Purchaser Filing Persons anticipate that Myovant’s operations will continue to be conducted substantially as they currently are being conducted.
Following the completion of the Merger and the delisting and deregistration with the SEC of Myovant common shares, Myovant will no longer be subject to the NYSE listing rules or the Exchange Act, and may experience positive effects on profitability as a result of the elimination of direct and indirect costs and expenses related to compliance with such rules and regulations.
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Except as otherwise determined by Sumitovant and notified in writing to Myovant at least five business days prior to the effective time, upon completion of the Merger (i) the directors of Merger Sub immediately prior to the effective time will be the directors of the surviving company following the effective time and (ii) Myovant’s officers immediately prior to the effective time will be the officers of the surviving company following the effective time.
The Purchaser Filing Persons currently anticipate that Myovant’s operations will initially be conducted following completion of the Merger substantially as they are currently being conducted (except that Myovant will cease to be a public company and will instead be a wholly owned subsidiary of Sumitovant). However, the Purchaser Filing Persons are evaluating and will continue to evaluate Myovant’s assets, corporate capital structure, capitalization, operations, businesses, properties and personnel with a view towards determining possible synergies and the efficient allocation of resources in order to maximize Myovant’s long-term earnings potential as a private company, which may include material changes in Myovant’s corporate structure and business.
Certain Effects of the Merger
If the Merger Proposal receives the required approvals of Myovant’s shareholders described elsewhere in this proxy statement and the other conditions to the completion of the Merger are either satisfied or, to the extent permitted by applicable law, waived, Merger Sub will be merged with and into Myovant upon the terms set forth in the Merger Agreement with Myovant continuing as the surviving company. As the surviving company in the Merger, Myovant will continue to exist following the Merger as a wholly owned subsidiary of Sumitovant.
At the effective time, by virtue of the Merger and without any further action, the memorandum of association and the bye-laws of Merger Sub, each as in effect immediately prior to the effective time, will become the memorandum of association and bye-laws of the surviving company.
Following completion of the Merger, all of the equity interests in Myovant, as the surviving company, will be beneficially owned by the Purchaser Filing Persons and none of the Minority Shareholders will, by virtue of the Merger, have any direct ownership in, or be a shareholder of, Myovant, the surviving company or the Purchaser Filing Persons. As a result, the Minority Shareholders will no longer benefit from any increase in the value, nor will they bear the risk of any decrease in the value, of Myovant common shares. Following the Merger, the Purchaser Filing Persons will benefit from any increase in Myovant’s value and will also bear the risk of any decrease in Myovant’s value.
At the effective time, each holder of Myovant common shares (other than Myovant common shares held by (i) Dissenting Holders, (ii) Sumitovant or (iii) Myovant or its wholly owned subsidiaries) immediately prior to the effective time will be entitled to receive the per share merger consideration for each share held and all such Myovant common shares will, at the effective time, be cancelled, be no longer outstanding, and automatically cease to exist. Please see the section of this proxy statement entitled “The Merger Agreement—Effect of the Merger on the Myovant Common Shares and Merger Sub.”
For information regarding the effects of the Merger on Myovant’s outstanding equity awards, please see the sections entitled “The Merger Agreement—Treatment of Myovant Equity Awards” and “Special Factors—Interests of Myovant’s Directors and Executive Officers in the Merger.”
The Myovant common shares are currently registered under the Exchange Act and trade on the NYSE under the symbol “MYOV.” Following the completion of the Merger, the Myovant common shares will no longer be traded on the NYSE or any other public market. In addition, the registration of the Myovant common shares under the Exchange Act will be terminated, and Myovant will no longer be required to file periodic and other reports with the SEC with respect to the Myovant common shares or otherwise. Termination of registration of the Myovant common shares under the Exchange Act will reduce the information required to be furnished by Myovant to Myovant’s shareholders and the SEC, and would make provisions of the Exchange Act, such as the requirement to file annual and quarterly reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with shareholders’ meetings pursuant to Section 14(a) of the Exchange Act, no longer applicable to Myovant. Myovant will become the beneficiary of the cost savings achieved by Myovant no longer remaining a company subject to the reporting requirements under the federal securities laws.
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Certain Effects of the Merger on the Purchaser Filing Persons
Following the consummation of the Merger, Sumitovant will own all of the equity interests of Myovant and be the sole beneficiary of future earnings, growth and value, and will be the only shareholder entitled to vote on corporate matters affecting Myovant.
Additionally, following the Merger, the Myovant common shares will be delisted from the NYSE, will be deregistered under the Exchange Act and will cease to be publicly traded. See the section of this proxy statement entitled “Special Factors—Plans for Myovant After the Merger.” As such, Myovant will be relieved of the requirements applicable to public companies, including, among other things, the pressure to meet analyst forecasts and the requirements and restrictions on trading that directors, officers and beneficial owners of more than 10% of the shares of the common shares face as a result of the provisions of Section 16 of the Exchange Act. Myovant will also be relieved of the obligation to separately prepare and furnish information to its shareholders.
The primary detriments of the Merger to the Purchaser Filing Persons include the fact that all of the risk of any possible decrease in the future earnings, growth or value of Myovant following the Merger will be borne by the Purchaser Filing Persons. Additionally, the Purchaser Filing Persons’ ownership of Myovant will be illiquid, with no public trading market for such securities.
The table below sets forth the beneficial ownership of Myovant common shares and resulting interests in Myovant’s net book value and net loss of the Purchaser Filing Persons prior to and immediately after the consummation of the Merger, based on Myovant’s net book value at September 30, 2022 and net loss for the six months ended September 30, 2022, as if the Merger were completed on such date:
 
Prior to the Consummation of the Merger
After the Consummation of the Merger
(in thousands, except %)
%
Ownership(1)
Net book
value at
September 30,
2022(1)
Net loss
for the six
months ended
September 30,
2022(1)
%
Ownership
Net book
value at
September 30,
2022
Net loss
for the six
months ended
September 30,
2022
Sumitovant and its affiliates
51.8%
$(265,992)
$(34,649)
100%
$(513,249)
$(66,858)
(1)
Calculated based on 96,557,652 Myovant common shares outstanding as of September 30, 2022 and Sumitovant’s ownership as of September 30, 2022 of 50,041,181 Myovant common shares.
Alternatives to the Merger
As noted above, in response to the proposed offer from Sumitovant, the Special Committee evaluated potential strategic alternatives for Myovant, including continuing as a separate public company or pursuing an alternative transaction with a third party, with the assistance of Myovant’s senior management and advisors. The Special Committee considered the risks and potential likelihood of achieving greater value for the Minority Shareholders by pursuing potential strategic alternatives to the Merger, including continuing as a separate public company or pursuing an alternative transaction with a third party, in each case, relative to the benefits of the Merger. In this regard, the Special Committee took into account that Sumitovant, as the holder of a majority of Myovant common shares, has an effective veto over any alternative transaction, and that Sumitovant stated in its initial non-binding proposal letter delivered on September 30, 2022 that it had no interest in selling any of the Myovant common shares it owns nor approving any alternative sale, merger or similar transaction involving Myovant. For more information on the process behind the Special Committee’s determination, please see the sections entitled “Special Factors—Background of the Merger” and “Special Factors—Reasons for the Merger; Recommendation of the Special Committee and the Myovant Board; Fairness of the Merger.” Sumitovant has made the only firm offer to acquire Myovant that Myovant received during the past two years.
Projected Financial Information
Myovant Management Projections
Myovant does not, as a matter of course, publicly disclose long-term financial projections because of, among other reasons, the uncertainty and subjectivity of the underlying assumptions and estimates and the unpredictability of Myovant’s business and the competitive markets in which it operates. However, in connection with the Special Committee’s evaluation of a potential transaction with Sumitovant, Myovant management prepared and provided to
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representatives of Goldman Sachs, who then presented to the Special Committee on June 28, 2022, the Initial Projections, related to periods from fiscal year 2022 to the fiscal year ending March 31, 2036 (“fiscal year 2035”). At the direction of the Special Committee, the Initial Projections were revised by Myovant management and were superseded by the Revised Projections, which reflect revised underlying assumptions as described below, related to periods from fiscal year 2022 to fiscal year 2036. The Revised Projections were initially presented to the Special Committee at its meeting on August 3, 2022 and did not change thereafter. In this section of the proxy statement, we refer to the Initial Projections and the Revised Projections together as the “Financial Projections.” The Financial Projections are based on certain assumptions made by management, and were based on preliminary five-year projections for the periods from fiscal year 2022 through the fiscal year ending March 31, 2027 (“fiscal year 2026”) that had been presented by management to the Myovant Board in March 2022 as part of Myovant’s regular long-range planning process and were shared with J.P. Morgan. The Revised Projections were used by Goldman Sachs with the Special Committee’s approval for purposes of preparing Goldman Sachs’ financial analyses and fairness opinion provided to the Special Committee on October 23, 2022 in connection with the Special Committee’s consideration of the transactions contemplated by the Merger Agreement, as more fully described in the section entitled “Special Factors—Opinion of Financial Advisor to the Special Committee.”
The summary of the Financial Projections is included in this proxy statement because the Financial Projections were made available to Goldman Sachs for the purpose of rendering an opinion that is materially related to the proposed transaction with Sumitovant and SMP and are being disclosed in order to comply with the SEC rules or requirements under applicable law, including case law regarding disclosure of the financial advisor’s analyses. The Financial Projections included in this proxy statement, other than preliminary five-year projections that had been presented by management to the Myovant Board in March 2022 and subsequently shared with J.P. Morgan, which were subsequently incorporated into the Financial Projections, were not shared with the Purchaser Filing Persons or their advisors prior to the execution of the Merger Agreement.
The Financial Projections were generated solely for internal use and not developed with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial data, published guidelines of the SEC regarding forward-looking statements or Generally Accepted Accounting Principles (“GAAP”), but, in the view of Myovant management, were reasonably prepared in good faith on a basis reflecting the best available estimates and judgments at the time of preparation, and presented as of the time of preparation. No independent registered public accounting firm provided any assistance in preparing the Financial Projections. Accordingly, no independent registered public accounting firm has examined, compiled or otherwise performed any procedures with respect to the Financial Projections or expressed any opinion or given any other form of assurance with respect thereto, and they assume no responsibility for the information contained in the Financial Projections. The Ernst & Young LLP report included in Myovant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“fiscal year 2021”) relates solely to the historical financial information of Myovant and to an assessment of Myovant’s internal controls over financial reporting. Such reports do not extend to the Financial Projections and should not be read to do so.
The inclusion of the Financial Projections should not be regarded as an indication that Myovant, Sumitovant or their respective affiliates or financial advisors or any of their respective representatives or any other recipient of this information considered, or now considers, the Financial Projections to be necessarily predictive of future results. There can be no assurance that the projected results will be realized or that actual results will not be materially lower or higher than estimated, whether or not the Merger is completed. None of Myovant, Sumitovant or their respective affiliates, officers, directors, advisors or other representatives can provide any assurance that actual results will not differ from the Financial Projections, and, except as required by applicable law, none of Myovant, Sumitovant or their respective affiliates undertakes any obligation to update, or otherwise revise or reconcile, the Financial Projections to reflect circumstances existing after the date the Financial Projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Financial Projections are shown to be inappropriate. None of Myovant or its affiliates, officers, directors, advisors or other representatives has made or makes any representation to any Myovant shareholder or other person regarding the information included in the Financial Projections or Myovant’s ultimate performance compared to the information contained in the Financial Projections or that forecasted results will be achieved. Myovant has made no representation to Sumitovant, in the Merger Agreement or otherwise, concerning the Financial Projections. The Financial Projections are forward-looking statements. The assumptions and estimates underlying the Financial Projections, all of which are difficult to predict and many of which are beyond the control of Myovant, may not be realized. Neither Myovant nor any of its affiliates assumes any responsibility to holders of Myovant common shares for the accuracy of this information. In particular, the Financial
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Projections, while presented with numerical specificity necessarily, were based on numerous variables and assumptions that are inherently uncertain and are subject to a wide variety of significant business, economic, competitive and regulatory risks and uncertainties that could cause actual results to differ materially from those contained in the Financial Projections. Because the Financial Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year and are unlikely to anticipate each circumstance that will have an effect on the commercial value of ORGOVYX®, MYFEMBREE®, RYEQO® and Myovant’s product candidates. As a result, there can be no assurance that the Financial Projections accurately reflect future trends or accurately estimate the future market for ORGOVYX®, MYFEMBREE®, RYEQO® and Myovant’s product candidates. There can be no assurance of the approval, or timing of such approval, of any of Myovant’s clinical-stage product candidates, and it is possible that other therapeutic scenarios will be preferable. Important factors that may affect actual results and results in the Financial Projections not being achieved include, but are not limited to: the success and cost of Myovant’s commercialization of its approved products and product candidates, if approved; the impact on Myovant’s business, financial results, results of operations and ongoing clinical trials from the effects of the COVID-19 pandemic; risks related to development programs, including the success and anticipated timing of Myovant’s ongoing and future clinical and non-clinical studies, and uncertainties relating to the success of Myovant’s clinical trials for its product candidates and any future therapy or product candidates; uncertainties surrounding the regulatory landscape that governs Myovant’s products and product candidates, including risks related to regulatory approval, including the timing and status of anticipated future regulatory submissions and Myovant’s ability to obtain and maintain regulatory approvals for its product candidates; the ability to obtain, maintain, and enforce intellectual property protection for Myovant’s products and product candidates; risks related to significant competition from other biotechnology and pharmaceutical companies; and other risks identified in Myovant’s SEC filings, including Myovant’s Annual Report on Form 10-K for fiscal year 2021 and Myovant’s most recent Quarterly Report on Form 10-Q and Current Reports on Form 8-K, and described under the section entitled “Cautionary Statement Concerning Forward-Looking Information.” The Financial Projections also reflect assumptions as to certain business decisions that are subject to change.
Modeling and forecasting the future commercialization of products and clinical, pre-clinical and research stage product candidates is a highly speculative endeavor. In addition to the various limitations, risks and uncertainties described above, we also cannot assure you that Myovant will obtain and maintain any of the regulatory approvals necessary for the commercialization of ORGOVYX®, MYFEMBREE®, RYEQO® and its product candidates, or that Myovant’s competitors will not commercialize products that are safer, more effective or more successfully marketed and sold than any products that Myovant may commercialize in the future.
The Financial Projections contain certain non-GAAP financial measures that Myovant management believes are helpful in understanding Myovant’s financial performance and future results. Myovant management regularly uses a variety of financial measures that are not in accordance with GAAP for forecasting, budgeting and measuring financial performance. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. While Myovant believes these non-GAAP financial measures provide meaningful information to help investors understand the operating results and to analyze Myovant’s financial and business trends on a period-to-period basis, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of Myovant’s competitors and may not be directly comparable to similarly titled measures of Myovant’s competitors due to potential differences in the exact method of calculation. The SEC rules that would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures provided to a board of directors or a financial advisor in connection with a proposed business combination such as the Merger if the disclosure is included in a document such as this proxy statement. In addition, reconciliations of non-GAAP financial measures were not relied upon by the Special Committee or its independent financial advisor in connection with their respective evaluations of the Merger. Accordingly, Myovant has not provided a reconciliation of the non-GAAP financial measures included in the Financial Projections to the relevant GAAP financial measures.
The Financial Projections do not take into account any circumstances or events occurring after the date they were prepared, and, except as may be required in order to comply with applicable securities laws, Myovant does not intend to update or otherwise revise the Financial Projections, or the specific portions presented, to reflect circumstances existing after the date when they were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error. For the foregoing reasons, as well as the bases and assumptions on which the Financial Projections were compiled, the inclusion of specific portions of the Financial Projections in this proxy statement should not be regarded as an indication that such projections are an accurate prediction of future events, and they should not be relied on as such.
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Myovant management prepared the Revised Projections, which were provided to the Special Committee, the Myovant Board (other than the Sumitomo Directors) and Goldman Sachs. The Revised Projections are the final projections that were made available to, and relied upon by, the Special Committee, the Myovant Board (other than the Sumitomo Directors) and Goldman Sachs in connection with their evaluation of the proposed transaction with Sumitovant and SMP. Myovant management had previously prepared the Initial Projections, which were also provided to the Special Committee and Goldman Sachs. However, the Initial Projections were revised and superseded by the Revised Projections and therefore were not relied upon by the Special Committee, the Myovant Board (other than the Sumitomo Directors) or Goldman Sachs.
The Initial Projections were reviewed and adjusted by Myovant management based upon feedback provided by the Special Committee, which adjustments included, without limitation, (i) modifying certain assumptions about the probability of success for the contraceptive label impact on MYFEMBREE® revenue projections (from 100% to 72%), (ii) updating the assumed worldwide loss of exclusivity for certain patent protections associated with ORGOVYX® and MYFEMBREE® currently in the market to begin in 2036 rather than 2035 and (iii) updating the loss of exclusivity for certain patent protections associated with new indications of Myovant’s existing products from 2033 to 2036. These different assumptions are further described in the key assumptions underlying the Revised Projections and in the key assumptions underlying the Initial Projections set forth below.
Revised Projections
The Special Committee, the Myovant Board (other than the Sumitomo Directors) and Goldman Sachs relied upon, among other things, the following key assumptions underlying the Revised Projections:
3% annual price increase for ORGOVYX® and MYFEMBREE®;
volume growth (i) of approximately 11% in the fiscal year ending March 31, 2028 (“fiscal year 2027”), stepping down to approximately 3% by fiscal year 2036, for ORGOVYX®, (ii) ranging from approximately 8% to approximately 45% in fiscal year 2027 and ranging from 0% to approximately 33% thereafter for MYFEMBREE® and (iii) of 0% until the start of the fiscal year ending March 31, 2031 and growing approximately 54% on average per year thereafter for a product candidate under development;
probability of success (i) of 100% for ORGOVYX®, (ii) ranging from 75% to 100% for MYFEMBREE® (based on different indications, including 100% for use in the treatment of endometriosis in pre-menopausal women) and (iii) 5% for a product candidate under development;
cash flows discounted to June 30, 2022, using the mid-year convention;
change in working capital assumed to be $0 in terminal year;
14% corporate effective tax rate and tax savings associated with NOLs discounted at WACC;
utilized $1.027 billion of NOLs (80% of taxable income for post-2017 NOLs) and $2 million in existing Research & Development tax credit as of March 31, 2022;
2036 worldwide loss of exclusivity representing that Myovant has exclusivity on ORGOVYX® and MYFEMBREE® through at least 2036 both within and outside the United States, after which generic erosion is assumed (sensitivity of annual erosion of 60% to 100% within the financial analysis);
contraceptive label impact on MYFEMBREE® revenue projections at 72% probability of success; and
loss of exclusivity for certain new indications of Myovant’s existing products in 2036.
The following table presents a summary of the Revised Projections:
Revised Projections | Risk-Adjusted
($ in millions, unaudited)(1)
FYE Mar-31
$ in millions
FYQ2-
Q4
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
2034E
2035E
2036E
Terminal
Net Product Revenue
$242
$599
$1,125
$1,656
$2,149
$2,334
$2,552
$2,695
$2,852
$3,059
$3,266
$3,487
$3,692
$3,880
$4,079
$4,079
% Growth
112%
88%
47%
30%
9%
9%
6%
6%
7%
7%
7%
6%
5%
5%
5%
(+) Collaboration and Milestone Revenue(2)
$120
$21
$129
$464
$45
$44
$47
$398
$48
$371
$40
$40
$516
$41
$27
$0
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FYE Mar-31
$ in millions
FYQ2-
Q4
2022E
2023E
2024E
2025E
2026E
2027E
2028E
2029E
2030E
2031E
2032E
2033E
2034E
2035E
2036E
Terminal
(-) Direct Product Cost of Goods Sold
$(6)
$(16)
$(31)
$(45)
$(59)
$(64)
$(69)
$(73)
$(82)
$(96)
$(111)
$(126)
$(137)
$(144)
$(152)
$(152)
% of Net Product Sales
(3)%
(3)%
(3)%
(3)%
(3)%
(3)%
(3)%
(3)%
(3)%
(3)%
(4)%
(4)%
(4)%
(4)%
(4)%
(-) Collaboration Expense to Pfizer
$(105)
$(270)
$(510)
$(751)
$(976)
$(1,061)
$(1,160)
$(1,225)
$(1,280)
$(1,342)
$(1,401)
$(1,469)
$(1,541)
$(1,619)
$(1,700)
$(1,700)
(-) Other Royalty Expenses(3)
$(18)
$(44)
$(82)
$(121)
$(152)
$(163)
$(177)
$(187)
$(199)
$(213)
$(226)
$(241)
$(256)
$(269)
$(277)
$(277)
(-) Richter Product Supply Cost of Goods Sold
$(5)
$(1)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Gross Profit
$228
$288
$631
$1,203
$1,007
$1,091
$1,192
$1,607
$1,339
$1,780
$1,569
$1,691
$2,273
$1,889
$1,977
$1,950
% Margin
46%
50%
57%
46%
46%
46%
52%
46%
52%
47%
48%
54%
48%
48%
(-) Research & Development (“R&D”)
$(113)
$(137)
$(132)
$(131)
$(120)
$(121)
$(124)
$(131)
$(132)
$(135)
$(137)
$(140)
$(141)
$(138)
$(141)
$(141)
% of Net Product Revenue
(47)%
(23)%