Veracyte, Inc.

VCYT
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VERACYTE, INC. : Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)

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12/03/2019 | 11:11 pm

Item 1.01 Entry into a Material Definitive Agreement.



On December 3, 2019 (the "Closing Date"), Veracyte, Inc. (the "Company") entered
into a License and Asset Purchase Agreement (the "LAPA") with NanoString, Inc.
("NanoString"), pursuant to which the Company (the "Transaction") (i) obtained
an exclusive worldwide license to NanoString's nCounter FLEX Analysis System
(the "FLEX System") for in vitro diagnostic use and for the development and
commercialization of in vitro diagnostic tests, including in vitro diagnostic
devices (IVDs) or laboratory developed tests (LDTs), for use on the FLEX System
(collectively, the "License") and (ii) acquired certain assets, including
NanoString's rights with respect to the Prosigna Breast Cancer Prognostic Gene
Signature Assay ("Prosigna"), the LymphMark Lymphoma Subtyping Test
("LymphMark") and the assay software modules that operate together with the FLEX
System. In connection with the Transaction, the Company will assume certain
liabilities associated with the assets purchased under the LAPA, including
ongoing third-party royalty obligations related to Prosigna and LymphMark. As
part of the Transaction, the Company will also offer certain employees of
NanoString employment. In connection with entering into the LAPA, the Company
and NanoString also entered into various service and supply agreements relating
to the manufacture and supply of Prosigna, LymphMark, and other in-vitro
diagnostic tests that may be developed by or on behalf of the Company for use on
the FLEX System and for the manufacture and supply of the FLEX System.



As consideration under the LAPA, the Company will pay NanoString $40,000,000 in
cash. NanoString is also entitled to receive 376,732 shares of the Company's
common stock (the "Equity Consideration"), which shares represent a value of
approximately $10,000,000 based on the average closing price of the Company's
common stock for the ten consecutive trading days ending on the third trading
day prior to the Closing Date. The Company is required under the LAPA to
register the Equity Consideration for resale within 90 days of the Closing Date
as set forth in the registration rights schedule to the LAPA (the "Registration
Rights Schedule").



Pursuant to the terms of the LAPA, NanoString may not sell the Equity
Consideration for the first 90 days following the Closing Date. Thereafter,
NanoString may, subject to limited exceptions, not sell Equity Consideration
representing more than 10% of the average daily trading volume of the Company's
common stock for the 30-day period preceding any such sale.



Pursuant to the LAPA, NanoString is also eligible to receive three additional
payments, based upon the achievement of certain commercialization milestones,
totaling $10,000,000 in the aggregate (the "Milestone Payments"). The individual
Milestone Payments of $3,500,000, $3,500,000 and $3,000,000 will be due,
respectively, upon the Company's commercial launch of the first, second and
third diagnostic test for use on the FLEX System, other than Prosigna or
LymphMark, in each case as measured by the processing of the first commercial
patient sample.



The foregoing summaries of the LAPA and Registration Rights Schedule are not
complete and are qualified in their entirety by reference to the LAPA and
Registration Rights Schedule, copies of which are filed as Exhibits 2.1 and 4.1
to this Current Report on Form 8-K and are incorporated herein by reference. The
LAPA contains customary representations and warranties, covenants and
indemnities. The representations, warranties and covenants contained in the LAPA
were made only for the purposes of the LAPA, were made as of specific dates, and
were made solely for the benefit of the parties to the LAPA, and may not have
been intended to be statements of fact but, rather, as a method of allocating
risk and governing the contractual rights and relationships among the parties.
The assertions embodied in those representations and warranties may be subject
to important qualifications and limitations agreed to by the parties in
connection with negotiating their respective terms. Moreover, the
representations and warranties may be subject to a contractual standard of
materiality that may be different from what may be viewed as material to the
Company's stockholders. For the foregoing reasons, none of the Company's
stockholders or any other person should rely on such representations and
warranties, or any characterizations thereof, as statements of factual
information at the time they were made or otherwise.



Item 2.01 Completion of Acquisition or Disposition of Assets.



The information set forth above under Item 1.01 is hereby incorporated by
reference in its entirety into this Item 2.01.



In connection with the Transaction, the Company obtained from the Securities and
Exchange Commission
, pursuant to its authority under Rule 3-13 under
Regulation S-X, a waiver from the requirements of Rule 3-05 and Article 11 of
Regulation S-X to provide certain financial statements and pro forma financial
information relating to the Transaction. As a result, the Company will only
provide an audited statement of assets acquired and liabilities assumed prepared
on the basis of the allocation of the Company's purchase price as of the
acquisition date (the "Abbreviated Financial Statements"). The Company will
provide the Abbreviated Financial Statements in lieu of the full financial
statements and related pro forma information required under Rule 3-05 and
Article 11 of Regulation S-X in an amendment to this Current Report on Form 8-K
to be filed within 71 days following the date that this Current Report on Form
8-K must be filed (the "Financial Statement Due Date"), pursuant to Item 9.01 of
Form



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8-K, or, in the alternative, to the extent filed prior to the Financial
Statement Due Date, by including such information in a footnote to the Company's
financial statements to be included in its Annual Report on Form 10-K as of and
for the year ending December 31, 2019.



Item 3.02 Unregistered Sales of Equity Securities.



The information set forth above under Item 1.01 relating to the Equity
Consideration is hereby incorporated by reference in its entirety into this Item
3.02. The sale of the Equity Consideration was deemed to be exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D
promulgated thereunder). In the LAPA, NanoString represented its intention to
acquire the securities for investment only and not with a view to or for sale in
connection with any distribution thereof, and appropriate legends were placed
upon the book entry entitlements for the Equity Consideration.



Item 9.01 Financial Statements and Exhibits.




(d) Exhibits


Exhibit No. Description

2.1*† License and Asset Purchase Agreement, dated December 3, 2019, by
and among Veracyte, Inc. and NanoString, Inc.
4.1 Registration Rights Schedule, dated December 3, 2019.
* Certain schedules and exhibits to the License and Asset Purchase
Agreement have been omitted pursuant to Item 601(a)(5) of Regulation
S-K, but a copy will be furnished supplementally to the Securities
and Exchange Commission
upon request.
† Certain portions of the License and Asset Purchase Agreement have
been omitted because they are not material and would likely cause
competitive harm to the registrant if disclosed.






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