Rain Oncology to be Acquired by Pathos AI for $1.16 in cash per share

Rain Oncology has entered into a definitive merger agreement whereby Pathos AI will acquire Rain for $1.16 in cash per share plus a non-tradeable contingent value right for potential cash payments of up to approximately 17c per share. The Rain Board of Directors voted unanimously to approve the proposed transaction. The upfront cash consideration represents a 17% premium over Rain’s unaffected stock price as of October 13. A subsidiary of Pathos will commence a tender offer to acquire all outstanding shares of Rain for $1.16 in cash per share plus a CVR representing a contractual right to receive two potential contingent aggregate cash payments as follows: an aggregate amount equal to $5.0M – up to approximately 14c per share -, minus certain expenses incurred related to pending or future litigation involving Rain and its directors or officers, minus any shortfall in a target level of net cash, plus (C) any cash at closing in excess of the target net cash; a development CVR Payment of either $1.0M or approximately 3c per share, upon the first patient dosed in a clinical stage study conducted by Pathos using milademetan within five years of the closing of the merger; or 80% of the net proceeds from any license or disposition of milademetan effected within two years of the closing of the merger. The closing of the tender offer is subject to certain conditions, including the tender of Rain shares representing at least one share more than 50% of the total number of outstanding shares of common stock as of immediately prior to consummation of the tender offer; the availability of at least $49.6M of cash and cash equivalents, net certain liabilities at closing; and other customary conditions. Following the tender offer closing, this subsidiary will be merged into Rain with Rain as the surviving entity of the merger, which will then operate as a separate, wholly-owned subsidiary of Pathos. If the tender offer is successful, the Transaction is expected to close in January 2024.