Entities advised by Baker Brothers acquired securities of MethylGene Inc.

MONTREAL, April 4 /CNW/ - Baker Bros. Investments II, L.P., Baker Brothers Life Sciences, L.P. and 14159, L.P., U.S. funds managed by Baker Bros. Advisors, LLC, announced today filing the following early warning report with the Canadian securities regulatory authorities on the SEDAR website at www.sedar.com:

(a)   Name of the Reporting Issuer(s) for which the Report is made:
     
    MethylGene Inc. ("MethylGene")
     
(b)   Name and Address of Offeror:
     
    Baker Bros. Investments II, L.P. ("Investments II"),
Baker Brothers Life Sciences, L.P. ("Baker Brothers Life Sciences") and
14159, L.P. ("14159")
(collectively, the "Offerors")
     
    667 Madison Avenue
21st Floor
New York, NY
10065  USA
     
(c)   The designation and number or principal amount of securities and the offeror's securityholding percentage in the class of securities of which the offeror acquired ownership or control in the transaction or occurrence giving rise to the obligation to file the news release, and whether it was ownership or control that was acquired in those circumstances:
     
    On April 4st, 2011, (the "Closing Date") the Offerors, U.S. funds managed by Baker Bros. Advisors, LLC, an entity controlled by Julian C. Baker and Felix J. Baker,  acquired ownership of an aggregate of 49,214,809 units ("Units") (representing 49,214,809 Common Shares (as defined below) and 14,764,442 Warrants (as defined below)) by way of private placement (the "Private Placement"), subscribed for pursuant to securities purchase agreements entered into on March 24, 2011 between MethylGene and each of the Offerors (the "Subscription Agreements"). Each Unit consists of one common share in the capital of MethylGene (a "Common Share") and thirty one-hundredths (0.30) of a common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each whole Warrant is exercisable for one Common Share (a "Warrant Share") at a price of C$0.1492 for a period of five years from the Closing Date.
     
    In addition, Baker Brothers Life Sciences has purchased on March 24, 2011, C$382,599.00 principal amount of senior unsecured convertible debentures ("Debentures") issued by MethylGene, which Debentures were automatically converted into 3,078,030 Units (representing 3,078,030 Common Shares and 923,409 Warrants) at a conversion price of C$0.1243 per Unit on the Closing Date (collectively with the Private Placement, the "Offering").
     
    Pursuant to the foregoing transactions, the Offerors acquired ownership on the Closing Date of an aggregate of 52,292,839 Units comprised of (i) 52,292,839 Common Shares (representing 16.45% of the then issued and outstanding Common Shares) and (ii) 15,687,851 Warrants entitling them to purchase 15,687,851 Warrant Shares (representing 3.90% of the then issued and outstanding Common Shares, and, aggregated with the 52,292,839 Common Shares, representing a total of 16.88% of the then issued and outstanding Common Shares in each case on a fully diluted basis assuming full exercise of all of the Warrants).
     
(d)   The designation and number or principal amount of securities and the offeror's securityholding percentage in the class of securities immediately after the transaction or occurrence giving rise to obligation to file the news release:
     
    Immediately following the Offering, the Offerors owned an aggregate of 52,292,839 Units, comprised of (i) 52,292,839 Common Shares (representing 16.45% of the then issued and outstanding Common Shares) and (ii) 15,687,851 Warrants entitling them to purchase 15,687,851 Warrant Shares (representing 3.90% of the then issued and outstanding Common Shares, and, aggregated with the 52,292,839 Common Shares, representing a total of 16.88% of the then issued and outstanding Common Shares in each case on a fully diluted basis assuming full exercise of all of the Warrants).
     
(e)   The designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in paragraph (d) over which:
     
    (i) the offeror, either alone or together with any joint actors, has ownership and control:
     
    The Offerors own an aggregate of 52,292,839 Units, comprised of (i) 52,292,839 Common Shares (representing 16.45% of the then issued and outstanding Common Shares) and (ii) 15,687,851 Warrants entitling them to purchase 15,687,851 Warrant Shares (representing 3.90% of the then issued and outstanding Common Shares, and, aggregated with the 52,292,839 Common Shares, representing a total of 16.88% of the then issued and outstanding Common Shares in each case on a fully diluted basis assuming full exercise of all of the Warrants).
     
    (ii) the offeror, either alone or together with any joint actors, has ownership but control is held by other persons or companies other than the offeror or any joint actor:
     
      Not applicable.
     
    (iii) the offeror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership:
     
      Not applicable.
     
(f)   The name of the market in which the transaction or occurrence that gave rise to the news release took place:
     
    Not applicable. The securities acquired were issued from treasury.
     
(g)   The value, in Canadian dollars, of any consideration offered per security if the offeror acquired ownership of a security in the transaction or occurrence giving rise to the obligation to file a news release:
     
    (1) The Offerors acquired 49,214,809 Units at a subscription price of C$0.1243 per Unit, and (2) Baker Brothers Life Sciences also acquired C$382,599.00 principal amount of Debentures, which Debentures were automatically converted into 3,078,030 Units at a conversion price of C$0.1243 per Unit on the Closing Date.
     
(h)   The purpose of the offeror and any joint actors in effecting the transaction or occurrence that gave rise to the news release, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer:
     
    The Offerors acquired the securities for investment purposes and not with a view to acquiring control of or over MethylGene.
     
(i)   The general nature and the material terms of any agreement, other than lending arrangements, with respect to securities of the reporting issuer entered into by the offeror, or any joint actor, and the issuer of the securities or any other entity in connection with the transaction or occurrence giving rise to the news release, including agreements with respect to the acquisition, holding, disposition or voting of any of the securities:
     
    Pursuant to the terms of the Subscription Agreements, Baker Brothers Life Sciences has been granted a pre-emptive right to acquire, subject to certain conditions (the "Pre-emptive Right"), any class or series of the equity securities of MethylGene, any voting securities of MethylGene, or any securities convertible or exchangeable into, or entitling purchase of, any of the foregoing, subsequently issued by MethylGene from time to time, in proportion to Baker Brothers Life Sciences' aggregate holdings in MethylGene (collectively the "Offered Securities"), for a term related to the achievement of certain milestones by MethylGene, but in any event until no later than 48 months following the Closing Date.
     
    In addition, Baker Brothers Life Sciences will be entitled under the terms of the Subscription Agreements to acquire any Offered Securities that are subject to the Pre-emptive Right but which are not otherwise purchased by other investors who have also been granted a Pre-emptive Right in connection with the Private Placement, subject to certain conditions.
     
    Furthermore, Baker Brothers Life Sciences will have the right, subject to certain conditions, for a period of two (2) years following the Closing Date (i) to appoint one (1) observer to MethylGene's board of directors (the "Board") who shall have the right to receive notice of and attend the meetings of the Board, and shall have the right to address the Board at any of its meetings, but who shall not have any right to vote thereat, and (ii) to nominate one (1) Board member; provided, however that in the event Baker Brothers Life Sciences' nominated Board member is not independent from it, Baker Brothers Life Sciences' right to appoint one (1) observer to the Board shall terminate upon the appointment of such nominee to the Board.
     
    The Warrants include standard adjustment provisions for stock splits, stock dividends, mergers, recapitalizations and the like as well as a cashless exercise feature. In addition, the Warrants provide that MethylGene shall not effect any exercise of the Warrants, and the holder thereof shall not have the right to exercise any portion of the Warrants, to the extent that after giving effect to such exercise, the holder (together with its affiliates and joint actors) would beneficially own in excess of 19.9% of the Common Shares outstanding immediately after giving effect to such exercise. Notwithstanding any such limitations, each holder will have the right to exercise its Warrants upon consummation of certain transactions, such as a merger, the sale of all or substantially all of the assets of MethylGene, a take-over bid or a similar transaction.
     
(j)   The names of any joint actors in connection with the disclosure required by this Report:
     
    Not applicable.
     
(k)   In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value, in Canadian dollars of the consideration paid by the offeror:
     
    (1) The Offerors acquired an aggregate of 49,214,809 Units at a subscription price of C$0.1243 per Unit, and (2) Baker Brothers Life Sciences also acquired C$382,599.00 principal amount of Debentures, which Debentures were automatically converted into 3,078,030 Units at a conversion price of C$0.1243 per Unit on the Closing Date, for an aggregate consideration of C$6,500,000.
     
(l)   If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 of NI 62-103 in respect of the reporting issuer's securities:
     
    Not applicable. This is the Offerors' first report filed under the early warning reporting system under NI 62-103 with respect to MethylGene's securities.
     
(m)   If applicable, a description of the exemption from securities legislation being relied on by the offeror and the facts supporting that reliance:
     
    Not applicable.

Baker Bros. Investments II, L.P., Baker Brothers Life Sciences, L.P. and 14159, L.P., U.S.


SOURCE Baker Bros. Investments II, L.P.

For further information:

Robert Coburn, Chief Operating Officer, 667 Madison Avenue, 21st Floor, New York, New York, 10065, (212) 339-5640

Profil de l'entreprise

Baker Bros. Investments II, L.P.

Renseignements sur cet organisme

Baker Brothers Life Sciences, L.P.

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