Sanofi announces settlement agreement related to Contingent Value Rights (CVRs) Litigation
31 Ottobre 2019 - 04:30AM
Sanofi announces settlement agreement related to Contingent Value
Rights (CVRs) Litigation
Sanofi announces settlement agreement related to
Contingent Value Rights (CVRs) Litigation
PARIS – October 31, 2019 -
Sanofi announced today that it has entered into an agreement to
settle (the “Settlement Agreement”) the previously disclosed action
UMB Bank, N.A., as Trustee v. Sanofi (No. 15 Civ. 8725 (GBD) (the
“Action”), currently pending in the United States District Court
for the Southern District of New York. The Action involves
claims against Sanofi for breach of the Contingent Value Rights
Agreement, dated as of March 31, 2011 (the “CVR Agreement”),
relating to Sanofi’s publicly-traded contingent value rights
(“CVRs”) issued in connection with the acquisition of Genzyme
Corporation.
The Settlement Agreement provides that Sanofi
and Plaintiff UMB Bank, N.A. (“Plaintiff” or the “Trustee”), on
behalf of an express trust for the benefit of each and every holder
of one or more contingent value rights (the “CVR Holders”), have
agreed to fully and completely resolve the Action, without any
admission of liability or wrongdoing, on the following terms:
- In full and complete satisfaction of all claims asserted in the
Action and in exchange for the releases set forth in the Settlement
Agreement, Sanofi shall pay to the Trustee, for distribution as
discussed below, a total of $315,000,000 U.S.D. (the “Settlement
Payment” or “Litigation Proceeds”);
- Any and all claims or causes of action that (a) in any way
arise out of, are based upon, relate to, or concern the facts,
matters, occurrences, claims made, allegations, representations,
omissions, actions (or failure to act), transactions, agreements,
or conduct alleged, complained of, set forth, referred to, involved
in, or which could have been raised or made in the Action and/or
any of the complaints in the Action, (b) in any way arise out of,
are based upon, relate to, or concern the CVR Agreement and/or the
CVRs, (c) in any way relate to or concern the development and/or
commercialization of alemtuzumab (marketed under the brand name
Lemtrada®), and/or (d) in any way relate to or concern the
production and/or manufacturing of Cerezyme® and/or Fabrazyme®,
shall be released;
- The following events shall take place: (i) the Action
will be voluntarily dismissed with prejudice; (ii) the CVRs will be
delisted from the NASDAQ, will not thereafter be listed on any
national securities exchange or quotation in any other quotation
medium, and will be extinguished; and (iii) the CVR Agreement, and
each and all of its attendant rights and obligations, will be
terminated.
The occurrence of the Effective Date (as defined
in the Settlement Agreement) of the Settlement Agreement is subject
to, among other conditions, Court Approval (as defined in the
Settlement Agreement) and, in accordance with the terms of the
Settlement Agreement, the Trustee intends to initiate proceedings
in the probate court for Hennepin County, Minnesota (the “Probate
Court”), pursuant to the Minnesota Trust Code, Minn. Stat. §§
501C.0201-.0208 seeking an order from the Probate Court, among
other things, (i) approving the Settlement Agreement and directing
the implementation of its terms, (ii) providing that the CVR
Agreement is terminated and that none of the Trustee, the CVR
Holders, and Sanofi shall have any further rights or obligations
under the CVR Agreement, (iii) approving the notice(s) sent by the
Trustee to the CVR Holders in connection with the Settlement
Agreement and the court approval thereof and providing that such
notice(s) satisfy any and all notice requirements relating to court
approval and as set forth in the CVR Agreement, including, for the
avoidance of doubt, those imposed on Sanofi, and (iv) providing
that Sanofi shall have no responsibility to anyone, including the
CVR Holders, relating to the Trustee’s distribution of the
Settlement Payment. Sanofi cannot predict when or if the
Effective Date of the Settlement Agreement will occur. If the
Effective Date does not occur, the parties will return to the
positions they were in with respect to the Action prior to entry
into the Settlement Agreement.
Plaintiff, in its capacity as Trustee for the
CVR Holders, is solely responsible for the distribution of the
Settlement Payment to CVR Holders.
The Trustee previously entered into an agreement
with certain CVR Holders (the “Funding Holders”), dated November
16, 2016, through which it, subject to certain terms and
conditions, obtained funding for the prosecution of the Action (the
“Funding Agreement”). In accordance with the terms of the CVR
Agreement and the Funding Agreement, prior to any distribution to
be made to all CVR Holders, any Litigation Proceeds will first go
towards repaying the Funding Holders for their funded amounts, to
the expenses of the Trustee, including legal fees and expenses and
the Trustee’s fees, and to a success fee paid to the Funding
Holders and to counsel for the Trustee equal in aggregate to the
greater of (a) half of the legal fees incurred on a contingent
basis plus the total funding commitment of the Funding Holders and
(b) an amount ranging between approximately 20% and 27% of the
gross Litigation Proceeds, depending on the total amount of
Litigation Proceeds (all such fees, expenses and other payments
required to be made from the Litigation Proceeds in accordance with
the Funding Agreement, the “Funding Agreement Payments”).
After the Funding Agreement Payments, 100% of the remaining
Litigation Proceeds shall be distributed by the Trustee for the
benefit of all CVR Holders in accordance with the CVR
Agreement.
The Trustee currently estimates that the Funding
Agreement Payments will total approximately $107,000,000. As
a result, the Trustee currently estimates that approximately
$208,000,000 of the Litigation Proceeds, or approximately $0.88 per
CVR, will be distributed to CVR Holders on account of the
outstanding CVRs. However, as of the date hereof, the Trustee
is unable to determine the precise amount that will be distributed
to the CVR Holders (on an aggregate or per CVR basis).
For any questions relating to the Settlement
Agreement and/or the distribution of the Settlement Payment, Sanofi
directs all CVR Holders to the Trustee:
Gavin Wilkinson, Senior Vice PresidentUMB Bank, National
Association120 South Sixth Street, Suite 1400Minneapolis, MN
55402Email: SanofiSettlement@umb.com
The above description of the Settlement
Agreement is a summary of the material terms only, and is qualified
in its entirety by the terms thereof. The Settlement
Agreement is attached as an Exhibit to a Form 6-K being filed
substantially contemporaneously herewith.
The Settlement Payment will not have an impact
on Sanofi’s business net income.1
About Sanofi Sanofi is dedicated to
supporting people through their health challenges. We are a global
biopharmaceutical company focused on human health. We prevent
illness with vaccines, provide innovative treatments to fight pain
and ease suffering. We stand by the few who suffer from rare
diseases and the millions with long-term chronic conditions.
With more than 100,000 people in 100 countries, Sanofi is
transforming scientific innovation into healthcare solutions around
the globe. Sanofi, Empowering Life |
Media Relations Contact Quentin Vivant Tel.: +33
(0)1 53 77 46 46 mr@sanofi.com |
Investor
Relations Contact George Grofik Tel.: +33 (0)1 53 77 45 45
ir@sanofi.com |
Sanofi Forward-Looking StatementsThis press
release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995, as amended.
Forward-looking statements are statements that are not historical
facts. These statements include the statements regarding the
occurrence of the Effective Date, estimates of the Funding
Agreement Payments and of the amount of the Litigation Proceeds to
be distributed to CVR Holders (on an aggregate and per CVR basis)
and other projections and estimates and their underlying
assumptions, statements regarding plans, objectives, intentions and
expectations with respect to future financial results, events,
operations, services, product development and potential, and
statements regarding future performance. Forward-looking
statements are generally identified by the words “expects”,
“anticipates”, “believes”, “intends”, “estimates”, “plans” and
similar expressions. Although Sanofi’s management believes
that the expectations reflected in such forward-looking statements
are reasonable, investors are cautioned that forward-looking
information and statements are subject to various risks and
uncertainties, many of which are difficult to predict and generally
beyond the control of Sanofi, that could cause actual results and
developments to differ materially from those expressed in, or
implied or projected by, the forward-looking information and
statements. These risks and uncertainties include among other
things, the ability to obtain Court Approval and satisfy the other
conditions to the occurrence of the Effective Date (including the
risk that it will not occur and the parties will return to their
positions prior to the entry into the Settlement Agreement, without
any distribution of Litigation Proceeds), the continued accrual of
expenses of the Trustee and other factors that could affect the
final amount of the Funding Agreement Payments and of the amount of
the Litigation Proceeds to be distributed to CVR Holders, and other
risks and uncertainties associated with the Settlement Agreement,
the uncertainties inherent in research and development, future
clinical data and analysis, including post-marketing decisions by
regulatory authorities, such as the FDA or the EMA, regarding
whether and when to approve any drug, device or biological
application that may be filed for any such product candidates as
well as their decisions regarding labelling and other matters that
could affect the availability or commercial potential of such
product candidates, the absence of guarantee that the product
candidates if approved will be commercially successful, the future
approval and commercial success of therapeutic alternatives,
Sanofi’s ability to benefit from external growth opportunities, to
complete related transactions and/or obtain regulatory clearances,
risks associated with intellectual property and any related pending
or future litigation and the ultimate outcome of such litigation,
including risks associated with the achievement of, where
necessary, court approval in connection with any settlement of
pending litigation, trends in exchange rates and prevailing
interest rates, volatile economic conditions, the impact of cost
containment initiatives and subsequent changes thereto, the average
number of shares outstanding as well as those discussed or
identified in the public filings with the SEC and the AMF made by
Sanofi, including those listed under “Risk Factors” and “Cautionary
Statement Regarding Forward-Looking Statements” in Sanofi’s annual
report on Form 20-F for the year ended December 31, 2018.
Other than as required by applicable law, Sanofi does not undertake
any obligation to update or revise any forward-looking information
or statements. |
1 Business net income is a non-GAAP financial measure (see
Appendix 10 to the July 29, 2019 press release for a
definition).
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