Enliven Therapeutics, Inc. 10-K

Item 1. Business. Summary We are a biopharmaceutical company that has been dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious diseases. On October 13, 2022, we, Iguana Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary, or the Merger Sub, and Enliven Therapeutics, Inc., a Delaware corporation, or Enliven , entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which, among other things, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Enliven, with Enliven continuing as our wholly owned subsidiary and the surviving corporation of the Merger, which transaction is referred to herein as the Merger. If the Merger is completed, the business of Enliven will continue as the business of the combined company. We expect to devote significant time and resources to the completion of the Merger. However, there can be no assurances that such activities will result in the completion of the Merger. Further, the completion of the Merger may ultimately not deliver the anticipated benefits or enhance shareholder value. If the Merger is not completed, we will reconsider our strategic alternatives. We consider one of the following courses of action to be the most likely alternatives if the Merger is not completed: • Dissolve and liquidate our assets . If, for any reason, the Merger does not close, our board of directors may conclude that it is in the best interest of stockholders to dissolve the company and liquidate our assets. In that event, we would be required to pay all of our debts and contractual obligations, and to set aside certain reserves for potential future claims. There would be no assurances as to the amount or timing of available cash remaining to distribute to stockholders after paying our obligations and setting aside funds for reserves. • Pursue another strategic transaction . We may resume the process of evaluating a potential strategic transaction in order to attempt another strategic transaction like the Merger. • Operate our business. Our board of directors may elect to seek new product candidates for development. Merger Agreement Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, or the Effective Time, (a) each then-outstanding share of Enliven common stock (including shares of Enliven common stock issued upon conversion of Enliven preferred stock, which conversion will occur immediately prior to the Effective Time and shares of Enliven common stock issued in the Financing Transaction (as defined below)) will be converted into the right to receive a number of shares of our common stock (subject to the payment of cash in lieu of fractional shares and after giving effect to the Reverse Stock Split (as defined below)) calculated in accordance with the Merger Agreement (the ratio of such conversion, the Exchange Ratio); and (b) each then-outstanding Enliven stock option to purchase Enliven common stock will be assumed by us, subject to adjustment as set forth in the Merger Agreement. Subject to the terms and conditions of, and the calculation of the Exchange Ratio pursuant to, the Merger Agreement, it is currently anticipated that upon the closing of the Merger, our pre-Merger stockholders will own approximately 16% of the combined company and pre-Merger Enliven stockholders (including those purchasing Enliven shares in the Financing Transaction) will own approximately 84.1% of the combined company on a pro forma basis, based on the number of shares of our common stock expected to be issued in connection with the Merger. The provisions for calculating the Exchange Ratio are set forth in the Merger Agreement, and assume a valuation for Enliven equal to $324.6 million, plus the proceeds of the Financing Transaction, and a valuation for us equal to our net cash as of the business day immediately prior to the closing date of the Merger, plus $10 million, in each case as further described in the Merger Agreement. The Exchange Ratio is also based on the relative capitalizations of the companies. For purposes of calculating the Exchange Ratio, shares of our common stock underlying our stock options outstanding immediately prior to the Effective Time with an exercise price per share of less than or equal to $10.00 (as adjusted for the Reverse Stock Split) will be deemed to be outstanding, and all shares of Enliven common stock underlying outstanding Enliven stock options, warrants and other derivative securities will be deemed to be outstanding. In connection with the Merger, we will seek the approval of our stockholders at a special meeting expected to be held on February 22, 2023 to, among other things, (a) issue the shares of our common stock issuable in connection with the Merger under the rules of The Nasdaq Stock Market LLC, or Nasdaq, pursuant to the terms of the Merger Agreement, or the 4 Required Voting Proposal, (b) amend our certificate of incorporation to ( i ) increase the number of authorized shares of our common stock from 200,000,000 shares to 400,000,000 shares and (ii) effect a reverse split of our common stock, at a ratio of not less than 1-for-3 and not more than 1-for-7 and to be determined prior to the Effective Time in accordance with the Merger Agreement, or the Reverse Stock Split, which is intended to ensure that Nasdaq listing requirements are satisfied and (c) amend certain terms of our equity incentive plans as described in the Merger Agreement. Each of us and Enliven have agreed to customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants relating to (1) using reasonable best efforts to obtain the requisite approvals of our respective stockholders, (2) non-solicitation of alternative acquisition proposals, (3) the conduct of our respective businesses during the period between the date of signing the Merger Agreement and the closing of the Merger, (4) us using reasonable best efforts to maintain the existing listing of our common stock on Nasdaq and causing the shares of our common stock to be issued in connection with the Merger to be approved for listing on Nasdaq prior to the closing of the Merger, (5) us filing with the U.S. Securities and Exchange Commission, or the SEC, and causing to become effective a registration statement to register the shares of our common stock to be issued in connection with the Merger, or the Registration Statement, and (6) each of us and Enliven filing a pre-merger notification requirement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act. Consummation of the Merger is subject to certain closing conditions, including, among other things, (1) approval by our stockholders of the Required Voting Proposal, (2) approval by the Enliven stockholders of the adoption of the Merger Agreement, (3) Nasdaq’s approval of the listing of the shares of our common stock to be issued in connection with the Merger, (4) the effectiveness of the Registration Statement, (5) our net cash as determined in accordance with the Merger Agreement being between $75 million and $95 million, (6) the waiting period under the HSR Act having expired or been terminated and (7) our closing of the previously announced Asset Sale. The closing condition set forth in clause (2) above was satisfied on January 25, 2023, when the Enliven stockholders approved adoption of the Merger Agreement. The closing condition set forth in clause (4) above was satisfied when the Registration Statement was declared effective by the SEC on January 23, 2023. The closing condition set forth in clause (6) above was satisfied on November 28, 2022, when the waiting period under the HSR Act expired without extension or a request for additional information or documentary material. The closing condition set forth in clause (7) above was satisfied on November 10, 2022, when the Asset Sale was completed. Each party’s obligation to consummate the Merger is also subject to other specified customary conditions, including the representations and warranties of the other party being true and correct as of the date of the Merger Agreement and as of the closing date of the Merger, generally subject to an overall material adverse effect qualification, and the performance in all material respects by the other party of its obligations under the Merger Agreement required to be performed on or prior to the date of the closing of the Merger. Enliven’s obligation to consummate the Merger is also subject to the completion of the Financing Transaction such that Enliven receives gross proceeds of at least $131.6 million and our obligation to consummate the Merger is subject to the completion of the Financing Transaction such that Enliven receives gross proceeds of at least $75.0 million. The Merger Agreement contains certain termination rights of each of us and Enliven, including, subject to compliance with the applicable terms of the Merger Agreement, the right of each party to terminate the Merger Agreement to enter into a definitive agreement for a superior proposal. Upon termination of the Merger Agreement under specified circumstances, we may be required to pay Enliven a termination fee of $3.0 million and Enliven may be required to pay us a termination fee of $9.75 million. In addition, Enliven will be required to pay us a termination fee of $3.0 million if Enliven or we terminate the Merger Agreement at specified times with all conditions to closing of the Merger satisfied other than completion of the Financing Transaction such that Enliven receives gross proceeds of at least $131.6 million or $75 million, respectively. At the Effective Time, the board of directors of the combined company is expected to consist of nine members, eight of whom will be designated by Enliven and one of whom will be designated by us. Enliven’s designees are expected to be the current members of the board of directors of Enliven. Our designee is expected to be Rahul Ballal, our President and Chief Executive Officer. Concurrently with the execution and delivery of the Merger Agreement, Enliven entered into a common stock purchase agreement, or the Purchase Agreement, with certain new and existing Enliven investors, pursuant to which Enliven agreed to issue and sell to such investors, and such investors agreed to purchase from Enliven, shares of Enliven common stock for an aggregate purchase price of approximately $164.5 million, or the Financing Transaction. The closing of the Financing Transaction is conditioned on the satisfaction or waiver of the closing conditions to the Merger as set forth in the Merger Agreement and other customary closing conditions, and is expected to occur immediately prior to the closing of the Merger, in accordance with the terms of the Purchase Agreement. The shares of Enliven common stock to be issued in connection with the Financing Transaction will be converted into the right to receive a number of shares of our common stock in the Merger in accordance with the Exchange Ratio, or the Converted Financing Stock (subject to the payment of cash in lieu of fractional shares and after giving effect to the Reverse Stock Split). 5 At or prior to the Effective Time, we will enter into a Contingent Value Rights Agreement, or the CVR Agreement, with a rights agent, or the Rights Agent, pursuant to which our pre-Merger common stockholders will receive one contingent value right (each, a CVR) for each outstanding share of our common stock held by such stockholder on such date. Each CVR will represent the contractual right to receive payments upon the occurrence of certain events related to the Asset Sale, subject to and in accordance with the terms and conditions of, the CVR Agreement. The contingent payments under the CVR Agreement, if they become payable, will become payable to the Rights Agent for subsequent distribution to the holders of the CVRs. In the event that no such proceeds are received, holders of the CVRs will not receive any payment pursuant to the CVR Agreement. There can be no assurance that holders of CVRs will receive any amounts with respect thereto. The right to the contingent payments contemplated by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement. The CVRs will not be evidenced by a certificate or any other instrument and will not be registered with the SEC. The CVRs will not have any voting or dividend rights and will not represent any equity or ownership interest in us or any of our affiliates. No interest will accrue on any amounts payable in respect of the CVRs. Asset Purchase Agreement On September 6, 2022, we entered into an Asset Purchase Agreement, or the Asset Purchase Agreement, with Cardurion Pharmaceuticals, Inc., or Cardurion, providing for the sale of tovinontrine (IMR-687) and all of our other assets related to our PDE9 program, or the Asset Sale. Pursuant to the terms of the Asset Purchase Agreement, we agreed to sell tovinontrine and all of our other assets related to our PDE9 program to Cardurion. As consideration for the Asset Sale, in addition to $250,000 previously paid by Cardurion to us upon execution of a non-binding term sheet, the aggregate purchase price consisted of an upfront cash payment of $34,750,000 upon closing of the transaction and a $10,000,000 potential future payment that may become payable if Cardurion achieves a proof of concept milestone or other specified clinical milestones and a $50,000,000 potential future payment that may become payable if Cardurion achieves specified regulatory and/or commercial milestone events, in each case as described in the Asset Purchase Agreement and subject to the terms of the Asset Purchase Agreement. The Asset Purchase Agreement contains certain customary representations, warranties and covenants. The Asset Purchase Agreement also contains customary indemnification provisions pursuant to which the parties agree to indemnify each other for certain matters , including, among other things, breaches of certain representations, warranties and covenants in connection with the Asset Sale. At a special meeting of our stockholders held on November 9, 2022, our stockholders voted to approve the Asset Sale. On November 10, 2022, we announced the closing of the Asset Sale. Business and Programs Prior to the April 2022 discontinuation of our clinical programs, our business focused on developing and commercializing novel therapeutics to treat patients suffering from rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies, and other serious diseases. Our pipeline was built around tovinontrine, an inhibitor of phosphodiesterase-9, or PDE9. We were evaluating tovinontrine in a Phase 2b clinical trial for the treatment of SCD and ß-thalassemia and had previously announced expectations to evaluate tovinontrine in HFpEF. We had also previously been advancing IMR-261, an activator of nuclear factor erythroid 2–related factor 2, or Nrf2. Product Candidates Tovinontrine (IMR-687) Tovinontrine is a small molecule inhibitor of PDE9 that was sold to Cardurion as part of the Asset Sale. SCD Program We conducted the Ardent Phase 2b clinical trial of tovinontrine, a randomized, double-blind, placebo-controlled trial in approximately 115 adult patients with SCD. The Ardent trial followed completion of our Phase 2a clinical trial of tovinontrine in SCD, which demonstrated a well-tolerated safety profile for tovinontrine and potential benefits from tovinontrine with respect to vaso-occlusive crises, or VOCs. In April 2022, we announced the results from interim analyses of the Ardent clinical trial which showed no significant difference in median annualized rate of VOCs in the high-dose tovinontrine group versus placebo in an intent-to-treat population. In addition, no meaningful difference was observed in fetal hemoglobin, or HbF, response in either the high or low dose tovinontrine groups as compared to placebo. Based on the data generated by this interim analysis, we decided to discontinue the Ardent trial as well as the further development of tovinontrine in SCD. 6 ß-thalassemia Program We also conducted the Forte Phase 2b clinical trial of tovinontrine, a randomized, double-blind, placebo-controlled trial in approximately 120 patients with ß-thalassemia. In November 2021, we presented data from a pre-specified interim analysis from the Forte trial in patients with transfusion-dependent thalassemia. This initial interim analysis data demonstrated a well-tolerated safety profile for tovinontrine and a trend for reduced transfusion burden in the higher dose cohort. In April 2022, we announced the results from a second interim analysis of the Forte clinical trial that demonstrated no meaningful benefit in transfusion burden or improvement in most disease-related biomarker from treatment with tovinontrine. Based on the data generated by this interim analysis, we decided to discontinue the Forte trial as well as the further development of tovinontrine in ß-thalassemia. HFpEF Program We previously announced our expectation to dose the first patient in the SP9IN Phase 2 clinical trial of tovinontrine in HFpEF in the second quarter of 2022. The SP9IN trial was expected to be a randomized, placebo-controlled trial of approximately 170 patients 45 years of age or older with enriched PDE9 expression and persistent symptoms of HFpEF. In April 2022, we decided not to pursue development of tovinontrine in HFpEF and instead to explore strategic options. IMR-261 We previously commenced research activities for IMR-261 (formerly CXA-10), an activator of Nrf2. In preclinical models of SCD, IMR-261 was observed to activate expression of HbF and reduce VOCs. Furthermore, in a preclinical model of ß-thalassemia, IMR-261 was observed to increase hemoglobin and enhance red blood cell maturation. We had initiated work on drug product manufacturing for IMR-261 as we explored potential clinical development paths in hemoglobinopathies, iron disorders and potentially other areas. In April 2022, we decided to discontinue our development plans with respect to IMR-261 and instead to explore strategic options. As part of our review of strategic options to maximize stockholder value, on November 21, 2022, we provided notice of termination for our two existing license agreements related to IMR-261. The termination of each agreement will be effective on February 16, 2023. We also decided to discontinue prosecution of intellectual property related to IMR-261. Sales and Marketing We are not currently conducting sales and marketing efforts with respect to any of our previous programs and our plans for future sales and marketing are dependent on the results of our ongoing strategic evaluation . Research and Development We are not currently conducting research and development of any of our previous programs and our plans for future research and development are dependent on the results of our ongoing strategic evaluation. Intellectual Property When applicable to our development programs, we strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of our business, including by seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in our field. Our future commercial success may depend, in part, on our ability to: obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business; defend and enforce our intellectual property rights, in particular our patent rights; preserve the confidentiality of our trade secrets; and operate without infringing, misappropriating or violating the valid and enforceable patents and proprietary rights of third parties. Our ability to stop third parties from making, using, selling, offering to sell or importing any products that we develop may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. The patent positions of biopharmaceutical companies like ours are generally uncertain and can involve complex legal, scientific and factual issues. We cannot predict whether the patent applications we may pursue will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors. We also cannot ensure that patents will issue with respect to any patent applications that we or our licensors may file in the future, nor can we ensure that any of our owned or licensed patents or future patents will be commercially useful in 7 protecting our product candidates and methods of manufacturing the same. In addition, the coverage claimed in a patent application may be significantly reduced before a patent is issued, and its scope can be reinterpreted and even challenged after issuance. As a result, we cannot guarantee that any products we develop will be protected or remain protectable by enforceable patents. Moreover, any patents that we hold may be challenged, circumvented or invalidated by third parties. See “ Risk Factors—Risks Related to Our Intellectual Property ” for a more comprehensive description of risks related to our intellectual property. We generally file patent applications directed to our key programs in an effort to secure our intellectual property positions vis-a-vis these programs. Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the U.S. Patent and Trademark Office may be significantly narrowed before issuance, if issued at all. In connection with the Asset Sale, our exclusive license agreement, or the Lundbeck Agreement, with H. Lundbeck A/S, or Lundbeck , and all other intellectual property owned by us that related to tovinontrine was assigned to Cardurion. As a result, as of November 10, 2022, we no longer hold a license to the intellectual property that is the subject of the Lundbeck Agreement or own any other intellectual property related to tovinontrine. As part of our review of strategic options to maximize stockholder value, on November 21, 2022, we provided notice of termination for our two existing license agreements related to IMR-261. The termination of each agreement will be effective on February 16, 2023. We also decided to discontinue prosecution of intellectual property related to IMR-261. The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, the term of a patent covering a U.S. Food and Drug Administration, or FDA , approved drug may, in certain cases, be eligible for a patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 as compensation for the loss of patent term during the FDA regulatory review process. The period of extension may be up to five years, but cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval. Only one patent among those eligible for an extension and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. Similar provisions are available in Europe and in certain other jurisdictions to extend the term of a patent that covers an approved drug. If our use of drug candidates or the drug candidate itself receive FDA approval, we intend to apply for patent term extensions, if available, to extend the term of patents that cover the approved use or drug candidate. We also intend to seek patent term extensions in any jurisdictions where available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. In addition to patent protection, we rely upon unpatented trade secrets and confidential know-how and continuing technological innovation to develop and maintain our competitive position. However, trade secrets and confidential know-how are difficult to protect. We seek to protect our proprietary information, in part, using confidentiality agreements with any collaborators, scientific advisors, employees and consultants and invention assignment agreements with our employees. We also have agreements requiring assignment of inventions with selected consultants, scientific advisors and collaborators. These agreements may not provide meaningful protection. These agreements may also be breached, and we may not have an adequate remedy for any such breach. In addition, our trade secrets and/or confidential know-how may become known or be independently developed by a third party, or misused by any collaborator to whom we disclose such information. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our products or to obtain or use information that we regard as proprietary. Although we take steps to protect our proprietary information, third parties may independently develop the same or similar proprietary information or may otherwise gain access to our proprietary information. As a result, we may be unable to meaningfully protect our trade secrets and proprietary information. See “Risk Factors—Risks Related to Our Intellectual Property” for a more comprehensive description of risks related to our intellectual property. Government Regulation and Product Approvals Government authorities in the United States at the federal, state and local level, and in other countries and jurisdictions, such as the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of biopharmaceutical products. The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources. While we are not currently developing any product candidates and do not have any products approved for sale, if we decide to pursue any future product development efforts, we would be subject to such government regulation. 8 Employees and Human Capital Resources As of December 31, 2022, we had six full-time employees, including one employee with a Ph.D. degree. None of our employees are engaged in research and development or are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. Corporate Information We were incorporated under the laws of the State of Delaware on January 26, 2016. Our principal executive offices are located at 1309 Beacon Street, Suite 300, Office 341, Brookline, MA 02446 and our telephone number is 617-927-9989. Our website address is www.imaratx.com. Our website and the information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K.