Point Biopharma insiders to reap millions from Lilly deal
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Top executives and directors of Indianapolis-based Point Biopharma Global Inc. could rake in an eye-popping $212 million from their deal to sell the company to drugmaker Eli Lilly and Co.
Some could also reap millions more in severance pay and stock options, according to information Point Biopharma disclosed in an Oct. 13 filing.
That will shower riches on insiders at Point Biopharma, a four-year-old company that has a pipeline of clinical and preclinical radioligand therapies in development for the treatment of cancer.
Radioligands are seen as a hot, new class of drugs that hold the promise of targeting cancer cells by linking a radioisotope to a targeting molecule. Together, they deliver radiation direction to cancer cells, enabling significant anti-tumor effectiveness while limiting the damage to healthy tissue.
Point Biopharma, formed in 2019, went public two years later following a combination with Therapeutics Acquisition Corp., a special purpose acquisition company or SPAC. Point Biopharma operates a 180,000-square foot building off of Georgetown Road on the city’s northwest side that it renovated as a manufacturing plant for about $25 million.
Earlier this month, Indianapolis-based Lilly announced it was buying Point Biopharma for $1.4 billion. Lilly agreed to pay the young company $12.50 a share, an 85% premium over its previous closing price of $6.68 a share.
Other major deals that generated huge payoffs for Indiana insiders in recent years include Endocyte Inc.’s sale to Novartis AG in 2018 for $2.1 billion (with $177 million going to insiders), ExactTarget’s sale to Salesforce.com in 2013 for $2.5 billion (with $640 million going to insiders) and Guidant Corp.’s sale to Boston Scientific in 2006 for $27 billion (with $673 million going to insiders.
The following is a breakdown of money that will accrue to top insiders at Point Biopharma, based on a $12.50 a share sales price:
- Allan Silber, chairman: $115.3 million
- Joe McCann, CEO: $45.2 million
- Neil Fleshner, chief medical officer: $40.7 million
- Ari Shomair, chief of staff: $9.6 million
- Jonathan Ross Goodman, board member: $523,400
- David Lubner, board member: $487,500
- Gerry Hogue, board member: $269,950
- Robin Hallett, senior vice president of discovery and translational sciences: $198,750
- Rajesh Malik, board member: $46,250
- Yael Margolin, board member: $21,400.
In addition, several insiders also own huge additional blocks of stock options, worth tens of millions of dollars more. Several executives could also take home six-figure severance payments if they are terminated without case.
This doesn’t even include the top institutional and mutual fund holders of Point Biopharma stock, which hold tens of millions of shares worth hundreds of millions of dollars.
The largest institutional holder is BVF Inc., which owns about 9.9% of the stock, or 10.6 million shares, worth about $132.9 million, according to Yahoo Finance. The second-largest institutional shareholder is Blackrock Inc., which owns about 6% of the stock, or 6.3 million shares, worth about $80 million.
The acquisition deal happened fairly quickly, according to a background recap included in the filing. Point Biopharma said it received interest from several unnamed parties, including two biopharmaceutical companies in 2022 and 2023.
Representatives of Point Biopharma and Lilly met while attending an unspecified health-care conference June 5 through June 8. About a week later, they entered into a confidentiality agreement.
In the following weeks, the two sides held several meetings in person and by videoconference. Lilly officials, including CEO David Ricks, also toured Point Biopharma’s facility in Indianapolis on several occasions.
In August, Lilly offered Point Biopharma $12 a share. In September, an unnamed second bidder offered $13 a share, but with several contingency clauses. Point Biopharma rejected the offer.
The same month, Lilly raised its offer to $12.50 a share. Point Biopharma issued a counteroffer to Lilly for $13 a share. Lilly said it was unlikely to raise its offer. After lengthy deliberation, Point accepted the $12.50 a share offer on Oct. 1. The two companies announced the deal on Oct. 3.