Amendment No. 4 to Form F-4
Table of Contents

As filed with the Securities and Exchange Commission on June 9, 2020

No. 333-237702

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 4

to

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Immatics B.V.

(Exact name of registrant as specified in its charter)

 

 

 

The Netherlands   2836   Not Applicable
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (IRS Employer
Identification Number)

Paul-Ehrlich-Straße 15

72076 Tübingen, Federal Republic of Germany

Tel: +49 (7071) 5397-0

(Address, including Zip Code, and Telephone Number, including Area Code, of Principal Executive Offices)

 

 

Jordan Silverstein

Immatics US, Inc.

2130 W. Holcombe Blvd., Suite 900

Houston, Texas 77030

Tel: (281) 810-7545

(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

 

 

Copies to:

Jocelyn M. Arel, Esq.

Mitchell S. Bloom, Esq.
Michael R. Patrone, Esq.
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
(617) 570-1000

 

Christian O. Nagler, Esq.

Peter S. Seligson, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212) 446-4900

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effectiveness of this registration statement.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of
securities to be registered
  Amount
to be
registered
  Proposed
maximum
offering price
per share
  Proposed
maximum
aggregate
offering price
  Amount of
registration fee

Ordinary Shares, nominal value €0.01 per share

  59,681,117(1)   $10.00   $596,811,170(2)   $77,466.09(3)

TopCo Public Warrants to purchase Ordinary Shares

  7,187,500(4)   $1.91   $13,728,125(5)   $1,781.91(3)

Aggregate Fee

          $610,539,295   $79,248.00(6)

 

 

 

(1)

Represents ordinary shares, nominal value €0.01 per share (the “Ordinary Shares”), of the registrant (“TopCo”) to be issued upon completion of the business combination described in the proxy statement/prospectus contained herein (the “Business Combination”), and includes (a) 14,375,000 Ordinary Shares to be issued to holders of Class A ordinary shares of ARYA Sciences Acquisition Corp. (“ARYA”), (b) 3,593,750 Ordinary Shares to be issued to holders of Class B ordinary shares of ARYA, (c) up to 34,524,867 Ordinary Shares comprised of (i) 33,093,838 Ordinary Shares to be issued to the current shareholders of Immatics Biotechnologies GmbH (“Immatics”), (ii) 627,611 Ordinary Shares to be issued in exchange for outstanding vested Immatics employee SARs, (iii) 105,987 Ordinary Shares to be issued in exchange for shares outstanding under the Immatics board incentive program and (iv) 697,431 Ordinary Shares to be issued to the University of Texas MD Anderson Cancer Center in exchange for its shares of Immatics US, Inc. and (d) 7,187,500 Ordinary Shares issuable upon exercise of warrants of TopCo to be issued to holders of public warrants of ARYA, each in connection with the Business Combination.

(2)

Pursuant to Rules 457(c), 457(f)(1) and 457(f)(3) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is the product of (i) $10.00 (the implied price of the Class A ordinary shares of ARYA) multiplied by (ii) 59,681,117 Ordinary Shares issuable in connection with the Business Combination.

(3)

Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001298.

(4)

Represents warrants of TopCo to be issued to holders of public warrants of ARYA in connection with the Business Combination.

(5)

Pursuant to Rules 457(c), 457(f)(1) and 457(f)(3) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed aggregate maximum offering price is the product of (i) $1.91 (the average of the high and low prices of the public warrants of ARYA as reported on NASDAQ on April 13, 2020) multiplied by (ii) 7,187,500 public warrants.

(6)

Previously paid.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information contained in this document is subject to completion or amendment. A registration statement relating to these securities has been filed with the United States Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document is not an offer to sell these securities and it is not soliciting an offer to buy these securities, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

 

PRELIMINARY – SUBJECT TO COMPLETION, DATED JUNE 9, 2020

LETTER TO SHAREHOLDERS OF ARYA SCIENCES ACQUISITION CORP.

ARYA Sciences Acquisition Corp.

c/o Perceptive Advisors

51 Astor Place, 10th Floor

New York, New York 10003

Dear ARYA Sciences Acquisition Corp. Shareholder:

You are cordially invited to attend an annual general meeting of ARYA Sciences Acquisition Corp., a Cayman Islands exempted company (“ARYA”), which will be held on                 , 2020 at 9:00 a.m., New York City time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022 (the “General Meeting”).

On March 17, 2020, ARYA, Immatics Biotechnologies GmbH, a German limited liability company (“Immatics”), Immatics B.V., a Dutch private limited liability company (“TopCo”), Immatics Merger Sub 1, a Cayman Islands exempted company (“ARYA Merger Sub”), and Immatics Merger Sub 2, a Cayman Islands exempted company (“IB Merger Sub”), entered into a Business Combination Agreement (as it may be amended from time to time, the “Business Combination Agreement”), pursuant to which several transactions will occur, and in connection therewith, TopCo will be the ultimate parent company of Immatics and ARYA (the “Business Combination”).

At the General Meeting, ARYA shareholders will be asked to consider and vote upon a proposal, as a special resolution (the “Business Combination Proposal” or “Proposal No. 1”), to adopt the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, approve the First Merger and the plan of merger between ARYA and ARYA Merger Sub in the form tabled at the General Meeting, which will be substantially in the form attached to the accompanying proxy statement/prospectus as Annex B (the “Plan of First Merger”), and approve the Second Merger and the plan of merger between the First Surviving Company (as defined below) and IB Merger Sub in the form tabled at the General Meeting, which will be substantially in the form attached to the accompanying proxy statement/prospectus as Annex C (the “Plan of Second Merger” and, together with the Plan of First Merger, the “Plans of Merger”).

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, upon consummation of the Business Combination, among other things:

 

   

each of the shareholders of Immatics that duly executed and delivered a shareholder undertaking agreeing to participate in the transaction prior to Closing (collectively, the “Participating Shareholders”) will exchange (the “Exchange”) their equity interests in Immatics for ordinary shares, nominal value €0.01 per share, of TopCo (“TopCo Shares”);

 

   

immediately after the Exchange, TopCo will change its legal form from a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) to a public limited liability company (naamloze vennootschap);

 

   

ARYA Merger Sub will merge with and into ARYA (the “First Merger”), with ARYA as the surviving company (the “First Surviving Company”) in the merger and will become a wholly owned subsidiary of TopCo;

 

   

in connection with the First Merger, (a) each Class A Share and Class B Share (collectively, the “ARYA Ordinary Shares”) will be automatically exchanged for one TopCo Share, (b) each outstanding public warrant to purchase Class A Shares (as defined below) (the “ARYA Public Warrants”) will be converted into a warrant to purchase one TopCo Share (the “TopCo Public Warrants”) and (c) the 5,953,125 outstanding warrants (the “Private Placement Warrants”) held by ARYA Sciences Holdings, a Cayman Islands exempted company (“ARYA Sponsor”), will be forfeited for no consideration and cancelled pursuant to the Sponsor Letter Agreement (as defined below); and


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on the first business day following the closing date of the Business Combination, the First Surviving Company will merge with and into IB Merger Sub, with IB Merger Sub as the surviving company in the merger, and each ordinary share of the First Surviving Company will be automatically converted into one ordinary share of IB Merger Sub.

In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, ARYA and TopCo entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for and purchase, and TopCo agreed to issue and sell to such PIPE Investors, an aggregate of 10,415,000 TopCo Shares at $10.00 per share for gross proceeds of $104,150,000 (the “PIPE Financing”) on the Closing Date, $25,000,000 of which will be funded by an affiliate of ARYA Sponsor (the “Sponsor PIPE Entity”). The TopCo Shares to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. TopCo will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the closing of the Business Combination.

Additionally, in connection with their entry into the Business Combination Agreement, ARYA and TopCo entered into a letter agreement (the “Sponsor Letter Agreement”) with ARYA Sponsor and the current independent directors of ARYA (the “ARYA Initial Shareholders”) pursuant to which (a) each ARYA Initial Shareholder agreed to vote to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger, (b) ARYA Sponsor agreed to forfeit the Private Placement Warrants issued to it at the time of the ARYA IPO and (c) each ARYA Initial Shareholder agreed to waive any adjustment to the conversion rate at which their Class B ordinary shares (the “Founder Shares”) would convert into Class A ordinary shares (the “Class A Shares”) as a result of the PIPE Financing as provided for in the ARYA amended and restated memorandum and articles of association or any similar anti-dilution or similar protection.

In addition to the Business Combination Proposal, ARYA shareholders are being asked to consider and vote on a proposal, as an ordinary resolution, to adjourn the General Meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the General Meeting is scheduled, there are insufficient ARYA Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (B) in order to solicit additional proxies from ARYA shareholders in favor of the Business Combination Proposal, or (C) if ARYA shareholders redeem an amount of Class A Shares such that the condition (the “Aggregate TopCo Transaction Proceeds Condition”) to each party’s obligation to consummate the Business Combination that the amount of cash in the Trust Account (net of the aggregate amount of cash required to satisfy any exercise by ARYA shareholders of their right to have ARYA redeem their Class A Shares in connection with the Business Combination (the “Cash Redemption Amount”) together with the proceeds from the PIPE Financing (the “Aggregate PIPE Proceeds”) (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) is not at least $150,000,000 (the “Adjournment Proposal” or “Proposal No 2”). The Adjournment Proposal will only be presented to ARYA shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, or in the event that ARYA shareholders redeem an amount of Class A Shares such that the Aggregate TopCo Transaction Proceeds Condition would not be satisfied. Each of these proposals is more fully described in this proxy statement/prospectus, which each shareholder is encouraged to read carefully.

The Class A Shares, ARYA Public Units and ARYA Public Warrants are currently listed on the NASDAQ Capital Market (“NASDAQ”) under the symbols “ARYA,” “ARYAU” and “ARYAW,” respectively. Upon the closing of the Business Combination, the ARYA securities will be delisted from NASDAQ. TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants on NASDAQ under the symbols “IMTX” and “IMTXW,” respectively, upon the closing of the Business Combination. We cannot assure you that the TopCo Shares or TopCo Public Warrants will be approved for listing on NASDAQ.

 

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TopCo is an “emerging growth company” under applicable United States federal securities laws and will be subject to reduced public company reporting requirements. Investing in TopCo’s securities involves a high degree of risk. See “Risk Factors” beginning on page 43 of the accompanying proxy statement/prospectus for a discussion of information that should be considered in connection with an investment in TopCo’s securities.

With respect to ARYA and the holders of the ARYA Ordinary Shares, the accompanying proxy statement/prospectus serves as a:

 

   

proxy statement for the general meeting of ARYA shareholders being held on                , 2020, where ARYA shareholders will vote on, among other things, a proposal to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger; and

 

   

prospectus for the TopCo Shares and TopCo Public Warrants that ARYA shareholders and public warrant holders will receive in the Business Combination.

Pursuant to the ARYA amended and restated memorandum and articles of association, ARYA is providing its public shareholders with the opportunity to redeem, upon the closing of the Business Combination, Class A Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes payable) of the ARYA IPO and certain of the proceeds of the sale of the Private Placement Warrants. Redemptions referred to herein shall take effect as repurchases under the ARYA amended and restated memorandum and articles of association. The per-share amount ARYA will distribute to investors who properly redeem their Class A Shares will not be reduced by the aggregate deferred underwriting commission of $4,671,875 that ARYA will pay to the underwriters of the ARYA IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $                as of                 , 2020, the estimated per Class A Share redemption price would have been approximately $                . The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding Class A Shares (i.e., in excess of 2,156,250 Class A Shares). ARYA has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by ARYA’s public shareholders will reduce the amount in the Trust Account. The Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the proceeds from the PIPE Financing (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) being at least $150,000,000.

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by ARYA’s public shareholders, the Aggregate TopCo Transaction Proceeds Condition is not met or is not waived, then each of ARYA and Immatics may elect not to consummate the Business Combination. In addition, in no event will ARYA redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the ARYA amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement. Holders of outstanding ARYA Public Warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement/prospectus assumes that (i) none of ARYA’s public shareholders exercise

 

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their redemption rights with respect to their Class A Shares, (ii) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, (iii) the recipients of cash proceeds from the conversion of Immatics’ stock appreciation rights who are required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will re-invest such proceeds as set forth in the Business Combination Agreement, and (iv) the options issued to holders of Immatics’ stock appreciation rights that would vest on or after January 1, 2021, as contemplated by the Business Combination Agreement, are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method. For more information about the factors that affect the assumptions above, please see the section entitled “The Business Combination — Ownership of TopCo.”

The ARYA Initial Shareholders have agreed to waive their redemption rights with respect to any ARYA Ordinary Shares they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the ARYA Initial Shareholders own 20% of the issued and outstanding ARYA Ordinary Shares, including all of the Founder Shares. The ARYA Initial Shareholders, and the other directors and officers of ARYA have agreed to vote any ARYA Ordinary Shares owned by them in favor of the Business Combination and the transactions contemplated thereby. The Founder Shares are subject to transfer restrictions. The ARYA amended and restated memorandum and articles of association includes a conversion adjustment which provides that the Founder Shares will automatically convert at the time of the Business Combination into a number of Class A Shares one day after the closing of the Business Combination, at a conversion rate that entitles the holders of such Founder Shares to continue to own, in the aggregate, 20% of the issued and outstanding ARYA Ordinary Shares after giving effect to the PIPE Financing. However, the ARYA Initial Shareholders have agreed to waive such conversion adjustment pursuant to the Sponsor Letter Agreement. As a result, each remaining Founder Share will be exchanged for one TopCo Share at the closing of the Business Combination, such that the ARYA Initial Shareholders will hold approximately 5.7% of the total number of TopCo Shares outstanding after the consummation of the Business Combination. Please see the section entitled “Frequently Used Terms and Basis of Presentation” in the accompanying proxy statement/prospectus for assumptions relating to this calculation.

ARYA is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the General Meeting and at any adjournments or postponements of the General Meeting. Information about the General Meeting, the Business Combination and other related business to be considered by the ARYA shareholders at the General Meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the General Meeting, all ARYA shareholders are urged to read carefully the accompanying proxy statement/prospectus, including the Annexes and the accompanying financial statements of TopCo, ARYA and Immatics carefully and in their entirety. In particular, you are urged to read carefully the section entitled Risk Factors beginning on page 43 of the accompanying proxy statement/prospectus.

After careful consideration, the ARYA Board has approved the Business Combination Agreement and the Business Combination, and recommends that ARYA shareholders vote “FOR” adoption of the Business Combination Agreement and approval of the Business Combination, the First Merger, the Second Merger, and the Plans of Merger, and “FOR” all other proposals presented to ARYA shareholders in the accompanying proxy statement/prospectus. When you consider the ARYA Board’s recommendation of these proposals, you should keep in mind that certain ARYA directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the section entitled “The Business Combination — Interests of Certain Persons in the Business Combination” in the accompanying proxy statement/prospectus for additional information.

Approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting.

 

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Your vote is very important. Whether or not you plan to attend the General Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to ensure that your shares are represented at the General Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Business Combination Proposal is approved at the General Meeting. The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the General Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the General Meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the General Meeting. If you are a shareholder of record and you attend the General Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT ARYA REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED VOTE AT THE GENERAL MEETING. THE REDEMPTION RIGHTS INCLUDE THE REQUIREMENT THAT A HOLDER MUST IDENTIFY HIMSELF, HERSELF OR ITSELF IN WRITING AS A BENEFICIAL HOLDER AND PROVIDE HIS, HER OR ITS LEGAL NAME, PHONE NUMBER AND ADDRESS TO THE TRANSFER AGENT IN ORDER TO VALIDLY REDEEM HIS, HER OR ITS SHARES. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of the ARYA Board, I would like to thank you for your support of ARYA Sciences Acquisition Corp. and look forward to a successful completion of the Business Combination.

Sincerely,

                , 2020

Joseph Edelman

Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated                , 2020, and is expected to be first mailed or otherwise delivered to ARYA shareholders on or about                , 2020.

 

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ADDITIONAL INFORMATION

No person is authorized to give any information or to make any representation with respect to the matters that this proxy statement/prospectus describes other than those contained in this proxy statement/prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by TopCo, ARYA or Immatics. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of this proxy statement/prospectus nor any distribution of securities made under this proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of TopCo, ARYA or Immatics since the date of this proxy statement/prospectus or that any information contained herein is correct as of any time subsequent to such date.

 

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NOTICE OF ANNUAL GENERAL MEETING

OF ARYA SCIENCES ACQUISITION CORP.

TO BE HELD                , 2020

To the Shareholders of ARYA Sciences Acquisition Corp.:

NOTICE IS HEREBY GIVEN that an annual general meeting of ARYA Sciences Acquisition Corp., a Cayman Islands exempted company (“ARYA”), will be held on                 at 9:00 a.m., New York City time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022 (the “General Meeting”). You are cordially invited to attend the General Meeting to conduct the following items of business and/or consider, and if thought fit, approve the following resolutions:

 

1.

Business Combination Proposal RESOLVED, as a special resolution (the “Business Combination Proposal” or “Proposal No. 1”) (i) that the Business Combination Agreement, dated as of March 17, 2020 (as it may be amended from time to time, the “Business Combination Agreement,” a copy of which is attached to the accompanying proxy statement/prospectus as Annex A), by and among ARYA, Immatics Biotechnologies GmbH, a German limited liability company (“Immatics”), Immatics B.V., a Dutch private limited liability company (“TopCo”), Immatics Merger Sub 1, a Cayman Islands exempted company (“ARYA Merger Sub”), and Immatics Merger Sub 2, a Cayman Islands exempted company (“IB Merger Sub”), pursuant to which several transactions will occur, and in connection therewith, TopCo will be the ultimate parent company of Immatics and ARYA (the “Business Combination”), and ARYA’s entry into the Business Combination Agreement and transactions contemplated thereby be confirmed, ratified and approved in all respects; (ii) that: (a) ARYA be authorised to merge with ARYA Merger Sub so that ARYA be the surviving company and all the undertaking, property and liabilities of ARYA Merger Sub vest in ARYA by virtue of such merger pursuant to the Companies Law (2020 Revision) of the Cayman Islands; (b) the plan of merger in the form tabled to the General Meeting (a draft of which is attached to the accompanying proxy statement/prospectus as Annex B, the “Plan of First Merger”) be authorised, approved and confirmed in all respects; and (c) ARYA be authorised to enter into the Plan of First Merger and (iii) that: (a) ARYA be authorised to merge with and into IB Merger Sub so that IB Merger Sub be the surviving company and all the undertaking, property and liabilities of ARYA vest in IB Merger Sub by virtue of such merger pursuant to the Companies Law (2020 Revision) of the Cayman Islands; (b) the plan of merger in the form tabled to the General Meeting (a draft of which is attached to the accompanying proxy statement/prospectus as Annex C, the “Plan of Second Merger,” and together with the Plan of First Merger, the “Plans of Merger”) be authorised, approved and confirmed in all respects; and (c) ARYA be authorised to enter into the Plan of Second Merger; and

 

2.

Adjournment Proposal — RESOLVED, as an ordinary resolution, to adjourn the General Meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the General Meeting is scheduled, there are insufficient ARYA Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (B) in order to solicit additional proxies from ARYA shareholders in favor of the Business Combination Proposal, or (C) if ARYA shareholders redeem an amount of Class A Shares such that the condition (the “Aggregate TopCo Transaction Proceeds Condition”) to each party’s obligation to consummate the Business Combination that the amount of cash in the Trust Account (net of the aggregate amount of cash required to satisfy any exercise by ARYA shareholders of their right to have ARYA redeem their Class A Shares in connection with the Business Combination (the “Cash Redemption Amount”)) together with the proceeds from the PIPE Financing (the “Aggregate PIPE Proceeds”) ( net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) is not at least $150,000,000 (the “Adjournment Proposal” or “Proposal No 2”).

 

3.

Consideration of the financial statements of ARYA for the year ended December 31, 2019.

The record date for the General Meeting for ARYA shareholders that hold their shares in “street name” is May 29, 2020. For ARYA shareholders holding their shares in “street name”, only shareholders at the close of

 

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business on that date may vote at the General Meeting or any adjournment thereof. For the avoidance of doubt, the record date does not apply to ARYA shareholders that hold their shares in registered form and are registered as shareholders in ARYA’s register of members. ARYA shareholders that hold their shares in registered form are entitled to one vote on each proposal presented at the General Meeting for each ARYA Ordinary Share held on the date of the General Meeting.

As further described in this proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, upon consummation of the Business Combination, among other things:

 

   

each of the shareholders of Immatics that duly executed and delivered a shareholder undertaking agreeing to participate in the transaction prior to Closing (collectively, the “Participating Shareholders”) will exchange (the “Exchange”) their equity interests in Immatics for ordinary shares, nominal value €0.01 per share, of TopCo (“TopCo Shares”);

 

   

immediately after the Exchange, TopCo will change its legal form from a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) to a public limited liability company (naamloze vennootschap);

 

   

ARYA Merger Sub will merge with and into ARYA (the “First Merger”), with ARYA as the surviving company (the “First Surviving Company”) in the merger and will become a wholly owned subsidiary of TopCo;

 

   

in connection with the First Merger, (a) each Class A Share and Class B Share (collectively, the “ARYA Ordinary Shares”) will be automatically exchanged for one TopCo Share, (b) each outstanding public warrant to purchase Class A Shares (as defined below) (the “ARYA Public Warrants”) will be converted into a warrant to purchase one TopCo Share and (c) the 5,953,125 outstanding warrants (the “Private Placement Warrants”) held by ARYA Sciences Holdings, a Cayman Islands exempted company (“ARYA Sponsor”), will be forfeited for no consideration and cancelled pursuant to the Sponsor Letter Agreement (as defined below); and

 

   

on the first business day following the closing date of the Business Combination, the First Surviving Company will merge with and into IB Merger Sub, with IB Merger Sub as the surviving company in the merger, and each ordinary share of the First Surviving Company will be automatically converted into one ordinary share of IB Merger Sub.

In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, ARYA and TopCo entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for and purchase, and TopCo agreed to issue and sell to such PIPE Investors, an aggregate of 10,415,000 TopCo Shares at $10.00 per share for gross proceeds of $104,150,000 (the “PIPE Financing”) on the Closing Date, $25,000,000 of which will be funded by an affiliate of ARYA Sponsor (the “Sponsor PIPE Entity”). The TopCo Shares to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. TopCo will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the closing of the Business Combination.

Additionally, in connection with their entry into the Business Combination Agreement, ARYA and TopCo entered into a letter agreement (the “Sponsor Letter Agreement”) with the ARYA Initial Shareholders (as defined below) pursuant to which (a) each ARYA Initial Shareholder agreed to vote to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger, (b) ARYA Sponsor agreed to forfeit the Private Placement Warrants issued to it at the time of the ARYA IPO and (c) each ARYA Initial Shareholder agreed to waive any adjustment to the conversion rate at which their Class B ordinary shares (the “Founder Shares”) would convert into Class A ordinary shares (the “Class A Shares”) as a result of the PIPE Financing as provided for in the ARYA amended and restated memorandum and articles of association or any similar anti-dilution or similar protection.

 

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The above matters are more fully described in this proxy statement/prospectus, which also includes, as Annex A, a copy of the Business Combination Agreement. You are urged to read carefully this proxy statement/prospectus in its entirety, including the Annexes and accompanying financial statements of TopCo, ARYA and Immatics.

Pursuant to the ARYA amended and restated memorandum and articles of association, ARYA is providing its public shareholders with the opportunity to redeem, upon the closing of the Business Combination, Class A Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes payable) of the ARYA IPO and certain of the proceeds of the sale of the Private Placement Warrants. Redemptions referred to herein shall take effect as repurchases under the ARYA amended and restated memorandum and articles of association. The per-share amount ARYA will distribute to investors who properly redeem their Class A Shares will not be reduced by the aggregate deferred underwriting commission of $4,671,875 that ARYA will pay to the underwriters of the ARYA IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $                as of                 , 2020, the estimated per Class A Share redemption price would have been approximately $                . The redemption rights include the requirement that a holder must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to the Transfer Agent in order to validly redeem his, her or its shares. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding Class A Shares (i.e., in excess of 2,156,250 Class A Shares). ARYA has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by ARYA’s public shareholders will reduce the amount in the Trust Account. The Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) being at least $150,000,000.

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by ARYA’s public shareholders, the Aggregate TopCo Transaction Proceeds Condition is not met or is not waived, then each of ARYA and Immatics may elect not to consummate the Business Combination. In addition, in no event will ARYA redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the ARYA amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement. Holders of outstanding ARYA Public Warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement/prospectus assumes that (i) none of ARYA’s public shareholders exercise their redemption rights with respect to their Class A Shares, (ii) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, (iii) the recipients of cash proceeds from the conversion of Immatics’ stock appreciation rights who are required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will re-invest such proceeds as set forth in the Business Combination Agreement, and (iv) the options issued to holders of Immatics’ stock appreciation rights that would vest on or after January 1, 2021 as contemplated by the Business Combination Agreement, are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method. For more information about the factors that affect the assumptions above, please see the section entitled “The Business Combination — Ownership of TopCo.”

 

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ARYA Sponsor and the current independent directors of ARYA (the “ARYA Initial Shareholders”), as well as ARYA’s officers and other current directors, have agreed to waive their redemption rights with respect to any ARYA Ordinary Shares they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the ARYA Initial Shareholders own 20% of the issued and outstanding ARYA Ordinary Shares, including all of the Founder Shares. The ARYA Initial Shareholders, and the other directors and officers of ARYA have agreed to vote any ARYA Ordinary Shares owned by them in favor of the Business Combination. The Founder Shares are subject to transfer restrictions. The ARYA amended and restated memorandum and articles of association includes a conversion adjustment which provides that the Founder Shares will automatically convert at the time of the Business Combination into a number of Class A Shares one day after the closing of the transactions contemplated by the Business Combination Agreement, at a conversion rate that entitles the holders of such Founder Shares to continue to own, in the aggregate, 20% of the issued and outstanding ARYA Ordinary Shares after giving effect to the PIPE Financing. However, the ARYA Initial Shareholders have agreed to waive such conversion adjustment pursuant to the Sponsor Letter Agreement. As a result, each remaining Founder Share will be exchanged for one TopCo Share at the closing of the Business Combination, such that the ARYA Initial Shareholders will hold approximately 5.7% of the total number of TopCo Shares outstanding after the consummation of the Business Combination. Please see the section entitled “Frequently Used Terms and Basis of Presentation” in the proxy statement/prospectus for assumptions relating to this calculation.

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

Approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. The ARYA Board recommends that you vote “FOR” each of these proposals.

By Order of the Board of Directors

Joseph Edelman

Chairman of the Board of Directors

New York, New York

                , 2020

 

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TABLE OF CONTENTS

 

     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     ii  

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS

     ii  

IMPORTANT INFORMATION ABOUT IFRS AND NON-IFRS FINANCIAL MEASURES

     ii  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     ii  

FREQUENTLY USED TERMS AND BASIS OF PRESENTATION

     iii  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE GENERAL MEETING

     1  

SUMMARY

     19  

RISK FACTORS

     43  

GENERAL INFORMATION

     120  

GENERAL MEETING OF ARYA SHAREHOLDERS

     123  

THE BUSINESS COMBINATION

     131  

MATERIAL TAX CONSIDERATIONS

     150  

THE BUSINESS COMBINATION AGREEMENT AND ANCILLARY DOCUMENTS

     181  

SELECTED HISTORICAL FINANCIAL DATA OF IMMATICS

     194  

SELECTED HISTORICAL FINANCIAL DATA OF ARYA

     196  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     198  

COMPARATIVE SHARE INFORMATION

     208  

BUSINESS OF TOPCO BEFORE THE BUSINESS COMBINATION

     210  

BUSINESS OF IMMATICS AND CERTAIN INFORMATION ABOUT IMMATICS

     212  

IMMATICS’ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     279  

BUSINESS OF ARYA AND CERTAIN INFORMATION ABOUT ARYA

     296  

ARYA’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     317  

MANAGEMENT OF TOPCO AFTER THE BUSINESS COMBINATION

     323  

DESCRIPTION OF TOPCO SECURITIES

     342  

COMPARISON OF SHAREHOLDER RIGHTS

     355  

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     378  

BENEFICIAL OWNERSHIP OF TOPCO SECURITIES

     381  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     384  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

     385  

PROPOSAL NO. 2 — THE ADJOURNMENT PROPOSAL

     386  

LEGAL MATTERS

     387  

EXPERTS

     388  

ENFORCEMENT OF CIVIL LIABILITIES

     388  

HOUSEHOLDING INFORMATION

     388  

TRANSFER AGENT AND REGISTRAR

     388  

FUTURE SHAREHOLDER PROPOSALS

     389  

WHERE YOU CAN FIND MORE INFORMATION

     389  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission, or SEC, by TopCo (File No. 333-237702), constitutes a prospectus of TopCo under Section 5 of the U.S. Securities Act of 1933, as amended, or the Securities Act, with respect to the TopCo securities to be issued to ARYA shareholders and Immatics equityholders, if the business combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to the general meeting of ARYA shareholders at which ARYA shareholders will be asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger by the approval and adoption of the Business Combination Proposal, among other matters.

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar; and

 

   

“€,” “EUR” and “Euro” each refer to the Euro.

The exchange rate used for conversion between U.S. dollars and Euros is based on the ECB euro reference exchange rate published by the European Central Bank.

IMPORTANT INFORMATION ABOUT IFRS AND NON-IFRS FINANCIAL MEASURES

Immatics’ audited financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and referred to in this proxy statement/prospectus as “IFRS.”

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

The Immatics logo LOGO , Immatics®, XPRESIDENT®, ACTengine®, ACTallo®, ACTolog®, XCEPTOR, TCER, AbsQuant, IMADetect and other trademarks or service marks of Immatics appearing in this prospectus are the property of the Company. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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FREQUENTLY USED TERMS AND BASIS OF PRESENTATION

In this proxy statement/prospectus:

Active Employee” means any active employee of Immatics or any of its subsidiaries, other than a Management Member, as of March 31, 2020.

Aggregate PIPE Proceeds” means the cash proceeds to be actually received by TopCo or any of its Affiliates in respect of the PIPE Financing.

Aggregate TopCo Transaction Proceeds Condition” means the condition to each party’s obligation to consummate the Business Combination if the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) is not at least $150,000,000.

Ancillary Documents” means, collectively, the Sponsor Letter Agreement, the Investor Rights Agreement and the Subscription Agreements.

ARYA” means ARYA Sciences Acquisition Corp., a Cayman Islands exempted company.

ARYA amended and restated memorandum and articles of association” means the amended and restated memorandum and articles of association of ARYA, effective October 4, 2018.

ARYA Board” means the board of directors of ARYA.

ARYA Initial Shareholders” means ARYA Sponsor, Kevin Conroy, Dr. David Hung and Dr. Todd Wider.

ARYA IPO” means ARYA’s initial public offering, consummated on October 10, 2018, of 14,375,000 ARYA Public Units (including 1,875,000 units sold pursuant to the underwriters’ exercise of their over-allotment option) at $10.00 per unit, with each unit consisting of one Class A Share and one ARYA Public Warrant.

ARYA Merger Sub” means Immatics Merger Sub 1, a Cayman Islands exempted company.

ARYA Ordinary Shares” means collectively the Class A Shares and the Class B Shares.

ARYA Public Units” means the units issued in the ARYA IPO, consisting of one Class A Share and one-half of one ARYA Public Warrant.

ARYA Public Warrants” means warrants to acquire Class A Shares, issued as part of units in the ARYA IPO, at an initial exercise price of $11.50 per share.

ARYA shareholder” means any holder of ARYA Ordinary Shares.

ARYA Sponsor” means ARYA Sciences Holdings, a Cayman Islands exempted company and an affiliate of Perceptive.

Business Combination” means all of the transactions contemplated by the Business Combination Agreement, including (i) the First Merger; (ii) the Exchange; (iii) the Conversion; and (iv) the Second Merger. For accounting and financial reporting purposes, the Exchange will be accounted for as a recapitalization under IFRS, while the other transactions will be accounted for based on IFRS 2 (“Share-based Payment”).

Business Combination Agreement” means that certain Business Combination Agreement, dated as of March 17, 2020, by and among ARYA, Immatics, TopCo, ARYA Merger Sub and IB Merger Sub which is attached hereto as Annex A, and as may be amended from time to time.

Cash Redemption Amount” means the aggregate amount of cash required to satisfy any valid exercise by ARYA shareholders of their right to have ARYA redeem their Class A Shares in connection with the Business Combination.

 

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Cayman Islands Companies Law” means the Companies Law (2020 Revision) of the Cayman Islands, as amended, modified, re-enacted or replaced from time to time.

Class A Shares” means the Class A ordinary shares, par value $0.0001 per share, of ARYA.

Class B Shares” means the Class B ordinary shares, par value $0.0001 per share, of ARYA.

Conversion” means the transactions whereby TopCo will change its legal form from a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) to a public limited liability company (naamloze vennootschap).

DCGC” means the Dutch Corporate Governance Code, as of December 8, 2016 and as amended from time to time.

Converted Options” means the options issued to holders of Unvested Immatics SARs, as contemplated by the Business Combination Agreement.

Exchange” means the exchange by the shareholders of Immatics that have agreed to participate in the transaction of their equity interests in Immatics to TopCo in exchange for TopCo Shares.

Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

First Merger” means the merger of ARYA with and into ARYA Merger Sub, with ARYA being the surviving company.

Former Employees” means any former employee of Immatics whose service relationship with Immatics ended on or before March 31, 2020 and any Active Employee who tendered their resignation on or before March 31, 2020.

Founder Shares” means the aggregate 3,593,750 Class B Shares that are currently owned by the ARYA Initial Shareholders, of which 3,503,750 shares are held by ARYA Sponsor and 30,000 shares are held by each of Mr. Kevin Conroy, Dr. Todd Wider and Dr. David Hung (for a combined total of 90,000 shares).

First Anniversary of Closing” means the day one year after the consummation of the Business Combination.

General Meeting” means the annual general meeting of ARYA that is the subject of this proxy statement/prospectus.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

IB Merger Sub” means Immatics Merger Sub 2, a Cayman Islands exempted company.

Immatics” means Immatics Biotechnologies GmbH, a German limited liability company, and, unless the context otherwise requires, its consolidated subsidiaries.

Immatics Equity Plan” means each of the Immatics Biotechnologies GmbH Stock Appreciation Program 2010, the Immatics Biotechnologies 2016 Equity Incentive Plan and each other plan that provides for the award of rights of any kind to receive any share or any benefit measured in whole or in part by reference to any share of Immatics or any of its subsidiaries.

Immatics SAR” means a stock appreciation right or tandem award in respect of Immatics Shares granted under an Immatics Equity Plan or otherwise.

Immatics SAR Holders” means the holders of Immatics SARs.

Immatics Shares means ordinary shares of Immatics.

Immatics US” means Immatics US, Inc., a Delaware corporation.

 

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Investment Company Act” means the Investment Company Act of 1940, as amended.

Investor Rights Agreement” means that certain Investor Rights Agreement to be entered into by and among TopCo, the ARYA Initial Shareholders and certain investors, which shall be effective as of the closing of the Business Combination and which shall be substantially in the form attached hereto as Annex E.

IRS” means the U.S. Internal Revenue Service.

Management Members” means certain members of management of Immatics as set forth in the Schedules.

Matching Stock Options” means the two (2) options to purchase one (1) TopCo Share each, with an exercise price equal to $10 (or higher, as necessary to comply with Section 409A of the U.S. Tax Code), granted by TopCo under the TopCo Equity Plan for each TopCo Share purchased by each holder of Vested Immatics SAR reinvesting a portion of his or her SAR Cash Proceeds.

Mergers” means, collectively, the First Merger and the Second Merger.

Morrow” means Morrow Sodali LLC, proxy solicitor to ARYA.

NASDAQ” means NASDAQ Stock Market LLC.

Other Founder” means a co-founder of Immatics US affiliated with University of Texas MD Anderson Cancer Center.

Participating Shareholders” means each of the shareholders of Immatics that duly executed and delivered the Shareholder Undertaking (as defined in the Business Combination Agreement) agreeing to participate in the transaction prior to Closing.

Perceptive” means Perceptive Advisors LLC and, where applicable, its affiliates.

PIPE Financing” means the private placement of 10,415,000 TopCo Shares to the PIPE Investors pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, for gross proceeds to TopCo in an aggregate amount of approximately $104,150,000, pursuant to the Subscription Agreements.

PIPE Investors” means the investors (including the Sponsor PIPE Entity) in the PIPE Financing pursuant to the Subscription Agreements.

Plan of First Merger” means, in connection with the First Merger, the plan of merger between ARYA and ARYA Merger Sub in the form tabled at the General Meeting, which will be substantially in the form attached hereto as Annex B.

Plans of Merger” means, collectively, the Plan of First Merger and the Plan of Second Merger.

Plan of Second Merger” means, in connection with the Second Merger, the plan of merger between the First Surviving Company and IB Merger Sub in the form tabled at the General Meeting, which will be substantially in the form attached hereto as Annex C.

Private Placement Warrants” means the warrants held by ARYA Sponsor that were issued to ARYA Sponsor in a private placement at the time of the ARYA IPO, each of which is exercisable for one Class A Share at an exercise price of $11.50 per share.

public shareholders” means holders of public shares, including the ARYA Initial Shareholders and the directors and officers of ARYA to the extent they hold public shares, provided, that any of the ARYA Initial Shareholders or the directors and officers of ARYA will be considered a “public shareholder” only with respect to any public shares held by them.

public shares” means Class A Shares included in the units issued in the ARYA IPO.

SEC” means the United States Securities and Exchange Commission.

Second Merger” means the merger of ARYA into IB Merger Sub, with IB Merger Sub as the surviving entity.

 

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Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Sponsor Letter Agreement” means the letter agreement, dated as of March 17, 2020, by and between the ARYA Initial Shareholders, TopCo and ARYA, attached hereto as Annex F.

Sponsor PIPE Entity” means the entity that is an affiliate of ARYA Sponsor that is invested in the PIPE Financing.

Subscription Agreements” means those certain subscription agreements entered into on March 17, 2020, among ARYA, TopCo and the PIPE Investors named therein relating to the PIPE Financing.

TopCo” means Immatics B.V., a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) that will, at or prior to consummation of the Business Combination, be converted into a Dutch public limited liability company (naamloze vennootschap) and will change its name to Immatics N.V., and, unless the context otherwise requires, includes its consolidated subsidiaries for periods following the Business Combination.

TopCo Articles of Association” means the articles of association of TopCo, to be effective as of the consummation of the Business Combination, which are attached hereto as Annex D.

TopCo Board” means the TopCo Supervisory Board and the TopCo Management Board and, from and after the First Anniversary of Closing, the board of directors of TopCo.

TopCo Director” means a TopCo Executive Director or a TopCo Non-Executive Director.

TopCo Equity Plan” means the omnibus equity incentive plan of TopCo to be approved and adopted by the board of directors and shareholder(s) of TopCo, in consultation with Immatics and ARYA, to be effective prior to the closing date of the Business Combination.

TopCo Management Board” means the TopCo management board until the First Anniversary of Closing.

TopCo Managing Director” means a member of the TopCo Management Board.

TopCo Executive Director” means an executive member of the TopCo Board.

TopCo Non-Executive Director” means a non-executive member of the TopCo Board.

TopCo Financing Preferred Shares” means the cumulative preferred shares, nominal value €0.01 per share, of TopCo.

TopCo Public Warrants” means warrants to acquire TopCo Shares on substantially equivalent terms and conditions as the ARYA Public Warrants.

TopCo Shares” means the ordinary shares, nominal value €0.01 per share, of TopCo.

TopCo Supervisory Board” means the board of directors of TopCo after First Anniversary of Closing.

TopCo Supervisory Director” means a member of the TopCo Supervisory Board.

Transfer Agent” means Continental Stock Transfer & Trust Company.

Trust Account” means the trust account of ARYA that holds the proceeds from the ARYA IPO and certain of the proceeds from the sale of the Private Placement Warrants.

 

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Trust Agreement” means the Investment Management Trust Account Agreement, dated October 10, 2018, between ARYA and the Trustee.

Trustee” means Continental Stock Transfer & Trust Company.

U.S. Tax Code” means the U.S. Internal Revenue Code of 1986, as amended.

Unvested Immatics SAR” means, solely with respect to Immatics SARs held by Active Employees and Management Members, any Immatics SARs that would vest on or after January 1, 2021.

Vested Immatics SAR” means: (a) with respect to Immatics SARs held by Former Employees and former non-employee service providers, any Immatics SARs that vested as of such Former Employee’s termination of service relationship with Immatics; and (b) with respect to Immatics SARs held by Active Employees, Management Members and the Other Founder, any Immatics SARs that have vested or would vest by December 31, 2020 in accordance with their terms as of the date hereof.

Warrant Agreement” means the Warrant Agreement, dated as of October 10, 2018, between ARYA and the Trustee.

Unless otherwise specified, all share calculations assume: (i) no exercise of redemption rights by public shareholders; (ii) prior to the consummation of the Business Combination, no inclusion of the 13,140,625 Class A Shares issuable upon the exercise of 7,187,500 ARYA Public Warrants or 5,953,125 Private Placement Warrants; (iii) after the consummation of the Business Combination, no inclusion of the 7,187,500 TopCo Shares issuable upon the exercise of 7,187,500 TopCo Public Warrants; (iv) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics; (v) the recipients of cash proceeds from the conversion of Immatics’ stock appreciation rights who are required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will re-invest such proceeds as set forth in the Business Combination Agreement; (vi) the options issued to holders of Immatics’ stock appreciation rights that would vest on or after January 1, 2021, as contemplated by the Business Combination Agreement, are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method; and (vii) no inclusion of the TopCo Shares available for issuance under the TopCo Equity Plan (other than the treatment of Unvested Immatics SARs noted in clause (vi)).

For more information about factors that affect the assumptions above, please see the section entitled “The Business Combination — Ownership of TopCo.”

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

AND THE GENERAL MEETING

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the General Meeting and the proposals to be presented at the General Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to ARYA shareholders. Shareholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the General Meeting, which will be held on                , 2020 at 9:00 a.m., New York City time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

ARYA shareholders are being asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger, among other proposals. ARYA has entered into the Business Combination Agreement, providing for, among other things:

 

   

the First Merger, pursuant to which (a) each ARYA Ordinary Share will be automatically exchanged for one TopCo Share and (b) each outstanding ARYA Public Warrant to purchase a Class A Share will be converted into a TopCo Public Warrant;

 

   

the Exchange;

 

   

the Conversion; and

 

   

the Second Merger.

These transactions are collectively referred to as the Business Combination. You are being asked to vote on the Business Combination Proposal. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

This proxy statement/prospectus and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the General Meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its Annexes.

 

Q:

When and where is the General Meeting?

 

A:

The General Meeting will be held on                , 2020 at 9:00 a.m., New York City time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022.

 

Q:

What are the specific proposals on which I am being asked to vote at the General Meeting?

 

A:

ARYA shareholders are being asked to approve the following proposals:

 

  1.

Business Combination Proposal — To adopt the Business Combination Agreement and approve the Business Combination the First Merger, the Second Merger and the Plans of Merger (Proposal No. 1); and

 

  2.

Adjournment Proposal — To consider and vote upon a proposal to adjourn the General Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal

 

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  (Proposal No. 2). The Adjournment Proposal will only be presented to ARYA shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, or in the event that ARYA shareholders redeem an amount of Class A Shares such that the Aggregate TopCo Transaction Proceeds Condition would not be satisfied.

 

Q:

How will the COVID-19 pandemic impact in-person voting at the General Meeting?

 

A:

We intend to hold the General Meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (COVID-19) situation. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website                , and we encourage you to check this website prior to the meeting if you plan to attend.

 

Q:

Are the proposals conditioned on one another?

 

A:

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that in the event the Business Combination Proposal does not receive the requisite vote for approval, then ARYA will not consummate the Business Combination. If ARYA does not consummate the Business Combination and fails to complete an initial business combination by October 10, 2020, ARYA will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such Trust Account to its public shareholders.

 

Q:

Why is ARYA proposing the Business Combination?

 

A:

ARYA is a blank check company incorporated as a Cayman Islands exempted company on June 29, 2018 and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more target businesses. Although ARYA may pursue an acquisition opportunity in any business, industry, sector or geographical location for purposes of consummating an initial business combination, ARYA has focused on North American or European companies in the life sciences and medical technology sectors. ARYA is not permitted under its amended and restated memorandum and articles of association to effect a business combination with a blank check company or a similar type of company with nominal operations.

ARYA has identified several criteria and guidelines it believes are important for evaluating acquisition opportunities. ARYA has sought to acquire companies that: have a scientific or other competitive advantage in the markets in which they operate and which can benefit from access to additional capital as well as ARYA’s industry relationships and expertise; are ready to be public, with strong management, corporate governance and reporting policies in place; will likely be well received by public investors and are expected to have good access to the public capital markets; have significant embedded and/or underexploited growth opportunities; exhibit unrecognized value or other characteristics that ARYA believes have been misevaluated by the market based on its rigorous analysis and scientific and business due diligence review; and will offer attractive risk-adjusted equity returns for ARYA shareholders.

Based on its due diligence investigations of Immatics and the industry in which it operates, including the financial and other information provided by Immatics in the course of negotiations, ARYA believes that Immatics meets the criteria and guidelines listed above. Please see the section entitled “The Business Combination — The ARYA Board’s Reasons for the Business Combination” for additional information.

 

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Q:

Why is ARYA providing shareholders with the opportunity to vote on the Business Combination?

 

A:

The approval of the Business Combination is required under the ARYA amended and restated memorandum and articles of association, and the First Merger requires the approval of ARYA shareholders under Cayman Islands law. In addition, such approvals are also conditions to the closing of the Business Combination under the Business Combination Agreement. Additionally, under its amended and restated memorandum and articles of association, ARYA must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of its initial business combination either in conjunction with a tender offer or in conjunction with a shareholder vote. For business and other reasons, ARYA has elected to provide its shareholders with the opportunity to have their public shares redeemed in connection with a shareholder vote rather than a tender offer. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Therefore, ARYA is seeking to obtain the approval of its shareholders of the Business Combination Proposal and also allow its public shareholders to effectuate redemptions of their public shares in connection with the closing of the Business Combination in accordance with the ARYA amended and restated memorandum and articles of association.

 

Q:

What other matters will be brought before the General Meeting?

 

A:

In addition to consideration of the proposals described above, ARYA shareholders will have the opportunity to consider the financial statements of ARYA for the year ended December 31, 2019 and ask questions of ARYA’s management. Holders of the Class B Shares will also vote on the election of ARYA’s Class I directors, Michael Altman and Dr. Todd Wider.

 

Q:

Will I have the opportunity to vote in the election of ARYA’s directors if I only hold Class A Shares?

 

A:

No. Pursuant to the ARYA amended and restated memorandum and articles of association, prior to an initial business combination only holders of Class B Shares are entitled to vote in the election of ARYA’s directors. Holders of only Class A Shares are not entitled to vote in the election of ARYA’s directors.

 

Q:

What revenues and profits/losses has Immatics generated in the last two years?

 

A:

For the quarters ended March 31, 2020 and 2019, Immatics had total revenue of €7.0 million and €3.6 million, and net losses of €8.6 million and €5.9 million, respectively. At the end of quarter ended March 31, 2020, Immatics’ total assets were €121.8 million and its total liabilities were €171.8 million. For the fiscal years ended December 31, 2019 and 2018, Immatics had total net revenues of €18.4 million and €3.8 million, and net losses of €32.5 million and €32.4 million, respectively. At the end of fiscal year 2019, Immatics’ total assets were €134.3 million and its total liabilities were €175.0 million. For additional information, please see the sections entitled “Selected Historical Financial Data of Immatics” and “Immatics Managements Discussion and Analysis of Financial Condition and Results of Operations.”

 

Q:

What impact will the COVID-19 pandemic have on the Business Combination?

 

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the business of ARYA, Immatics and TopCo, and there is no guarantee that efforts by ARYA, Immatics and TopCo to address the adverse impacts of the coronavirus will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. If ARYA or Immatics are unable to recover from a business disruption on a timely basis, the Business Combination and TopCo’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak and become more costly. Each of ARYA, Immatics and TopCo may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

 

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Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions set forth therein, ARYA and Immatics will effect a transaction that would replicate the economics of a merger of ARYA and Immatics through a series of mergers and equity contributions and exchanges, which is collectively referred to as the Business Combination. To effect the Business Combination, among other things, (i) the First Merger will be effected; (ii) the Exchange will be effected; (iii) the Conversion will be effected; and (iv) the Second Merger will be effected. As a result of the Business Combination, TopCo will be the ultimate parent company of ARYA and Immatics (following the Exchange) and Immatics’ direct and indirect subsidiaries. Please see the section entitled “The Business Combination” for additional information.

TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants on NASDAQ under the symbols “IMTX” and “IMTXW,” respectively, upon the closing of the Business Combination. We cannot assure you that the TopCo Shares or TopCo Public Warrants will be approved for listing on NASDAQ. In addition, TopCo will be a “foreign private issuer” and as a “foreign private issuer,” TopCo will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that TopCo must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. TopCo will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. As a foreign private issuer, TopCo will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of the TopCo Shares and TopCo Public Warrants. See “Risk Factors—As a foreign private issuer , TopCo will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of the TopCo Shares and TopCo Public Warrants.”

 

Q:

How has the announcement of the Business Combination affected the trading price of ARYA’s Class A Shares?

 

A:

On March 16, 2020, the last trading date before the public announcement of the Business Combination, the ARYA Public Units, Class A Shares and ARYA Public Warrants closed at $11.20, $9.84 and $2.12, respectively. On                , 2020, the trading date immediately prior to the date of this proxy statement/prospectus, the ARYA Public Units, Class A Shares and ARYA Public Warrants closed at $                , $                and $                , respectively.

 

Q:

Following the Business Combination, will ARYA’s securities continue to trade on a stock exchange?

 

A:

No. ARYA anticipates that, following consummation of the Business Combination, the ARYA Public Units will automatically separate into their component parts, the Class A Shares and ARYA Public Warrants will be delisted from NASDAQ and ARYA will be deregistered under the Exchange Act. However, TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants on NASDAQ under the symbols “IMTX” and “IMTXW,” respectively, upon the closing of the Business Combination.

 

Q:

Is the Business Combination the first step in a “going private” transaction?

 

A:

No. ARYA does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Immatics to access the U.S. public markets.

 

Q:

Will the management of Immatics change in the Business Combination?

 

A:

The current executive officers of Immatics are Dr. Harpreet Singh, the Chief Executive Officer, Mr. Thomas Ulmer, the Chief Financial Officer, Dr. Cedrik Britten, the Chief Medical Officer, Dr. Carsten Reinhardt, the Chief Development Officer, Dr. Rainer Kramer, the Chief Business Officer, Dr. Toni Weinschenk, the Chief Innovation Officer, and Dr. Steffen Walter, the Chief Technology Officer. These individuals are intended to continue to serve as TopCo’s executive officers upon consummation of the Business Combination.

 

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Upon the closing of the Business Combination, TopCo will be governed through a two-tier board structure which consists of a supervisory board and a management board. The Management Board consists of one Managing Director and the Supervisory Board consists of seven Supervisory Directors:

 

   

the Managing Director will be Harpreet Singh;

 

   

the Class I Supervisory Directors are Michael G. Atieh, a designee of the ARYA Initial Shareholders and Paul R. Carter, a designee of dievini, and their terms will expire at the first annual meeting of shareholders following the date of the consummation of the Business Combination;

 

   

the Class II Supervisory Directors are Peter Chambré and Heather L. Mason, and their terms will expire at the second annual meeting of shareholders following the date of the consummation of the Business Combination; and

 

   

the Class III Supervisory Directors are Adam Stone, a designee of the ARYA Initial Shareholders, and Christof Hettich, a designee of dievini, and their terms will expire at the third annual meeting of shareholders following the date of the consummation of the Business Combination.

Pursuant to the Business Combination Agreement, on the one year anniversary of the consummation of the Business Combination, the TopCo Board will automatically convert into a single-tiered board of directors comprised of nine members and divided into three classes, with each director serving a staggered, three-year term. The Supervisory Directors will retain their designated class upon the transition to the one-tier board.

For an explanation of the roles and responsibilities at each tier of our two-tierd board of directors, please see the section entitled “Management of TopCo After the Business Combination”.

 

Q:

What will ARYA shareholders receive in the Business Combination?

 

A:

Upon consummation of the First Merger, each Class A Share and Class B Share will be automatically exchanged for one TopCo Share.

 

Q:

What will ARYA warrant holders receive in the Business Combination?

 

A:

Upon consummation of the First Merger, each ARYA Public Warrant will automatically become a TopCo Public Warrant.

Pursuant to the Sponsor Letter Agreement, ARYA Sponsor will forfeit its Private Placement Warrants for no consideration and such Private Placement Warrants will be cancelled.

 

Q:

What will ARYA unitholders receive in the Business Combination?

 

A:

In connection with the consummation of the Business Combination, the ARYA Public Units will automatically separate into their component parts, and holders of ARYA Public Units will receive one TopCo Share for each Class A Share and one TopCo Public Warrant for each ARYA Public Warrant.

 

Q:

What will Immatics equityholders receive in the Business Combination?

 

A:

Upon consummation of the Exchange, holders of Immatics equity will receive TopCo Shares. Subject to the terms and conditions of the Business Combination Agreement, the consideration received by the Immatics equityholders will be an aggregate number of TopCo shares equal to (a) $350,000,000 (subject to certain downward adjustments set forth in the Business Combination Agreement), divided by (b) $10. See “Summary—Consideration to Immatics Equityholders in the Business Combination” for information on the consideration to be received by Immatics equityholders, including the assumptions on which this calculation is based.

 

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Q:

What is the PIPE Financing?

 

A:

In connection with the Business Combination and concurrently with the execution of the Business Combination Agreement, ARYA and TopCo entered into the Subscription Agreements with the PIPE Investors pursuant to which the PIPE Investors agreed to subscribe for and purchase, and TopCo agreed to issue and sell to such PIPE Investors, an aggregate of 10,415,000 TopCo Shares for gross proceeds of $104,150,000, at a purchase price of $10.00 per share, $25,000,000 of which will be funded by Sponsor PIPE Entity.

 

Q:

What equity stake will the current shareholders of ARYA, the PIPE Investors and the current shareholders of Immatics hold in TopCo after the closing of the Business Combination?

 

A:

It is anticipated that, upon completion of the Business Combination: (i) ARYA’s public shareholders (other than the PIPE Investors) will own approximately 22.7% of TopCo; (ii) the PIPE Investors (including certain Immatics equityholders and the Sponsor PIPE Entity) will own approximately 16.4% of TopCo; (iii) the ARYA Initial Shareholders (including ARYA Sponsor but not including the Sponsor PIPE Entity) will own approximately 5.7% of TopCo; and (iv) the Immatics equityholders (not including the equityholders participating in the PIPE Financings) will own approximately 55.2% of TopCo. These levels of ownership interests assume that (A) no Class A Shares are elected to be redeemed by ARYA’s public shareholders (B) that 10,415,000 TopCo Shares are issued to the PIPE Investors in connection with the PIPE Financing, (C) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, (D) the recipients of SAR Cash Proceeds required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will reinvest such proceeds as set forth in the Business Combination Agreement, and (E) the Converted Options are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method.

The ownership percentages with respect to TopCo following the Business Combination do not take into account the warrants to purchase TopCo Shares that will remain outstanding immediately following the Business Combination, but do include Founder Shares, which will immediately be exchanged for an equivalent number of TopCo Shares at the closing of the Business Combination. If the actual facts are different than these assumptions (which they are likely to be), the ownership percentages in TopCo will be different. For more information, please see the sections entitled “The Business Combination — Ownership of TopCo” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

Q:

Will ARYA obtain new financing in connection with the Business Combination and are there any arrangements to help ensure that ARYA will have sufficient funds to consummate the Business Combination?

 

A:

Yes. ARYA will obtain new equity financing through a private placement of TopCo Shares in the PIPE Financing. TopCo will use the Aggregate PIPE Proceeds, together with the proceeds received from the Trust Account, for general corporate purposes. The PIPE Financing is contingent upon, among other things, the closing of the Business Combination. Unless waived by ARYA or Immatics, the Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) equaling or exceeding $150,000,000.

 

Q:

Why is ARYA proposing the Adjournment Proposal?

 

A:

ARYA is proposing the Adjournment Proposal to allow the ARYA Board to adjourn the General Meeting to a later date or dates (i) to the extent necessary to ensure that any required supplement or amendment to this proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the General

 

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  Meeting is scheduled, there are insufficient ARYA Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (ii) in order to solicit additional proxies from ARYA shareholders in favor of the Business Combination Proposal, or (iii) if ARYA shareholders redeem an amount of Class A Shares such that the Aggregate TopCo Transaction Proceeds Condition would not be satisfied. The Adjournment Proposal will only be presented to ARYA shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, or in the event that ARYA shareholders redeem an amount of Class A Shares such that the Aggregate TopCo Transaction Proceeds Condition would not be satisfied. Please see the section entitled “Proposal No. 2 — The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my Class A Shares before the General Meeting?

 

A:

The record date for the General Meeting for ARYA shareholders that hold their shares in “street name” is earlier than the date that the Business Combination is expected to be completed. If you transfer your Class A Shares after the record date for ARYA shareholders that hold their shares in “street name,” but before the General Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the General Meeting. However, you will not be able to seek redemption of your Class A Shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your Class A Shares prior to the record date for ARYA shareholders that hold their shares in “street name,” you will have no right to vote those shares at the General Meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:

What vote is required to approve the proposals presented at the General Meeting?

 

A:

The approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Accordingly, an ARYA shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of ARYA Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the Business Combination Proposal. The ARYA Initial Shareholders have agreed to vote their Founder Shares and any public shares purchased by them during or after the ARYA IPO in favor of the Business Combination Proposal.

The approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Accordingly, an ARYA shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of ARYA Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the Adjournment Proposal.

 

Q:

What happens if the Business Combination Proposal is not approved?

 

A:

If the Business Combination Proposal is not approved and ARYA does not consummate a business combination by October 10, 2020, ARYA will be required to dissolve and liquidate the Trust Account.

 

Q:

How many votes do I have at the General Meeting?

 

A:

ARYA shareholders that hold their shares in “street name” are entitled to one vote on each proposal presented at the General Meeting for each ARYA Ordinary Share held of record as of May 29, 2020, the

 

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  record date for the General Meeting. As of the close of business on the record date, there were 17,968,750 outstanding ARYA Ordinary Shares. For the avoidance of doubt, the record date does not apply to ARYA shareholders that hold their shares in registered form and are registered as shareholders in ARYA’s register of members. ARYA shareholders that hold their shares in registered form are entitled to one vote on each proposal presented at the General Meeting for each ARYA Ordinary Share held on the date of the General Meeting.

 

Q:

What constitutes a quorum at the General Meeting?

 

A:

One or more shareholders who together hold 50% of the issued and outstanding ARYA Ordinary Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The ARYA Initial Shareholders, who currently own 20% of the issued and outstanding ARYA Ordinary Shares, will count towards this quorum. In the absence of a quorum, the chairman of the General Meeting has power to adjourn the General Meeting. As of the record date for the General Meeting for ARYA shareholders that hold their shares in “street name,” the presence of 8,984,375 ARYA Ordinary Shares would be required to achieve a quorum.

 

Q:

How will the ARYA Initial Shareholders and ARYA’s other current directors and officers vote?

 

A:

Prior to the ARYA IPO, ARYA entered into agreements with the ARYA Initial Shareholders and each of its other directors and officers, pursuant to which each agreed to vote any ARYA Ordinary Shares owned by them in favor of a proposed initial business combination. None of the ARYA Initial Shareholders nor any of ARYA’s other current directors or officers has purchased any ARYA Ordinary Shares during or after the ARYA IPO and, as of the date of this proxy statement/prospectus, neither ARYA nor the ARYA Initial Shareholders or any of ARYA’s other directors or officers have entered into agreements and are not currently in negotiations to purchase ARYA Ordinary Shares prior to the consummation of the Business Combination. Currently, the ARYA Initial Shareholders own 20% of the issued and outstanding ARYA Ordinary Shares, including all of the Founder Shares, and will be able to vote all of such shares at the General Meeting.

 

Q:

What interests do the ARYA Initial Shareholders and ARYA’s other current officers and directors have in the Business Combination?

 

A:

The ARYA Initial Shareholders and ARYA’s other current officers and directors have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination Proposal. These interests include:

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed not to redeem any ARYA Ordinary Shares held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that ARYA Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $35,037,500, but, given the transfer restrictions on such shares, ARYA believes such shares have less value;

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ARYA fails to complete an initial business combination by October 10, 2020;

 

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the fact that the Investor Rights Agreement will be entered into by the ARYA Initial Shareholders;

 

   

the fact that ARYA Sponsor paid an aggregate of $5,953,125 for its 5,953,125 Private Placement Warrants and that such Private Placement Warrants will expire worthless if a business combination is not consummated by October 10, 2020;

 

   

the fact that, at the option of ARYA Sponsor, any amounts outstanding under certain working capital loans made by ARYA Sponsor or any of its affiliates to ARYA in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares which will be identical to the Private Placement Warrants;

 

   

the fact that, in connection with the PIPE Financing, the Sponsor PIPE Entity will receive 2,500,000 TopCo Shares;

 

   

the right of the ARYA Initial Shareholders to receive TopCo Shares, subject to certain lock-up periods;

 

   

the anticipated designation by the ARYA Initial Shareholders of Adam Stone and Michael G. Atieh as directors of TopCo following the Business Combination;

 

   

the continued indemnification of ARYA’s existing directors and officers and the continuation of ARYA’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until ARYA (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by October 10, 2020;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors will lose their entire investment in ARYA and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by October 10, 2020; and

 

   

the fact that if the Trust Account is liquidated, including in the event ARYA is unable to complete an initial business combination within the required time period, ARYA Sponsor has agreed to indemnify ARYA to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ARYA has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ARYA, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

These interests may influence the ARYA Board in making its recommendation that you vote in favor of the approval of the Business Combination.

 

Q:

Did the ARYA Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

No. The ARYA Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. ARYA’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of ARYA’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, ARYA’s officers and directors and its advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the ARYA Board in valuing Immatics’ business and assuming the risk that the ARYA Board may not have properly valued such business.

 

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Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of holders of at least two-thirds of ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting, then the Business Combination Proposal will be approved and, assuming the satisfaction or waiver of the other conditions to closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of holders of at least two-thirds of ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting, then the Business Combination Proposal will fail and ARYA will not consummate the Business Combination. If ARYA does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until October 10, 2020. If ARYA fails to complete an initial business combination by October 10, 2020, then it will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to its public shareholders.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of ARYA public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest (which interest shall be net of taxes payable), by (ii) the total number of then-outstanding public shares; provided that ARYA will not redeem any Class A Shares issued in the ARYA IPO to the extent that such redemption would result in ARYA having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A public shareholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the Class A Shares included in the units sold in the ARYA IPO. Holders of outstanding ARYA Public Warrants do not have redemption rights in connection with the Business Combination. The ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed to waive their redemption rights with respect to any ARYA Ordinary Shares they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $                as of                 , 2020, the estimated per share redemption price would have been approximately $                . Additionally, Class A Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of taxes payable) in connection with the liquidation of the Trust Account, unless ARYA completes an alternative business combination prior to October 10, 2020.

 

Q:

Can the ARYA Initial Shareholders redeem their Founder Shares in connection with consummation of the Business Combination?

 

A:

No. The ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed to waive their redemption rights with respect to their Founder Shares and any public shares they may hold in connection with the consummation of the Business Combination.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act),

 

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  may not redeem Class A Shares in excess of an aggregate of 15% of the shares sold in the ARYA IPO without ARYA’s consent. Accordingly, all Class A Shares in excess of 15% of Class A Shares sold in the ARYA IPO owned by a holder will not be redeemed for cash without ARYA’s consent. On the other hand, a public shareholder who holds less than 15% of the public shares may redeem all of the public shares held by such shareholder for cash.

Class B Shares cannot be redeemed.

In no event is your ability to vote all of your shares (including those shares held by you in excess of 15% of the shares sold in the ARYA IPO) for or against the Business Combination restricted.

ARYA has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by ARYA public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $                as of                , 2020. The Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) being at least $150,000,000. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by ARYA’s public shareholders, this condition is not met or is not waived, then each of ARYA and Immatics may elect not to consummate the Business Combination. In addition, in no event will ARYA redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the ARYA amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement.

 

Q:

Is there a limit on the total number of ARYA public shares that may be redeemed?

 

A:

Yes. The ARYA amended and restated memorandum and articles of association provides that it may not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 (such that ARYA is not subject to the SEC’s “penny stock” rules). Other than this limitation, the ARYA amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold. The Business Combination Agreement provides that, as a condition to each party’s obligation to consummate the Business Combination, ARYA may not have net tangible assets less than $5,000,001 at the closing date of the transactions contemplated by the Business Combination Agreement. In addition, the Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) being at least $150,000,000. If, as a result of redemptions of Class A Shares by ARYA’s public shareholders, this condition is not met or is not waived, then each of ARYA and Immatics may elect not to consummate the Business Combination. If the Business Combination is not consummated, ARYA will not redeem any Class A Shares and all Class A Shares submitted for redemption will be returned to the holders thereof, and ARYA instead may search for an alternate business combination.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your Class A Shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other proposal described by this proxy statement/prospectus. As a result, the Business Combination Agreement can be approved by shareholders who will redeem their shares and no longer remain shareholders, leaving shareholders who

 

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  choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer shareholders, potentially less cash and the potential inability to meet the listing standards of NASDAQ.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (i) if you hold ARYA Public Units, separate the underlying Class A Shares and ARYA Public Warrants, and (ii) prior to 5:00 p.m., New York City time, on                , 2020 (two business days before the initial date of the General Meeting), tender your shares physically or electronically and identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your shares and submit a request in writing that ARYA redeem your Class A Shares for cash to Continental Stock Transfer & Trust Company (the “Transfer Agent”) at the following address:

Continental Stock Transfer & Trust Company

1 State Street

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

You do not have to be a record date holder in order to exercise your redemption rights. ARYA shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is ARYA’s understanding that ARYA shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, ARYA does not have any control over this process and it may take longer than two weeks. ARYA shareholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

ARYA shareholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date set forth in this proxy statement/prospectus, or up to two business days prior to the vote on the Business Combination Proposal at the General Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s (DTC) Deposit/Withdrawal At Custodian (DWAC) system, at such shareholder’s option. The requirement for physical or electronic delivery prior to the General Meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the Business Combination is approved.

Any demand for redemption, once made, may be withdrawn at any time until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that the Transfer Agent return the shares (physically or electronically). The redemption rights include the requirement that a holder must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to the Transfer Agent in order to validly redeem his, her or its shares. You may make such request by contacting the Transfer Agent at the phone number or address listed under the question “Who can help answer my questions?” below.

If you hold ARYA Public Units registered in your own name, you must deliver the certificate for such ARYA Public Units to the Transfer Agent with written instructions to separate such ARYA Public Units into Class A Shares and ARYA Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the ARYA Public Units.

 

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If a broker, dealer, commercial bank, trust company or other nominee holds your ARYA Public Units, you must instruct such nominee to separate your ARYA Public Units. Your nominee must send written instructions by facsimile to the Transfer Agent. Such written instructions must include the number of ARYA Public Units to be split and the nominee holding such ARYA Public Units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of Class A Shares and ARYA Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the ARYA Public Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your ARYA Public Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming shareholder. However, this fee would be incurred regardless of whether or not shareholders seeking to exercise redemption rights are required to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. See the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences for U.S. Holders Exercising Redemption Rights”. If you are a U.S. Holder of Class A Shares contemplating exercise of your redemption rights, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

Q:

What are the U.S. federal income tax consequences as a result of the Business Combination?

 

A:

Subject to the limitations and qualifications described in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders” below, the Business Combination is generally intended to be tax-deferred to U.S. Holders (as defined in the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders”) of Class A Shares and ARYA Public Warrants for U.S. federal income tax purposes, except to the extent that U.S. Holders of Class A Shares receive cash pursuant to the exercise of redemption rights.

However, ARYA believes it is a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes and, if certain proposed Treasury Regulations are finalized in their current form, U.S. Holders may be required to recognize gain as a result of the Business Combination except, with respect to Class A Shares (but not ARYA Public Warrants), if a U.S. Holder makes (or has made) certain elections discussed further below.

In addition, Section 367(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, in certain circumstances may impose additional requirements for certain U.S. Holders to qualify for tax-deferred treatment with respect to the exchange of Class A Shares and/or ARYA Public Warrants in the Business Combination.

The tax consequences of the Business Combination are complex and will depend on your particular circumstances. For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, including the application of the PFIC rules and Section 367(a) of the U.S. Tax Code, see the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences of the Mergers to U.S. Holders.” If you are a U.S. Holder exchanging Class A Shares or ARYA Public Warrants in the Business Combination, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

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Q:

If I am an ARYA warrant holder, can I exercise redemption rights with respect to my ARYA Public Warrants?

 

A:

No. The holders of ARYA Public Warrants have no redemption rights with respect to such warrants.

 

Q:

Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination?

 

A:

The Cayman Islands Companies Law provides that a shareholder of a Cayman company shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation (the “Dissenter Rights”). However, such rights are not available in respect of the shares of any class for which an open market exists on a recognized stock exchange where, upon the merger or the consolidation, the shareholder receives, amongst other things, either: (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; or (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders.

With respect to the First Merger, (i) NASDAQ is a recognized stock exchange and is a national securities exchange, (ii) ARYA shareholders will receive shares of the surviving company and (iii) immediately following receipt of shares of the surviving company, ARYA shareholders will then exchange such shares for TopCo Shares that will be listed on NASDAQ. Accordingly, Dissenter Rights will not be available in respect of the First Merger. The absence of Dissenter Rights does not impede a shareholder’s ability to exercise such shareholder’s redemption rights as outlined in the ARYA amended and restated memorandum and articles of association.

Appraisal rights are not available to holders of Immatics Shares in connection with the Business Combination.

 

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

If the Business Combination is consummated, the funds held in the Trust Account will be used to: (i) pay ARYA public shareholders who properly exercise their redemption rights; (ii) pay $4,671,875 in deferred underwriting commissions to the underwriters of the ARYA IPO; and (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by ARYA and other parties to the Business Combination Agreement in connection with the Business Combination pursuant to the terms of the Business Combination Agreement. Any remaining funds will be used by TopCo for general corporate purposes.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of closing conditions in the Business Combination Agreement, including the approval by ARYA shareholders of the Business Combination Proposal and the Aggregate TopCo Transaction Proceeds Condition. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination.”

 

Q:

What happens if the Business Combination Agreement is terminated or the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated. Please see the section entitled “The Business Combination Agreement and Ancillary Documents” for information regarding the parties’ specific termination rights.

 

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If ARYA does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until October 10, 2020. If ARYA fails to complete an initial business combination by October 10, 2020, then ARYA will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem ARYA public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish ARYA public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of ARYA’s remaining shareholders and the ARYA Board, dissolve and liquidate, subject in the case of (ii) and (iii) to ARYA’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the ARYA IPO. Please see the section entitled “Risk Factors — Risks Related to ARYA” for additional information.

Holders of Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, there will be no redemption rights or liquidating distributions with respect to the ARYA Public Warrants and Private Placement Warrants, which will expire worthless if ARYA fails to complete an initial business combination by October 10, 2020.

 

Q:

When is the Business Combination expected to be completed?

 

A:

The closing of the Business Combination is expected to take place on or prior to the third business day following the satisfaction or waiver of the conditions described below in the subsection entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination.” The closing is expected to occur in the second quarter of 2020. The Business Combination Agreement may be terminated by ARYA or Immatics if the closing of the Business Combination has not occurred by October 10, 2020 (the “Termination Date”) (unless mutually extended).

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination.”

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes, and to consider how the Business Combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you hold your shares in “street name” and were a holder of record of ARYA Ordinary Shares on May 29, 2020, the record date for the General Meeting, you may vote with respect to the proposals in person or virtually at the General Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. For the avoidance of doubt, the record date does not apply to ARYA shareholders that hold their shares in registered form and are registered as shareholders in ARYA’s register of members. All holders of shares in registered form on the day of the General Meeting are entitled to vote at the General Meeting.

 

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Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the General Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the General Meeting so that your shares will be voted if you are unable to attend the General Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m., New York City time, on                 , 2020.

Voting in Person at the Meeting. If you attend the General Meeting and plan to vote in person, you will be provided with a ballot at the General Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you have the right to vote in person at the General Meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the General Meeting and vote in person, you will need to bring to the General Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. For additional information, please see the section entitled “General Meeting of ARYA Shareholders.”

 

Q:

What will happen if I abstain from voting or fail to vote at the General Meeting?

 

A:

At the General Meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will be counted as present for purposes of determining whether a quorum is present. For purposes of approval, broker non-votes and abstentions will have no effect on the Business Combination Proposal or the Adjournment Proposal.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by ARYA without an indication of how the shareholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the General Meeting.

 

Q:

If I am not going to attend the General Meeting in person, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the General Meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

We intend to hold the General Meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (COVID-19) situation. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website                , and we encourage you to check this website prior to the meeting if you plan to attend.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee.

 

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  ARYA believes that all of the proposals presented to the shareholders at this General Meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the General Meeting. If you do not provide instructions with your proxy card, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares. This indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the General Meeting. Your broker, bank or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to ARYA’s Secretary at the address listed below so that it is received by ARYA’s Secretary prior to the General Meeting or attend the General Meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to ARYA’s Secretary, which must be received by ARYA’s Secretary prior to the General Meeting.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the General Meeting?

 

A:

ARYA will pay the cost of soliciting proxies for the General Meeting. ARYA has engaged Morrow to assist in the solicitation of proxies for the General Meeting. ARYA has agreed to pay Morrow a fee of $22,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. ARYA will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of ARYA Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of ARYA Ordinary Shares and in obtaining voting instructions from those owners. The directors, officers and employees of ARYA may also solicit proxies by telephone, by facsimile, by mail, on the Internet, in person or virtually. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

ARYA Sciences Acquisition Corp.

51 Astor Place, 10th Floor

New York, New York 10003

(212) 284-2300

Attention: Michael Altman, Chief Financial Officer

Email: michael@perceptivelife.com

 

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You may also contact the proxy solicitor for ARYA at:

Morrow Sodali

470 West Avenue, 3rd Floor

Stamford, Connecticut 06902

Individuals, please call toll-free: (800) 662-5200

Banks and brokerage, please call: (203) 658-9400

Email: ARYA.info@investor.morrowsodali.com

To obtain timely delivery, ARYA shareholders must request the materials no later than                , 2020, or five business days prior to the General Meeting.

You may also obtain additional information about ARYA from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your public shares (either physically or electronically) to the Transfer Agent prior to the General Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your public shares, please contact the Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus and does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the Annexes and accompanying financial statements of TopCo, ARYA and Immatics, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the General Meeting (as described below). Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Immatics

Immatics is a German limited liability company that was incorporated in 2000. Immatics combines the discovery of true targets for cancer immunotherapies with the development of the right T cell receptors (“TCRs”) with the goal of enabling a robust and specific T cell response against these targets. This deep know-how is the foundation for Immatics’ pipeline of Adoptive Cell Therapies and TCR Bispecifics, as well as its collaborations with global leaders in the pharmaceutical industry. Immatics is committed to delivering the power of T cells and to unlocking new avenues for patients in its fight against cancer.

Pioneering therapies: Immatics’ pipeline consists of two lead product classes, engineered Adoptive Cell Therapies (ACTengine) and antibody-like TCR Bispecifics (TCER). Each therapeutic modality has distinct attributes to produce the desired therapeutic effect for patients at different disease stages and with different types of tumors focusing on particularly hard-to-treat solid cancers. With this approach, Immatics believes the company is well positioned to expand the potential therapeutic value for patients across a broad range of tumor types and stages. In addition, Immatics is developing strategies designed to advance commercial viability, safety and clinical efficacy via process optimization for ACT programs and implementing next-generation ACT approaches including allogeneic cell therapies (ACTallo) and a novel ultra-personalized approach to immunotherapy. Immatics is developing the following product candidates: ACTengine IMA201, IMA202, IMA203 programs are in Phase 1 clinical trials and IMA204 is in preclinical development. In addition, Immatics is developing one preclinical stage ACTallo product candidate (IMA301). ACTolog, currently in a Phase 1 clinical trial, is Immatics’ clinical pilot trial (IMA101) for multi-target ACT. ACTolog (IMA101) is a clinical pilot trial (not intended to be developed as a product candidate) delivering a proof-of-principle for Immatics’ next-generation multi-TCR-T approach. Within its TCER modality, Immatics is advancing two preclinical TCR Bispecifics candidates towards the IND stage of development and first-in-human clinical trials, IMA401 and IMA402.

Competitive advantage: Immatics aims to cover all required areas key to developing effective TCR-based cancer immunotherapies in one company. A unique strength is Immatics’ two proprietary technology discovery platforms enabling identification of true targets and development of right TCRs. Immatics believes that its systematic application of the XPRESIDENT platform over more than a decade has created the largest peptide-HLA (pHLA) target database known in the industry and enables identification of otherwise inaccessible and intracellular drug targets with very high sensitivity. From this large pool of targets, Immatics has recently focused on a prioritized short-list of over 200 cancer targets and has developed an extensive intellectual property portfolio to protect its discoveries. The proprietary XCEPTOR technology platform is designed to facilitate the fast and efficient discovery, engineering and validation of TCRs with high affinity and high specificity and benefits from a unique interplay with the XPRESIDENT target database. Immatics believes that its technology platforms, therapeutic modalities and scientific knowledge provide it with a significant competitive advantage.

Intellectual property portfolio: Immatics intends to continue building on its extensive intellectual property portfolio in the field of cancer targets, TCRs and technologies. Immatics’ portfolio currently includes over 3,000



 

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worldwide active patent applications and more than 1,550 secured patents, of which over 230 are granted in the United States. Immatics owns patent applications directed to its IMA202 (MAGEA1) product candidate and patents and applications directed to its IMA201 (MAGE4/8), IMA203 (PRAME), IMA204 (COL6A3 exon 6), IMA301 (cancer testis antigen), and IMA401 (cancer testis antigen) product candidates. The protection of Immatics’ assets is a key element of the company’s ability to not only strengthen its product pipeline, but also to successfully defend and expand its position as a leader in the field of TCR therapies.

Collaborations with global leaders: The differentiated nature of Immatics’ discovery programs has been validated by recent collaborations including Amgen, Genmab, Bristol Myers Squibb and GlaxoSmithKline and which involve a total of ten Immatics targets. Immatics will seek to capitalize on the respective collaborator’s drug development and regulatory expertise and commercial capabilities to bring Immatics’ collaboration product candidates to market. Immatics does not rely or depend on any of its four collaborations with global leaders, hence it does not consider any of these four collaborations as material for its proprietary pipeline. Immatics has established material collaborations and/or licenses with MD Anderson Cancer Center, UTHealth and Sanquin and considers these important for further development of its clinical pipeline.

Highly experienced global leadership team: Immatics has a highly experienced global leadership team that operates seamlessly between its locations in Germany and the United States. The management consists of an interdisciplinary team that includes medical and scientific experts, as well as accomplished business leaders, and collectively has multiple decades of experience in the pharmaceutical and biotechnology industries. In addition, the management team includes the creators and developers of Immatics’ core technologies, and benefits from their continued contributions. From its research and development origins in Tübingen, Germany, to its cell therapy R&D and manufacturing center in Houston, Texas, Immatics’ global team is committed to developing and advancing the company’s therapeutic pipeline and supporting its collaboration programs to address significant unmet medical needs in oncology.

The mailing address of Immatics’ principal executive office is Paul-Ehrlich-Straße 15, 72076 Tübingen, Federal Republic of Germany and its telephone number is +49 (7071) 5397-0. Immatics’ US executive office is located at 2130 W. Holcombe Blvd, Houston, Texas 77030 and its telephone number is 346-204-5400.

TopCo

Immatics B.V. (“TopCo”) is a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) that was incorporated on March 10, 2020. To date, TopCo has not conducted any material activities other than those incident to its formation and the pending Business Combination and only has nominal assets consisting of cash and cash equivalents. Accordingly, no financial statements of TopCo have been included in this proxy statement/prospectus. Prior to consummation of the Business Combination, TopCo’s corporate form will be converted to a Dutch public limited liability company (naamloze vennootschap) and its name will be changed to Immatics N.V. TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants under the Exchange Act and on NASDAQ under the symbols “IMTX” and “IMTXW,” respectively, upon the closing of the Business Combination.

The mailing address of TopCo’s principal executive office prior to the closing of the Business Combination is Paul-Ehrlich-Straße 15, 72076 Tübingen, Federal Republic of Germany. The mailing address of TopCo’s principal executive office after the closing of the Business Combination will be Paul-Ehrlich-Straße 15, 72076 Tübingen, Federal Republic of Germany.

ARYA

ARYA Sciences Acquisition Corp. (“ARYA”) is a blank check company incorporated as a Cayman Islands exempted company on June 29, 2018 and formed for the purpose of effecting a merger, share exchange, asset



 

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acquisition, share purchase, reorganization or similar business combination with one or more target businesses. ARYA consummated its initial public offering on October 10, 2018, generating net proceeds of approximately $144,750,000, which includes proceeds from the issuance of the Private Placement Warrants to ARYA Sponsor.

The Class A Shares, ARYA Public Units and ARYA Public Warrants are traded on NASDAQ under the ticker symbols “ARYA,” “ARYAU” and “ARYAW,” respectively. Upon the closing of the Business Combination, ARYA’s securities will be delisted from NASDAQ.

The mailing address of ARYA’s registered office is 51 Astor Place, 10th Floor, New York, New York 10003.

ARYA Merger Sub

Immatics Merger Sub 1 (“ARYA Merger Sub”) is a Cayman Islands exempted company and a direct wholly-owned subsidiary of TopCo that was incorporated on March 12, 2020 to facilitate the consummation of the Business Combination. In the Business Combination, ARYA Merger Sub will merge with and into ARYA, with ARYA continuing as the surviving entity.

The mailing address of ARYA Merger Sub’s registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands.

IB Merger Sub

Immatics Merger Sub 2 (“IB Merger Sub”) is a Cayman Islands exempted company and a direct wholly-owned subsidiary of TopCo that was incorporated on March 12, 2020 to facilitate the consummation of the Business Combination. In the Business Combination, ARYA will merge with and into IB Merger Sub, with IB Merger Sub continuing as the surviving entity.

The mailing address of IB Merger Sub’s registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands.

The Business Combination

General

On March 17, 2020, ARYA, Immatics Biotechnologies GmbH (“Immatics”), TopCo, ARYA Merger Sub and IB Merger Sub entered into a Business Combination Agreement (as it may be amended from time to time, the “Business Combination Agreement”), which provides for, among other things:

 

   

the First Merger, pursuant to which (a) each ARYA Ordinary Share will be automatically exchanged for one TopCo Share and (b) each outstanding ARYA Public Warrant will be converted into a TopCo Public Warrant;

 

   

the Exchange;

 

   

the Conversion; and

 

   

the Second Merger.

For more information about the Business Combination, please see the sections entitled The Business Combination and The Business Combination Agreement and Ancillary Documents. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.



 

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Organizational Structure

The following diagram illustrates the pre-Business Combination organizational structure of ARYA:

 

 

LOGO

The following diagram illustrates the pre-Business Combination organizational structure of Immatics:

 

 

LOGO



 

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The following diagram illustrates the structure of TopCo immediately following the Business Combination. This diagram assumes that (a) no ARYA shareholders exercise their redemption rights, (b) 10,415,000 TopCo Shares are issued to the PIPE Investors in the PIPE Financing, (c) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, and (d) the recipients of SAR Cash Proceeds required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will reinvest such proceeds as set forth in the Business Combination Agreement, and (e) the Converted Options are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method. If these assumptions are not correct, then the shareholdings set forth in the diagram below would change. For more information about factors that affect the assumptions above, please see the section entitled “The Business Combination — Ownership of TopCo.”

 

 

LOGO

Effect of the Business Combination on Existing ARYA Equity

Subject to the terms and conditions of the Business Combination Agreement, the Business Combination will result in, among other things, the following:

 

   

each Class A Share will be converted into one fully paid and non-assessable TopCo Share;

 

   

each Founder Share will be converted into one fully paid and non-assessable TopCo Share;

 

   

each ARYA Public Warrant will be converted into a TopCo Public Warrant, on the same terms and conditions as those applicable to the ARYA Public Warrants; and

 

   

ARYA Sciences Holdings (“ARYA Sponsor”) will forfeit 5,953,125 Private Placement Warrants for no consideration, which Private Placement Warrants constitute all of the ARYA warrants held by ARYA Sponsor as of the date hereof.

Consideration to Immatics Equityholders in the Business Combination

Subject to the terms and conditions of the Business Combination Agreement, the consideration to be received by the Immatics equityholders in connection with the Business Combination will be an aggregate number of TopCo Shares equal to (a) $350,000,000 (subject to certain downward adjustments set forth in the



 

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Business Combination Agreement), divided by (b) $10.00. Such calculation for the aggregate number of TopCo Shares to be received by Immatics equityholders is based upon assumptions (c), (d) and (e) described below in the section entitled “— Ownership of TopCo.”

Subject to the terms and conditions of the Business Combination Agreement and effective as of the Closing (as defined below), each Vested Immatics SAR that is outstanding immediately prior to the Closing will be converted into a right to receive a cash payment equal to the value, if any, of such Vested Immatics SAR less the applicable exercise price of such Vested Immatics SAR (“SAR Cash Proceeds”), and certain recipients of SAR Cash Proceeds will re-invest a portion of their SAR Cash Proceeds in exchange for the number of TopCo Shares equal to the respective recipient’s reinvested portion of SAR Cash Proceeds divided by $10.00 (collectively, the “SAR Re-investment”). In connection with the SAR Re-investment, TopCo will grant Matching Stock Options to certain Immatics SAR Holders.

Subject to the terms and conditions of the Business Combination Agreement and effective as of the Closing, each Unvested Immatics SAR that is outstanding immediately prior to the Closing will be cancelled in exchange for an option to purchase a certain number of TopCo Shares under the TopCo Equity Plan that will preserve the economic spread of the Unvested Immatics SARs and that will vest over three years following the vesting commencement date of July 31, 2020, in twelve equal quarterly installments.

Ownership of TopCo

It is anticipated that, upon completion of the Business Combination: (i) ARYA’s public shareholders (other than the PIPE Investors) will own approximately 22.7% of TopCo (Determined by multiplying the total amount of ARYA Ordinary Shares by the exchange ratio in the Business Combination of one TopCo Ordinary Share for each ARYA Ordinary Share); (ii) the PIPE Investors (including certain Immatics equityholders and the Sponsor PIPE Entity) will own approximately 16.4% of TopCo; (iii) the ARYA Initial Shareholders (including ARYA Sponsor but not including the Sponsor PIPE Entity) will own approximately 5.7% of TopCo; and (iv) the Immatics equityholders (excluding the Immatics equityholders that are participating in the PIPE Financing) will own approximately 55.2% of TopCo. These levels of ownership interests assume that (A) no Class A Shares are elected to be redeemed by ARYA’s public shareholders, (B) that 10,415,000 TopCo Shares are issued to the PIPE Investors in connection with the PIPE Financing, (C) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, (D) the recipients of SAR Cash Proceeds required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will reinvest such proceeds as set forth in the Business Combination Agreement, and (E) the Converted Options are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method. If the actual facts are different than these assumptions (which they are likely to be), the relative ownership percentages in TopCo will be different.

In addition to the assumptions made in the preceding paragraph, the factors that will determine the ownership percentages upon consummation of the Business Combination include:

 

   

if the Participating Shareholders represent less than 100% of the issued and outstanding shares of Immatics prior to the Business Combination, it would reduce the aggregate ownership of the Immatics equityholders and increase the aggregate ownership of the other shareholder groups described above;

 

   

if there are any “change of control” payments made or required to be made by Immatics, it would reduce the aggregate ownership of the Immatics equityholders and increase the aggregate ownership of the other shareholder groups described above;



 

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if there are any redemptions by public shareholders of Class A Shares in connection with the Business Combination, it would reduce the aggregate ownership of the public shareholders and increase the aggregate ownership of the other shareholder groups described above;

 

   

if the recipients of SAR Cash Proceeds who are required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares do not re-invest such proceeds as set forth in the Business Combination Agreement, it would reduce the aggregate ownership of the Immatics equityholders and increase the aggregate ownership of the other shareholder groups commensurately; and

 

   

if the PIPE Investors do not fund the PIPE Financing in full, it would reduce the aggregate ownership of the PIPE Investors and increase the aggregate ownership of the other shareholder groups described above commensurately.

For further information related to the determination of the number of TopCo Shares to be issued to the Immatics equityholders upon completion of the Business Combination, please see the section entitled “— Consideration to Immatics Equityholders in the Business Combination”.

The ownership percentages with respect to TopCo following the Business Combination do not take into account the warrants to purchase TopCo Shares that will remain outstanding immediately following the Business Combination, but do include Founder Shares, which will be exchanged for TopCo Shares at the closing of the Business Combination on a one-for-one basis.

For a summary of the financial analysis ARYA conducted when determining the equity valuation of Immatics, please see “The Business Combination — Summary of ARYA Financial Analysis.”

Conditions to Closing of the Business Combination

The respective obligations of each party to the Business Combination Agreement to consummate the Business Combination, are subject to the satisfaction, or written waiver by the party for whose benefit such condition exists, at or prior to the Closing of the following conditions:

 

   

there must not be in effect any order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the Business Combination;

 

   

the registration statement — of which this proxy statement/prospectus forms a part — must have become effective in accordance with the provisions of the Securities Act, no stop order has been issued by the SEC and remains in effect with respect to the registration statement of which this proxy statement/prospectus forms a part, and no proceeding seeking such a stop order has been threatened or initiated by the SEC and remains pending;

 

   

the approval, at the General Meeting, of the Business Combination Proposal by a special resolution in accordance with ARYA’s governing documents;

 

   

the approval of the Immatics shareholders of the transfer of shares of Immatics as required in order to implement the Exchange (as described more fully below in the section entitled “The Business Combination Agreement and Ancillary Documents — Covenants of the Parties — Covenants of Immatics, TopCo, ARYA Merger Sub and IB Merger Sub”);

 

   

TopCo has at least $5,000,001 of net tangible assets remaining;

 

   

the Aggregate TopCo Transaction Proceeds Condition is met; and

 

   

the Aggregate PIPE Proceeds must be equal to or greater than $100,000,000.



 

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The obligations of the parties to the Business Combination Agreement to consummate the Business Combination are subject to additional conditions, as described more fully below in the section entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination.

Ancillary Documents

Investor Rights Agreement

At the closing of the Business Combination, TopCo will enter into an Investor Rights Agreement, substantially in the form attached hereto as Annex E, providing for, among other things, subject to the terms thereof, customary registration rights, including demand and piggy-back rights subject to cut-back provisions, and information rights in favor of the ARYA Initial Shareholders and certain investors. TopCo has agreed to use its reasonable best efforts to file a shelf registration statement to register the TopCo Shares covered by the Investor Rights Agreement at any time that TopCo is eligible to do so and in no event later than the date that the Lock-Up Period (as defined below) expires. Pursuant to the Investor Rights Agreement, each holder party to the agreement will agree not to sell, transfer, pledge or otherwise dispose of the TopCo Shares it receives in connection with the Business Combination for 180 days from the closing of the Business Combination (the “Lock-Up Period”), subject to certain limited exceptions.

The Investor Rights Agreement also provides that until the fifth anniversary of the consummation of the Business Combination, (i) the ARYA Initial Shareholders will have the right to nominate two directors to serve on the TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board, as a Class I Director and Class III Director, respectively, and (ii) dievini Hopp BioTech holding GmbH & Co. KG (“dievini”) will have the right to nominate two directors to serve on the TopCo Supervisory Board, or after the First Anniversary of Closing, TopCo Board, as a Class I Director and Class III Director, respectively. Should the ARYA Initial Shareholders or dievini own less than                TopCo Shares but more than                TopCo Shares during such five-year period, the ARYA Initial Shareholders, collectively, or dievini (as applicable) shall have the right to appoint only one Class I Director. If any time during such five-year period the Initial ARYA Shareholders or dievini (as applicable) own (or in the case of the Initial ARYA Shareholders, collectively own) less than                 TopCo Shares, such nomination rights shall expire.

Subscription Agreements

In connection with the execution of the Business Combination Agreement, ARYA and TopCo entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to subscribe for and purchase, and TopCo agreed to issue and sell to such PIPE Investors, an aggregate of 10,415,000 TopCo Shares at $10.00 per share for gross proceeds of $104,150,000 on the Closing Date, $25,000,000 of which will be funded by an affiliate of ARYA Sponsor (the “Sponsor PIPE Entity”). The TopCo Shares to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. TopCo has agreed to register the resale of the TopCo Shares issued in connection with the PIPE Financing pursuant to a registration statement that must be filed within 45 days after the consummation of the Business Combination. The Subscription Agreements also contain other customary representations, warranties, covenants and agreements of the parties thereto.

The closings under the Subscription Agreements will occur substantially concurrently with the closing of the Business Combination and are conditioned on such closing and on other customary closing conditions. The Subscription Agreements will be terminated, and be of no further force and effect, upon the earlier to occur of (i) the termination of the Business Combination Agreement in accordance with its terms, (ii) the mutual written agreement of the parties thereto, (iii) notification to the PIPE Investors that the Business Combination has been abandoned and (iv) if any of the conditions to the closing are not satisfied on or prior to the closing of the Business Combination.



 

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Sponsor Letter Agreement

In connection with their entry into the Business Combination Agreement, ARYA and TopCo entered into a letter agreement, attached hereto as Annex F, with the ARYA Initial Shareholders (as defined below) pursuant to which (i) each ARYA Initial Shareholder agreed to vote to adopt the Business Combination Agreement and approve the Business Combination, the First Merger, the Second Merger and the Plans of Merger, (ii) ARYA Sponsor agreed to forfeit the Private Placement Warrants issued to it at the time of the ARYA IPO and (iii) each ARYA Initial Shareholder agreed to waive any adjustment to the conversion rate at which their Class B ordinary shares (the “Founder Shares”) would convert into Class A Shares as a result of the PIPE Financing as provided for in the ARYA amended and restated memorandum and articles of association or any similar anti-dilution or similar protection.

ARYA Board’s Reasons for Approval of the Business Combination

ARYA was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The ARYA Board sought to do this by utilizing the networks and industry experience of both ARYA Sponsor and the ARYA Board to identify, acquire and operate one or more businesses. The members of the ARYA Board have extensive transactional experience, particularly in the healthcare and life sciences industries. The ARYA Board also includes medical doctors with experience in both the detection and treatment of cancer.

In particular, the ARYA Board considered the following positive factors, although not weighted or in any order of significance, in deciding to approve the Business Combination Proposal:

 

   

Advancement of a proprietary pipeline of product candidates through clinical development;

 

   

Development of cell therapies and biologics providing two distinct mechanisms of actions suitable for different cancer stages;

 

   

Manufacturing processes designed to efficiently generate product candidates;

 

   

Competitive technology platforms;

 

   

Leading intellectual property portfolio in the field of cancer targets;

 

   

Strategic alliances with collaborators;

 

   

Novel ultra-personalized approach to immunotherapy;

 

   

Experienced management team;

 

   

Strong commitment of top tier US healthcare investors and existing Immatics shareholders; and

 

   

Financial analysis conducted by ARYA’s management team.

The ARYA Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

the risk that the potential benefits of the Business Combination may not be fully achieved;

 

   

the risks and costs to ARYA if the Business Combination is not completed;

 

   

the fact that the Business Combination Agreement includes an exclusivity provision that prohibits ARYA from soliciting other business combination proposals;

 

   

the risk that ARYA’s shareholders may fail to provide the respective votes necessary to effect the Business Combination;

 

   

the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within ARYA’s control;



 

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the nomination rights of certain investors;

 

   

the limited review undertaken by the ARYA Board;

 

   

potential litigation challenging the Business Combination;

 

   

the fees and expenses associated with completing the Business Combination; and

 

   

various other risks associated with the Business Combination, the business of ARYA and the business of Immatics described under the section entitled “Risk Factors.”

In addition to considering the factors described above, the ARYA Board also considered that certain of the officers and directors of ARYA may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of ARYA’s shareholders (see “— Interests of Certain Persons in the Business Combination” below). ARYA’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the ARYA Board, the Business Combination Agreement and the transactions contemplated therein, including the Business Combination.

The ARYA Board concluded that the potential benefits that it expected ARYA and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the ARYA Board determined that the Business Combination Agreement, the Business Combination and the Plans of Merger, were advisable, fair to, and in the best interests of, ARYA and its shareholders.

For more information about the ARYA Board’s decision-making process concerning the Business Combination, please see the section entitled “The Business Combination — The ARYA Board’s Reasons for the Business Combination.

The General Meeting of ARYA Shareholders

Date, Time and Place of General Meeting

The General Meeting of ARYA shareholders will be held on                , 2020, at 9:00 a.m., New York City time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022.

We intend to hold the General Meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (COVID-19) situation. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website                 , and we encourage you to check this website prior to the meeting if you plan to attend.

Proposals

At the General Meeting, ARYA shareholders will be asked to consider and vote on:

 

  1.

Business Combination Proposal — To adopt the Business Combination Agreement and approve the Business Combination the First Merger, the Second Merger and the Plans of Merger (Proposal No. 1); and

 

  2.

Adjournment Proposal — To consider and vote upon a proposal to adjourn the General Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes



 

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  for, or otherwise in connection with, the approval of the Business Combination Proposal (Proposal No. 2). The Adjournment Proposal will only be presented to ARYA shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, or in the event that ARYA shareholders redeem an amount of Class A Shares such that the Aggregate TopCo Transaction Proceeds Condition would not be satisfied.

Please see the sections entitled “Proposal No. 1 — The Business Combination Proposal” and “Proposal No. 2 — The Adjournment Proposal.”

Voting Power; Record Date

For ARYA shareholders holding their shares in “street name,” only holders of record at the close of business on May 29, 2020, the record date for the General Meeting, will be entitled to vote at the General Meeting. Each ARYA shareholder that holds its shares in “street name” is entitled to one vote for each ARYA Ordinary Share that such shareholder owned as of the close of business on the record date. If an ARYA shareholder’s shares are held in “street name” or are in a margin or similar account, such shareholder should contact its broker, bank or other nominee to ensure that votes related to the shares beneficially owned by such shareholder are properly counted. On the record date, there were 17,968,750 ARYA Ordinary Shares outstanding, of which 14,375,000 are public shares and 3,593,750 are Founder Shares held by the ARYA Initial Shareholders. For the avoidance of doubt, the record date does not apply to ARYA shareholders that hold their shares in registered form and are registered as shareholders in ARYA’s register of members. ARYA shareholders that hold their shares in registered form are entitled to one vote on each proposal presented at the General Meeting for each ARYA Ordinary Share held on the date of the General Meeting.

Vote of the ARYA Initial Shareholders and ARYA’s Other Directors and Officers

Prior to the ARYA IPO, ARYA entered into agreements with the ARYA Initial Shareholders and the other current directors and officers of ARYA, pursuant to which each agreed to vote any ARYA Ordinary Shares owned by them in favor of an initial business combination. These agreements apply to the ARYA Initial Shareholders, including ARYA Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to ARYA shareholders in this proxy statement/prospectus. As of the record date for ARYA shareholders that hold their shares in “street name,” the ARYA Initial Shareholders and the other current directors and officers own 3,593,750 Founder Shares, representing 20% of the ARYA Ordinary Shares then outstanding and entitled to vote at the General Meeting.

The ARYA Initial Shareholders and the other current directors and officers of ARYA have waived any redemption rights, including with respect to Class A Shares purchased in the ARYA IPO or in the aftermarket, in connection with the Business Combination. The Founder Shares held by the ARYA Initial Shareholders have no redemption rights upon the liquidation of ARYA and will be worthless if no business combination is effected by ARYA by October 10, 2020. However, the ARYA Initial Shareholders and the other current directors and officers of ARYA are entitled to redemption rights upon the liquidation of ARYA with respect to any public shares they may own.

Quorum and Required Vote for Proposals at the General Meeting

The approval of the Business Combination Proposal requires the affirmative vote of holders of at least two-thirds of ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Accordingly, an ARYA shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of ARYA Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business



 

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Combination Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the Business Combination Proposal. The ARYA Initial Shareholders have agreed to vote their Founder Shares and any public shares purchased by them during or after the ARYA IPO in favor of the Business Combination Proposal.

The approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the ARYA Ordinary Shares that are entitled to vote and are voted at the General Meeting. Accordingly, an ARYA shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of ARYA Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the Adjournment Proposal.

One or more shareholders who together hold 50% of the issued and outstanding ARYA Ordinary Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The ARYA Initial Shareholders, who currently own 20% of the issued and outstanding ARYA Ordinary Shares, will count towards this quorum. In the absence of a quorum, the chairman of the General Meeting has power to adjourn the General Meeting. As of the record date for the General Meeting for ARYA shareholders that hold their shares in “street name,” 8,984,375 ARYA Ordinary Shares would be required to achieve a quorum.

The closing of the Business Combination is conditioned upon the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal does not receive the requisite vote for approval, ARYA will not consummate the Business Combination. If ARYA does not consummate the Business Combination and fails to complete an initial business combination by October 10, 2020, ARYA will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the public shareholders.

Recommendation to ARYA Shareholders

The ARYA Board believes that each of the Business Combination Proposal and the Adjournment Proposal to be presented at the General Meeting is in the best interests of ARYA and its shareholders and recommends that its shareholders vote “FOR” each of the proposals.

Interests of Certain Persons in the Business Combination

In considering the recommendation of the ARYA Board to vote in favor of the Business Combination, ARYA shareholders should be aware that aside from their interests as shareholders, the ARYA Initial Shareholders and ARYA’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other ARYA shareholders generally. The ARYA Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to ARYA shareholders that they approve the Business Combination Proposal. ARYA shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal.



 

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These interests include:

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed not to redeem any ARYA Ordinary Shares held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that ARYA Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $35,037,500, but, given the transfer restrictions on such shares, ARYA believes such shares have less value;

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ARYA fails to complete an initial business combination by October 10, 2020;

 

   

the fact that the Investor Rights Agreement will be entered into by the ARYA Initial Shareholders;

 

   

the fact that ARYA Sponsor paid an aggregate of $5,953,125 for its 5,953,125 Private Placement Warrants and that such Private Placement Warrants will expire worthless if a business combination is not consummated by October 10, 2020;

 

   

the fact that, at the option of ARYA Sponsor, any amounts outstanding under certain working capital loans made by ARYA Sponsor or any of its affiliates to ARYA in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares which will be identical to the Private Placement Warrants;

 

   

the fact that, in connection with the PIPE Financing, the Sponsor PIPE Entity will receive 2,500,000 TopCo Shares;

 

   

the right of the ARYA Initial Shareholders to receive TopCo Shares, subject to certain lock-up periods;

 

   

the anticipated designation by the ARYA Initial Shareholders of Adam Stone and Michael G. Atieh as directors of TopCo following the Business Combination;

 

   

the continued indemnification of ARYA’s existing directors and officers and the continuation of ARYA’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until ARYA (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by October 10, 2020;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors will lose their entire investment in ARYA and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by October 10, 2020; and

 

   

the fact that if the Trust Account is liquidated, including in the event ARYA is unable to complete an initial business combination within the required time period, ARYA Sponsor has agreed to indemnify ARYA to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ARYA has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ARYA, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.



 

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Redemption Rights

Pursuant to ARYA’s amended and restated memorandum and articles of association, holders of ARYA public shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with ARYA’s amended and restated memorandum and articles of association. As of                , 2020, this would have amounted to approximately $                per share. If a holder of ARYA public shares exercises its redemption rights, then such holder will be exchanging its Class A Shares for cash and will not own shares of TopCo following the closing of the Business Combination. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than fifteen percent (15%) of the Class A Shares included in the ARYA Public Units sold in the ARYA IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash.

ARYA has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by ARYA public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $                as of                , 2020. The Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) and the Aggregate PIPE Proceeds (net of any unpaid ARYA Expenses as defined in the Business Combination Agreement) being at least $150,000,000. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by ARYA’s public shareholders, the Aggregate TopCo Transaction Proceeds Condition is not met or is not waived, then each of ARYA and Immatics may elect not to consummate the Business Combination. In addition, in no event will ARYA redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the ARYA amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement. ARYA shareholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “General Meeting of ARYA Shareholders — Redemption Rights” in order to properly redeem their public shares.

Holders of ARYA Public Warrants will not have redemption rights with respect to such warrants.

Certain Information Relating to TopCo

Listing of TopCo Shares and TopCo Public Warrants on NASDAQ

TopCo Shares and TopCo Public Warrants currently are not traded on a stock exchange. TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants on NASDAQ under the symbols “IMTX” and “IMTXW,” respectively, upon the closing of the Business Combination. We cannot assure you that the TopCo Shares or TopCo Public Warrants will be approved for listing on NASDAQ.

Delisting of ARYA Ordinary Shares and Deregistration of ARYA

ARYA and Immatics anticipate that, following consummation of the Business Combination, the Class A Shares, ARYA Public Units and ARYA Public Warrants will be delisted from NASDAQ, and ARYA will be deregistered under the Exchange Act.



 

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Emerging Growth Company; Foreign Private Issuer

TopCo is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). TopCo will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which TopCo has total annual gross revenue of at least $1.07 billion or (c) in which TopCo is deemed to be a large accelerated filer, which means the market value of TopCo Shares held by non-affiliates exceeds $700 million as of the last business day of TopCo’s prior second fiscal quarter, and (ii) the date on which TopCo issued more than $1.0 billion in non-convertible debt during the prior three-year period. TopCo intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that TopCo’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation. The JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards.

As a “foreign private issuer,” TopCo will be subject to different U.S. securities laws than domestic U.S. issuers. The rules governing the information that TopCo must disclose differ from those governing U.S. corporations pursuant to the Exchange Act. TopCo will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. In addition, as a “foreign private issuer,” TopCo’s officers and directors and holders of more than 10% of the issued and outstanding TopCo Shares, will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability.

Comparison of Shareholder Rights

Until consummation of the First Merger, Cayman Islands law and the ARYA amended and restated memorandum and articles of association will continue to govern the rights of ARYA shareholders. After consummation of the First Merger, Dutch law and the TopCo Articles of Association will govern the rights of TopCo shareholders.

There are certain differences in the rights of ARYA shareholders prior to the Business Combination and the rights of TopCo shareholders after the Business Combination. Please see the section entitled “Comparison of Shareholder Rights.”

Material Tax Consequences

Subject to the limitations and qualifications described in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders,” the Business Combination is generally intended to be tax-deferred to U.S. Holders of Class A Shares and ARYA Public Warrants for U.S. federal income tax purposes, except to the extent that the U.S. Holders of Class A Shares receive cash pursuant to the exercise of redemption rights.

Holders of Class A Shares and ARYA Public Warrants should read carefully the information included under the section entitled “Material Tax Considerations” for a detailed discussion of material U.S. federal and Cayman Islands tax consequences of the Business Combination, including the receipt of cash pursuant to the exercise of redemption rights, and the material U.S. federal, Dutch and German tax consequences of the ownership and disposition of TopCo Shares and TopCo Public Warrants after the Business Combination. Holders of Class A



 

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Shares and ARYA Public Warrants are urged to consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Business Combination, and prospective holders of TopCo Shares and TopCo Public Warrants are urged to consult their tax advisors to determine the tax consequences (including the application and effect of any state, local or other income and other tax laws) of any acquisition, holding, redemption and disposal of TopCo Shares or acquisition, holding, exercise or disposal of TopCo Public Warrants.

Accounting Treatment of the Business Combination

The Business Combination is made up of the series of transactions within the Business Combination Agreement as described elsewhere within this proxy statement/prospectus. For accounting and financial reporting purposes, the Exchange will be accounted for as a recapitalization under IFRS, while the other transactions will be accounted for based on International Accounting Standards Board (“IASB”) International Financial Reporting Standard (“IFRS”) 2, Share-based Payment (“IFRS 2”).

Appraisal Rights

The Cayman Islands Companies Law provides that a shareholder of a Cayman company shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation (the “Dissenter Rights”). However, such rights are not available in respect of the shares of any class for which an open market exists on a recognized stock exchange where, upon the merger or the consolidation, the shareholder receives, amongst other things, either:

(a) shares of a surviving or consolidated company, or depository receipts in respect thereof; or

(b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders.

With respect to the First Merger, (i) NASDAQ is a recognized stock exchange and is a national securities exchange, (ii) ARYA shareholders will receive shares of the surviving company and (iii) immediately following receipt of shares of the surviving company, ARYA shareholders will then exchange such shares for TopCo Shares that will be listed on NASDAQ. Accordingly, Dissenter Rights will not be available in respect of the First Merger. The absence of Dissenter Rights does not impede a shareholder’s ability to exercise such shareholder’s redemption rights as outlined in the ARYA amended and restated memorandum and articles of association.

Appraisal rights are not available to holders of Immatics Shares in connection with the Business Combination.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via e-mail or other electronic correspondence. ARYA has engaged Morrow to assist in the solicitation of proxies.

If an ARYA shareholder grants a proxy, such shareholder may still vote its shares in person if it revokes its proxy before the General Meeting. An ARYA shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “General Meeting of ARYA Shareholders — Revoking Your Proxy.”



 

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Risk Factor Summary

In evaluating the Business Combination and the proposals to be considered and voted on at the General Meeting, you should carefully review and consider the risk factors set forth under “Risk Factors.” The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of TopCo, ARYA and Immatics to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of TopCo following consummation of the Business Combination.



 

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Summary Historical Financial Data of Immatics

The following tables set forth summary historical financial information and operating data for Immatics as of and for the three months ended March 31, 2020 and 2019 and as of and for the years ended December 31, 2019 and 2018. You should read the following summary historical financial information and operating data in conjunction with the sections entitled “Immatics Managements Discussion and Analysis of Financial Condition and Results of Operations,” Immatics’ unaudited interim condensed consolidated financial statements and related notes thereto and Immatics’ consolidated financial statements and related notes, all included elsewhere in this proxy statement/prospectus. The consolidated statement of operations data for the years ended December 31, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2019 and 2018 have been derived from Immatics’ audited consolidated financial statements appearing elsewhere in this proxy statement/prospectus. The consolidated statement of operations data for the three months ended March 31, 2020 and 2019 and the consolidated balance sheet data as of March 31, 2020 have been derived from Immatics’ unaudited consolidated financial statements appearing elsewhere in this proxy statement/prospectus and have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the unaudited data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial information in those statements. Immatics’ historical results may not be indicative of the results that may be achieved in the future.

Consolidated Statement of Operations Data:

 

     Three Months Ended March 31,     Year Ended December 31,  
Euros in thousands, except share and per share data            2020                         2019             2019     2018  

Revenue from collaboration agreements

   7,040     3,626     18,449     3,770  

Research and development expenses

     (12,246     (7,990     (40,091     (33,971

General and administrative expenses

     (6,188     (2,275     (11,756     (7,666

Other income

     113       3       385       3,458  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating result

     (11,281     (6,636     (33,013     (34,409

Financial income

     2,730       825       790       2,215  

Financial expenses

     (29     (70     (264     (161
  

 

 

   

 

 

   

 

 

   

 

 

 

Financial result

     2,701       755       526       2,054  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before taxes

     (8,580     (5,881     (32,487     (32,355

Taxes on income

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   (8,580   (5,881   (32,487   (32,355
  

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

        

Equityholders of the parent

     (8,306     (5,684     (31,571     (31,444

Non-controlling interest

     (274     (197     (916     (911
      

 

 

   

 

 

 

Net Loss

   (8,580   (5,881   (32,487   (32,355
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share — basic and diluted(1)

   (7.14   (4.89   (27.13   (27.02

Weighted average shares outstanding — basic and diluted

     1,163,625       1,163,625       1,163,625       1,163,625  

 

(1)

For more information on the calculation of basic and diluted net loss per share attributable to equityholders of the parent for the years ended December 31, 2019 and 2018, see Note 25 to Immatics’ consolidated financial statements included elsewhere in this proxy statement/prospectus.



 

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Consolidated Balance Sheet Data:

 

     As of March 31,
2020
     As of December 31,  
Euros in thousands    2019      2018  

Cash and cash equivalents

   72,202      103,353      39,367  

Total current assets

     109,737        124,000        55,288  

Total non-current assets

     12,032        10,277        6,030  

Total current liabilities

     77,263        69,296        26,838  

Total non-current liabilities

     94,537        105,816        43,651  

Total shareholders’ deficit

   (50,031    (40,835    (9,171

Consolidated Cash Flow Data:

 

     Three Months Ended March 31,     Year Ended December 31,  
Euros in thousands            2020                     2019                     2019                     2018          

Net cash (used in) provided by operating activities

   (28,286   (248   68,045     7,583  

Net cash used in investing activities

     (2,387     (333     (2,137     (413

Net cash (used in) provided by financing activities

     (611     (446     (1,862     23,648  

 



 

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Summary Historical Financial Data of ARYA

The following tables contain summary historical financial data for ARYA. Such data as of December 31, 2019 and 2018, for the year ended December 31, 2019 and for the period from June 29, 2018 (inception) through December 31, 2018 has been derived from the audited financial statements of ARYA included elsewhere in this proxy statement/prospectus. The summary historical financial data for ARYA as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 are derived from ARYA’s unaudited interim financial statements included in this proxy/statement prospectus.

The information below is only a summary and should be read in conjunction with the sections entitled “ARYA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in ARYA’s financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus.

 

     Three Months Ended
March 31,
    Year Ended
December 31, 2019
    Period from
June 29, 2018
(inception) to
December 31, 2018
 
     2020
(unaudited)
    2019
(unaudited)
 

Statement of Operations Data:

        

General and administrative costs

   $ 4,127,299     $ 153,570     $ 774,607     $ 111,684  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (4,127,299     (153,570     (774,607     (111,684

Investment income on Trust Account

     857,447       872,335       3,353,229       738,284  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (3,269,852   $ 718,765     $ 2,578,622     $ 626,600  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class A ordinary shares(1)

     14,375,000       14,375,000       14,375,000       14,375,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income per share, Class A ordinary shares

   $ 0.06     $ 0.06     $ 0.23     $ 0.05  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class B ordinary shares

     3,593,750       3,593,750       3,593,750       3,593,750  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share, Class B ordinary shares

   $ (1.15   $ (0.04   $ (0.22   $ (0.03
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Including 13,545,245, 13,686,244, 13,872,230 and 13,614,368 Class A ordinary shares subject to possible redemption as of March 31, 2020 and 2019 and December 31, 2019 and 2018, respectively.

 

     March 31, 2020
(unaudited)
    As of
December 31, 2019
(audited)
     December 31, 2018
(audited)
 

Condensed Balance Sheet Data (At Period End):

       

Working capital(1)

   $ (3,574,634   $ 552,665      $ 1,327,272  

Total assets

   $ 149,483,579     $ 148,776,423      $ 145,820,556  

Total liabilities

   $ 9,031,128     $ 5,054,120      $ 4,676,875  

Class A ordinary shares subject to possible redemption(2)

   $ 135,452,450     $ 138,722,300      $ 136,143,680  

Total shareholders’ equity

   $ 5,000,001     $ 5,000,003      $ 5,000,001  

 

(1)

Working capital calculated as current assets less current liabilities.



 

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(2)

13,545,245, 13,872,230 and 13,614,368 Class A ordinary shares subject to possible redemption at redemption value at March 31, 2020, December 31, 2019 and 2018, respectively.

 

     Three Months Ended
March 31,
    Year Ended
December 31, 2019
    Period from
June 29, 2018
(inception) to
December 31, 2018
 
     2020
(audited)
    2019
(unaudited)
    (audited)     (audited)  

Cash Flow Data:

        

Net cash used in operating activities

   $ (172,676   $ (12,243   $ (323,980   $ (238,298

Net cash used in investing activities

     —         —         —         (143,750,000

Net cash provided by financing activities

     —         —         —         145,186,604  


 

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COMPARATIVE PER SHARE DATA

The following table sets forth:

 

   

historical per share information of ARYA as of and for the three months ended March 31, 2020 and as of and for the year ended December 31, 2019;

 

   

historical per share information of Immatics as of and for the three months ended March 31, 2020 and as of and for the year ended December 31, 2019; and

 

   

unaudited pro forma per share information of the combined company for the three months ended March 31, 2020 and the year ended December 31, 2019 after giving effect to the Business Combination and PIPE Financing, assuming two redemption scenarios as follows:

 

   

Assuming No Redemptions: This presentation assumes that no holders of Class A Shares exercise their redemption rights upon consummation of the Business Combination.

 

   

Assuming Maximum Redemptions: This presentation assumes that holders of 8,927,543 redeemable Class A Shares exercise their redemption rights upon consummation of the Business Combination at a redemption price of approximately $10.34 (€9.44) per share.

The following tables assume that 10,415,000 TopCo Shares are issued in the PIPE Financing. If the actual facts are different than these assumptions, the below numbers will be different. These figures also do not take into account the number of TopCo Public Warrants to purchase TopCo Shares that will be outstanding immediately following the completion of the Business Combination.



 

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The historical information should be read in conjunction with “— Summary Historical Financial Data of Immatics,” “— Summary Historical Financial Data of ARYA,” “ARYAs Managements Discussion and Analysis of Financial Condition and Results of Operations” and “Immatics Managements Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus and the historical financial statements and related notes of each of ARYA and Immatics contained elsewhere in this proxy statement/prospectus. The unaudited pro forma combined share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined net income per share information below does not purport (i) to represent what the actual results of operations of TopCo would have been had the Business Combination been completed or (ii) to project TopCo’s results of operations that may be achieved after the Business Combination. The unaudited pro forma book value per share information below does not purport to represent what the book value of TopCo would have been had the Business Combination been completed nor the book value per share for any future period.

 

As of and for the three months ended March 31, 2020               
                 Pro Forma Combined  
     Immatics     ARYA     No
Redemptions
     Maximum
Redemptions
 

Book value per ordinary share(1)

   (43.00            2.38      1.21  

Book value per share, Class A Shares (basic and diluted)

            9.15 (4)                    

Book value per share, Class B Shares (basic and diluted)

            (0.91 )(5)                    

Net loss attributable to equityholders of parent per ordinary share

   (7.14 )(2)             (0.15    (0.18

Net income per share — Class A Shares

            0.05                     

Net loss per share — Class B Shares

            (1.04                   

Cash dividends per share

                                     

Cash dividends per share — Class A Shares

                                     

Cash dividends per share — Class B Shares

                                     

 

As of and for the year ended December 31, 2019               
                 Pro Forma Combined  
     Immatics     ARYA(3)     Assuming
No
Redemptions
     Assuming
Maximum
Redemptions
 

Book value per ordinary share(1)

   (35.09     —         —          —    

Book value per share — Class A Shares (basic and diluted)

     —       8.87 (4)      —          —    

Book value per share — Class B Shares (basic and diluted)

     —       0.14 (5)      —          —    

Net loss attributable to equityholders of the parent per ordinary share

   (27.13 )(2)          (0.53    (0.62

Net income per share — Class A Shares

     —       0.21       —          —    

Net loss per share — Class B Shares

     —       (0.19     —          —    

Cash dividends per share

     —         —         —          —    

Cash dividends per share — Class A Shares

     —         —         —          —    

Cash dividends per share — Class B Shares

     —         —         —          —    

 

(1)

Book value per share represents total shareholder’s (deficit) equity divided by total shares outstanding.

(2)

Prior to the Exchange, 1,163,625 Immatics GmbH shares were outstanding. After the exchange, Immatics Participating Shareholders and Other Founder will hold 33,093,838 and 697,431 shares, respectively, in Immatics B.V., resulting in a reduction of net loss



 

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  per share to €(0.25) and to €(0.93) on a pro forma basis for the three months ended March 31, 2020 and for the year ended December 31, 2019, respectively.
(3)

ARYA historically prepared its financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) with the U.S. dollar as its reporting currency. Per share amounts reported for ARYA reflect its historical financial results reported under U.S. GAAP and are reported in Euro. The historical financial statements of ARYA are presented in USD. The historical financial information was translated from U.S. dollars to Euros using the historical exchange rates as described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement/prospectus.

(4)

Book value per share — Class A Shares represents marketable securities held in Trust Account minus deferred underwriting commissions divided by total Class A Shares outstanding.

(5)

Book value per share — Class B Shares represents net assets except for marketable securities held in Trust Account and deferred underwriting commissions divided by total Class B Shares outstanding.



 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein and the matters addressed in the section entitled “General Information, in evaluating the Business Combination and the proposals to be voted on at the General Meeting. Certain of the following risk factors apply to the business and operations of Immatics and will also apply to the business and operations of TopCo following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of TopCo following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by TopCo, ARYA and Immatics which later may prove to be incorrect or incomplete. TopCo, ARYA and Immatics may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair their business or financial condition.

Risks Related to Immatics’ Financial Position and Need for Additional Capital

Immatics has a history of operating losses; Immatics expects to continue to incur losses and Immatics may never be profitable.

Immatics is a clinical-stage biopharmaceutical company active in the development and discovery of potential T cell redirecting immunotherapies for the treatment of cancer. Immatics does not have products approved for commercial sale and has not generated revenue from operations. Immatics has incurred net losses in each year since its inception in 2000, including consolidated net losses of €32.5 million and €32.4 million for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, Immatics had accumulated consolidated losses of €233.2 million. Immatics does not expect to generate any meaningful product sales or royalty revenues for the foreseeable future. Immatics expects to incur significant additional operating losses in the future as it expands its development and clinical trial activities in support of demonstrating the effectiveness of its products.

Immatics’ ability to achieve long-term profitability is dependent upon obtaining regulatory approvals for its products and successfully commercializing its products alone or with third parties. However, its operations may not be profitable even if any of its products under development are successfully developed and produced and thereafter commercialized.

Immatics will need additional financing to fund its operations and complete the development and commercialization of its various product candidates, and if Immatics is unable to obtain such financing, it may be unable to complete the development and commercialization of its product candidates. Raising additional capital may cause dilution to Immatics’ existing shareholders, restrict its operations or require it to relinquish rights to its technologies or product candidates.

Immatics’ operations have consumed substantial amounts of cash since inception. Immatics’ research and development and its operating costs have also been substantial and are expected to increase. While Immatics has been successful in the past in obtaining financing, it expects to continue to spend substantial amounts to continue the clinical development of its product candidates. As of December 31, 2019, Immatics had $133 million in cash and cash equivalents.

Accordingly, Immatics believes that its existing cash and cash equivalents will be sufficient to fund its operations until the third quarter of 2021 (excluding proceeds from the proposed transaction). With this level of funding Immatics plans to continue development of its clinical stage programs IMA201, IMA202, IMA203, and IMA101, the development of its preclinical stage programs IMA204, IMA401 and IMA402, and to perform further

 

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technology advancement and research activities that may lead to new product candidates. For details, please see the section entitled “Business of Immatics and Certain Information about Immatics”. It is difficult to estimate how far into the development of the current product candidates Immatics will reach with the current level of funding. However, in order to complete the development of its current product candidates, and in order to effectuate its business plan, Immatics anticipates that it will have to spend more than the funds currently available to Immatics (including proceeds from the proposed transaction). Additional funding will be required for all programs, including clinical and preclinical programs, prior to market approval and commercialization. Furthermore, changing circumstances may cause Immatics to increase its spending significantly faster than it currently anticipates, and it may require additional capital for the further development and commercialization of its product candidates and may need to raise additional funds sooner if it chooses to expand more rapidly than it presently anticipates. Moreover, Immatics’ fixed expenses such as rent, minimum payments to its contract manufacturers, and other contractual commitments, including those for its research collaborations, are substantial and are expected to increase in the future.

Immatics will need to obtain additional financing to fund its future operations, including completing the development and commercialization of its product candidates. Immatics’ future funding requirements will depend on many factors, including, but not limited to:

 

   

progress, timing, scope and costs of its clinical trials, including the ability to timely initiate clinical sites, enroll subjects and manufacture Adoptive Cell Therapy (“ACT”) and bispecific T cell engaging receptor (“TCR Bispecific”) product candidates for its ongoing, planned and potential future clinical trials;

 

   

time and cost to conduct investigational new drug application (“IND”) or clinical trial application (“CTA”) enabling studies for its preclinical programs;

 

   

time and costs required to perform research and development to identify and characterize new product candidates from its research programs;

 

   

time and cost necessary to obtain regulatory authorizations and approvals that may be required by regulatory authorities to execute clinical trials or commercialize its products;

 

   

its ability to successfully commercialize its product candidates, if approved;

 

   

its ability to have clinical and commercial products successfully manufactured consistent with U.S. Food and Drug Administration (“FDA”), European Medicines Agency (“EMA”), and other authorities’ regulations;

 

   

amount of sales and other revenues from product candidates that Immatics may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party coverage and reimbursement for patients;

 

   

sales and marketing costs associated with commercializing its products, if approved, including the cost and timing of building its marketing and sales capabilities;

 

   

cost of building, staffing and validating its manufacturing processes, which may include capital expenditure;

 

   

terms and timing of its current and any potential future collaborations, licensing or other arrangements that Immatics has established or may establish;

 

   

cash requirements of any future acquisitions or the development of other product candidates;

 

   

costs of operating as a public company;

 

   

time and cost necessary to respond to technological, regulatory, political and market developments;

 

   

costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and

 

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costs associated with any potential business or product acquisitions, strategic collaborations, licensing agreements or other arrangements that Immatics may establish.

Unless and until Immatics can generate a sufficient amount of revenue, it may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances and marketing or distribution arrangements. Additional funds may not be available when it needs them on terms that are acceptable to Immatics, or at all. Immatics has no committed source of additional capital and if it is unable to raise additional capital in sufficient amounts or on acceptable terms to Immatics, Immatics may be required to delay or reduce the scope of or eliminate one or more of its research or development programs or its commercialization efforts. Immatics’ current license and collaboration agreements may also be terminated if it is unable to meet its obligations to perform contractually agreed research and development work under those agreements. As a result, Immatics may seek to access the public or private capital markets whenever conditions are favorable, even if it does not have an immediate need for additional capital at that time.

To the extent that Immatics raises additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on Immatics’ ability to incur additional debt, limitations on its ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact its ability to conduct its business. If Immatics raises additional funds through strategic collaborations and alliances and licensing arrangements with third parties, it may have to relinquish valuable rights to its technologies or product candidates, or grant licenses on terms unfavorable to Immatics.

Immatics has limited experience in operating its current business, which makes it difficult to evaluate its business plan and its prospects.

Immatics has only a limited operating history in its current line of business on which a decision to invest in its company can be based. The future of Immatics currently is dependent upon its ability to implement its business plan, as that business plan may be modified from time to time by its management and Supervisory Board. While Immatics believes that it has a reasonable business plan and research and development strategy, Immatics has only a limited operating history against which it can test its plans and assumptions, and investors therefore cannot evaluate the likelihood of its success based on previous experience.

Immatics faces the problems, expenses, difficulties, complications and delays normally associated with a pre-commercial biopharmaceutical company, many of which are beyond its control. Accordingly, Immatics’ prospects should be considered in light of the risks, expenses and difficulties frequently encountered in the establishment of a new business developing technologies in an industry that is characterized by a number of market entrants and intense competition. Because of its size and limited resources, Immatics may not possess the ability to successfully overcome many of the risks and uncertainties frequently encountered by pre-commercial companies involved in the rapidly evolving field of immunotherapy. If its research and development efforts are successful, it may also face the risks associated with the shift from development to commercialization of new products based on innovative technologies. There can be no assurance that Immatics will be successful in developing and commercialization of its product candidates.

Immatics is substantially dependent on the success of its product candidates and cannot guarantee that these product candidates will successfully complete development, receive regulatory approval, or be successfully commercialized.

Immatics currently has no products approved for commercial sale. It has invested a significant portion of its efforts and financial resources in the development of its current product candidates and expects that it will continue to invest heavily in its current product candidates, as well as in any future product candidates it may

 

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develop. Immatics’ business depends entirely on the successful development and commercialization of its product candidates, which may never occur. Its ability to generate revenues in the future is substantially dependent on its ability to develop, obtain regulatory approval for, and then successfully commercialize its product candidates. Immatics currently generates no revenue from the sale of any products, and it may never be able to develop or commercialize a marketable product.

Immatics’ product candidates will require additional clinical and non-clinical development, regulatory approval, commercial manufacturing arrangements, establishment of a commercial organization, significant marketing efforts, and further investment before it generates any revenue from product sales. Immatics cannot assure you that it will meet its timelines for its current or future clinical trials, which may be delayed or not completed for a number of reasons.

Immatics is not permitted to market or promote any of its product candidates before it receives regulatory approval from the FDA or comparable regulatory authorities in other countries, and Immatics may never receive such regulatory approval for any of its product candidates or regulatory approval that will allow it to successfully commercialize its product candidates. If Immatics does not receive regulatory approval with the necessary conditions to allow successful commercialization, and then successfully commercialize its product candidates, Immatics will not be able to generate revenue from those product candidates in the United States or other countries in the foreseeable future, or at all. Any significant delays in obtaining approval for and commercializing its product candidates will have a material adverse impact on its business and financial condition.

Immatics has not previously submitted a biologics license application (“BLA”) to the FDA, or similar marketing application to comparable foreign authorities, for any product candidate, and Immatics cannot be certain that its current or any future product candidates will be successful in clinical trials or receive regulatory approval.

Immatics’ product candidates are susceptible to the risks of failure inherent at any stage of product development, including the appearance of unexpected adverse events or failure to achieve primary endpoints in clinical trials. Further, its product candidates may not receive regulatory approval even if they are successful in clinical trials.

Immatics will be unable to commercialize its products if its trials are not successful.

Its research and development programs are at an early stage. Immatics must demonstrate its products’ safety and effectiveness in humans through extensive clinical testing. Immatics may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of its products, including but not limited to the following:

 

   

after reviewing trial results, Immatics or its collaborators may abandon projects that it might previously have believed to be promising;

 

   

Immatics, its collaborators or regulators, may suspend or terminate clinical trials if the participating subjects or patients are being exposed to unacceptable health risks;

 

   

the effects Immatics’ potential products have may not be the desired effects or may include undesirable side effects or other characteristics that preclude regulatory approval or limit their commercial use if approved;

 

   

manufacturers may not meet the necessary standards for the production of the product candidates or may not be able to supply the product candidates in a sufficient quantity;

 

   

regulatory authorities may find that Immatics’ clinical trial design or conduct does not meet the applicable approval requirements; and

 

   

safety and efficacy results in various human clinical trials reported in scientific and medical literature may not be indicative of results Immatics obtains in its clinical trials.

 

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Clinical testing is very expensive, can take many years, and the outcome is uncertain. It could take several years before Immatics learns the results from any clinical trial using ACT or TCR Bispecifics. The data collected from Immatics’ clinical trials may not be sufficient to support approval by the FDA, EMA, or regulatory authorities in other countries of its ACT- or TCR Bispecifics-based product candidates for the treatment of tumors. The clinical trials for Immatics’ products under development may not be completed on schedule and the FDA, EMA or regulatory authorities in other countries may not ultimately approve any of its product candidates for commercial sale. If Immatics fails to adequately demonstrate the safety and effectiveness of any product candidate under development, it may not receive regulatory approval for those products, which would prevent it from generating revenues or achieving profitability.

Immatics’ Business and the Development, Regulatory Review and Approval of Its Product Candidates

The FDA regulatory pathways can be difficult to predict, and whether, for example, the FDA’s Accelerated Approval pathway is available or further unanticipated clinical trials are required will depend on the data obtained in Immatics’ ongoing clinical trials.

The regulatory approval pathway and the amount of time it takes Immatics to obtain regulatory approvals for its product candidates will depend on the data that are obtained in its ongoing clinical trials and any future clinical trials, including future registrational or pivotal clinical trials. Immatics may attempt to seek approval on a per indication basis for its product candidates on the basis of a single pivotal trial or on the basis of data from one or more uncontrolled trials. While the FDA requires in most cases two adequate and well-controlled pivotal clinical trials to demonstrate the efficacy of a product candidate, a single trial with strong confirmatory evidence may be sufficient in instances where the trial is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and if confirmation of the result in a second trial would be practically or ethically impossible. In rare cancer indications with very limited treatment options, a large and/or controlled trial is often not feasible and thus data from smaller and even uncontrolled trials may be sufficient for regulatory approval. Depending on the data Immatics obtains, the FDA or other regulatory authorities may require additional clinical trials to be carried out or further patients to be treated prior to the granting of any regulatory approval for marketing of its product candidates. It is difficult for Immatics to predict with such a novel technology exactly what will be required by the regulatory authorities in order to take its product candidates to market or the timeframes under which the relevant regulatory approvals can be obtained.

The FDA has various programs that are intended to facilitate and expedite development and review of new drugs to address unmet medical need in the treatment of serious or life-threatening conditions. These expedited programs help ensure that therapies for serious conditions are available as soon as it can be concluded that the therapies’ benefits justify their risks, taking into account the seriousness of the condition and the availability of alternative treatment. These programs include Breakthrough Therapy designation, Fast Track designation, Accelerated Approval, and Priority Review designation. Depending on the data that is obtained by Immatics in its current and future clinical trials for its wholly owned product candidates, Immatics may seek Breakthrough Therapy or Fast Track designation, Priority Review, or Accelerated Approval from the FDA for its product candidates and equivalent accelerated approval procedures in other countries. However, given the novel nature of its product candidates, it is difficult for Immatics to predict or guarantee whether the FDA or other regulatory authorities will approve such requests or what further clinical or other data may be required to support an application for such accelerated approval procedures. Even if Immatics obtains Breakthrough Therapy designation, the FDA may decide to rescind the designation if, for example, the designation is no longer supported by clinical data obtained after designation.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. For example, clinical trials may be required in pediatric populations before any marketing approval can be obtained, which can

 

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be time-consuming and costly. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA and foreign regulatory authorities also have substantial discretion in the drug and biologics approval processes. The number and types of preclinical programs and clinical trials that will be required for regulatory approval varies depending on the product candidate, the disease or condition that the product candidate is designed to address, and the regulations applicable to any particular product candidate. Approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, and there may be varying interpretations of data obtained from preclinical programs or clinical trials, either of which may cause delays or limitations in the approval or the decision not to approve an application. In addition, approval of Immatics’ product candidates could be delayed or refused for many reasons, including the following:

 

   

the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of Immatics’ or its collaborators’ clinical trials;

 

   

Immatics or its collaborators may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that Immatics’ product candidates are safe, pure, potent and have a favorable risk/benefit profile for any of their proposed indications;

 

   

the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

 

   

the FDA or comparable foreign regulatory authorities may disagree with Immatics’ interpretation of data from preclinical programs or clinical trials;

 

   

the data collected from clinical trials of product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

 

   

Immatics’ manufacturing processes or facilities or those of the third-party manufacturers it uses may not be adequate to support approval of its product candidates; and

 

   

the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering Immatics’ clinical data insufficient for approval.

It is possible that no product candidates will ever obtain the appropriate regulatory approvals necessary to commercialize one of Immatics’ ACT and TCR Bispecific therapies. Any delay in obtaining, or failure to obtain, required approvals would materially adversely affect Immatics’ ability to generate revenue from the particular product candidate, which would result in significant harm to its business.

Immatics is subject to extensive regulation, and the regulatory approval processes in the U.S., Europe and other countries or regions are costly, lengthy and time-consuming. Immatics may also experience significant delays in the regulatory approval of its product candidates.

Immatics’ potential products, cell processing and manufacturing activities, are subject to comprehensive regulation by the FDA in the United States and by comparable authorities in other countries. The process of obtaining FDA and other required regulatory approvals, including foreign approvals, is expensive and often takes many years and can vary substantially based upon the type, complexity and novelty of the products involved.

Immatics has not previously submitted a BLA to the FDA, or similar approval submissions to comparable foreign authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish that the product candidate meets the prescribed requirements of safety, purity and potency for each desired indication. The BLA must also include detailed information regarding the chemistry, manufacturing and

 

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controls for the product. International marketing authorization applications equivalent to a BLA must contain similar types of data and information. Immatics expects the novel nature of its product candidates to create additional challenges in obtaining regulatory approval. For example, the FDA has limited experience with commercial development of T cell directed therapies for cancer. Accordingly, the regulatory approval pathway for its product candidates may be uncertain, complex, expensive and lengthy, and approval may not be obtained. Requirements and requests for additional information can occur for any clinical trial of any of Immatics’ product candidates. Such request can result in delays of the start of Immatics’ clinical trials or in clinical holds being imposed on ongoing trials, and there is no guarantee that the FDA will not continue to require further or additional information ahead of permitting any trial to proceed, whether from Immatics’ collaborators or from Immatics.

If Immatics violates regulatory requirements at any stage, whether before or after marketing approval is obtained, Immatics may face a number of regulatory consequences, including refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-marketing requirements and commitments including the need for additional testing, imposition of distribution or other restrictions under a Risk Evaluation and Mitigation Strategy (“REMS”), product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, debarment from receiving government contracts, and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, or civil or criminal penalties, including fines and imprisonment, and adverse publicity, among other adverse consequences. Additionally, Immatics may not be able to obtain the labeling claims necessary or desirable for the promotion of its products.

Immatics or its collaborators could also encounter delays if physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of its product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles. Further, a clinical trial may be suspended or terminated by Immatics or a collaborator, Institutional Review Boards (IRBs) for the institutions in which such trials are being conducted or by responsible Ethics Committees (ECs), the Data Monitoring Committee for such trial, or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or Immatics’ clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If Immatics or its collaborators experience termination of, or delays in the completion of, any clinical trial of its product candidates, the commercial prospects for its product candidates will be harmed, and Immatics’ ability to generate product revenue will be delayed. In addition, any delays in completing its clinical trials will increase Immatics’ costs, slow its product development and approval process and jeopardize its ability to commence product sales and generate revenue.

Additionally, Immatics has limited experience in conducting clinical trials with adoptive cellular therapies and T cell engaging biologics and in conducting clinical trials through to regulatory approval. Because of this lack of experience, Immatics cannot be certain that planned clinical trials will begin or be completed on time, if at all. Large-scale trials would require significant additional financial and management resources, and reliance on third-party clinical investigators, contract research organizations (“CROs”), or consultants.

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of Immatics’ product candidates.

 

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Immatics is subject to manufacturing risks that could substantially increase its costs and limit supply of its products. The manufacture of Immatics’ product candidates is complex, and Immatics may encounter difficulties in production, particularly with respect to process development, quality control, upscaling or scaling-out of its manufacturing capabilities. If Immatics, or any of its third-party manufacturers encounter such difficulties, Immatics’ ability to provide supply of its product candidates for clinical trials or its products for patients, if approved, could be delayed or stopped, or it may be unable to maintain a commercially viable cost structure.

Immatics’ product candidates are cellular products or biologics and the process of manufacturing its products is complex, highly regulated and subject to multiple risks.

The manufacture of Immatics’ cellular product candidates involves complex processes, including, for example, for ACTengine genetically modified autologous T cell products (IMA201, IMA202, IMA203, and IMA204), harvesting and transporting blood cells from every patient for T cell isolation, engineering of the T cells to express a specific T cell receptor for a tumor target, ex vivo multiplying the T cells to obtain the desired cell numbers for the dose, and finally transporting of the T cell product back to the patient for infusing the modified T cells back into the same patient. As a result of the complexities, the cost to manufacture cellular products per dose is generally higher than traditional small molecule chemical compounds or biologics, and the manufacturing process is less reliable, more variable and is more difficult to reproduce. Immatics’ manufacturing process may be susceptible to product loss or failure due to logistical issues associated with the collection of patients’ blood cells, shipping such material to the manufacturing site, shipping the final product back to the patient, and infusing the patient with the product. Product loss or failure may also be caused by manufacturing issues associated with the variability in patient starting material especially from heavily treated cancer patients, interruptions in the manufacturing process, contamination, equipment failure, assay failures, improper installation or operation of equipment, vendor or operator error, inconsistency in cell growth, and variability in product characteristics. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. If for any reason Immatics loses a patient’s starting material, or any intermediate product at any point in the process, or if any product does not meet the preset specifications, the manufacturing process for that patient will need to be restarted, sometimes including re-collection of blood cells from the patient, and the resulting delay may adversely affect that patient’s outcome. It may even happen, that failed product manufacture may prevent a patient from getting a T cell product. If microbial, environmental or other contaminations are discovered in Immatics’ product candidates or in the manufacturing facilities in which its product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. If such contaminations or other product quality issues are not discovered and if as a result thereof patients are exposed to a health risk, Immatics may be held liable. Its insurance may not cover those cases, or the financial coverage may not be sufficient.

Because its ACTengine cellular product candidates are manufactured specifically for each individual patient, Immatics will be required to maintain a chain of identity with respect to the patient’s cellular material as it moves from the patient to the manufacturing facility, through the manufacturing process, and back to the patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in adverse patient outcomes, loss of product, or regulatory action including withdrawal of Immatics’ products from the market. Further, as product candidates are developed through preclinical to late stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause Immatics’ product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials or otherwise necessitate the conduct of additional studies, including bridging clinical trials, which can be costly and time-consuming.

Currently, Immatics’ cellular product candidates are manufactured using processes developed or modified by Immatics but based on current industry standards and are designed to deliver a clinical proof of concept (“PoC”). Immatics has selected an open process as the manufacturing process for early stage clinical trials through PoC. However, Immatics is currently developing a second-generation process that is closed, partially automated and viable for advanced clinical trials through product registration, and all ongoing and future company-sponsored

 

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clinical trials. Although Immatics believes that the 2nd generation process is commercially viable, there are risks associated with scaling to the level required for advanced clinical trials or commercialization, including, among others, cost overruns, potential problems with process upscaling, scale-out, process reproducibility, technology transfer, stability issues, lot consistency, and timely availability of raw materials. This includes potential risks associated with FDA not agreeing with all of the details of Immatics’ validation data or its potency assay for its Phase 1 or future Phase 2 clinical trials. Furthermore, some of Immatics’ contract manufacturing organizations (“CMOs”) may not be able to establish comparability of their products with the ACT products used in Immatics’ Phase 1 or future Phase 2 clinical trials or may not be fully validated prior to starting its pivotal or registration clinical trial. As a result of these challenges, Immatics may experience delays in its clinical development and/or commercialization plans. It may ultimately be unable to reduce the cost of goods for its product candidates to levels that will allow for an attractive return on investment if and when those product candidates are commercialized.

Immatics manufacturing capabilities for its allogenic cellular therapy product candidate IMA301 are still in the process of being developed. Immatics may not successfully establish a robust production process that fulfills the requirements of the FDA and other regulatory authorities. If Immatics fails to establish such a manufacturing process, it may not be able commence clinical trials in IMA301 or clinical trials may be delayed. Immatics also cannot guarantee that the production process it is currently developing for IMA301 is viable and can be effectively scaled up or transferred to an CMO for later phase clinical testing and commercialization. For example, there is insufficient experience in the field regarding vectors for transduction of the gd T cells used to manufacture IMA301. If it turns out that Immatics cannot generate a suitable and GMP-compliant vector, the IMA301 manufacturing process may be endangered. If Immatics fails to develop a process that can be used throughout the life cycle of the product candidate, commercialization of IMA301 may be delayed or may not occur.

Manufacturing of TCR Bispecifics, such as IMA401, IMA402 and potential future product candidates, is susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, issues with purity, variability in product characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, inacceptable purity, product defects, loss of production batches and other supply disruptions. In such cases, Immatics’ development program may experience major delays and it may have to produce a new batch of a given TCER. This will be costly and will delay Immatics’ TCER development program. In particular, production of a new GMP batch may be time-consuming, as it relies on the availability of facilities with GMP capabilities at Immatics’ CMO, and such facilities must be booked far in advance. Immatics may also experience failure of production of the master cell bank that is used to produce its TCER molecules. For example, missing clonality of the cell line or non-sterility of the cell bank may require production of a new master cell bank which would be associated with additional costs and delays.

Any failure to follow current Good Manufacturing Practice (“cGMP”) or other regulatory requirements or any delay, interruption or other issues that arise in the manufacture, fill and finish, packaging, or storage of Immatics’ product candidates as a result of a failure of its facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair Immatics’ ability to develop and commercialize its product candidates, including leading to significant delays in the availability of drug product for its clinical trials or the termination or hold on a clinical trial, or the delay or prevention of a filing or approval of marketing applications for its product candidates.

Immatics’ TCR Bispecific product candidates that have been produced and are stored for later use may degrade, become contaminated or suffer other quality defects, which may cause the affected product candidates to no longer be suitable for their intended use in clinical trials or other development activities. If the defective product candidates cannot be replaced in a timely fashion, Immatics may incur significant delays in its development programs that could adversely affect the value of such product candidates.

In September 2015, Immatics entered into a lease agreement with the UTH facility in Houston, Texas for clinical production of ACT products, including Immatics’ product candidates IMA101, IMA201, IMA202, and IMA203 for clinical trials, and it also intends to manufacture IMA204, IMA301 and potentially also future cellular therapy

 

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product candidates in this facility once INDs or CTAs have been approved for these product candidates, especially for early stage clinical trials, by the respective regulatory bodies. Immatics would expect that development and construction of its own manufacturing facility would provide it with enhanced control of material supply for both clinical trials and the commercial market, enable a more efficient implementation of process changes, and allow for better long-term margins. However, Immatics has no experience as a company in developing a large manufacturing facility, and Immatics may not be successful in finalizing the development of its own manufacturing facility or capability. Immatics may establish multiple manufacturing facilities as it expands its commercial footprint to multiple geographies, which may lead to regulatory delays or prove costly. Even if Immatics is successful, its manufacturing capabilities could be affected by cost-overruns due to idle capacity, unexpected delays, equipment failures, labor shortages, natural disasters, epidemics, power failures, and numerous other factors that could prevent it from realizing the intended benefits of its manufacturing strategy and have a material adverse effect on Immatics’ business. The manufacture of cell therapy products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of cell therapy products often encounter difficulties in production, particularly in scaling up initial production. These problems include difficulties with production costs and yields, quality control, including stability, patient to patient variability of the product candidate and quality assurance testing, shortages of qualified personnel, and compliance with strictly enforced federal, state, local and foreign regulations.

Any problems or delays Immatics or its CMOs experience in preparing for commercial scale manufacturing of a cell therapy or biologic product candidate or component may result in a delay in the FDA approval of the product candidate or may impair Immatics’ ability to manufacture commercial quantities or such quantities at an acceptable cost, which could result in the delay, prevention, or impairment of clinical development and commercialization of its product candidates and could adversely affect its business. Furthermore, if Immatics or its commercial manufacturers fail to deliver the required commercial quantities or supply of its product candidates on a timely basis and at reasonable costs, Immatics would likely be unable to meet demand for its products, and it would lose potential revenues.

In addition, the manufacturing process and facilities for any products that Immatics may develop is subject to FDA and/or foreign regulatory authority approval processes, and Immatics or its CMOs will need to meet all applicable regulatory authority requirements, including cGMP and current Good Tissue Practices (“cGTP”) requirements, on an ongoing basis, including requirements pertaining to quality control, quality assurance, and the maintenance of records and documentation. The FDA and other regulatory authorities enforce these requirements through facility inspections. Manufacturing facilities must be approved by the FDA pursuant to inspections that will be conducted after Immatics submits its marketing applications. Manufacturers are also subject to continuing FDA and other regulatory authority inspections following marketing approval. Further, Immatics, in cooperation with its CMOs, must supply all necessary chemistry, manufacturing, and control documentation in support of a BLA on a timely basis.

Immatics, or its CMOs’ manufacturing facilities, may be unable to comply with Immatics’ specifications, cGMP and cGTP requirements, and with other FDA, state, and foreign regulatory requirements. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of product candidates that may not be detectable in final product testing. If Immatics or its CMOs are unable to reliably produce products to specifications acceptable to the FDA or other regulatory authorities, or in accordance with the strict regulatory requirements, Immatics may not obtain or maintain the approvals it needs to commercialize such products. Even if Immatics obtains regulatory approval for any of its product candidates, there is no assurance that either Immatics or its CMOs will be able to manufacture the approved product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Deviations from manufacturing requirements may further require remedial measures that may be costly and/or time-consuming for Immatics or a third party to implement and may include the temporary or permanent suspension of a clinical trial

 

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or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon Immatics or third parties with whom it contracts could materially harm Immatics’ business.

Even to the extent Immatics uses and continues to use CMOs, it is ultimately responsible for the manufacture of its products and product candidates. A failure to comply with these requirements may result in regulatory enforcement actions against Immatics’ manufacturers or Immatics, including fines and civil and criminal penalties, which could result in imprisonment, suspension or restrictions of production, suspension, injunctions, delay or denial of product approval or supplements to approved products, clinical holds or termination of clinical trials, warning or untitled letters, regulatory authority communications warning the public about safety issues with the biologic, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the civil False Claims Act (“FCA”), corporate integrity agreements, consent decrees, or withdrawal of product approval.

Challenges Immatics may face could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of its product candidates, impair commercialization efforts, increase its cost of goods, cause a lack of patient participation in clinical trials and have an adverse effect on its business, financial condition, results of operations and growth prospects.

Immatics is engaged in preclinical development to identify, generate and characterize new product candidates for potential clinical development. Drug development is expensive, time-consuming and it is uncertain that such development programs will lead to new drug candidates that may continue to be tested in clinical trials and receive regulatory approval.

A significant portion of Immatics’ research activities focus on the identification, generation and characterization of new product candidates. These activities are expensive, time-consuming and costly, and may never lead to a product candidate that shows appropriate safety and efficacy data in preclinical studies to enter clinical development. This means that success from research and development is uncertain, early programs may not reach clinical development and Immatics may never produce revenues from its preclinical development activities. If the target criteria for a product candidate are not met, Immatics may also decide to prolong preclinical development to improve the profile of a product candidate. In addition, if new treatment options are approved for the same indications as Immatics’ preclinical product candidates, Immatics may discontinue such early development programs.

The targets addressed by IMA201, IMA202, IMA203, IMA301, IMA401, IMA402 belong to the class of cancer testis antigens that are well-established immunotherapy targets. Future targets for product development may not belong to well-known target proteins and generation of such product candidates may be challenging. For example, IMA204 is directed against a tumor stroma target. Immatics is not aware of a comparable product candidate currently in preclinical or clinical development. Immatics may find out during preclinical development that targets like the one addressed by IMA204 cannot be safely addressed by immunotherapy. Immatics cannot guarantee that it will be able to show safety and efficacy for product candidates addressing new target classes like the one addressed by IMA204, and Immatics may not be able to enter clinical testing with or to successfully market IMA204 or similar future product candidates.

Development of a product candidate intended for use in combination with an already approved product may present more or different challenges than development of a product candidate for use as a single agent.

Immatics is currently developing IMA201, IMA202, IMA203, IMA204, IMA101, IMA301, IMA401, and IMA402. Immatics and its collaborators are also studying or intending to study ACT product candidates and TCR Bispecifics product candidates along with other products, such as checkpoint inhibitor immunotherapies. The development of product candidates for use in combination with another product may present challenges. For example, the FDA may require Immatics to use more complex clinical trial designs, in order to evaluate the contribution of each product and product candidate to any observed effects. It is possible that the results of these

 

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trials could show that most or any positive results are attributable to the already approved product. Moreover, following product approval, the FDA may require that products used in conjunction with each other be cross-labeled. To the extent that Immatics does not have rights to already approved products, this may require Immatics to work with another company to satisfy such a requirement. Moreover, developments related to the already approved products may impact its clinical trials for the combination as well as its commercial prospects should Immatics receive marketing approval. Such developments may include changes to the approved product’s safety or efficacy profile, changes to the availability of the approved product, and changes to the standard of care.

If Immatics encounters difficulties enrolling patients in its clinical trials, its clinical development activities could be delayed or otherwise adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on Immatics’ ability to enroll a sufficient number of patients. Despite diligent planning of its clinical trials and analysis of their feasibility regarding patient recruitment, Immatics may experience difficulties, delays or inability in patient enrollment in its clinical trials for a variety of reasons, including:

 

   

the size and nature of the patient population;

 

   

the severity and incidence of the disease under investigation;

 

   

the general health condition of the patient population;

 

   

the patient eligibility criteria and study procedures defined in the protocol;

 

   

the size of the study population required for analysis of the trial’s primary endpoints;

 

   

the proximity of patients to trial sites;

 

   

the design of the trial and the complexity for patients and clinical sites;

 

   

the screening procedures and the rate of patients failing screening procedures;

 

   

the duration required for screening and manufacturing of the patients’ investigational products;

 

   

the risk that patients’ general health conditions do not allow the conduct of study/screening procedures (for example, tumor biopsy, or leukapheresis) or application of lymphodepletion regimen;

 

   

the ability to manufacture patient products appropriately (for example, at a sufficient high dose, or with sufficiently active T cells);

 

   

insufficient manufacturing capacities;

 

   

the ability to establish appropriate drug substance or drug product logistics/transportation;

 

   

the ability to obtain approval (regulatory and ethical approval and approval according to local law) for the conduct of the clinical trial in a sufficient number of countries;

 

   

the ability to recruit appropriate clinical sites;

 

   

the ability to provide appropriate screening assays;

 

   

the ability to recruit clinical trial investigators with the appropriate competencies and experience;

 

   

the efforts to facilitate timely enrollment in clinical trials and the effectiveness of recruiting publicity;

 

   

the patient referral practices of physicians within the same hospital as well as within other hospitals or private practices;

 

   

competing clinical trials for similar therapies, other new therapeutics, new combination treatments, new medicinal products;

 

   

approval of new indications for existing therapies or approval of new therapies in general or changes in standard of care;

 

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the implementation of surgical measures leading to a higher cure rate of patients;

 

   

the implementation of preventive measures leading to early detection of the disease under investigation and a higher cure rate;

 

   

the implementation of measures (for example, prophylactic vaccines) leading to a dramatic reduction in incidence of the disease under investigation;

 

   

clinicians’ and patients’ perceptions as to the potential advantages and side effects of the product candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved or become standard of care for the indications Immatics is investigating;

 

   

clinical investigators enrolling patients who do not meet the enrollment criteria, requiring the inclusion of additional patients in clinical trials;

 

   

the ability to obtain and maintain patient consents;

 

   

the risk that patients having received a single anti-tumor infusion in clinical trials start additional anti-tumor treatments despite of not having experienced progression of tumor disease; and

 

   

inability of clinical sites to enroll patients as health care capacities are required to cope with natural disasters, epidemics or other health system emergencies, such as the COVID-19 pandemic.

Immatics’ clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as its product candidates, and this competition will reduce the number and types of patients available to Immatics because some eligible patients may instead opt to enroll in a competitor’s trial. Because the number of qualified clinical investigators is limited, Immatics expects to conduct some of its clinical trials at the same clinical trial sites that some of its competitors use, which will reduce the number of patients who are available for its clinical trials at such clinical trial sites. Enrolling patients at the same sites as its competitors may compromise the quality and conclusiveness of Immatics’ clinical data by introducing bias. Moreover, because Immatics’ product candidates represent a departure from more commonly used methods for cancer treatment, potential patients and their doctors may be inclined to use conventional therapies, such as chemotherapy and approved immunotherapies, rather than enroll patients in any clinical trial. In addition, potential enrollees in Immatics’ ACT trials with IMA101, IMA201, IMA202, IMA203 or IMA204 may opt to participate in other clinical trials because of the length of time between the time that their tumor is excised and the ACT is infused back into the patient. Amendments to Immatics’ clinical protocols may affect enrollment in, or results of Immatics’ trials, including amendments it has made to further define the patient populations to be studied.

Not all patients suffering from a specific cancer that is in principle addressable by Immatics’ product candidates are eligible for its trials and therapies. First, patients have to express a specific genetic marker called HLA-A*02. While this marker is found on approximately 40-50% of individuals in North America and Europe, it is less frequent in other populations, such as China or Japan. If HLA screening for a patient shows that HLA-A*02 is not expressed, he/she cannot be treated with Immatics’ current product candidates. Second, the prevalence of the targets addressed by IMA201, IMA202, IMA203 and IMA204 differs between different tumor entities. For a given patient, a biomarker assay must be performed in order to find out whether he/she expresses one of the targets and can be treated with one of Immatics’ product candidates. Immatics cannot be certain that the anticipated and assumed target prevalence are confirmed in the patient populations of its Phase 1 trials, and lower target prevalences may be experienced. Third, further eligibility criteria are in place to ensure that the patients can tolerate and potentially benefit from the treatment. Thus, only a fraction of patients screened for Immatics’ clinical trials will finally receive cellular products. Patients may therefore be hesitant to consent to Immatics’ trials, and overall many more patients will have to be screened to treat the targeted number of patients. This may hinder recruitment for Immatics’ trials and may delay its development timelines. It is uncertain how many more patients Immatics will be required to screen. If the required number of patient screenings is much higher than anticipated, Immatics’ clinical trial costs may increase. Immatics may combine two or more product candidates into multi-target trials to mitigate this risk. However, Immatics cannot be certain whether this measure will be

 

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effective in enhancing recruitment. Multi-target trials may also be more difficult to implement and to be permitted to proceed by FDA or other competent authority outside the U.S.

Even if Immatics is able to enroll a sufficient number of patients in its clinical trials, delays in patient enrollment or small population size may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect Immatics’ ability to advance the development of its product candidates.

The FDA may disagree with Immatics’ regulatory plan, and it may fail to obtain regulatory approval of its product candidates.

If and when Immatics’ ongoing Phase 1 clinical trials for IMA201, IMA202, IMA203, and IMA101 are completed and, assuming positive data, it expects to advance to potential registrational trials. The general approach for FDA approval of a new biologic or drug is for the sponsor to provide dispositive data from two well-controlled, Phase 3 clinical studies of the relevant biologic or drug in the relevant patient population. Phase 3 clinical studies typically involve hundreds of patients, have significant costs and take years to complete. Immatics anticipates pursuing registrational trials, for example for IMA201, IMA202, and IMA203, as single agents or in combination that are designed to evaluate the efficacy of the respective product candidate in a single open-label, non-comparative, two-stage, pivotal, multicenter, single-arm clinical trials in patients who have exhausted available treatment options. Immatics plans to discuss its proposed trial designs with the FDA and other authorities prior to submission of INDs and CTAs. If the trial results are sufficiently compelling, Immatics intends to discuss with the FDA submission of a BLA for the relevant product candidate. Further, Immatics plans to have discussions with other authorities, such as the EMA in Europe or Health Canada in Canada regarding any planned marketing authorization submissions. It cannot be guaranteed that FDA and other regulatory authorities will agree to move to a registrational trial on the basis of data generated from a single completed Phase 1 trial. Authorities may ask for additional early stage or Phase 2 clinical data first. Even if the FDA agrees with the design and implementation of the clinical trials set forth in an IND, Immatics cannot guarantee that the FDA will not change their requirements in the future. For example, the FDA may require that Immatics conducts a comparative trial against an approved therapy including potentially an approved autologous T cell therapy, which would significantly delay Immatics’ development timelines and require substantially more resources. In addition, the FDA may only allow Immatics to evaluate patients that have already failed autologous therapy or very late stage patients, which are extremely difficult patients to treat and patients with advanced and aggressive cancer, and Immatics’ product candidates may fail to improve outcomes for such patients.

Immatics may pursue an approval under FDA’s Accelerated Approval pathway, and Immatics believes its Accelerated Approval strategy is warranted given the limited alternatives for patients with relapsed and/or refractory cancers. However, the FDA may ultimately require a Phase 3 clinical trial prior to approval, particularly since Immatics’ product candidates represent a novel treatment. In addition, the standard of care may change with the approval of new products, which may result in the FDA requiring a demonstration of meaningful therapeutic benefit to patients over such existing treatments.

As a condition of approval, the FDA may require that Immatics implement various post-marketing requirements and conduct post-marketing studies, any of which would require a substantial investment of time, effort, and money, and which may limit Immatics’ commercial prospects.

As a condition of biologic licensing, the FDA is authorized to require that sponsors of approved BLAs implement various post-market requirements, including a REMS, and/or one or more Phase 4 studies. For example, when the FDA approved Novartis’ Kymriah in August 2017, a CAR-T cell therapy for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (“ALL”) that is refractory or in second or later relapse, the FDA required significant post-marketing commitments, including a Phase 4 trial, revalidation of a test method, and a substantial REMS program that included, among other requirements, the certification of hospitals and their associated clinics that dispense Kymriah, which certification includes a number of

 

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requirements, the implementation of a Kymriah training program, and limited distribution only to certified hospitals and their associated clinics. If Immatics receives approval of its product candidates, the FDA may determine that similar or additional post-approval requirements are necessary. To the extent that Immatics is required to establish and implement any post-approval requirements, it will likely need to invest a significant amount of time, effort, and money. Such post-approval requirements may also limit the commercial prospects of its product candidates.

Obtaining and maintaining regulatory approval of Immatics’ product candidates in one jurisdiction does not mean that it will be successful in obtaining regulatory approval of its product candidates in other jurisdictions.

In order to market and sell its products outside the United States, Immatics or its third-party collaborators are required to obtain separate marketing approvals and comply with numerous and varying regulatory requirements. Obtaining and maintaining regulatory approval of Immatics’ product candidates in one jurisdiction does not guarantee that it will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. Approval policies and requirements may vary among jurisdictions. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that Immatics intends to charge for its products is also subject to approval. Immatics or its collaborators may not be able to file for regulatory approval of its product candidates in international jurisdictions or obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for Immatics and could delay or prevent the introduction of its products in certain countries. If Immatics fails to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, Immatics’ target market will be reduced and its ability to realize the full market potential of its product candidates will be harmed.

Immatics may not be able to file applications to commence additional clinical trials on the timelines it expects, and even if it is able to, the FDA or applicable competent authorities may not permit Immatics to proceed.

Immatics plans to submit INDs for additional product candidates to the FDA in the future. It also plans to submit applications to start clinical trials of additional product candidates outside the U.S. to the national competent authorities (for example, CTA to Paul-Ehrlich Institute (“PEI”) in Germany).

The filing of INDs to the FDA and the filing of applications outside the U.S. is dependent on additional data that have to be generated to support such regulatory filings. Hence, these filings may be delayed if the tests to generate those data show unexpected results or if technical issues arise in generating those data in the first place.

Immatics cannot be sure that submission of an IND, IND amendment or CTA will result in the FDA or any other competent authority outside the U.S. allowing testing and clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such clinical trials. The manufacturing and preclinical safety and efficacy testing requirements of both ACT and TCR Bispecifics remain emerging and evolving fields. Accordingly, Immatics expects chemistry, manufacturing and control related topics, including product specification, as well as preclinical safety testing, will be a focus of IND reviews, which may delay the allowance of INDs by the FDA or CTA approval by other competent authorities outside the U.S.

 

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Certain Immatics’ current clinical trials are being conducted outside the United States, and the FDA may not accept data from trials conducted in foreign locations.

Certain current clinical trials of Immatics’ drug candidates are being conducted or planned to be conducted partially outside the United States. Immatics may also conduct future clinical trials for its drug candidates partially or fully outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles and good clinical practice (“GCP”) requirements. Further, the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In general, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom Immatics intends to label the product in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations.

Conducting clinical trials outside the United States also exposes Immatics to additional risks, including risks associated with:

 

   

additional foreign regulatory requirements;

 

   

foreign exchange fluctuations;

 

   

compliance with foreign manufacturing, customs, shipment and storage requirements;

 

   

an inability to negotiate the terms of clinical trial agreements at arms’ length in countries where a template agreement for such trials is required by law;

 

   

cultural differences in medical practice and clinical research; and

 

   

diminished protection of intellectual property in some countries.

Immatics cannot assure you that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from such clinical trials, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt Immatics’ development of its drug candidates.

It may take longer and cost more to complete its clinical trials than Immatics projects, or it may not be able to complete them at all.

For budgeting and planning purposes, Immatics has projected the date for the commencement of future trials, and continuation and completion of its ongoing clinical trials. However, a number of factors, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, and unanticipated adverse events may cause significant delays. Immatics may even not be able to complete clinical trials involving any of its products at all or as projected. Delays in clinical trials are associated with significant costs to maintain the necessary services, infrastructure and to pay running obligations to internal staff, clinical sites and service providers.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on Immatics’ ability to enroll a sufficient number of patients who remain in the study until its conclusion. In addition, its clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as Immatics’ product candidates, and this competition will reduce the number and types of patients available to Immatics because some patients who might have opted to enroll in Immatics’ trials may instead opt to enroll in a competitor’s trial. Accordingly, Immatics cannot guarantee that its trials will progress as planned or as scheduled. Delays in patient enrollment may result in increased costs or may affect the timing or outcome of Immatics’ ongoing and planned clinical trials, which could prevent completion of these trials and adversely affect Immatics’ ability to advance the development of its product candidates.

 

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Immatics expects to rely on outside vendors (for example, independent contractors, contract research organizations) to conduct, supervise or monitor some or all aspects of clinical trials involving its products. Immatics will have less control over the timing and other aspects of these clinical trials than if Immatics conducted them entirely on its own. If Immatics fails to commence or complete, or experience delays in, any of its planned clinical trials, its stock price and its ability to conduct its business as currently planned could be harmed.

Immatics currently anticipates that it will have to rely on its CMOs to manufacture its adoptive cell therapy products for clinical trials. If they fail to commence or complete, or experiences delays in, manufacturing Immatics’ adoptive cell therapy products, its planned clinical trials will be delayed, which will adversely affect its stock price and Immatics’ ability to conduct its business as currently planned.

Clinical trials are expensive, time-consuming and difficult to design and implement, and Immatics’ clinical trial costs may be higher than for more conventional therapeutic technologies or drug products.

Clinical trials are expensive and difficult to design, implement and conduct, in part because they are subject to rigorous regulatory requirements. Because Immatics’ ACT product candidates are based on new cell therapy technologies and manufactured on a patient-by-patient basis, it expects that such candidates will require extensive research and development and have substantial manufacturing costs per dose. Immatics’ TCR Bispecific product candidates also require extensive research and development, as the applicable technology is new and experience with developing such biologics is rare in the field. Moreover, the development of a companion diagnostic will also require extensive research and development, and such companion diagnostic must be suitable to support both enrollment into larger clinical trials and routine hospital procedures after marketing approval. Any failure or delay in developing a suitable companion diagnostic will delay or make it impossible to conduct larger clinical trials for ACT product candidates and/or TCR Bispecific product candidates. In addition, costs to treat patients with recurrent and/or refractory cancer and to treat potential side effects that may result from Immatics’ product candidates, non-investigational medicinal products, rescue or prophylactic medication applied in its clinical trials can be significant. Some clinical trial sites do not bill, or obtain coverage from Medicare, Medicaid, health insurance, or other third-party payors for some or all of these costs for patients enrolled in Immatics’ clinical trials, and Immatics can be required by those trial sites to pay such costs. In countries outside the U.S., it is expected that all costs related to the clinical trial and to the management of study patients (for example, management of adverse reactions, hospitalization) are paid by the sponsor of the clinical trial. As trial designs for development of Immatics’ product candidates are complex, its clinical trial costs are likely to be significantly higher per patient than those of more conventional therapeutic technologies or drug products. Immatics aims to combine two or more of its ACT product candidates within one clinical trial or within a multi-TCR-T concept in order to achieve durable clinical efficacy results and to increase the patient population. The set up and conduct of such multi-TCR-T clinical trials is expensive and may bear unknown risks, such as regulatory, preclinical, safety and manufacturing risks. In addition, Immatics’ proposed personalized product candidates involve several complex and costly manufacturing and processing steps, the costs of which will be borne by Immatics. Immatics is also responsible for the manufacturing costs of products for patients that do not receive the product due to any reason (for example, rapid degradation of general health status, not meeting inclusion/exclusion criteria for infusion). Depending on the number of patients that Immatics ultimately screens and enrolls in its trials, the number of trials that it may need to conduct, and the companion diagnostic Immatics needs to develop, its overall clinical trial costs may be higher than for more conventional treatments.

Immatics’ clinical trials may fail to demonstrate adequately the safety and efficacy of its product candidates, which would prevent or delay regulatory approval and commercialization.

The clinical trials of Immatics’ product candidates are, and the manufacturing and marketing of its products will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where Immatics intends to test and market its product candidates. Before obtaining regulatory approvals for the commercial sale of any of its product candidates, Immatics must demonstrate

 

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through lengthy, complex and expensive preclinical testing and clinical trials that its product candidates are safe and efficacious for use in each target indication or use in a biomarker driven population. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use. The risk/benefit profile required for product licensure will vary depending on these factors and may include not only the ability to show tumor shrinkage, but also adequate duration of response, a delay in the progression of the disease, and/or an improvement in survival. For example, response rates from the use of Immatics’ product candidates may not be sufficient to obtain regulatory approval unless it can also show an adequate improvement of survival.

Even if Immatics is able to show anti-tumor efficacy for one or several of its product candidates, the risk/benefit profile may be negatively impacted by an unfavorable safety profile, which could force Immatics to discontinue a development program. This may happen if the risk for patients is deemed unacceptable based on the number or severity of adverse events, or the number of patient deaths related to the clinical trial treatment.

Regulatory authorities may ultimately disagree with Immatics’ chosen endpoints or may find that its studies or study results do not support product approval. Immatics cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as Immatics does, and more trials could be required before Immatics submits its product candidates for approval. To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, Immatics may be required to expend significant resources, which may not be available to Immatics, to conduct additional trials in support of potential approval of its product candidates.

The results of preclinical studies and early clinical trials of Immatics’ product candidates with small patient populations may not be predictive of the results of later-stage clinical trials.

Immatics has opened enrollment into four Phase 1 clinical trials investigating cellular product candidates. The primary objectives of these clinical trials are to establish safety and tolerability and, for its ACTengine clinical trials, to determine the recommended Phase 2 dose. Preliminary, single cohort, or top-line results from those and future early stage studies may not be representative of the final study results.

Immatics has reported preliminary results for clinical trials of its product candidates, including ACT for the treatment of recurrent and/or refractory solid tumors. Immatics may also report preliminary results from future clinical trials. These preliminary results are subject to substantial risk of change due to small sample sizes and may change as patients are evaluated or as additional patients are enrolled in these or newly set up clinical trials. These outcomes may be unfavorable, deviate from Immatics’ earlier reports, and/or delay or prevent regulatory approval or commercialization of its product candidates, including candidates for which it has reported preliminary favorable safety and efficacy results. In clinical studies where a staged expansion is expected, such as studies using a Simon’s two stage design, these outcomes may result in the failure to meet an initial efficacy threshold for the first stage. Furthermore, other measures of efficacy for these clinical trials and product candidates may not be as favorable.

Moreover, initial trial (for example, Phase 1 or Phase 2a) results may not be representative of later-stage trial results (for example, Phase 2b or Phase 3), even if conducted in a very similar trial population. The results of studies in one set of patients or line of treatment may not be predictive of those obtained in another and the results in various human clinical trials reported in scientific and medical literature may not be indicative of results Immatics obtains in its clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Additional non-clinical studies may also reveal unfavorable product candidate characteristics, including safety concerns.

For example, Immatics’ studies of cellular therapies in patients without any indicated standard-of-care treatment utilize an “open-label, single arm, dose-escalation/de-escalation” trial design. An open-label, single arm, dose-

 

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escalation/de-escalation trial is one where both the patient and investigator know what investigational treatment (monotherapy or combination) at which dose the patient is receiving. This trial design has the potential to create selection bias by encouraging the investigators to enroll a more favorable patient population (for example, indications better suitable for immunotherapies, fitter patients, less prior therapies) compared to a more broader patient population. In Immatics’ current Phase 1 clinical trials investigators have significant discretion over the selection of patient participants. Although preliminary data from these trials was generally positive, that data may not necessarily be representative of interim or final results, as new patients are cycled through the applicable treatment regimens. As the trials continue, the investigators may prioritize patients with more progressed forms of cancer and/or worse general health condition than the initial patient population, based on the safety/success or perceived safety/success of that initial population. Patients with more progressed forms of cancer or worse general health conditions may experience more and/or worse adverse events or be less responsive to treatment, and accordingly, interim or final safety and efficacy data may show an increase in frequency or severity of adverse events and/or a decline in patient response rate or change in other assessment metrics. As the trials continue or in subsequent trials, investigators may shift their approach to the patient population, which may ultimately experience more and/or worse adverse events and/or result in a decline in both interim and final efficacy data from the preliminary data, or conversely, a decrease in frequency and/or severity of adverse events or an increase in final efficacy data following a decline in the interim efficacy data, as patients with more progressed forms of cancer or worse general health condition are cycled out of the trials and replaced by patients with less advanced forms of cancer or with better general health conditions. This opportunity for investigator selection bias in Immatics’ trials as a result of open-label design, which is standard in dose-escalation/de-escalation trials, may not be adequately handled and may cause a decline in or distortion of clinical trial data from Immatics’ preliminary results. Any future trial which utilizes an open-label design is similarly susceptible to such bias. Depending on the outcome of its open-label studies, Immatics may need to conduct one or more follow-up or supporting studies in order to successfully develop its products for FDA approval. Many companies in the biotechnology, pharmaceutical and medical device industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier development, and Immatics cannot be certain that it will not face such setbacks.

Immatics expects there may be greater variability in results for products processed and administered on a patient-by-patient basis, as anticipated for its cellular therapy product candidates, than for “off-the-shelf” products, like many other drugs. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. Many companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. Immatics’ current and future clinical trial results may not be successful. Moreover, should there be a flaw in a clinical trial, it may not become apparent until the clinical trial is well advanced. In the case that Immatics decides to develop its product candidates for use with other oncology products, or combine more than one ACT product candidate, the design, implementation, and interpretation of the clinical trials necessary for marketing approval will be more complex than if Immatics would have developed its product candidates alone.

The deviations in Immatics’ proposed new products from existing products may require it to perform additional testing, which will increase the cost, and extend the time for obtaining approval.

Immatics’ ACT based therapy is based on first-generation adoptive cell therapy technology suitable for delivering for small early phase clinical trials. These current methods of treatment are very labor intensive and

 

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expensive, which has limited their widespread application. Immatics has developed new processes that it anticipates will enable more efficient manufacturing of ACT. Immatics may have difficulty demonstrating that the products produced from its new processes are comparable to the existing products. The FDA and regulatory authorities in other countries may require additional clinical testing before permitting a larger clinical trial with the new processes, and the product may not demonstrate the desired activity in new clinical trials. Cellular products are not considered as well characterized products because there are hundreds of markers present on these cells, and even small changes in manufacturing processes could alter the cell types. It is unclear at this time which of those markers are critical for success of these cells to combat cancer, so Immatics’ ability to predict the outcomes with newer manufacturing processes is limited. The changes that Immatics has made to the historical manufacturing process may require additional testing, which may increase costs and timelines associated with these developments.

Immatics’ TCR Bispecific product candidates contain features that have not been previously tested in this composition in clinical trials or marketed products. Regulatory authorities (for example, the FDA or EMA) may require additional non-clinical studies before permitting Immatics to enter clinical trials with its product candidates. Regulatory authorities may also ask for additional early-stage trials or production of additional batches of TCR Bispecific products before permitting larger clinical trials or registration trials. To comply with those requests would increase costs and timelines for the development of Immatics’ TCR Bispecifics.

Immatics is, and if it receives regulatory approval of its product candidates, will continue to be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and Immatics may be subject to penalties if it fails to comply with regulatory requirements or experiences unanticipated problems with its product candidates.

Any regulatory approvals that Immatics receives for its product candidates will require surveillance to monitor the safety and efficacy of such product candidate(s). The FDA may also require a REMS to approve Immatics’ product candidates, which could entail requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA may also require post-approval Phase 4 studies. Moreover, the FDA and comparable foreign regulatory authorities will continue to closely monitor the safety profile of any product even after approval. If the FDA or comparable foreign regulatory authorities become aware of new safety information after approval of any of Immatics’ product candidates, they may withdraw approval, require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on a product’s indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. Any such restrictions could limit sales of the product.

In addition, Immatics, its contractors, and its collaborators are and will remain responsible for FDA compliance, including requirements related to product design, testing, clinical and preclinical trials approval, manufacturing processes and quality, labeling, packaging, distribution, adverse event and deviation reporting, storage, advertising, marketing, promotion, sale, import, export, submissions of safety and other post-marketing information and reports such as deviation reports, registration, product listing, annual user fees, and recordkeeping for its product candidates. Immatics and any of its collaborators, including its contract manufacturers, could be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with regulatory requirements. Application holders must further notify the FDA, and depending on the nature of the change, obtain FDA pre-approval for product and manufacturing changes. The cost of compliance with post-approval regulations may have a negative effect on Immatics’ operating results and financial condition.

 

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Later discovery of previously unknown problems with Immatics’ product candidates, including adverse events of unanticipated severity or frequency, that the product is less effective than previously thought, problems with its third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

 

   

restrictions on the marketing, distribution, or manufacturing of Immatics’ product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;

 

   

restrictions on the labeling of Immatics’ product candidates, including required additional warnings, such as black box warnings, contraindications, precautions, and restrictions on the approved indication or use;

 

   

modifications to promotional pieces;

 

   

changes to product labeling or the way the product is administered;

 

   

liability for harm caused to patients or subjects;

 

   

fines, restitution, disgorgement, warning letters, untitled letters, or holds on or termination of clinical trials;

 

   

refusal by the FDA to approve pending applications or supplements to approved applications filed by Immatics or suspension or revocation of license approvals;

 

   

product seizure or detention, or refusal to permit the import or export of Immatics’ product candidates;

 

   

injunctions or the imposition of civil or criminal penalties, including imprisonment;

 

   

FDA debarment, debarment from government contracts, and refusal of future orders under existing contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements;

 

   

regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product candidate;

 

   

reputational harm; or

 

   

the product becoming less competitive.

Any of these events could further have other material and adverse effects on Immatics’ operations and business and could adversely impact its stock price and could significantly harm its business, financial condition, results of operations, and prospects.

The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of Immatics’ product candidates. Immatics cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If Immatics is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if it is not able to maintain regulatory compliance, Immatics may lose any marketing approval that it may have obtained, be subject to other regulatory enforcement action, and may not achieve or sustain profitability.

The regulatory landscape that will govern Immatics’ product candidates is still evolving; regulations relating to more established gene therapy and cell therapy products and TCR Bispecific products are still developing, and changes in regulatory requirements could result in delays or discontinuation of development of its product candidates or unexpected costs in obtaining regulatory approval.

Because Immatics is developing novel cell immunotherapy product candidates that are unique biological entities, the regulatory requirements that Immatics will be subject to are not entirely clear. Even with respect to more established products that fit into the categories of gene therapies or cell therapies, the regulatory landscape is still developing. For example, regulatory requirements governing gene therapy products and cell therapy products

 

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have become more stringent and comprehensive frequently and may continue to extend in the future. Moreover, there is substantial, and sometimes uncoordinated, overlap in those responsible for regulation of existing gene therapy products and cell therapy products. For example, in the United States, the FDA has established the Office of Tissues and Advanced Therapies (OTAT), formerly known as the Office of Cellular, Tissue and Gene Therapies (OCTGT), within its Center for Biologics Evaluation and Research (CBER) to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. Gene therapy clinical trials in the U.S. are also subject to review and oversight by an institutional biosafety committee (IBC), a local institutional committee that reviews and oversees basic and clinical research conducted at the institution participating in the clinical trial. Similar regulatory bodies exist in Europe and other jurisdictions. Although the FDA or specific regulatory authorities in other countries (for example, EMA or PEI) decides whether individual gene therapy protocols may proceed, review process and determinations of other reviewing bodies can impede or delay the initiation of a clinical study, even if for example, the FDA has reviewed the study and approved its initiation. Conversely, the FDA can place an IND application on clinical hold even if such other entities have provided a favorable review. Furthermore, each clinical trial must be reviewed and approved by an independent IRB at or servicing each institution at which a clinical trial will be conducted; equivalent processes are in place in other regions of the world. In addition, adverse developments in clinical trials of gene therapy products conducted by others may cause the FDA or other regulatory bodies to change the requirements for approval of any of Immatics’ product candidates.

While there is already a T cell engaging bispecific molecule approved and regulatory guidelines have been issued for this class of drugs, bispecific therapeutics are still new in the field and regulators have even less experience with TCR Bispecifics. Thus, guidance for development and regulatory approval of such drugs may change.

Complex regulatory environments exist in the different jurisdictions in which Immatics might consider seeking regulatory approvals for its product candidates, further complicating the regulatory landscape. For example, in the EU a special committee called the Committee for Advanced Therapies was established within the EMA in accordance with Regulation (EC) No. 1394/2007 on advanced therapy medicinal products (“ATMPs”) to assess the quality, safety and efficacy of ATMPs, and to follow scientific developments in the field. ATMPs include gene therapy products as well as somatic cell therapy products and tissue engineered products.

These various regulatory review committees and advisory groups and new or revised guidelines that they promulgate from time to time may lengthen the regulatory review process, require Immatics to perform additional studies, increase its development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of its product candidates or lead to significant post-approval limitations or restrictions. Because the regulatory landscape for Immatics’ cell immunotherapy product candidates is new, it may face even more cumbersome and complex regulations than those emerging for other gene therapy products and cell therapy products. Furthermore, even if Immatics’ product candidates obtain required regulatory approvals, such approvals may later be revoked, suspended or otherwise withdrawn as a result of changes in regulations or the interpretation of regulations by applicable regulatory agencies.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease Immatics’ ability to generate sufficient product revenue to maintain its business.

Because Immatics’ current products represent, and its other potential product candidates will represent novel approaches to the treatment of diseases, there are many uncertainties regarding the development, the market acceptance, third-party reimbursement coverage and the commercial potential of its product candidates.

Human immunotherapy products are a new category of therapeutics. Because this is a relatively new and expanding area of novel therapeutic interventions, there are many uncertainties related to development, marketing, reimbursement, and the commercial potential for Immatics’ product candidates. There can be no assurance as to the number of required clinical trials, the length of the trial period, the number of patients the

 

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FDA and regulatory authorities in other jurisdictions will require to be enrolled in the trials in order to establish the safety and efficacy of immunotherapy products, or that the data generated in these trials will be acceptable to the FDA to support marketing approval. The FDA and comparable foreign regulatory may take longer than usual to come to a decision on any BLA or similar marketing application that Immatics submits and may ultimately determine that there is not enough data, information, or experience with Immatics’ product candidates to support an approval decision. Regulatory authorities may also require that Immatics conduct additional post-marketing studies or implement risk management programs. For example, the FDA may require a REMS until more experience with Immatics’ product candidates is obtained. Finally, after increased usage, Immatics may find that its product candidates do not have the intended effect or have unanticipated side effects, potentially jeopardizing initial or continuing regulatory approval and commercial prospects.

Immatics may also find that the manufacture of its product candidates is more difficult or more expensive than anticipated, resulting in an inability to produce a sufficient amount of its product candidates for its clinical trials or, if approved, commercial supply. Moreover, because of the complexity and novelty of Immatics’ manufacturing process, there are only a limited number of manufacturers who have the capability of producing its product candidates. Should any of its contract manufacturers no longer produce its product candidates, it may take Immatics significant time to find a replacement, if it is able to find a replacement at all.

Immatics may also find that the development of a companion diagnostic for its product candidates is more difficult or more expensive than anticipated, resulting in an inability to provide the required diagnostic testing for its clinical trials, or if approved, for the market. Moreover, because of the complexity and novelty of Immatics’ companion diagnostic biomarker, there are only a limited number of providers who have the capability of supporting the development of a companion diagnostic. Should any of its contract research organization (“CRO”) partners fail to meet its development goals, it may take Immatics significant time to find a replacement, if it is able to find a replacement at all.

There is no assurance that the approaches offered by Immatics’ products will gain broad acceptance among doctors or patients or that governmental agencies or third-party medical insurers will be willing to provide reimbursement coverage for proposed product candidates. Moreover, Immatics does not have verifiable internal marketing data regarding the potential size of the commercial market for its product candidates, nor has it obtained current independent marketing surveys to verify the potential size of the commercial markets for its current product candidates or any future product candidates. Since Immatics’ current product candidates and any future product candidates will represent novel approaches to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from these product candidates. Accordingly, Immatics may spend significant capital trying to obtain approval for product candidates that have an uncertain commercial market. The market for any products that Immatics successfully develops will also depend on the cost of the product. Immatics does not yet have sufficient information to reliably estimate what it will cost to commercially manufacture its current product candidates, and the actual cost to manufacture these products could materially and adversely affect the commercial viability of these products. Immatics’ goal is to reduce the cost of manufacturing and providing its therapies. However, unless it can reduce those costs to an acceptable amount, Immatics may never be able to develop a commercially viable product. If Immatics does not successfully develop and commercialize products based upon its approach or find suitable and economical sources for materials used in the production of its products, Immatics will not become profitable, which would materially and adversely affect the value of its common stock.

Immatics’ ACT product candidate may be provided to patients in combination with other agents provided by third parties. The cost of such combination therapy may increase the overall cost of ACT therapy and may result in issues regarding the allocation of reimbursements between Immatics’ therapy and the other agents, all of which may affect Immatics’ ability to obtain reimbursement coverage for the combination therapy from third party medical insurers.

 

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COVID-19 may materially and adversely affect Immatics’ business and financial results.

Immatics’ business could be adversely affected by health epidemics in regions where it has clinical trial sites or other business operations; epidemics could also cause significant disruptions in the operations of third-party manufacturers and CROs upon whom Immatics relies. In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and governments imposed restrictions on travel between the United States, Europe and certain other countries. Further, the President of the United States declared the COVID-19 pandemic a national emergency, invoking powers under the Stafford Act, the legislation that directs federal emergency disaster response. In Germany and many other European countries, governmental orders became effective in March 2020 to reduce virus transmission by social distancing. Those measures impact social and working life and travel.

The effects of these and other governmental orders, as well as shelter-in-place or work-from-home policies may negatively impact productivity, disrupt Immatics’ and its partners’ business and delay its clinical programs and timelines (including its ACTengine genetically modified autologous T cell products), the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on Immatics’ ability to conduct its business in the ordinary course. These and similar, and perhaps more severe, disruptions in Immatics’ operations could negatively impact its business, financial condition and results of operations, including its ability to obtain financing.

Quarantines, shelter-in-place and similar government orders, or the perception that further orders, shutdowns or other restrictions on the conduct of business operations could occur related to COVID-19 and could impact personnel at Immatics, at suppliers, Immatics’ collaborators or at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which would disrupt Immatics’ supply chain. Immatics’ operations, including research and manufacturing, could also be disrupted due to staff absences as a result of self-isolation procedures or extended illness at Immatics or at suppliers or collaborators.

In addition, Immatics’ clinical trials may be affected by the COVID-19 pandemic, including:

 

   

delays or difficulties in enrolling patients in clinical trials, including that patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services;

 

   

delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

 

   

diversion or prioritization of healthcare resources away from the conduct of clinical trials and towards the COVID-19 pandemic, including the diversion of hospitals serving as Immatics’ clinical trial sites and hospital staff supporting the conduct of its clinical trials, who, as healthcare providers, may have heightened exposure to COVID-19;

 

   

interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal, state or provincial governments, employers and others; and

 

   

limitations in employee resources that would otherwise be focused on the conduct of Immatics’ clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.

In addition to the risks listed above, Immatics may also experience the following adverse impacts for its clinical trials:

 

   

delays in receiving approval from local regulatory authorities to initiate its planned clinical trials;

 

   

delays in clinical sites receiving the supplies and materials needed to conduct its clinical trials;

 

   

interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product and patient specimens used in its clinical trials;

 

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changes in local regulations as part of a response to the COVID-19 coronavirus outbreak, which may require Immatics to change the ways in which its clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

 

   

delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and

 

   

the refusal of the FDA or other regulatory agencies to accept data from clinical trials from strongly affected geographies.

The global outbreak of COVID-19 continues to rapidly evolve. The extent to which COVID-19 may impact Immatics’ business and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States, Germany and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States, Germany and other countries to contain and treat the disease.

Risks Related to Immatics’ Reliance on Third Parties

Independent clinical investigators and CROs that Immatics engages to conduct its clinical trials may not devote sufficient time or attention to Immatics’ clinical trials or be able to repeat their past success.

Immatics expects to continue to depend on independent clinical investigators and CROs to conduct its clinical trials. CROs may also assist Immatics in the collection and analysis of data. Identifying, qualifying and managing performance of third-party service providers can be difficult, time-consuming and cause delays in Immatics’ development programs. These investigators and CROs will not be Immatics employees and Immatics will not be able to control, other than by contract, the amount of resources, including time, which they devote to Immatics’ product candidates and clinical trials. If independent investigators or CROs fail to devote sufficient resources to the development of Immatics’ product candidates, or if their performance is substandard, it may delay or compromise the prospects for approval and commercialization of any product candidates that Immatics develops. In addition, the use of third-party service providers may require Immatics to disclose some of its proprietary information to these parties, which could increase the risk that this information will be misappropriated. Further, regulatory agencies require that Immatics complies with GCP requirements for conducting, recording and reporting clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial subjects are protected. Failure of clinical investigators or CROs to meet their obligations to Immatics or comply with GCP requirements could adversely affect for example, the costs and timelines of the clinical development of Immatics’ product candidates and harm its business. Not fulfilling GCP requirements by investigators or CROs could even lead to denial of a BLA or similar marketing application to comparable foreign authorities.

Failure of third-party contractors to successfully develop and commercialize companion diagnostics for use with Immatics’ product candidates could harm its ability to commercialize its product candidates.

Immatics plans to develop companion diagnostics for its product candidates where appropriate. Such developments are expensive and time-consuming. The FDA and similar regulatory authorities outside the United States may request or require the development and regulatory approval of a companion diagnostic as a condition to approving one or more of Immatics’ product candidates, including, for example, IMA201, IMA202, IMA203, IMA204, and IMA401. Immatics does not have experience or capabilities in developing, seeking regulatory approval for or commercializing diagnostics and plan to rely in large part on third parties to perform these functions.

Immatics will likely outsource the development, production and commercialization of companion diagnostics to third parties. By outsourcing these companion diagnostics to third parties, Immatics becomes dependent on the

 

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efforts of its third-party contractors to successfully develop and commercialize these companion diagnostics. Immatics’ contractors:

 

   

may not perform their obligations as expected;

 

   

may encounter production difficulties that could constrain the supply of the companion diagnostic;

 

   

may encounter difficulties in obtaining regulatory approval;

 

   

may have difficulties gaining acceptance of the use of the companion diagnostic in the clinical community;

 

   

may not commit sufficient resources to the marketing and distribution of such product; and

 

   

may terminate their relationship with Immatics.

Immatics relies on third parties to obtain reagents and raw materials.

The manufacture of Immatics’ product candidates by itself or any of its CMOs requires access to a number of reagents and other critical raw materials from third-party suppliers. Such third parties may refuse to supply such reagents or other raw materials or alternatively refuse to supply on commercially reasonable terms. There may also be capacity issues at such third-party suppliers that impact Immatics’ ability to increase production of its product candidates.

Some of the materials used in the manufacture and processing of Immatics’ product candidates may only be supplied by one or a few vendors, which means that, should those vendors be unable to supply, for whatever reason, Immatics’ ability to manufacture product candidates and progress product candidates through clinical trials could be severely impacted and result in additional delays. Such failure to supply could also impact other supply relationships with other third parties and potentially result in additional payments being made or required in relation to such delays. In addition, where any raw material or precursor material (including, for example, lentiviral vector, cell culture medium, chromatographic column material or other essential raw material) is currently supplied by one or a few vendors, replacing such raw material or precursor or finding alternative vendors may not be possible or may significantly impact on the timescales for manufacture and supply of Immatics’ product candidates. Even where alternative materials or precursors or alternative vendors are identified, such alternative materials, precursors or vendors and their materials will need to be properly assessed and qualified and additional regulatory approvals may also need to be obtained all of which could result in significant delays to the supply of Immatics’ product candidates or an inability to supply product candidates within anticipated timescales, if at all.

Immatics has contracted and expects to contract additional third parties for the manufacture of some of its product candidates for clinical testing in the future, and it expects to do so for commercialization. Third-party contractors are also important to supply Immatics or its CMOs with important materials required for its product candidates or to develop and perform services essential for the manufacturing process. This reliance on third parties increases the risk that Immatics will not have sufficient quantities of its product candidates or products or such quantities at an acceptable cost and when needed, which could delay, prevent or impair its development or commercialization efforts.

Currently, Immatics’ ACT product candidates are manufactured by Immatics personnel at the University of Texas Health (UTH) facility. Immatics expects to continue to manufacture product candidates for early phase trials using its personnel at the UTH facility; but it is currently negotiating contracts with larger CMOs with experience in cell therapy development and manufacturing to manufacture its products for late stage clinical trials, including any pivotal trials. The process will involve the development of a given manufacturing process in house using Immatics personnel followed by technology transfer of each manufacturing process to the CMO. Immatics’ manufacturing strategy for bispecific T cell engagers includes CMOs for cell line development, process development, formulation development, cGMP manufacturing, analytics, release testing, fill and finish, packaging and storage.

 

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Immatics may not succeed in maintaining its relationships with current CMOs or establishing relationships with additional or alternative CMOs. Its product candidates may compete with other products and product candidates for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP and, for cellular products, also under cGTP regulations and that are both capable of manufacturing for Immatics and willing to do so. In addition, there are limited CMOs specialized in the manufacturing of cellular therapy products. If Immatics’ current and/or future CMOs for any of its product candidates or products that obtain approval should cease manufacturing for Immatics, it would experience delays in obtaining sufficient quantities of its product candidates for clinical trials and, if approved, commercial supply. Further, Immatics’ CMOs may breach, terminate, or not renew these agreements. If Immatics were to need to find alternative manufacturing facilities, it would significantly impact Immatics’ ability to develop, obtain regulatory approval for or market its product candidates, if approved. The commercial terms of any new arrangement could be less favorable than its existing arrangements and the expenses relating to the transfer of necessary technology and processes and obtaining applicable regulatory approvals could be significant.

Reliance on third-party manufacturers entails exposure to risks to which Immatics would not be subject if it manufactured the product candidate itself, including:

 

   

inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

 

   

reduced day-to-day control over the manufacturing process for its product candidates as a result of using third-party manufacturers for all aspects of manufacturing activities; this can result in significant delays of drug supply to any clinical trial or commercial product;

 

   

any new manufacturer would have to be educated in processes for the production of its product candidates;

 

   

contract manufacturers may not be able to execute manufacturing of its product candidates and other logistical support requirements appropriately;

 

   

the development of processes or the supply with materials important for the manufacturing of its product candidates may be delayed. This may lead to a situation that manufacturing of Immatics’ product candidates may not be possible at a preplanned and booked manufacturing slot at one of its CMOs. In this case, Immatics may be held liable for significant cancelation fees, and reservation of a new manufacturing slot may delay manufacturing by several months and may thereby impact Immatics’ development timelines;

 

   

manufacturers are subject to ongoing periodic unannounced inspection by the FDA, by authorities from Immatics’ jurisdictions and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards, and FDA or regulatory authorities from other countries further inspect any manufacturers for current cGMP and, if applicable, cGTP compliance as part of any marketing application Immatics submits; Immatics does not have control over third-party manufacturers’ compliance with these regulations and standards;

 

   

reduced control over the protection of its trade secrets and know-how from misappropriation or inadvertent disclosure;

 

   

termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that may be costly or damaging to Immatics or result in delays in the development or commercialization of its product candidates; and

 

   

disruptions to the operations of its third-party manufacturers or suppliers caused by conditions unrelated to its business or operations, including the bankruptcy of the manufacturer or supplier.

Any of these factors could cause the delay of approval or commercialization of Immatics’ product candidates, cause it to incur higher costs or prevent it from commercializing its product candidates successfully.

 

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Furthermore, if any of Immatics’ product candidates are approved and contract manufacturers fail to deliver the required commercial quantities of finished product on a timely basis and at commercially reasonable prices, and Immatics is unable to find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volumes and quality and on a timely basis, Immatics would likely be unable to meet demand for its products and could lose potential revenue. It may take several years to establish an alternative source of supply for Immatics’ product candidates and to have any such new source approved by the FDA or any other relevant regulatory authorities.

At some point in the future, Immatics may decide to operate its own manufacturing facility for its ACT product candidates in late-stage clinical testing and for its marketed products, which would require significant resources and Immatics may fail to successfully operate its facility, which could adversely affect its clinical trials and the commercial viability of its product candidates.

Currently, there are no immediate plans for Immatics to operate its own manufacturing facility for its product candidates in late-stage clinical testing or for its marketed products. However, Immatics may not be able to achieve clinical or commercial manufacturing and cell processing at a scale to satisfy demands for late stage clinical trials or commercialization on its own or with a CMO and thus may decide to operate a manufacturing facility for its product candidates. While Immatics believes the manufacturing and processing approaches are appropriate to support its clinical product development, Immatics has limited experience in managing a large-scale manufacturing facility. Immatics cannot be sure that the manufacturing processes employed by itself or the technologies that it incorporates for manufacturing will result in TCR-T cell product candidates suitable for clinical trials or commercialization.

Immatics has exclusive access to the early stage facility at UTH designed for the manufacturing of cellular products comprised of three fully functional GMP suites and support areas where Immatics’ hired and trained personnel perform all manufacturing related activities. The current lease extends through the end of 2021 with negotiations in place to extend the lease through the end of 2024. In case, the lease is not prolonged, Immatics may decide to run its own manufacturing facility. There can be no assurance that Immatics will complete the build-out of its manufacturing facility in a timely manner or at all. Immatics also does not yet have sufficient information to reliably estimate the cost of the clinical and commercial manufacturing and processing of its product candidates, and the actual cost to manufacture and process its product candidates could materially and adversely affect the commercial viability of its product candidates. In addition, the ultimate clinical and any commercial dose will affect Immatics’ ability to scale its costs per dose. As a result, Immatics may never be able to develop a commercially viable product. The commercial manufacturing facility Immatics may build will also require regulatory approval, including from FDA, which it may never obtain. Even if approved, Immatics would be subject to ongoing periodic unannounced inspection by the FDA or authorities from other jurisdictions, the Drug Enforcement Administration and corresponding state agencies to ensure strict compliance with cGMP and cGTP requirements, and other government regulations.

If Immatics were to decide in the future to own and operate a manufacturing facility, the designing and building process would be time-consuming, expensive, and Immatics may not realize the benefit of this investment. As a manufacturer of pharmaceutical products, Immatics is required to demonstrate and maintain compliance with cGMP and cGTP requirements, which include requirements related to production processes, quality control and assurance and recordkeeping. Furthermore, establishing and maintaining manufacturing operations requires a reallocation of other resources, particularly the time and attention of certain of its senior management. Any failure or delay in its manufacturing capabilities could adversely impact the clinical development or commercialization of Immatics’ or its collaborators’ product candidates.

The manufacture of biopharmaceutical products, especially of those cellular in nature like Immatics’ ACT product candidates, is complex and requires significant expertise, including the development of advanced manufacturing techniques and process controls. Manufacturers of cell therapy products often encounter difficulties in production, particularly in scaling out and validating initial production and ensuring the absence of

 

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contamination. These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. The application of new regulatory guidelines or parameters, such as those related to release testing, may also adversely affect Immatics’ ability to manufacture its product candidates. Furthermore, if contaminants are discovered in its supply of product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. Immatics cannot assure that any stability or other issues relating to the manufacture of its product candidates will not occur in the future.

Immatics or any of its CMOs may fail to manage the logistics of storing and shipping its raw materials and product candidates. Storage failures and shipment delays and problems caused by Immatics, its vendors or other factors not in its control, such as weather, could result in the inability to manufacture product, the loss of usable product or prevent or delay the delivery of product candidates to patients.

Immatics may also experience manufacturing difficulties due to resource constraints or as a result of labor disputes. If Immatics were to encounter any of these difficulties, Immatics’ ability to provide its product candidates to patients would be jeopardized.

Immatics has limited experience in large-scale or commercial manufacturing, and there can be no assurance that it will be able to effectively manufacture clinical or commercial quantities of its products.

In September 2015, Immatics entered into a collaboration agreement with UTH to gain exclusive access to a cGMP facility specialized in the manufacturing of cellular products. This facility is used exclusively for the manufacturing of Immatics’ product candidates by Immatics’ hired and trained personnel.

Although some of its employees have experience in the manufacturing of pharmaceutical products from prior employment at other companies, Immatics as a company does not have experience in large-scale or commercial manufacturing.

Immatics may not succeed in scaling up its production processes for ACT and/or biologics for pivotal trials and/or commercial supply. Immatics may need a larger scale manufacturing process for any TCR Bispecifics molecule than what it has planned, depending on the dose and regimen that is to be determined in its Phase 1 and future Phase 2 studies. Any changes in Immatics’ manufacturing processes, including those utilized by its CMOs, as a result of scaling up may result in the need to obtain additional regulatory approvals. Difficulties in achieving commercial-scale production or the need for additional regulatory approvals could delay the development and regulatory approval of its product candidates and ultimately affect Immatics’ success.

If Immatics or its third-party suppliers use hazardous, non-hazardous, biological or other materials in a manner that causes injury or violates applicable law, Immatics may be liable for damages.

Immatics’ research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, potentially infectious material and genetically modified cells. Immatics and its suppliers are subject to federal, state and local laws and regulations in the United States and Germany governing the use, manufacture, storage, handling and disposal of such hazardous materials. Although Immatics believes that its and its suppliers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, and that Immatics and its suppliers have all necessary permits, Immatics and its suppliers cannot completely eliminate the risk of contamination or injury resulting from hazardous chemical or biological materials. As a result of any such contamination or injury, Immatics may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt its business operations. In the event of an accident, Immatics could be held liable for damages or penalized with fines, and the liability could exceed its resources. Immatics has insurance in place for liabilities arising from handling biological and hazardous substances, but it may not or may not fully cover all costs from such

 

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accidents. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair Immatics’ research, development and production efforts, which could impact its business, prospects, financial condition or results of operations.

Immatics’ relationships with customers, physicians, and third-party payors are subject, directly or indirectly, to federal, state, local and foreign healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations. If Immatics or its employees, independent contractors, consultants, commercial partners and vendors violate these laws, Immatics could face substantial penalties.

These laws may impact, among other things, Immatics’ clinical research program, as well as its proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services is subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive and other business arrangements. Immatics may also be subject to federal, state and foreign laws governing the privacy and security of identifiable patient information. The U.S. healthcare laws and regulations that may affect Immatics’ ability to operate include, but are not limited to:

 

   

the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully, offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, the purchasing, leasing, ordering or arranging for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection. Practices that may be alleged to be intended to induce prescribing, purchases or recommendations, include any payments of more than fair market value, and may be subject to scrutiny if they do not qualify for an exception or safe harbor. In addition, a person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act and the Civil Monetary Penalties Statute;

 

   

federal civil and criminal false claims laws and civil monetary penalty laws, including the federal civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other federal government programs that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government, including federal healthcare programs;

 

   

the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by any trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

 

   

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and their respective implementing regulations, which impose requirements on certain

 

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covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information;

 

   

the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the United States Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) information related to payments or other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

 

   

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

Additionally, Immatics may be subject to state, local and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope. For example, Immatics may be subject to the following: state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and local laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require the reporting of information related to drug pricing; state and local laws requiring the registration of pharmaceutical sales and medical representatives; and state and foreign laws governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of Immatics’ business activities, or its arrangements with physicians, some of whom receive stock options as compensation, could be subject to challenge under one or more of such laws. If Immatics or its employees, independent contractors, consultants, commercial partners and vendors violate these laws, Immatics may be subject to investigations, enforcement actions and/or significant penalties. Immatics has adopted a code of business conduct and ethics, but it is not always possible to identify and deter employee misconduct or business noncompliance, and the precautions Immatics takes to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting itself from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Efforts to ensure that Immatics’ business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that Immatics’ business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against Immatics, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on its business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if Immatics becomes subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of its operations, any of which could adversely affect its ability to operate its business and its results of operations. In addition, the approval and commercialization of any of Immatics’ product candidates outside the United States will also likely subject Immatics to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

 

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Immatics’ existing therapeutic collaborations are important to its business, and future collaborations may also be important to Immatics. If Immatics is unable to maintain any of these collaborations, or if these collaborations are not successful, its business could be adversely affected.

Immatics has limited capabilities for drug development and does not yet have any capability for sales, marketing or distribution. Immatics has entered into collaborations with other companies that it believes can provide such capabilities, including its collaboration and license agreements with, for example, MD Anderson, Amgen, Genmab, Celgene Corporation, a Bristol-Myers Squibb Company (“BMS”), and GlaxoSmithKline (“GSK”). These collaborations have also provided Immatics with important funding for its development programs and technology platforms, and Immatics expects to receive additional funding under these collaborations in the future. Immatics’ existing therapeutic collaborations, and any future collaborations it enters into, may pose a number of risks, including the following:

 

   

collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

 

   

collaborators may not perform their obligations as expected;

 

   

collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

 

   

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

 

   

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with Immatics’ products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than Immatics’; this may also happen if the collaborators’ development of competing products is substantially faster than Immatics’ development timelines;

 

   

collaborators may not further develop product candidates developed by Immatics or co-developed with it under the collaboration;

 

   

product candidates discovered in collaboration with Immatics may be viewed by its collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of Immatics’ product candidates;

 

   

a collaborator with marketing and distribution rights to one or more of Immatics’ product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;

 

   

disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for Immatics with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

 

   

collaborators have certain defined rights to change or expand the scope of development programs during the course of the collaboration. This may lead to additional research work at Immatics that may be time-consuming and expensive. Such work may compete with Immatics’ own development programs and may delay timelines to market or proof-of-concept for its product candidates. If development programs under the collaboration turn out to be more costly and time-consuming, such unanticipated costs and work could likewise compete with Immatics’ internal development programs;

 

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collaborators may not properly maintain or defend Immatics’ intellectual property rights or may use its proprietary information in such a way as to invite litigation that could jeopardize or invalidate its intellectual property or proprietary information or expose Immatics to potential litigation;

 

   

collaborators may infringe the intellectual property rights of third parties, which may expose Immatics to litigation and potential liability; Immatics may also be held liable by the collaborator for potential infringement of third party intellectual property during the research and development work for the collaboration;

 

   

certain collaborations may be terminated for the convenience of the collaborator and, if terminated, Immatics could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. For example, certain of Immatics’ collaboration and license agreements may be terminated for convenience upon the completion of a specified notice period; and

 

   

collaborators may discontinue the development of product candidates within the collaboration, for example if they consider the results achieved so far or the product candidates not promising enough or if their development strategies change.

If Immatics’ therapeutic collaborations do not result in the successful development and commercialization of products or if one of its collaborators terminates its agreement with Immatics, it may not receive any future research funding or milestone or royalty payments under the collaboration. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or Roche, recently informed Immatics that it did not intend to continue development as contemplated under the collaboration agreement of April 26, 2016 and terminated the agreement as of September 30, 2020; as a result, Immatics will not receive any milestone or royalty payments under the collaboration. All of the risks relating to product development, regulatory approval and commercialization described in this prospectus also apply to the activities of Immatics’ program collaborators.

Additionally, subject to its contractual obligations to Immatics, if one of its collaborators is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by Immatics. If one of Immatics’ collaborators terminates its agreement with Immatics, it may find it more difficult to attract new collaborators.

For some of Immatics’ product candidates, it may in the future determine to collaborate with additional pharmaceutical and biotechnology companies for development and potential commercialization of therapeutic products. Immatics faces significant competition in seeking appropriate collaborators. Immatics’ ability to reach a definitive agreement for a collaboration will depend, among other things, upon its assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. These factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, and the existence of uncertainty with respect to Immatics’ ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with Immatics for its product candidate.

Collaborations are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that reduced the number of potential future collaborators. If Immatics is unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, it may have to curtail the development of a product candidate, reduce or delay one or more of its other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase its expenditures and undertake development or

 

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commercialization activities at its own expense. If Immatics elects to fund and undertake development or commercialization activities on its own, it may need to obtain additional expertise and additional capital, which may not be available to it on acceptable terms or at all. If Immatics fails to enter into collaborations and does not have sufficient funds or expertise to undertake the necessary development and commercialization activities, it may not be able to further develop its product candidates or bring them to market or continue to develop its technology platforms and its business may be materially and adversely affected.

Immatics may also be restricted under existing collaboration agreements from entering into future agreements on certain terms with potential collaborators. Subject to certain specified exceptions, each of its existing therapeutic collaborations contains an exclusivity restriction on Immatics’ engaging in activities that are the subject of the collaboration with third parties for specified periods of time.

Immatics may form or seek strategic alliances or enter into additional licensing arrangements in the future, and it may not realize the benefits of such alliances or licensing arrangements.

Immatics may form or seek strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that it believes will complement or augment its development and commercialization efforts with respect to its product candidates and any future product candidates that it may develop. Any of these relationships may require Immatics to incur non-recurring and other charges, increase its near and long-term expenditures, issue securities that dilute its existing shareholders or disrupt its management and business. In addition, Immatics faces significant competition in seeking appropriate strategic collaborations and the negotiation process is time-consuming and complex. Moreover, Immatics may not be successful in its efforts to establish strategic collaborations or other alternative arrangements for its product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view Immatics’ product candidates as having the requisite potential to demonstrate safety and efficacy. Any delays in entering into new strategic collaboration agreements related to Immatics’ product candidates could delay the development and commercialization of its product candidates in certain geographies for certain indications, which would harm Immatics’ business prospects, financial condition and results of operations.

Immatics depends on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm its business.

Immatics is dependent or may depend in the future on patents, know-how and proprietary technology, both its own and licensed from others. Immatics may also enter into additional license agreements that are material to the development of its product candidates.

Disputes may also arise between Immatics and its licensors and licensees regarding intellectual property subject to a license agreement, including those related to:

 

   

the scope of rights granted under the license agreement and other interpretation-related issues;

 

   

whether and the extent to which Immatics’ technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

 

   

Immatics’ right to sublicense patent and other rights to third parties under collaborative development relationships;

 

   

Immatics’ diligence obligations with respect to the use of the licensed technology in relation to its development and commercialization of its product candidates, and what activities satisfy those diligence obligations; and

 

   

the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by Immatics, its licensors, and its collaborators.

 

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If disputes over intellectual property that Immatics has licensed, or will license in the future, prevent or impair its ability to maintain its current licensing arrangements on acceptable terms, Immatics may be unable to successfully develop and commercialize the affected product candidates.

Immatics is generally also subject to all of the same risks with respect to protection of intellectual property that it licenses, as it is for intellectual property that it owns, which are described below. If Immatics or its licensors fail to adequately protect this intellectual property, Immatics’ ability to commercialize products could suffer.

Risks Related to Immatics’ Intellectual Property

If third parties claim that Immatics’ activities or products infringe upon their intellectual property, Immatics’ operations could be adversely affected.

There is a substantial amount of litigation, both within and outside the United States, involving patents and other intellectual property rights in the pharmaceutical industry. Immatics may, from time to time, be notified of claims that Immatics or its third party suppliers are infringing upon patents, trademarks, copyrights, or other intellectual property rights owned by third parties, and Immatics cannot provide assurances that other companies will not, in the future, pursue such infringement claims against Immatics or any third-party proprietary technologies Immatics has licensed. If Immatics or its third party suppliers were found to infringe upon a patent or other intellectual property right, or if Immatics failed to obtain or renew a license under a patent or other intellectual property right from a third party, or if a third party that Immatics was licensing technologies from was found to infringe upon a patent or other intellectual property rights of another third party, Immatics may be required to pay damages, including triple damages if the infringement is found to be willful, suspend the manufacture of certain product candidates or reengineer or rebrand Immatics’ product candidates, if feasible, or Immatics may be unable to enter certain new product markets. Any such claims could also be expensive and time-consuming to defend and divert management’s attention and resources. Immatics’ competitive position could suffer as a result. In addition, if Immatics has declined to enter into a valid non-disclosure or assignment agreement for any reason, Immatics may not own an invention or intellectual property rights and may not be adequately protected. Although Immatics has reviewed certain third-party patents and patent filings that Immatics believes may be relevant to its product candidates, Immatics has not conducted a full freedom-to-operate search or analysis for such product candidates, and Immatics may not be aware of patents or pending or future patent applications that, if issued, would block Immatics from commercializing its product candidates. Thus, Immatics cannot guarantee that it can successfully commercialize product candidates in a way that will not infringe any third party’s intellectual property.

Where Immatics licenses certain technology from a third party, the prosecution, maintenance and defense of the patent rights licensed from such third party may be controlled by the third party which may impact the scope of patent protection which will be obtained or enforced.

Where Immatics licenses patent rights or technology from a third-party, control of such third-party patent rights may vest in the licensor, particularly where the license is non-exclusive or field restricted. This may mean that Immatics is not able to control or affect the scope of the claims of any relevant third-party patent or have control over any enforcement of such a patent. Where a licensor brings an enforcement action, this could negatively impact Immatics’ business or result in additional restrictions being imposed on the license Immatics has and the scope of such license, or result in invalidation or limitation of the scope of the licensed patent. In addition, should Immatics wish to enforce the relevant patent rights against a third person, Immatics may be reliant on consent from the relevant licensor or the cooperation of the licensor. The licensor may refuse to bring such action and leave Immatics unable to restrict competitor entry into the market.

Immatics may be involved in lawsuits to protect or enforce its patents or the patents of its licensors, or lawsuits accusing its products of patent infringement, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe the patents of Immatics’ licensors. To counter infringement or unauthorized use, Immatics may be required to file infringement claims, which can be expensive and time-consuming. In addition, in

 

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an infringement proceeding, a court may decide that one or more of Immatics’ patents is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that its patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of its patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put Immatics’ patents applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from Immatics’ business. In the event of a successful claim of infringement against Immatics, Immatics may be enjoined from manufacturing, use, and marketing its products, or may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign its infringing products, which may be impossible or require substantial time and monetary expenditure.

Obtaining and maintaining Immatics’ patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and Immatics’ patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the United States Patent and Trademark Office (“USPTO”) and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, Immatics’ competitors might be able to enter the market, which would have a material adverse effect on its business.

Immatics may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

The cost to Immatics of any litigation or other proceeding relating to intellectual property rights, even if resolved in Immatics’ favor, could be substantial. Some of Immatics’ competitors may be better able to sustain the costs of complex patent litigation because they have substantially greater resources. If there is litigation against Immatics, Immatics may not be able to continue to operate.

Should third parties file patent applications or be issued patents claiming technology also used or claimed by Immatics, Immatics may be required to participate in interference proceedings in the USPTO to determine priority of invention. Immatics may be required to participate in interference proceedings involving its issued patents and pending applications. Immatics may be required to cease using the technology or to license rights from prevailing third parties as a result of an unfavorable outcome in an interference proceeding. A prevailing party in that case may not offer Immatics a license on commercially acceptable terms or at all.

Issued patents covering Immatics’ product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

If Immatics or one of its licensing collaborators initiates legal proceedings against a third party to enforce a patent covering one of Immatics’ product candidates, the defendant could counterclaim that the patent covering its product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes and post grant review, and equivalent

 

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proceedings in foreign jurisdictions (for example, opposition proceedings). Such proceedings could result in revocation or amendment to Immatics’ patents in such a way that they no longer cover Immatics’ product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, Immatics cannot be certain that there is no invalidating prior art, of which Immatics, its patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, Immatics would lose at least part, and perhaps all, of the patent protection on its product candidates. Such a loss of patent protection could have a material adverse impact on Immatics’ business.

Immatics may be subject to claims challenging the inventorship or ownership of its patents and other intellectual property.

Immatics’ agreements with employees and its personnel policies also generally provide that any inventions conceived by such individuals in the course of rendering services to Immatics shall be its exclusive property or that Immatics may obtain full rights to such inventions, at its election. However, Immatics may not obtain these agreements in all circumstances, and individuals with whom Immatics has these agreements may not comply with their terms. Immatics may be subject to claims that former employees, collaborators, or other third parties have an ownership interest in its patents or other intellectual property, or IP. Ownership disputes may arise, for example, from conflicting obligations of consultants or others who are involved in developing Immatics’ development candidates. Immatics also faces the risk that present or former employees could continue to hold rights to intellectual property used by Immatics, may demand the registration of intellectual property rights in their name and demand damages pursuant to the German Employee Invention Act. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If Immatics fails in defending any such claims, in addition to paying monetary damages, Immatics may lose valuable IP rights, such as exclusive ownership of, or right to use, valuable IP. Such an outcome could have a material adverse impact on Immatics’ business. Even if Immatics is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.

In addition to the protection afforded by patents, Immatics seeks to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of Immatics’ product discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Trade secrets, however, may be difficult to protect. Although Immatics requires all of its employees to assign their inventions to Immatics, and require all of its employees and key consultants who have access to its proprietary know-how, information, or technology to enter into confidentiality agreements, Immatics cannot be certain that its trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to its trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, Immatics may encounter significant problems in protecting and defending its intellectual property both in the United States and abroad. If Immatics is unable to prevent unauthorized material disclosure of its intellectual property to third parties, Immatics will not be able to establish or maintain a competitive advantage in its market, which could materially adversely affect Immatics’ business, operating results and financial condition.

Immatics may be subject to claims that its employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that its employees have wrongfully used or disclosed alleged trade secrets of their former employers.

Immatics employs individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including its competitors or potential competitors. In addition, Immatics employees

 

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involved in its strategic collaborations have access to certain joint confidential information or such information from the collaborator. Although Immatics tries to ensure that its employees, consultants, and independent contractors do not use the proprietary information or know-how of others in their work for Immatics, from time to time Immatics may be subject to claims that Immatics, or its employees, consultants, or independent contractors, have inadvertently or otherwise used or disclosed IP, including trade secrets or other proprietary information, of any of its employees’ former employers or other third parties. Litigation may be necessary to defend against these claims. If Immatics fails in defending any such claims, in addition to paying monetary damages, Immatics may lose valuable IP rights or personnel, which could adversely impact Immatics’ business. Even if Immatics is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Such liability can also occur if Immatics publishes or discloses confidential information from its collaboration without permission of the respective collaborator.

Changes in U.S. or foreign countries’ patent law could diminish the value of patents in general, thereby impairing Immatics’ ability to protect its products.

As is the case with other biopharmaceutical companies, Immatics’ success is dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to Immatics’ ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken Immatics’ ability to obtain new patents or to enforce its existing patents and patents that Immatics might obtain in the future. While Immatics does not believe that any of the patents owned or licensed by Immatics will be found invalid based on this decision, Immatics cannot predict how future decisions by the courts, the U.S. Congress or the USPTO may impact the value of Immatics’ patents, nor can Immatics predict changes in international patent law.

Immatics may not be able to protect its intellectual property rights throughout the world.

The legal protection afforded to inventors and owners of intellectual property in countries outside of the United States may not be as protective or effective as that in the United States and Immatics may, therefore, be unable to acquire and enforce intellectual property rights outside the United States to the same extent as in the United States. Whether filed in the United States or abroad, Immatics’ patent applications may be challenged or may fail to result in issued patents.

In addition, Immatics’ existing patents and any future patents Immatics obtains may not be sufficiently broad to prevent others from utilizing Immatics’ technologies or from developing or commercializing competing products. Furthermore, others may independently develop or commercialize similar or alternative technologies or therapies, or design around Immatics’ patents. Immatics’ patents may be challenged, invalidated, circumvented or narrowed, or fail to provide Immatics with any competitive advantages. In many foreign countries, patent applications and/or issued patents, or parts thereof, must be translated into the native language. If Immatics’ patent applications or issued patents are translated incorrectly, they may not adequately cover Immatics’ technologies; in some countries, it may not be possible to rectify an incorrect translation, which may result in patent protection that does not adequately cover Immatics’ technologies in those countries.

Filing, prosecuting, enforcing, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and Immatics’ intellectual property rights in some countries outside the United States are less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and certain state laws in the United States. Consequently, Immatics may not be able to prevent third parties from utilizing its inventions in all countries

 

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outside the United States, or from selling or importing products made using its inventions in and into the United States or other jurisdictions. Competitors may use Immatics’ technologies, or technology that Immatics licenses, in jurisdictions where Immatics has not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where Immatics has patent protection, but enforcement is not as strong as that in the United States. These products may compete with Immatics’ lead product candidate or any other current or future product candidates and Immatics’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biotechnology. In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. Thus, it may be difficult for Immatics to stop the infringement of its patents or the marketing of competing products in violation of Immatics’ proprietary rights, generally. Proceedings to enforce Immatics’ patent rights in foreign jurisdictions could result in substantial costs and divert Immatics’ efforts and attention from other aspects of its business, could put Immatics’ patents at risk of being invalidated or interpreted narrowly, could place its patent applications at risk of not issuing, and could provoke third parties to assert claims against Immatics. Immatics may not prevail in any lawsuits that Immatics initiates, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, Immatics’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that it owns.

Patent terms may be inadequate to protect Immatics’ competitive position on its product candidate or any future product candidates for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering Immatics’ product candidates or any future product candidates are obtained, once the patent life has expired, Immatics may be open to competition from competitive products. Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting Immatics’ current product candidates or any future product candidates might expire before or shortly after Immatics or its collaborators commercialize those candidates. As a result, Immatics’ patent portfolio may not provide Immatics with sufficient rights to exclude others from commercializing products similar or identical to Immatics’.

Risks Related to Immatics’ Business and Industry

Immatics is highly dependent on its key personnel, and if Immatics is not successful in attracting and retaining highly qualified personnel, Immatics may not be able to successfully implement its business strategy.

Immatics’ ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon its ability to attract and retain highly qualified managerial, scientific and medical personnel. Immatics is highly dependent on its management, scientific and medical personnel, including its Chief Executive Officer and other executive officers in its senior management. The loss of the services of any of Immatics’ executive officers, other key employees, and other scientific and medical advisors, and its inability to find suitable replacements could result in delays in product development and harm Immatics’ business.

Immatics conducts substantially all of its operations at its facilities in Tübingen, Germany, Houston, Texas and Munich, Germany where many other biopharmaceutical companies, academic and research institutions have facilities and/or headquarters which substantially increases Immatics’ competition for skilled personnel in its market and may limit its ability to hire and retain highly qualified personnel.

To induce current valuable employees to remain at Immatics through salary and cash incentives, Immatics has provided stock appreciation rights which will be converted into a new employee incentive scheme. Despite

 

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Immatics’ efforts to retain valuable employees, members of its management, scientific and development teams could always terminate their employment with Immatics on short notice. Even though Immatics has employment agreements in place with all its employees including key personnel, these employment agreements provide for at-will employment, which means that any of its employees could leave the company at any time, subject to notice periods and non-competition clauses. If key employees leave the company, this may result in delays in the development of its product candidates or may endanger the proper and regulation compliant conduct of its clinical trials. Immatics’ success highly depends on its ability to continue to attract, retain and motivate highly skilled “junior-, mid- and senior-level” personnel as well as scientific and medical personnel.

Immatics’ employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

Immatics is exposed to the risk of fraud or other illegal activity by its employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties may include intentional, reckless and/or negligent conduct that fails to: comply with the laws of the FDA and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, comply with manufacturing standards Immatics has established, comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws, or report financial information or data accurately or to disclose unauthorized activities to Immatics. If Immatics obtains FDA approval for any of Immatics’ product candidates and begins commercializing those products in the United States, Immatics’ potential exposure under such laws will increase significantly, and the costs associated with compliance with such laws are also likely to increase. Failure to comply with these laws may impact, among other things, Immatics’ current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

Immatics has adopted a Code of Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions Immatics takes to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting Immatics from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. Efforts to ensure that Immatics’ business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that Immatics’, or its employees’, consultants’, collaborators’, contractors’, or vendors’ business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against Immatics, and Immatics is not successful in defending itself or asserting its rights, those actions could have a significant impact on Immatics’ business, including civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, compliance agreements, withdrawal of product approvals, and curtailment of its operations, among other things, any of which could adversely affect its ability to operate its business and its results of operations. In addition, the approval and commercialization of any of Immatics’ product candidates outside the United States will also likely subject it to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

 

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Immatics will need to grow the size and capabilities of its organization, and it may experience difficulties in managing this growth.

Immatics’ operations are dependent upon the services of its executives and its employees who are engaged in research and development. The loss of the services of its executive officers or senior research personnel could delay its product development programs and its research and development efforts. In order to develop Immatics’ business in accordance with its business plan, Immatics will have to hire additional qualified personnel, including in the areas of research, manufacturing, clinical trials management, regulatory affairs, and sales and marketing. Immatics is continuing its efforts to recruit and hire the necessary employees to support its planned operations in the near term. However, competition for qualified employees among companies in the biotechnology and biopharmaceutical industry is intense, and no assurance can be given that Immatics will be able to attract, hire, retain and motivate the highly skilled employees that it needs. Future growth will impose significant added responsibilities on members of management, including:

 

   

identifying, recruiting, integrating, maintaining, and motivating additional employees;

 

   

managing Immatics’ internal development efforts effectively, including the clinical and FDA review process for its product candidates, while complying with its contractual obligations to contractors and other third parties; and

 

   

improving Immatics’ operational, financial and management controls, reporting systems, and procedures.

Immatics’ future financial performance and its ability to commercialize its product candidates will depend, in part, on its ability to effectively manage any future growth, and its management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

Immatics currently relies, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to Immatics on a timely basis when needed, or that Immatics can find qualified replacements. In addition, if Immatics is unable to effectively manage its outsourced activities or if the quality, compliance or accuracy of the services provided by consultants is compromised for any reason, its clinical trials may be extended, delayed, or terminated, and Immatics may not be able to obtain regulatory approval of its product candidates or otherwise advance its business. There can be no assurance that Immatics will be able to manage its existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all.

If Immatics is not able to effectively expand its organization by hiring new employees and expanding its groups of consultants and contractors, Immatics may not be able to successfully implement the tasks necessary to further develop and commercialize its product candidates and, accordingly, may not achieve its research, development, and commercialization goals on a timely basis, or at all.

If product liability lawsuits are brought against Immatics, Immatics may incur substantial liabilities and may be required to limit commercialization of its product candidates.

Immatics faces an inherent risk of product liability as a result of the clinical testing of its product candidates and will face an even greater risk if it commercializes any products. For example, Immatics may be sued if its product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Immatics may also still face risks from previous research and development activities. For example, IMA950, a multi-peptide vaccine previously developed by Immatics, is still in clinical use under the responsibility of clinical investigators outside of Immatics’ clinical trials (investigator-initiated trials). While any sponsor responsibility is with the investigator, Immatics cannot fully be sure that Immatics will not be held liable in the future for any potential product defects.

 

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Any product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. Large judgements have also been awarded in class action lawsuits based on therapeutics that had unanticipated side effects. If Immatics cannot successfully defend itself against product liability claims, Immatics may incur substantial liabilities or be required to limit commercialization of its product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

 

   

decreased demand for Immatics’ product candidates;

 

   

injury to Immatics’ reputation;

 

   

withdrawal of clinical trial participants or sites and potential termination of clinical trial sites or entire clinical programs;

 

   

initiation of investigations by regulators, refusal to approve marketing applications or supplements, and withdrawal or limitation of product approvals;

 

   

costs to defend the related litigation;

 

   

a diversion of management’s time and Immatics’ resources;

 

   

substantial monetary awards to trial participants or patients;

 

   

product recalls, withdrawals or labeling, marketing or promotional restrictions;

 

   

loss of revenue;

 

   

significant negative media attention;

 

   

decrease in the price of Immatics’ stock and overall value of its company;

 

   

exhaustion of Immatics’ available insurance coverage and its capital resources; or

 

   

the inability to commercialize Immatics’ product candidates.

Immatics’ inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products it develops, alone or with corporate collaborators. Immatics’ insurance policies may also have various exclusions, and Immatics may be subject to a product liability claim for which it has no coverage. While Immatics has obtained clinical trial insurance for its Phase 1 clinical trials and will also seek to obtain such insurance for future trials, Immatics may have to pay amounts awarded by a court or negotiated in a settlement that exceed its coverage limitations or that are not covered by its insurance, and Immatics may not have, or be able to obtain, sufficient capital to pay such amounts. Even if Immatics’ agreements with any future corporate collaborators entitle it to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

If Immatics fails to comply with federal and state healthcare and promotional laws, including fraud and abuse and information privacy and security laws, Immatics could face substantial penalties and its business, financial condition, results of operations, and prospects could be adversely affected.

As a biopharmaceutical company, Immatics is subject to many federal and state healthcare laws, including the federal Anti-Kickback Statute, the federal civil and criminal False Claims Act, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other price reporting requirements, the Veterans Health Care Act of 1992, the federal Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economics and Clinical Health Act), the Foreign Corrupt Practices Act of 1977, the Patient Protection and Affordable Care Act of 2010, and similar state laws. Even though Immatics does not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid, or other third-party payors, certain healthcare laws (for example, federal, state and European laws) and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to Immatics’ business. If Immatics does not comply with all applicable fraud and abuse laws, Immatics may be subject to healthcare fraud and abuse enforcement.

 

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Laws and regulations require calculation and reporting of complex pricing information for prescription drugs, and compliance will require Immatics to invest in significant resources and develop a price reporting infrastructure or depend on third parties to compute and report its drug pricing. Pricing reported to CMS must be certified. Non-compliant activities expose Immatics to FCA risk if they result in overcharging agencies, underpaying rebates to agencies, or causing agencies to overpay providers.

If Immatics or its operations are found to be in violation of any federal or state healthcare law, or any other governmental regulations that apply to it, Immatics may be subject to penalties, including civil, criminal, and administrative penalties, damages, fines, disgorgement, debarment from government contracts, refusal of orders under existing contracts, exclusion from participation in U.S. federal or state health care programs, corporate integrity agreements, and the curtailment or restructuring of its operations, any of which could materially adversely affect its ability to operate its business and its financial results. If any of the physicians or other healthcare providers or entities with whom Immatics expects to do business, including its collaborators, is found not to be in compliance with applicable laws, they may be subject to criminal, civil, or administrative sanctions, including but not limited to, exclusions from participation in government healthcare programs, which could also materially affect its business.

In the United States, engaging in the impermissible promotion of Immatics’ products, following approval, for off-label uses can also subject Immatics to false claims and other litigation under federal and state statutes, including fraud and abuse and consumer protection laws, which can lead to civil and criminal penalties and fines, agreements with governmental authorities that materially restrict the manner in which Immatics promotes or distributes therapeutic products and do business through, for example, corporate integrity agreements, suspension or exclusion from participation in federal and state healthcare programs, and debarment from government contracts and refusal of future orders under existing contracts. These false claims statutes include the federal civil False Claims Act, which allows any individual to bring a lawsuit against a biopharmaceutical company on behalf of the federal government alleging submission of false or fraudulent claims or causing others to present such false or fraudulent claims, for payment by a federal program such as Medicare or Medicaid. If the government decides to intervene and prevails in the lawsuit, the individual will share in the proceeds from any fines or settlement funds. If the government declines to intervene, the individual may pursue the case alone. These False Claims Act lawsuits against manufacturers of drugs and biologics have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements, up to $3.0 billion, pertaining to certain sales practices and promoting off-label uses. In addition, False Claims Act lawsuits may expose manufacturers to follow-on claims by private payors based on fraudulent marketing practices. This growth in litigation has increased the risk that a biopharmaceutical company will have to defend a false claim action, pay settlement fines or restitution, as well as criminal and civil penalties, agree to comply with burdensome reporting and compliance obligations, and be excluded from Medicare, Medicaid, or other federal and state healthcare programs. If Immatics or its future collaborators do not lawfully promote its approved products, if any, Immatics may become subject to such litigation and, if Immatics does not successfully defend against such actions, those actions may have a material adverse effect on its business, financial condition, results of operations and prospects.

Although an effective compliance program can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Moreover, achieving and sustaining compliance with applicable federal and state fraud laws may prove costly. Any action against Immatics for violation of these laws, even if Immatics successfully defends against it, could cause it to incur significant legal expenses and divert its management’s attention from the operation of its business.

If Immatics does not comply with laws regulating the protection of the environment and health and human safety, its business could be adversely affected.

Immatics’ research and development involves, and may in the future involve, the use of potentially hazardous materials, including chemicals, potentially infectious biological substances and genetically modified organisms. Immatics’ operations produce hazardous waste products. Although Immatics believes that its safety procedures

 

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for handling and disposing of these materials comply with the standards mandated by local, state and federal laws and regulations, the risk of accidental contamination or injury from these materials cannot be fully eliminated. If an accident occurs, Immatics could be held liable for resulting damages. Immatics is also subject to numerous environmental, health and workplace safety laws and regulations and fire and building codes, including those governing laboratory procedures, exposure to blood-borne, potentially infectious pathogens, use and storage of flammable agents and the handling of biohazardous materials and genetically modified organisms. Although Immatics maintains workers’ compensation insurance as prescribed by the States of Texas and German laws to cover Immatics for costs and expenses Immatics may incur due to injuries to its employees resulting from the use of these materials, this insurance may not provide adequate coverage against all potential liabilities. Immatics does not maintain insurance for environmental liability or toxic tort claims that may be asserted against Immatics. Additional federal, state and local laws and regulations affecting Immatics’ operations may be adopted in the future. Immatics may incur substantial costs to comply with, and substantial fines or penalties if Immatics violates, any of these laws or regulations.

Negative public opinion and increased regulatory scrutiny of genetic research and therapies involving gene editing and research done on animals may damage public perception of Immatics’ product candidates or adversely affect its ability to conduct its business or obtain regulatory approvals for its product candidates.

The gene-editing technologies that Immatics uses are novel. Public perception may be influenced by claims that gene editing is unsafe, and products incorporating gene editing may not gain the acceptance of the public or the medical community. The development of some of Immatics’ product candidates included research on animals or may in future require animal experiments. Immatics tries to limit the use of animal studies in the development of its products to the extent possible. However, FDA and regulatory authorities in other countries asked and may also ask in the future for some aspects of Immatics’ products to be studied using animal experiments, and certain aspects of product development require animal studies by applicable regulations and laws. Public perception of Immatics’ business may also be influenced by claims that studies on animals are unethical. In particular, Immatics’ success will depend upon physicians specializing in Immatics’ targeted diseases prescribing its product candidates as treatments in lieu of, or in addition to, existing, more familiar, treatments for which greater clinical data may be available. Any increase in negative perceptions of gene editing and animal studies may result in fewer physicians prescribing Immatics’ treatments or may reduce the willingness of patients to utilize its treatments or participate in clinical trials for its product candidates. In addition, given the novel nature of gene-editing and cell therapy technologies, governments may place import or export restrictions in order to retain control of the technologies. Increased negative public opinion or more restrictive government regulations either in the United States, Europe or internationally, would have a negative effect on Immatics’ business or financial condition and may delay or impair the development and commercialization of its product candidates or demand for such product candidates.

Immatics’ internal computer systems, or those used by its contract research organizations or other contractors or consultants, may fail or suffer security breaches.

Despite the implementation of security measures, Immatics’ internal computer systems and those of its contract research organizations and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized and authorized access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event was to occur and cause interruptions in Immatics’ operations, it could result in a disruption of its drug development programs. For example, the loss of clinical trial data from completed or ongoing clinical trials for a product candidate could result in delays in Immatics’ regulatory approval efforts and significantly increase its costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to Immatics’ data or applications, or inappropriate disclosure of confidential or proprietary information, Immatics could incur liability and the further development of any product candidates could be delayed. Loss of XPRESIDENT raw data, the XPRESIDENT database or target information could result in disruption of drug discovery and product candidate development activities. Unauthorized access to the aforementioned could limit development options and value potential for future target candidates or proprietary programs.

 

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Immatics is dependent on information technology systems, infrastructure and data.

Immatics is dependent upon information technology systems, infrastructure and data. The multitude and complexity of Immatics’ computer systems make them inherently vulnerable to service interruption or destruction, malicious intrusion and random attack. Likewise, data privacy or security breaches by third parties, employees, contractors or others may pose a risk that sensitive data, including Immatics’ intellectual property, trade secrets or personal information of its employees, patients, or other business partners may be exposed to unauthorized persons or to the public. Cyberattacks are increasing in their frequency, sophistication and intensity. Cyberattacks could include the deployment of harmful malware, denial-of-service, social engineering and other means to affect service reliability and threaten data confidentiality, integrity and availability. Immatics’ business and technology partners face similar risks and any security breach of their systems could adversely affect its security posture. While Immatics has invested, and continue to invest, in the protection of its data and information technology infrastructure, there can be no assurance that its efforts, or the efforts of its partners and vendors, will prevent service interruptions, or identify breaches in its systems, that could adversely affect its business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm to Immatics. In addition, Immatics’ liability insurance may not be sufficient in type or amount to cover it against claims related to security breaches, cyberattacks and other related breaches.

Business disruptions could seriously harm Immatics’ future revenue and financial condition and increase costs and expenses.

Immatics’ operations and those of its third-party suppliers and collaborators could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes or other extreme weather conditions, medical epidemics, labor disputes or other business interruptions. Although Immatics has limited business interruption insurance policies in place, any interruption could come with high costs for Immatics, as salaries and loan payments would usually continue. Moreover, any interruption could seriously harm Immatics’ ability to timely proceed with any clinical programs or to supply product candidates for use in its clinical programs or during commercialization. For example, the current COVID-19 pandemic is causing an interruption in Immatics’ clinical trial activities. Specifically, Immatics had to reduce its business activities including those in the laboratory according to governmental orders in the U.S. as well as in Germany. Additionally, supply chains disruptions impact and may continue to impact Immatics’ research activities. Clinical sites involved may not be able to enroll patients into Immatics’ trials as they have to keep free or use capacities for the treatment of COVID-19 patients. Any of the sites where we conduct clinical trials may announce that they will not enroll further patients into clinical trials until further notice. Immatics currently does not know, how substantial the delay for the development of its product candidates will be. Even if the situation improves in the U.S. and/or Europe, the impact on supply chains and patient recruitment may last longer.

If Immatics engages in future acquisitions or strategic partnerships, this may increase its capital requirements, dilute its shareholders, cause Immatics to incur debt or assume contingent liabilities, and subject Immatics to other risks.

Immatics may evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

 

   

increased operating expenses and cash requirements;

 

   

the assumption of additional indebtedness or contingent liabilities;

 

   

assimilation of operations, intellectual property and products of an acquired company or product, including difficulties associated with integrating new personnel;

 

   

the diversion of Immatics’ management’s attention from its existing product programs and initiatives in pursuing such a strategic merger or acquisition;

 

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retention of key employees, the loss of key personnel, and uncertainties in Immatics’ ability to maintain key business relationships;

 

   

risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and

 

   

Immatics’ inability to generate revenue from acquired technology and/or products sufficient to meet its objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

Depending on the size and nature of future strategic acquisitions, Immatics may acquire assets or businesses that require Immatics to raise additional capital or to operate or manage businesses in which Immatics have limited experience. Making larger acquisitions that require Immatics to raise additional capital to fund the acquisition will expose Immatics to the risks associated with capital raising activities. Acquiring and thereafter operating larger new businesses will also increase Immatics’ management, operating and reporting costs and burdens. In addition, if Immatics undertakes acquisitions, Immatics may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, Immatics may not be able to locate suitable acquisition opportunities and this inability could impair its ability to grow or obtain access to technology or products that may be important to the development of its business.

Unstable market and economic conditions may have serious adverse consequences on Immatics’ business, financial condition and stock price.

The global credit and financial markets have experienced extreme volatility and disruptions in the past, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Immatics’ general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Immatics’ portfolio of corporate and government bonds would also be adversely impacted. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on Immatics’ operations, growth strategy, financial performance and stock price and could require Immatics to delay or abandon clinical development plans. In addition, there is a risk that one or more of Immatics’ current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect its ability to attain its operating goals on schedule and on budget.

Immatics is exposed to risks related to currency exchange rates.

Immatics conducts a significant portion of its operations within Germany in both U.S. dollars and Euros and its arrangements with, for example, MD Anderson, Amgen, Genmab, BMS, and GSK are denominated in U.S. dollars or Euros. Changes in currency exchange rates have had and could have a significant effect on Immatics’ operating results. Exchange rate fluctuations between U.S. dollars and local currencies create risk in several ways, including the following: weakening of the Euro may increase the cost of overseas research and development expenses and other costs outside of Germany; strengthening of the U.S. dollar may decrease the value of any future revenues denominated in other currencies. Effects of exchange rates on transactions and cash deposits held in a currency other than the functional currency of a subsidiary can distort Immatics’ financial results; and commercial pricing and profit margins are affected by currency fluctuations. For example, international crises, conflicts or disasters such as the current COVID-19 pandemic may result in substantial instability in international financial markets, including with respect to exchange rates.

 

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A variety of risks associated with conducting research and clinical trials in multiple countries and marketing Immatics’ product candidates internationally could materially adversely affect its business.

Clinical trials are currently being conducted in the United States and in Germany, and Immatics plans to globally develop its current and future product candidates. Accordingly, Immatics expects that it will be subject to additional risks related to operating in foreign countries, including:

 

   

differing regulatory requirements in foreign countries;

 

   

unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

 

   

differing standards for the conduct of clinical trials;

 

   

increased difficulties in managing the logistics and transportation of storing and shipping product candidates produced in the United States or elsewhere and shipping the product candidate to patients in other countries;

 

   

import and export requirements and restrictions;

 

   

economic weakness, including inflation, or political instability in foreign economies and markets;

 

   

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

 

   

foreign taxes, including withholding of payroll taxes;

 

   

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

 

   

difficulties staffing and managing foreign operations;

 

   

workforce uncertainty in countries where labor unrest is more common than in the United States or Germany;

 

   

differing payor reimbursement regimes, governmental payors or patient self-pay systems, and price controls;

 

   

potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations;

 

   

challenges enforcing Immatics’ contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States or Germany;

 

   

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

   

business interruptions resulting from geo-political actions, including war and terrorism.

These and other risks associated with Immatics’ international operations may materially adversely affect its ability to attain or maintain profitable operations.

Immatics’ projections regarding the market opportunities for its product candidates may not be accurate, and the actual market for its products may be smaller than Immatics estimates.

Immatics’ projections of both the number of people who have the cancers Immatics is targeting, as well as the subset of people with these cancers who are in a position to receive second- or third-line therapy, and who have the potential to benefit from treatment with Immatics’ product candidates, are based on its beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research by third parties, and may prove to be incorrect. Further, new studies or

 

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approvals of new therapeutics may change the estimated incidence or prevalence of these cancers. The number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population for Immatics’ product candidates may be limited or may not be amenable to treatment with its product candidates and may also be limited by the cost of its treatments and the reimbursement of those treatment costs by third-party payors. Even if Immatics obtains significant market share for its product candidates, because the potential target populations are small, Immatics may never achieve profitability without obtaining regulatory approval for additional indications.

Immatics may seek orphan drug designation for some or all of its product candidates across various indications, but Immatics may be unable to obtain such designations or to maintain the benefits associated with orphan drug designation, including market exclusivity, which may cause its revenue, if any, to be reduced.

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic. In order to obtain orphan drug designation, the request must be made before submitting a BLA. In the European Union, EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval of that particular product for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same biologic (meaning, a product with the same principal molecular structural features) for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan drug exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. As a result, even if one of Immatics’ product candidates receives orphan exclusivity, the FDA can still approve other biologics that do not have the same principal molecular structural features for use in treating the same indication or disease or the same biologic for a different indication or disease during the exclusivity period. Furthermore, the FDA can waive orphan exclusivity if Immatics is unable to manufacture sufficient supply of its product or if a subsequent applicant demonstrates clinical superiority over its product.

Immatics may seek orphan drug designations for some or all of its product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products. Even if Immatics obtains orphan drug designations, exclusive marketing rights in the United States may be limited if Immatics seeks approval for an indication broader than the orphan designated indication and may be lost if the FDA later determines that the request for designation was materially defective or if Immatics is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition, or if a subsequent applicant demonstrates clinical superiority over Immatics’ products, if approved. In addition, although Immatics may seek orphan drug designation for other product candidates, Immatics may never receive such designations. Even with respect to the indications for which Immatics received orphan designation, Immatics may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products, and thus approval of Immatics’ product candidates could be blocked for

 

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seven years if another company previously obtained approval and orphan drug exclusivity for the same drug and same condition.

Immatics may seek Breakthrough Therapy or Fast Track designations and may pursue Accelerated Approval for some or all of its current product candidates, but Immatics may be unable to obtain such designations or, where obtained, Immatics may be unable to maintain Breakthrough Therapy designation or obtain or maintain the benefits associated with such designations.

In 2012, the FDA established a Breakthrough Therapy designation which is intended to expedite the development and review of products that treat serious or life-threatening diseases when “preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.” The designation of a product candidate as a Breakthrough Therapy provides potential benefits that include intensive guidance on an efficient drug development program, beginning as early as Phase 1, organizational commitment involving senior managers; and eligibility for rolling review and priority review.

Breakthrough Therapy designation does not change the standards for product approval. There can be no assurance that Immatics will receive Breakthrough Therapy designation for any product candidate or any particular indication. Additionally, other treatments from competing companies may obtain the designations and impact Immatics’ ability to develop and commercialize its product candidates, which may adversely impact its business, financial condition or results of operation.

Immatics may also seek Fast Track designation. If a drug or biologic candidate is intended for the treatment of a serious or life-threatening condition or disease and the drug demonstrates the potential to address unmet medical needs for the condition, the sponsor may apply for Fast Track designation. Under the Fast Track program, the sponsor of a new drug or biologic candidate may request that the FDA designate the candidate for a specific indication as a Fast Track drug or biologic concurrent with, or after, the submission of the IND for the candidate. The FDA must determine if the drug or biologic candidate qualifies for Fast Track designation within 60 calendar days of receipt of the sponsor’s request. Even if Immatics does apply for and receive Fast Track designation, Immatics may not experience a faster development, review or approval process compared to conventional FDA procedures. The FDA may rescind Fast Track designation if it believes that the designation is no longer supported by data from Immatics’ clinical development program.

Immatics may also seek Accelerated Approval under the FDA’s Accelerated Approval programs. The FDA may approve a drug or biologic for a serious or life-threatening disease or condition that generally provides meaningful advantages over available treatments and demonstrates an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. For drugs granted Accelerated Approval, post-marketing confirmatory trials have been required to describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. These confirmatory trials must be completed with due diligence. Moreover, the FDA may withdraw approval of Immatics’ product candidate or indication approved under the Accelerated Approval pathway if, for example:

 

   

the trial or trials required to verify the predicted clinical benefit of Immatics’ product candidate fails to verify such benefit or does not demonstrate sufficient clinical benefit to justify the risks associated with the drug;

 

   

other evidence demonstrates that Immatics’ product candidate is not shown to be safe or effective under the conditions of use;

 

   

Immatics fails to conduct any required post approval trial of its product candidate with due diligence; or

 

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Immatics disseminates false or misleading promotional materials relating to the relevant product candidate.

In Europe, the EMA has implemented the so-called “PRIME” (PRIority MEdicines) status in order support the development and accelerate the approval of complex innovative medicinal products addressing an unmet medical need. The PRIME status enables early dialogue with the relevant EMA scientific committees and, possibly, some payers; and thus reinforces the EMA’s scientific and regulatory support. It also opens accelerated assessment of the marketing authorization application (150 days instead of 210 days). The PRIME status, which is decided by the EMA, is reserved to medicines that may benefit from accelerated assessment, i.e. medicines of major interest from a public health perspective, in particular from a therapeutic innovation perspective and that target unmet medical need.

Changes in funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functions on which the operation of Immatics’ business may rely, which could negatively impact Immatics’ business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the FDA and other government agencies on which Immatics’ operations may rely are subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect Immatics’ business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process Immatics’ regulatory submissions, which could have a material adverse effect on its business.

Further, future government shutdowns could impact Immatics’ ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations due to insufficient funding of the SEC and other government agencies or due to a government shutdown that affects the SEC.

Immatics GmbH and Immatics US, Inc. are subject to taxes and may have increased tax reporting and liabilities as a result of tax authority assessments.

Both Immatics GmbH and Immatics US, Inc. have not been subject to detailed income tax audits in the past. Both companies’ tax returns since 2015 may therefore be subject to change based on subsequent tax audits. This could lead to potential court procedures and increased tax liabilities in the future.

Immatics has identified material weaknesses in its internal control over financial reporting which could, if not remediated, result in material misstatements in its financial statements.

Prior to the Business Combination, Immatics was a private company and had limited accounting and financial reporting personnel and other resources with which to address its internal controls and procedures. In connection with the audit of Immatics’ consolidated financial statements for the year ended December 31, 2019, its management identified material weaknesses in its internal controls related to (i) the sufficiency of resources with an appropriate level of technical accounting and SEC reporting experience, (ii) clearly defined control processes, roles and segregation of duties within Immatics’ finance and accounting functions and (iii) the design and operating effectiveness of IT general controls for information systems that are significant to the preparation of

 

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Immatics’ consolidated financial statements. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Immatics’ annual or interim financial statements will not be prevented or detected on a timely basis. If Immatics’ remedial measures are insufficient to address the material weaknesses, or if additional material weakness or significant deficiencies in its internal control are discovered or occur in the future, Immatics’ financial statements may contain material misstatements.

Actual or anticipated changes to the laws and regulations governing the health care system may have a negative impact on cost and access to health insurance coverage and reimbursement of healthcare items and services.

The United States and several foreign jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect Immatics’ ability to sell any of its future approved products profitably. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives, including the Patient Protection and Affordable Care Act (ACA), which became law in 2010. While it is difficult to assess the impact of the ACA in isolation, either in general or on Immatics’ business specifically, it is widely thought that the ACA increases downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price Immatics may charge for, any products it develops that receive regulatory approval. Further, the United States, European and foreign governments regularly consider reform measures that affect healthcare coverage and costs. Such reforms may include changes to the coverage and reimbursement of healthcare services and products. For example, there have been recent judicial and Congressional challenges to the ACA, which could have an impact on coverage and reimbursement for healthcare services covered by plans authorized by the ACA, and Immatics expects there will be additional challenges and amendments to the ACA in the future. In September 2017, members of the United States Congress unsuccessfully introduced legislation with the announced intention to repeal major provisions of the ACA. Executive or legislative branch attempts to repeal, reform or to repeal and replace the ACA will likely continue. In addition, various other healthcare reform proposals have also emerged at the federal and state level. In addition, recent changes to United States tax laws could negatively impact the ACA.

Immatics cannot predict what healthcare initiatives, if any, will be implemented in the U.S. at the federal or state level or in European or other jurisdictions, however, government and other regulatory oversight and future regulatory and government interference with the healthcare systems could adversely impact Immatics’ business and results of operations.

Immatics expects to experience pricing pressures in connection with the sale of any products that Immatics develops, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative proposals.

Immatics’ failure to comply with international data protection laws and regulations could lead to government enforcement actions and significant penalties against it, and adversely impact its operating results.

European Union (“EU”) member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations on Immatics. Moreover, the collection and use of personal health data in the EU, which was formerly governed by the provisions of the EU Data Protection Directive, was replaced with the EU General Data Protection Regulation (“GDPR”) in May 2018. The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of

 

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the EU to the U.S., provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. The GDPR requirements apply not only to third-party transactions, but also to transfers of information between Immatics and its subsidiaries, including employee information. The recent implementation of the GDPR has increased Immatics’ responsibility and liability in relation to personal data that it processes, including in clinical trials, and it may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase Immatics’ cost of doing business. In addition, new regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase Immatics’ costs of doing business. In this regard, Immatics expects that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the EU and other jurisdictions, and Immatics cannot determine the impact such future laws, regulations and standards may have on its business.

Immatics’ failure to comply with state and/or national data protection laws and regulations could lead to government enforcement actions and significant penalties against Immatics, and adversely impact its operating results.

In the European Union, regulations regarding data protection were revised in 2016 by Regulation (EU) 2016/679 to implement more strict regulations. There are numerous other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security concerns. In the U.S., some state privacy laws apply more broadly than the Health Insurance Portability and Accountability Act (“HIPAA”) and associated regulations. For example, California recently enacted legislation – the California Consumer Privacy Act (“CCPA”) – which went into effect January 1, 2020. The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Although the law includes limited exceptions, including for certain information collected as part of clinical trials as specified in the law, it may regulate or impact Immatics’ processing of personal information depending on the context.

Immatics’ insurance policies are expensive and protect only from some business risks, which leaves Immatics exposed to significant uninsured liabilities.

Immatics does not carry insurance for all categories of risks that its business may encounter, and insurance coverage is becoming increasingly expensive. Immatics does not know if it will be able to maintain existing insurance with adequate levels of coverage, and any liability insurance coverage it acquires in the future may not be sufficient to reimburse the company for any expenses or losses it may suffer. If Immatics obtains marketing approval for any product candidates that the company or its collaborators may develop, Immatics intends to acquire insurance coverage to include the sale of commercial products, but it may be unable to obtain such insurance on commercially reasonable terms or in adequate amounts. Required coverage limits for such insurances are difficult to predict and may not be sufficient. If potential losses exceed Immatics’ insurance coverage, its financial condition would be adversely affected. In the event of contamination or injury, Immatics could be held liable for damages or be penalized with fines in an amount exceeding its resources. Clinical trials or regulatory approvals for any of its product candidates could be suspended, which could adversely affect Immatics’ results of operations and business, including by preventing or limiting the development and commercialization of any product candidates that the company or its collaborators may develop. Additionally, operating as a public company will make it more expensive for Immatics to obtain director and officer liability insurance. As a result, it may be more difficult to attract and retain qualified individuals to serve on Immatics’ Supervisory Board, the board committees or the Management Board.

 

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Immatics is subject to new legislation, regulatory proposals, and healthcare payor initiatives that may increase its costs of compliance, and adversely affect its ability to market its products, obtain collaborators, and raise capital.

In the United States and other foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of Immatics’ product candidates, restrict or regulate post-approval activities, and affect its ability, or the ability of its collaborators, to profitably sell any products for which Immatics obtains marketing approval. Immatics expects that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that Immatics, or its collaborators, may receive for any approved products.

Since 2010, when the United States enacted the Affordable Care Act (ACA), there have been a number of legislative and regulatory changes to the health care system in U.S. and also certain foreign jurisdictions that could impact Immatics’ ability to sell its products profitably. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect on April 1, 2013 and were to remain in effect until 2024. The Bipartisan Budget Act of 2015 extended the 2% sequestration to 2025. In January 2013, the American Taxpayer Relief Act of 2012 (“ATRA”) was approved which, among other things, reduced Medicare payments to several providers, with primary focus on the hospital outpatient setting and ancillary services, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. On January 20, 2017, the new administration signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices, and, for that reason, some final regulations have yet to take effect. In December 2017, Congress repealed the individual mandate for health insurance required by the ACA and could consider further legislation to repeal other elements of the ACA. At the end of 2017, CMS promulgated regulations that reduce the amount paid to hospitals for outpatient drugs purchased under the 340B program, and some states have enacted transparency laws requiring manufacturers to report information on drug prices and price increases. On December 14, 2018, the United States District Court for the Northern District of Texas struck down the ACA, deeming it unconstitutional given that Congress repealed the individual mandate in 2017; on July 9, 2019, the U.S. Court of Appeals for the Fifth Circuit heard arguments on appeal in this matter. It is unclear how the eventual decision from this appeal, subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA and Immatics’ business.

Additional federal and state healthcare reform measures in the U.S. or foreign countries may be adopted in the future that may result in more rigorous coverage criteria, increased regulatory burdens and operating costs, decreased net revenue from Immatics’ pharmaceutical products, decreased potential returns from its development efforts, and additional downward pressure on the price that Immatics receives for any approved drug. Any reduction in reimbursement from Medicare or other foreign government healthcare programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent Immatics from being able to generate revenue, attain profitability or commercialize its products.

Legislative and regulatory proposals may also be made to expand post-approval requirements and restrict sales and promotional activities for drugs. Immatics cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance, or interpretations will be changed, or what the impact of such changes on the marketing approvals of Immatics’ product candidates, if any, may be. In addition, increased

 

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scrutiny by Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject Immatics to more stringent product labeling and post-marketing testing and other requirements.

In addition, there have been a number of other policy, legislative and regulatory proposals aimed at changing the pharmaceutical industry. For instance, on May 11, 2018, the current administration presented its “Blueprint” to lower drug prices and reduce out of pocket costs of drugs, as well as additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, and incentivize manufacturers to lower the list price of their products. Although some proposals related to the administration’s Blueprint may require additional authorization to become effective, may ultimately be withdrawn, or may face challenges in the courts, the U.S. Congress and the administration have indicated that they will continue to seek new legislative and administrative measures to control drug costs, including by addressing the role of pharmacy benefit managers in the supply chain. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Immatics is unable to predict the future course of federal or state healthcare legislation in the United States or other major drug markets directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. The ACA and any further changes in the law or regulatory framework that reduce Immatics’ revenue or increase its costs could also have a material and adverse effect on its business, financial condition and results of operations.

The use of Immatics’ and Immatics US’s net operating loss carryforwards and research tax credits may be limited, as a result of the Business Combination.

Both Immatics and Immatics US incurred significant losses in the past and therefore are entitled to use net operating loss carryforwards.

As of December 31, 2019, Immatics had German federal net operating loss carryforwards of at least €155 million. These net operating loss carryforwards will not expire. However, the Business Combination will result in an ownership change in accordance with § 8c (1) KStG (German corporation tax code). Therefore, these net operating loss carryforwards can be preserved only to the extent that Immatics’ fair value exceeds the equity in the tax books plus the net operating loss carryforwards. Therefore, Immatics’ net operating loss carryforwards could be reduced or eliminated as part of the transaction.

As of December 31, 2019, Immatics US had U.S. federal net operating loss carryforwards of at least $65 million. Immatics US’s net operating loss carryforwards arising in taxable years ending on or prior to December 31, 2017 will begin expiring in 2027 if Immatics US has not used them prior to that time. Net operating loss carryforwards arising in taxable years ending after December 31, 2017 are no longer subject to expiration under the U.S. Tax Code. Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), net operating losses arising in tax years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss. Due to the cumulative losses of Immatics US through December 31, 2019, Immatics US does not anticipate that such provision of the CARES Act will be relevant to it. Additionally, Immatics US’s ability to use any net operating loss and credit carryforwards to offset taxable income or tax, respectively, in the future will be limited under Sections 382 and 383 of the U.S. Tax Code, respectively, if Immatics US has a cumulative change in ownership of more than 50% within a three-year period.

Immatics has performed an analysis under Section 382 of the U.S. Tax Code as of the expected closing of the Business Combination. Per the analysis, the Business Combination may trigger such an ownership change. As a result, the federal carryforwards associated with the net operating losses and research tax credits may be limited and more likely to expire unutilized. Based on Immatics’ analysis, the annual limitation under Section 382 of the

 

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U.S. Tax Code is expected to be approximately $2.1 million. In addition to this limitation, Section 382 of the U.S. Tax Code provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on Immatics’ analysis, Immatics believes that Immatics US will have a net unrealized built-in gain at the time of the Business Combination; as a result, the limitation under Section 382 of the U.S. Tax Code may be increased during the recognition period.

In addition, since Immatics will need to raise substantial additional funding to finance its operations, Immatics may undergo further ownership changes in the future. Any such annual limitation may significantly reduce the utilization of the net operating loss carryforwards and research tax credits before they expire. Depending on Immatics’ future tax position, limitation of its ability to use net operating loss carryforwards in which Immatics is subject to income tax could have an adverse impact on its results of operations and financial condition.

Risks Related to the Business Combination

TopCo has no operating or financial history and its results of operations may differ significantly from the unaudited pro forma financial data included in this document.

TopCo has been recently incorporated and has no operating history and no revenues. This document includes unaudited pro forma condensed combined financial statements for TopCo. The unaudited pro forma condensed combined statement of operations of TopCo combines the historical audited results of operations of ARYA for the year ended December 31, 2019 with the historical audited results of operations of Immatics for the year ended December 31, 2019, and gives pro forma effect to the Business Combination as if it had been consummated as of January 1, 2019. The unaudited pro forma condensed combined balance sheet of TopCo combines the historical balance sheets of ARYA and Immatics as of December 31, 2019 and gives pro forma effect to the Business Combination as if it had been consummated on such date.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the dates indicated above, or the future consolidated results of operations or financial position of TopCo. Accordingly, TopCo’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document.

The COVID-19 pandemic may trigger an economic crisis which may delay or prevent the consummation of the Business Combination.

In December 2019, a coronavirus (COVID-19) outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since being initially reported in China, the coronavirus has spread to over 150 countries and every state in the United States. Given the ongoing and dynamic nature of the COVID-19 crisis, it is difficult to predict the impact on the business of ARYA, Immatics and TopCo, and there is no guarantee that efforts by ARYA, Immatics and TopCo to address the adverse impact of COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. If ARYA or Immatics are unable to recover from a business disruption on a timely basis, the Business Combination and TopCo’s business and financial conditions and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak, and become more costly. Each of ARYA, Immatics and TopCo may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

 

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During the pre-closing period, ARYA and Immatics are prohibited from entering into certain transactions that might otherwise be beneficial to ARYA, Immatics or their respective shareholders.

Until the earlier of consummation of the Business Combination or termination of the Business Combination Agreement, ARYA and Immatics are subject to certain limitations on the operations of their businesses, each as summarized under the “The Business Combination Agreement and Ancillary Documents — Covenants of the Parties.” The limitations on ARYA’s and Immatics’ conduct of their businesses during this period could have the effect of delaying or preventing other strategic transactions and may, in some cases, make it impossible to pursue business opportunities that are available only for a limited time.

Uncertainties about the Business Combination during the pre-closing period may cause a loss of key management personnel and other key employees.

Immatics is dependent on the experience and industry knowledge of its key management personnel and other key employees to operate its business and execute its business plans. TopCo’s success following the Business Combination will depend in part upon its ability to retain Immatics’ existing key management personnel and other key employees and attract new management personnel and other key employees. During the pre-closing period, current and prospective employees of Immatics may experience uncertainty about their roles with TopCo after the Business Combination, which may adversely affect the ability of TopCo to retain or attract management personnel and other key employees.

Uncertainties about the Business Combination during the pre-closing period may cause third parties to delay or defer decisions concerning Immatics or seek to change existing arrangements.

There may be uncertainty regarding whether the Business Combination will occur. This uncertainty may cause third parties to delay or defer decisions concerning Immatics, which could negatively affect Immatics’ business. Third parties may seek to change existing agreements with Immatics as a result of the Business Combination for these or other reasons.

ARYA Sponsor and each of ARYA’s officers and directors agreed to vote in favor of the Business Combination, regardless of how ARYA’s public shareholders vote.

Unlike other blank check companies in which the founders agree to vote their Founder Shares and any public shares purchased by them during or after such company’s initial public offering in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, ARYA Sponsor and each of ARYA’s officers and directors agreed, and their permitted transferees will agree, pursuant to the terms of letter agreements entered into with ARYA, to vote any Founder Shares held by them, as well as any public shares owned by them, in favor the Business Combination. As of the record date for ARYA shareholders holding their shares in “street name,” the ARYA Initial Shareholders owned 20% of the issued and outstanding ARYA Ordinary Shares, including all of the Founder Shares, and will be able to vote all of such shares at the General Meeting. Accordingly, it is more likely that the necessary shareholder approval will be received for the Business Combination than would be the case if ARYA Sponsor and each of ARYA’s officers and directors agreed to vote any ARYA Ordinary Shares owned by them in accordance with the majority of the votes cast by ARYA’s public shareholders.

ARYA may waive one or more of the conditions to the Business Combination.

ARYA may agree to waive, in whole or in part, one or more of the conditions to ARYA’s obligations to complete the Business Combination, to the extent permitted by the ARYA amended and restated memorandum and articles of association and applicable laws. ARYA may not waive the condition that ARYA public shareholders approve the Business Combination Proposal. Please see the section entitled “The Business Combination Agreement and Ancillary Documents — Conditions to Closing of the Business Combination” for additional information.

 

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Subsequent to the consummation of the Business Combination, TopCo may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

Although ARYA has conducted due diligence on Immatics, ARYA cannot assure you that this diligence revealed all material issues that may be present in Immatics’ business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of ARYA’s and Immatics’ control will not later arise. As a result, TopCo may be forced to later write-downs or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if ARYA’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with ARYA’s preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on TopCo’s liquidity, the fact that TopCo reports charges of this nature could contribute to negative market perceptions about the post-combination company or its securities. In addition, charges of this nature may cause TopCo to be unable to obtain future financing on favorable terms or at all.

The Business Combination may give rise to a taxable event for U.S. Holders of Class A Shares and ARYA Public Warrants

Subject to the limitations and qualifications described in “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders” below, the Business Combination is generally intended to be tax-deferred to U.S. Holders of Class A Shares and ARYA Public Warrants for U.S. federal income tax purposes, except to the extent that U.S. Holders of Class A Shares receive cash pursuant to the exercise of redemption rights. However, the failure to meet certain requirements could result in the exchange of Class A Shares and/or ARYA Public Warrants for TopCo Shares and/or TopCo Public Warrants being a taxable event.

In particular, ARYA believes it is a PFIC for U.S. federal income tax purposes and, if certain proposed Treasury Regulations are finalized in their current form, U.S. Holders may be required to recognize gain as a result of the Business Combination except, with respect to Class A Shares (but not ARYA Public Warrants), if a U.S. Holder makes (or has made) certain elections discussed further below.

In addition, Section 367(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder, in certain circumstances may impose additional requirements for a U.S. Holder to qualify for tax-deferred treatment with respect to the exchange of Class A Shares and/or ARYA Public Warrants in the Business Combination.

The requirements for tax-deferred treatment, including the application of the PFIC rules and Section 367(a) of the U.S. Tax Code, and the U.S. federal tax consequences to U.S. Holders if such requirements are not met are discussed in more detail under the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences of the Mergers to U.S. Holders.” If you are a U.S. Holder exchanging Class A Shares or ARYA Public Warrants in the Business Combination, you are urged to consult your tax advisor to determine the tax consequences thereof.

Immatics is a private company about which little information is available, and ARYA’s management conducted a limited due diligence review of Immatics; as a result, the ARYA Board and ARYA’s management may not have properly valued Immatics.

As a private company, very little public information generally exists about Immatics, and as a result, ARYA’s management and the ARYA Board were only able to conduct a limited due diligence review, based on the materials provided. In addition, the ARYA Board did not obtain a third-party valuation or fairness opinion in connection with the determination to approve the Business Combination. As a result, ARYA’s management and the ARYA Board may not have made the necessary analyses and determinations regarding the Business Combination and the value of Immatics.

 

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Risks Related to Ownership of TopCo Shares

The rights of TopCo’s shareholders and the duties of TopCo’s directors are governed by (i) Dutch law, (ii) the TopCo Articles of Association and (iii) internal rules and policies adopted by the TopCo Management Board or TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board, and differ in some important respects from the rights of shareholders and the duties of members of a board of directors of a Cayman Islands exempted company.

TopCo’s corporate affairs, as a Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) or a Dutch public limited liability company (naamloze vennootschap), are governed by (i) the TopCo Articles of Association, (ii) internal rules and policies adopted by the TopCo Management Board or TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board, and (iii) the laws governing companies incorporated in the Netherlands. The rights of TopCo shareholders and the duties of TopCo directors under Dutch law are different from the rights of shareholders and/or the duties of directors of a corporation organized under the laws of the Cayman Islands. In the performance of its duties, the TopCo Management Board and TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board, is required by Dutch law to consider TopCo’s interests and the interests of TopCo’s shareholders, its employees and other stakeholders (e.g., TopCo’s creditors and suppliers) as a whole and not only those of TopCo’s shareholders, which may negatively affect the value of your investment. In addition, the rights of TopCo’s shareholders, including the rights of shareholders as they relate to the exercise of shareholder rights, are governed by Dutch law and the TopCo Articles of Association and such rights differ from the rights of shareholders under Cayman Island law. See “Comparison of Shareholder Rights.”

TopCo is organized and existing under the laws of the Netherlands, and, as such, the rights of TopCo shareholders and the civil liability of TopCo directors and executive officers will be governed in certain respects by the laws of the Netherlands.

TopCo is organized and existing under the laws of the Netherlands, and, as such, the rights of TopCo’s shareholders and the civil liability of TopCo’s directors and executive officers will be governed in certain respects by the laws of the Netherlands. The ability of TopCo’s shareholders in certain countries other than the Netherlands to bring an action against TopCo, its directors and executive officers may be limited under applicable law. In addition, substantially all of TopCo’s assets are located outside the United States. As a result, it may not be possible for shareholders to effect service of process within the United States upon TopCo or its directors and executive officers or to enforce judgments against TopCo or them in U.S. courts, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. In addition, it is not clear whether a Dutch court would impose civil liability on TopCo or any of its directors and executive officers in an original action based solely upon the federal securities laws of the United States brought in a court of competent jurisdiction in the Netherlands.

As of the date of this proxy statement/prospectus, the United States and the Netherlands do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Accordingly, a judgment rendered by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized and enforced by the competent Dutch courts. However, if a person has obtained a final and conclusive judgment for the payment of money rendered by a court in the United States that is enforceable in the United States and files a claim with the competent Dutch court, the Dutch court will generally give binding effect to such foreign judgment insofar as it finds that (i) the jurisdiction of the U.S. court has been based on a ground of jurisdiction that is generally acceptable according to international standards, (ii) the judgment by the U.S. court was rendered in legal proceedings that comply with the Dutch standards of proper administration of justice including sufficient safeguards (behoorlijke rechtspleging) and (iii) the judgment by the U.S. court is not incompatible with a decision rendered between the same parties by a Dutch court, or with a previous decision rendered between the same parties by a foreign court in a dispute that concerns the same subject and is based on the same cause, provided that the previous decision qualifies for acknowledgment in the Netherlands and except to the extent that the foreign judgment contravenes Dutch public policy (openbare orde).

 

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Based on the lack of a treaty as described above, U.S. investors may not be able to enforce against TopCo or its directors, representatives or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

Under the TopCo Articles of Association, and certain other contractual arrangements between TopCo and its directors, TopCo indemnifies and holds its directors harmless against all claims and suits brought against them, subject to limited exceptions. There is doubt, however, as to whether U.S. courts would enforce such indemnity provisions in an action brought against one of TopCo’s directors in the United States under U.S. securities laws.

TopCo does not anticipate paying dividends on TopCo Shares.

The TopCo Articles of Association prescribe that any TopCo profits in any financial year will be distributed first to holders of TopCo Financing Preferred Shares, if outstanding. Any remaining profits may be reserved by the TopCo Management Board subject to the approval of the TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board. Any profits remaining thereafter and TopCo’s reserves may be distributed as dividends to the holders of TopCo Shares, subject to the appropriate record date, by the TopCo Board. The TopCo General Meeting shall be authorized to declare distributions on the proposal of the TopCo Management Board, which proposal shall require the prior approval of the TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board. TopCo will have power to make distributions to shareholders only to the extent that its equity exceeds the aggregate amount of the issued share capital and the reserves which must be maintained pursuant to Dutch law or by the TopCo Articles of Association. TopCo may not make any distribution of profits on shares held by TopCo as treasury shares and such treasury shares will not be taken into account when determining the profit entitlement of TopCo’s shareholders. The TopCo Management Board, or after the First Anniversary of Closing, the TopCo Board determines whether and how much of the profit shown in the adopted annual accounts it will reserve and the manner and date of any dividend. All calculations to determine the amounts available for dividends will be based on TopCo’s company-only annual accounts, which may be different from its consolidated financial statements, such as those included in this proxy statement/prospectus. In addition, the TopCo Management Board is permitted, subject to TopCo Supervisory Board approval and subject to certain requirements, to declare interim dividends without the approval of the shareholders. TopCo may reclaim any distributions, whether interim or not interim, made in contravention of certain restrictions of Dutch law from shareholders that knew or should have known that such distribution was not permissible. In addition, on the basis of Dutch case law, if after a distribution TopCo is not able to pay its due and collectable debts, then its shareholders or directors who at the time of the distribution knew or reasonably should have foreseen that result may be liable to TopCo’s creditors. TopCo has never declared or paid any cash dividends and TopCo has no plan to declare or pay any dividends in the foreseeable future on TopCo Shares. TopCo currently intends to retain any earnings for future operations and expansion.

Since TopCo is a holding company, its ability to pay dividends will be dependent upon the financial condition, liquidity and results of operations of, and TopCo’s receipt of dividends, loans or other funds from, its subsidiaries. TopCo’s subsidiaries are separate and distinct legal entities and have no obligation to make funds available to TopCo. In addition, there are various statutory, regulatory and contractual limitations and business considerations on the extent, if any, to which TopCo’s subsidiaries may pay dividends, make loans or otherwise provide funds to TopCo.

Each of ARYA Sponsor and Immatics’ current equityholders will own a significant portion of TopCo Shares and will have representation on the TopCo Supervisory Board, and after the First Anniversary of Closing, the TopCo Board. ARYA Sponsor and Immatics’ current equityholders may have interests that differ from those of other shareholders.

Upon the completion of the Business Combination, approximately 5.7% of TopCo Shares will be owned by the ARYA Initial Shareholders (but not including the Sponsor PIPE Entity), approximately 55.2% of

 

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TopCo Shares will be owned by the current Immatics’ equityholders and approximately 16.4% of TopCo Shares will be owned by the PIPE Investors (including certain Immatics equityholders and the Sponsor PIPE Entity). These levels of ownership interests assume that (A) no Class A Shares are elected to be redeemed by ARYA’s public shareholders and exclude the exercise of outstanding warrants, (B) that 10,415,000 TopCo Shares are issued to the PIPE Investors in connection with the PIPE Financing, (C) Participating Shareholders represent 100% of the issued and outstanding shares of Immatics and there are no “change of control” payments made or required to be made by Immatics, (D) the recipients of SAR Cash Proceeds required or permitted to reinvest such proceeds into TopCo in exchange for TopCo Shares will reinvest such proceeds as set forth in the Business Combination Agreement, and (E) the Converted Options are exercised in accordance with their terms and the dilutive effect of such options are calculated using the Treasury Stock Method. For more information about factors that affect the assumptions above, please see the section entitled “The Business Combination — Ownership of TopCo.” In addition, two of TopCo’s director nominees were designated by ARYA Sponsor. As a result, ARYA Sponsor and the current Immatics’ equityholders may be able to significantly influence the outcome of matters submitted for director action, subject to obligation of the TopCo Management Board and Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board to act in the interest of all of TopCo’s stakeholders, and for shareholder action, including the designation and appointment of the TopCo Management Board and TopCo Supervisory Board, and, after the First Anniversary of Closing, the TopCo Board (and committees thereof) and approval of significant corporate transactions, including business combinations, consolidations and mergers. The influence of ARYA Sponsor and the current Immatics’ equityholders over TopCo’s management could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of TopCo, which could cause the market price of TopCo Shares to decline or prevent TopCo’s shareholders from realizing a premium over the market price for TopCo Shares. Additionally, ARYA Sponsor is controlled by Perceptive, which is in the business of making investments in companies and which may from time to time acquire and hold interests in businesses that compete directly or indirectly with TopCo or that supply TopCo with goods and services. Perceptive may also pursue acquisition opportunities that may be complementary to (or competitive with) TopCo’s business, and as a result those acquisition opportunities may not be available to TopCo. Prospective investors in TopCo Shares should consider that the interests of ARYA Sponsor and the current Immatics’ equityholders may differ from their interests in material respects.

Provisions of the TopCo Articles of Association or Dutch corporate law might deter acquisition bids for TopCo that its shareholders might consider to be favorable and prevent or frustrate any attempt to replace or remove the TopCo Supervisory Board or TopCo Management Board at the time of such acquisition bid.

Certain provisions of the TopCo Articles of Association may make it more difficult for a third party to acquire control of the TopCo Supervisory Board, TopCo Management Board, or, after the First Anniversary of Closing, the TopCo Board or effect a change in the composition of such boards. These provisions include:

 

   

a provision that TopCo directors can only be removed (or a binding nomination by the Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board or shareholders representing, individually or jointly, 10% of TopCo’s issued share capital to appoint directors can only be set aside) by the shareholders by a majority of at least two thirds of the votes cast during a TopCo General Meeting, provided such votes represent more than half of the issued share capital (unless the removal was proposed by the TopCo Supervisory Board, or after the First Anniversary of Closing, the TopCo Board, in which case a majority of votes cast representing more than half of the issued share capital is required);

 

   

pursuant to the TopCo Articles of Association, the TopCo Management Board, and after the First Anniversary of Closing, the TopCo Board, is irrevocably authorized for a period of five years from the date of the Business Combination, to issue TopCo Shares which could enable TopCo to dilute the holding of an acquirer by issuing TopCo Shares to other parties. Issuances of TopCo Shares may make it more difficult for a shareholder or potential acquirer to obtain control over TopCo;

 

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a requirement that certain matters, including an amendment of the TopCo Articles of Association, may only be brought to the shareholders for a vote upon a proposal by the TopCo Management Board, which proposal requires the prior approval of the TopCo Supervisory Board, or, after the First Anniversary of Closing, upon a proposal by the TopCo Board. See “Description of TopCo Securities”; and

 

   

a provision implementing a staggered board, pursuant to which only one class of TopCo Supervisory Directors, or after the First Anniversary of Closing, TopCo Directors, will be elected at each TopCo General Meeting, with the other classes continuing for the remainder of their respective terms. See “Description of TopCo Securities.”

Such provisions could discourage a takeover attempt and impair the ability of shareholders to benefit from a change in control and realize any potential change of control premium. This may adversely affect the market price of the ordinary shares.

If TopCo fails to maintain an effective system of internal control over financial reporting, TopCo may not be able to accurately report its financial results or prevent fraud. As a result, shareholders could lose confidence in TopCo’s financial and other public reporting, which is likely to negatively affect TopCo’s business and the market price of TopCo Shares.

Effective internal control over financial reporting is necessary for TopCo to provide reliable financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in TopCo’s implementation could cause TopCo to fail to meet its reporting obligations. In addition, any testing conducted by TopCo, or any testing conducted by TopCo’s independent registered public accounting firm, may reveal deficiencies in TopCo’s internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to TopCo’s financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in TopCo’s reported financial information, which is likely to negatively affect TopCo’s business and the market price of TopCo Shares.

TopCo will be required to disclose changes made in its internal controls and procedures on a quarterly basis and its management will be required to assess the effectiveness of these controls annually. However, for as long as TopCo is an “emerging growth company” under the JOBS Act, its independent registered public accounting firm will not be required to attest to the effectiveness of TopCo’s internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. TopCo could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of TopCo’s internal controls could detect problems that TopCo’s management’s assessment might not. Undetected material weaknesses in TopCo’s internal controls could lead to financial statement restatements and require TopCo to incur the expense of remediation.

The market price and trading volume of TopCo Shares and TopCo Public Warrants may be volatile and could decline significantly following the Business Combination.

The stock markets, including NASDAQ on which TopCo intends to apply to list the TopCo Shares and TopCo Public Warrants under the symbols “IMTX” and “IMTXW,” respectively, have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market develops and is sustained for TopCo Shares and TopCo Public Warrants following the Business Combination, the market price of TopCo Shares and TopCo Public Warrants may be volatile and could decline significantly. In addition, the trading volume in TopCo Shares and TopCo Public Warrants may fluctuate and cause significant price variations to occur. Generally, securities of biotechnology companies tend to be volatile and experience significant price and volume fluctuations. If the market price of TopCo Shares and TopCo Public Warrants declines significantly, you may be unable to resell your securities at or above the market price as of the date of the consummation of the

 

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Business Combination. TopCo cannot assure you that the market price of the TopCo Shares and TopCo Public Warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

 

   

the realization of any of the risk factors presented in this proxy statement/prospectus;

 

   

actual or anticipated differences in TopCo’s estimates, or in the estimates of analysts, for TopCo’s revenues, results of operations, liquidity or financial condition;

 

   

additions and departures of key personnel;

 

   

failure to comply with the requirements of NASDAQ;

 

   

failure to comply with the Sarbanes-Oxley Act or other laws or regulations;

 

   

future issuances, sales or resales, or anticipated issuances, sales or resales, of TopCo Shares;

 

   

publication of research reports about TopCo;

 

   

the performance and market valuations of other similar companies;

 

   

broad disruptions in the financial markets, including sudden disruptions in the credit markets;

 

   

material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

 

   

speculation in the press or investment community;

 

   

actual, potential or perceived control, accounting or reporting problems; and

 

   

changes in accounting principles, policies and guidelines.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert TopCo’s management’s attention and resources, which could have a material adverse effect on TopCo.

If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about TopCo, its share price and trading volume could decline significantly.

The market for TopCo Shares will depend in part on the research and reports that securities or industry analysts publish about TopCo or its business. Securities and industry analysts do not currently, and may never, publish research on TopCo. If no securities or industry analysts commence coverage of TopCo, the market price and liquidity for TopCo Shares could be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover TopCo downgrade their opinions about TopCo Shares, publish inaccurate or unfavorable research about TopCo, or cease publishing about TopCo regularly, demand for TopCo Shares could decrease, which might cause its share price and trading volume to decline significantly.

Future issuances of TopCo Financing Preferred Shares or other equity securities may adversely affect TopCo, including the market price of TopCo Shares and may be dilutive to existing shareholders.

In the future, TopCo may issue TopCo Financing Preferred Shares or other equity ranking senior to TopCo Shares. TopCo Financing Preferred Shares have, and those other securities will generally have priority upon liquidation. Such securities also may be governed by an instrument containing covenants restricting its operating flexibility. Additionally, any convertible or exchangeable securities that TopCo issues in the future may have rights, preferences and privileges more favorable than those of TopCo Shares. Because TopCo’s decision to issue equity in the future will depend on market conditions and other factors beyond TopCo’s control, it cannot predict or estimate the amount, timing, nature or success of TopCo’s future capital raising efforts. As a result, future capital raising efforts may reduce the market price of TopCo Shares and be dilutive to existing shareholders.

 

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Even if the Business Combination is consummated the TopCo Public Warrants may never be in the money, and they may expire worthless.

The exercise price for the TopCo Public Warrants is $11.50 per TopCo Share. The TopCo Public Warrants may never be in the money prior to their expiration, and as such, the warrants may expire worthless.

TopCo’s ordinary shareholders may not have any preemptive rights in respect of future issuances of TopCo Shares.

In the event of an increase in TopCo’s share capital by way of an issue of TopCo Shares, holders of TopCo’s Shares are generally entitled under Dutch law to full preemptive rights, unless these rights are limited or excluded either by a resolution of the TopCo General Meeting or by a resolution of the TopCo Management Board, subject to the prior approval of the TopCo Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board (if such board has been authorized by the TopCo General Meeting for this purpose), or where shares are issued to TopCo’s employees or a group company (i.e., certain affiliates, subsidiaries or related companies) or paid up by means of a non-cash contribution, or in case of an exercise of a previously acquired right to subscribe for shares. The same preemptive rights apply when rights to subscribe for shares are granted.

Under the TopCo Articles of Association, the preemptive rights in respect of newly issued TopCo Shares may be restricted or excluded by a resolution of the TopCo General Meeting, which resolution requires a two-thirds majority of the votes cast if less than half of the issued share capital is present or represented at the meeting. The TopCo General Meeting may authorize the TopCo Management Board, subject to the prior approval of the TopCo Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board to limit or exclude the preemptive rights in respect of newly issued TopCo Shares. Such authorization for the TopCo Management Board, subject to the prior approval of the TopCo Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board can be granted and extended, in each case for a period not exceeding five years.

Pursuant to the TopCo Articles of Association, the TopCo Management Board is irrevocably authorized for a period of five years from the date of the Business Combination to limit or exclude preemptive rights on TopCo Shares up to 100% of the number of TopCo Shares in TopCo’s authorized share capital (from time to time). Upon the First Anniversary of Closing, the powers of the TopCo Management Board shall vest in the TopCo Board.

Accordingly, holders of TopCo Shares may not have any preemptive rights in connection with, and may be diluted by, an issue of new ordinary shares and it may be more difficult for a shareholder to obtain control over the TopCo General Meeting. See “Description of TopCo Securities — Share Capital,” “— Issuance of TopCo Shares” and “— Preemptive Rights.” Certain of TopCo’s ordinary shareholders outside the Netherlands, in particular, U.S. ordinary shareholders, may not be allowed to exercise preemptive rights to which they are entitled, if any, unless a registration statement under the Securities Act is declared effective with respect to TopCo Shares issuable upon exercise of such rights or an exemption from the registration requirements is available.

Preemptive rights do not exist with respect to the issue of TopCo Financing Preferred Shares and holder of TopCo Financing Preferred Shares have no preemptive right to acquire newly issued TopCo Shares. TopCo is not obligated to and does not comply with all the best practice provisions of the DCGC. This could adversely affect your rights as a shareholder.

As TopCo has its registered office in the Netherlands and will have its ordinary shares listed on an equivalent third (non-EU) country market to a regulated market (e.g., NASDAQ), TopCo is subject to the DCGC. The DCGC contains both principles and best practice provisions for the TopCo Management Board, subject to the TopCo Supervisory Board, or, after the First Anniversary of Closing, the TopCo Board, shareholders and the TopCo General Meeting, financial reporting, auditors, disclosure compliance and enforcement standards.

The DCGC is based on a “comply or explain” principle. Accordingly, TopCo is required to disclose in its management report publicly filed in the Netherlands, whether or not it is complying with the various provisions

 

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of the DCGC. If TopCo does not comply with one or more of those provisions (e.g., because of a conflicting NASDAQ requirement or U.S. market practice), TopCo is required to explain the reasons for such non-compliance.

TopCo acknowledges the importance of good corporate governance. However, TopCo does not comply with all the provisions of the DCGC, to a large extent because such provisions conflict with or are inconsistent with the corporate governance rules of NASDAQ and U.S. securities laws that will apply to TopCo upon the completion of the Business Combination, or because TopCo believes such provisions do not reflect customary practices of global companies listed on NASDAQ. This could adversely affect your rights as a shareholder and you may not have the same level of protection as a shareholder in a Dutch company that fully complies with the DCGC.

TopCo is an “emerging growth company,” and it cannot be certain if the reduced SEC reporting requirements applicable to emerging growth companies will make TopCo’s ordinary shares less attractive to investors, which could have a material and adverse effect on TopCo, including its growth prospects.

TopCo is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). TopCo will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following October 10, 2023, the fifth anniversary of the ARYA IPO, (b) in which TopCo has total annual gross revenue of at least $1.0 billion or (c) in which TopCo is deemed to be a large accelerated filer, which means the market value of our TopCo Shares that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which TopCo has issued more than $1.0 billion in non-convertible debt during the prior three-year period. TopCo intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requiring that TopCo’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. The JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. However, TopCo has chosen to “opt out” of this extended transition period and, as a result, TopCo will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. TopCo’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. TopCo cannot predict if investors will find TopCo Shares less attractive because TopCo intends to rely on certain of these exemptions and benefits under the JOBS Act. If some investors find TopCo Shares less attractive as a result, there may be a less active, liquid and/or orderly trading market for TopCo Shares and the market price and trading volume of TopCo Shares may be more volatile and decline significantly.

As a foreign private issuer, TopCo will be exempt from a number of rules under the U.S. securities laws and will be permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of the TopCo Shares and TopCo Public Warrants.

TopCo is a foreign private issuer, as such term is defined in Rule 405 under the Securities Act. As a foreign private issuer, TopCo will not be subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, TopCo will be exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. As long as TopCo is eligible for the foreign private issuer exemption, it will not be required to obtain shareholder approval for certain dilutive events, such as the establishment or material amendment of certain equity-based compensation plans, it will not be required to

 

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provide detailed executive compensation disclosure in its periodic reports, and it will be exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, TopCo’s officers and directors will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of its securities.

While TopCo will submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, it will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act.

Also, as a foreign private issuer, TopCo will be permitted to follow home country practice in lieu of certain corporate governance rules of the NASDAQ, including those that require listed companies to have a majority of independent directors and independent director oversight of executive compensation, nomination of directors and corporate governance matters. As long as TopCo relies on the foreign private issuer exemption, a majority of its board of directors will not be required to be independent directors and its compensation committee will not be required to be composed entirely of independent directors. Accordingly, holders of TopCo Shares may not have the same protections afforded to shareholders of listed companies that are subject to all of the applicable corporate governance requirements.

TopCo’s tax residency might change if Germany would ratify the MLI and change its provisional election on the corporate residence tie-breaker.

TopCo’s sole tax residency in Germany for purposes of the convention between Germany and the Netherlands for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (the “German-Dutch tax treaty”) is subject to the application of the provisions on tax residency as stipulated in the German-Dutch tax treaty as effective as of the date of this proxy statement/prospectus. However, among others, Germany and the Netherlands entered into a Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”). The MLI operates to amend bilateral tax treaties between participating states, provided there is a match between certain options made by the relevant states. The MLI provides, amongst others, for an amendment of relevant treaty rules regarding tax residency for purposes of relevant tax treaties. According to its elections, the Netherlands applies such deviating rules on tax residency, i.e., it did not opt out. With regard to Germany, provisional statements made at the time of signing the MLI indicate that it is intended to opt-out of the application of such provisions. However, given that the MLI has to date not been ratified in Germany and the options provided for in the MLI remain subject to discussion, it cannot be ruled out that Germany ultimately opts to amend the current rules regarding tax residency in line with the option exercised by the Netherlands. If Germany changed its provisional view on the election, the MLI rules on tax residency would become applicable to the German-Dutch tax treaty. In this case, the competent authorities of the Netherlands and Germany shall endeavor to determine by mutual agreement the sole tax residency of TopCo. During the period in which a mutual agreement between both states is absent, TopCo may not be entitled to any relief or exemption from tax provided by the German-Dutch tax treaty. During such period, there would also be a risk that both Germany and the Netherlands would levy dividend withholding tax on distributions by TopCo, in addition to the risk of double taxation on the profits of TopCo itself.

TopCo may be or may become a PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders.

If TopCo or any of its subsidiaries is a PFIC for any taxable year, or portion thereof, that is included in the holding period of a beneficial owner of the TopCo Shares or TopCo Public Warrants that is a U.S. Holder, such U.S. Holder may be subject to certain adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. It is uncertain whether TopCo or any of its subsidiaries, including Immatics, will be treated as a PFIC for U.S. federal income tax purposes immediately following the Business Combination,

 

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or any subsequent tax year. If TopCo determines that it and/or any of its subsidiaries is a PFIC for any taxable year, TopCo intends to provide a U.S. Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election with respect to TopCo and/or such subsidiaries, but there can be no assurance that TopCo would timely provide such required information, and such election would be unavailable with respect to TopCo Public Warrants in all cases.

Please see the section entitled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations to U.S. Holders Tax Consequences of Ownership and Disposition of TopCo Shares and TopCo Public Warrants Passive Foreign Investment Company Rules” for a more detailed discussion with respect to TopCo’s PFIC status. Prospective U.S. Holders of TopCo Shares or TopCo Public Warrants are urged to consult their tax advisors regarding the possible application of the PFIC rules to them.

Risks Related to ARYA

The ARYA Initial Shareholders and ARYA’s other current officers and directors have interests in the Business Combination that are different from or are in addition to other ARYA shareholders in recommending that ARYA shareholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement/prospectus.

When considering the ARYA Board’s recommendation that ARYA shareholders vote in favor of the approval of the Business Combination Proposal, ARYA shareholders should be aware that aside from their interests as shareholders, the ARYA Initial Shareholders and ARYA’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other ARYA shareholders generally. These interests include:

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed not to redeem any ARYA Ordinary Shares held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that ARYA Sponsor paid an aggregate of $25,000 for the Founder Shares and such securities will have a significantly higher value at the time of the Business Combination which, if unrestricted and freely tradable, would be valued at approximately $35,037,500, but, given the transfer restrictions on such shares, ARYA believes such shares have less value;

 

   

the fact that the ARYA Initial Shareholders and ARYA’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ARYA fails to complete an initial business combination by October 10, 2020;

 

   

the fact that the Investor Rights Agreement will be entered into by the ARYA Initial Shareholders;

 

   

the fact that ARYA Sponsor paid an aggregate of $5,953,125 for its 5,953,125 Private Placement Warrants and that such Private Placement Warrants will expire worthless if a business combination is not consummated by October 10, 2020;

 

   

the fact that, at the option of ARYA Sponsor, any amounts outstanding under certain working capital loans made by ARYA Sponsor or any of its affiliates to ARYA in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares which will be identical to the Private Placement Warrants;

 

   

the fact that, in connection with the PIPE Financing, the Sponsor PIPE Entity will receive 2,500,000 TopCo Shares;

 

   

the right of the ARYA Initial Shareholders to receive TopCo Shares, subject to certain lock-up periods;

 

   

the anticipated designation by the ARYA Initial Shareholders of Adam Stone and Michael G. Atieh as directors of TopCo following the Business Combination;

 

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the continued indemnification of ARYA’s existing directors and officers and the continuation of ARYA’s directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors may not participate in the formation of, or become directors or officers of, any other blank check company until ARYA (i) has entered into a definitive agreement regarding an initial business combination or (ii) fails to complete an initial business combination by October 10, 2020;

 

   

the fact that ARYA Sponsor and ARYA’s officers and directors will lose their entire investment in ARYA and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by October 10, 2020; and

 

   

the fact that if the Trust Account is liquidated, including in the event ARYA is unable to complete an initial business combination within the required time period, ARYA Sponsor has agreed to indemnify ARYA to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ARYA has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ARYA, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

The ARYA Initial Shareholders, including ARYA Sponsor and ARYA’s independent directors, hold a significant number of ARYA Ordinary Shares. They will lose their entire investment in ARYA if a business combination is not completed.

The ARYA Initial Shareholders hold an aggregate of 3,593,750 Founder Shares, representing 20% of the total outstanding ARYA Ordinary Shares upon completion of the ARYA IPO. The Founder Shares will be worthless if ARYA does not complete a business combination by October 10, 2020.

The personal and financial interests of ARYA’s officers and directors may have influenced their motivation in identifying and selecting Immatics and completing a business combination with Immatics and may influence their operation of TopCo following the Business Combination.

Since ARYA Sponsor and ARYA’s executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if a business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for a business combination.

At the closing of ARYA’s initial business combination, ARYA Sponsor and ARYA’s executive officers and directors, and any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on ARYA’s behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on ARYA’s behalf. These financial interests of ARYA Sponsor and ARYA’s executive officers and directors may influence their motivation in identifying and selecting a target business combination and completing the Business Combination.

ARYA is not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price ARYA is paying for the business is fair to ARYA from a financial point of view.

ARYA is not required to, and did not, obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”), or from an independent accounting firm, that the consideration ARYA shareholders will receive under the Business Combination Agreement is fair to ARYA shareholders from a financial point of view. ARYA’s public shareholders are therefore relying on the judgment of the ARYA Board, who determined fair market value based on standards generally accepted by the financial

 

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community. ARYA Sponsor and ARYA’s executive officers and directors have interests in the Business Combination that are different from, or in addition to, those of other ARYA shareholders generally. The ARYA Board was aware of and considered those interests, among other matters, in evaluating and negotiating the Business Combination and in recommending to ARYA shareholders that they approve the Business Combination Proposal. Please see the section entitled “The Business Combination — Interests of Certain Persons in the Business Combination” for more information.

The ARYA Initial Shareholders will control the election of the ARYA Board until consummation of a business combination and hold a substantial interest in ARYA. As a result, they will elect all of ARYA’s directors and may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.

The ARYA Initial Shareholders own 20% of the issued and outstanding ARYA Ordinary Shares. In addition, the Founder Shares, all of which are held by the ARYA Initial Shareholders, entitle the holders thereof to elect all of ARYA’s directors prior to the initial business combination. Holders of Class B Shares have the exclusive right prior to ARYA’s initial business combination to elect ARYA’s directors. Accordingly, as holders of the Class A Shares, ARYA public shareholders will not have the right to vote on the election of directors prior to consummation of the Business Combination. These provisions of the ARYA amended and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing a majority of the Founder Shares. As a result, holders of ARYA public shares will not have any influence over the election of directors of ARYA prior to an initial business combination.

In addition, as a result of their substantial ownership in ARYA, the ARYA Initial Shareholders may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that ARYA shareholders do not support, including amendments to the ARYA amended and restated memorandum and articles of association and approval of major corporate transactions, including the Business Combination. If the ARYA Initial Shareholders purchase any Class A Shares in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, the ARYA Initial Shareholders will exert significant influence over actions requiring a shareholder vote at least until the completion of a business combination.

ARYA Sponsor and ARYA’s other directors, executive officers, advisors and their affiliates may elect to purchase shares from ARYA public shareholders, which may influence a vote on the Business Combination.

ARYA Sponsor or ARYA’s other directors, executive officers, advisors or their affiliates may purchase Class A Shares in privately negotiated transactions or in the open market prior to the completion of the Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of the Class A Shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that ARYA Sponsor or ARYA’s other directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases would be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination or to satisfy the Aggregate TopCo Transaction Proceeds Condition, where it appears that such condition would otherwise not be met. This may result in the completion of the Business Combination that may not otherwise have been possible.

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your ARYA Public Units, Class A Shares or ARYA Public Warrants, potentially at a loss.

ARYA’s public shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of an initial business combination; (ii) the redemption of any public shares properly

 

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tendered in connection with a shareholder vote to amend the ARYA amended and restated memorandum and articles of association to modify the substance or timing of ARYA’s obligation to redeem 100% of the public shares if ARYA does not complete a business combination by October 10, 2020; and (iii) the redemption of all of the public shares if ARYA is unable to complete a business combination by October 10, 2020, subject to applicable law. In no other circumstances will a public shareholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your ARYA Public Units, Class A Shares or ARYA Public Warrants, potentially at a loss.

If ARYA is unable to complete a business combination by October 10, 2020, ARYA will cease all operations except for the purpose of winding up and ARYA will redeem the public shares and liquidate.

ARYA Sponsor and ARYA’s executive officers and directors have agreed that ARYA must complete a business combination by October 10, 2020. If ARYA has not completed an initial business combination within such time period, it will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest, net of tax (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of ARYA’s remaining shareholders and the ARYA Board, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to ARYA’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the ARYA IPO. In addition, if ARYA fails to complete an initial business combination by October 10, 2020, there will be no redemption rights on liquidating distributions with respect to ARYA Public Warrants or the Private Placement Warrants, which will expire worthless.

If the Business Combination is not completed, potential target businesses may have leverage over ARYA in negotiating a business combination and ARYA’s ability to conduct due diligence on a business combination as it approaches its dissolution deadline may decrease, which could undermine ARYA’s ability to complete a business combination on terms that would produce value for ARYA’s shareholders.

Any potential target business with which ARYA enters into negotiations concerning a business combination will be aware that ARYA must complete an initial business combination by October 10, 2020. Consequently, if ARYA is unable to complete this Business Combination, a potential target may obtain leverage over ARYA in negotiating a business combination, knowing that ARYA may be unable to complete a business combination with another target business by October 10, 2020. This risk will increase as ARYA gets closer to the timeframe described above. In addition, ARYA may have limited time to conduct due diligence and may enter into a business combination on terms that ARYA would have rejected upon a more comprehensive investigation.

Because of ARYA’s limited resources and the significant competition for business combination opportunities, if this Business Combination is not completed, it may be more difficult for ARYA to complete an initial business combination. In addition, resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If ARYA is unable to complete an initial business combination by October 10, 2020, ARYA’s public shareholders may receive only approximately $10.00 per share, on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against ARYA that ARYA Sponsor is unable to indemnify), and the ARYA Public Warrants will expire worthless.

If ARYA is unable to complete this Business Combination, ARYA would expect to encounter intense competition from other entities having a business objective similar to its business objective, including private

 

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investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses ARYA could acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than ARYA does and ARYA’s financial resources will be relatively limited when contrasted with those of many of these competitors. While ARYA believes there are numerous target businesses ARYA could potentially acquire with the net proceeds of the ARYA IPO and the sale of the Private Placement Warrants, ARYA’s ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by ARYA’s available financial resources. This inherent competitive limitation may give others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if ARYA is obligated to pay cash for the public shares redeemed and, in the event ARYA seeks shareholder approval of a business combination, ARYA makes purchases of its public shares, potentially reducing the resources available to ARYA for a business combination. Any of these obligations may place ARYA at a competitive disadvantage in successfully negotiating a business combination.

ARYA anticipates that, if ARYA is unable to complete this Business Combination, the investigation of other specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If ARYA decides not to complete a specific business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if ARYA reaches an agreement relating to a specific target business, ARYA may fail to complete such business combination (including the Business Combination described in this proxy statement/prospectus) for any number of reasons including those beyond ARYA’s control. Any such event will result in a loss to ARYA of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

If ARYA does not complete this Business Combination and is unable to complete an initial business combination by October 10, 2020, ARYA’s public shareholders may receive only approximately $10.00 per share on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against ARYA that ARYA Sponsor is unable to indemnify) and the ARYA Public Warrants will expire worthless.

The exercise of discretion by ARYA’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in the best interests of the public shareholders of ARYA.

In the period leading up to the closing of the Business Combination, other events may occur that, pursuant to the Business Combination Agreement, would require ARYA to agree to amend the Business Combination Agreement, to consent to certain actions or to waive rights that ARYA is entitled to under those agreements. Such events could arise because of changes in the course of Immatics’ business, a request by the Immatics shareholders or Immatics to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Immatics’ business and would entitle ARYA to terminate the Business Combination Agreement. In any of such circumstances, it would be in the discretion of ARYA, acting through the ARYA Board, to grant its consent or waive its rights. The existence of the financial and personal interests of ARYA’s directors described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for ARYA and the public shareholders of ARYA and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, ARYA does not believe there will be any changes or waivers that ARYA’s directors and officers would be likely to make after shareholder approval of the Business Combination has been obtained. While certain changes could be made without further shareholder

 

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approval, if there is a change to the terms of the Business Combination that would have a material impact on the shareholders, ARYA will be required to circulate a new or amended proxy statement/prospectus or supplement thereto and resolicit the vote of the ARYA public shareholders with respect to the Business Combination Proposal.

ARYA will incur significant transaction and transition costs in connection with the Business Combination.

ARYA has incurred and expects to incur significant, non-recurring costs in connection with consummating the Business Combination. All expenses incurred in connection with the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs.

ARYA’s transaction expenses as a result of the Business Combination are currently estimated at approximately $10,500,000, including $4,671,875 in deferred underwriting commissions to the underwriters of the ARYA IPO.

If third parties bring claims against ARYA, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share.

ARYA’s placing of funds in the Trust Account may not protect those funds from third-party claims against ARYA. Although ARYA will seek to have all vendors, service providers (other than ARYA’s independent auditors), prospective target businesses or other entities with which ARYA does business execute agreements with ARYA waiving any right, title, interest or claim of any kind in or to any funds held in the Trust Account for the benefit of ARYA’s public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against ARYA’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the funds held in the Trust Account, ARYA’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to ARYA than any alternative.

Examples of possible instances where ARYA may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by ARYA Management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where ARYA Management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with ARYA and will not seek recourse against the Trust Account for any reason. Upon redemption of ARYA’s public shares, if ARYA is unable to complete the Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the Business Combination, ARYA will be required to provide for payment of claims of creditors that were not waived that may be brought against ARYA within the ten years following redemption. Accordingly, the per-share redemption amount received by ARYA’s public shareholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

ARYA Sponsor has agreed that it will be liable to ARYA if and to the extent any claims by a vendor for services rendered or products sold to ARYA, or a prospective target business with which ARYA has discussed entering into a Business Combination Agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and

 

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all rights to seek access to the Trust Account and except as to any claims under ARYA’s indemnity of the underwriters of the ARYA IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, ARYA Sponsor will not be responsible to the extent of any liability for such third-party claims. ARYA has not independently verified whether ARYA Sponsor has sufficient funds to satisfy its indemnity obligations and believes that ARYA Sponsor’s only assets are securities of ARYA. ARYA Sponsor may not have sufficient funds available to satisfy those obligations. ARYA has not asked ARYA Sponsor to reserve for such eventuality, and therefore, no funds are currently set asid