Idera Pharmaceuticals Inc. (NasdaqCM:IDRA) (‘Idera') signed a definitive agreement to acquire BioCryst Pharmaceuticals Inc. (NasdaqGS:BCRX) (‘BioCryst') from a group of shareholders in a merger of equals transaction for approximately $630 million on January 21, 2018. Under the terms of the agreement, each share of BioCryst common stock will be exchanged for 0.5 shares of stock of Nautilus Holdco Inc. (“Holdco”), a wholly owned subsidiary of BioCryst, and each share of Idera common stock will be exchanged for 0.2 shares of Holdco stock. Each option to acquire shares of Idera common stock shall be assumed by Holdco and shall be converted into an option to acquire shares of Holdco common stock. Each warrant and pre-funded warrant of Idera shall be assumed by Holdco and shall be converted into a warrant to acquire Holdco common stock. Holco will assume the Idera 1997 Stock Incentive Plan, the Idera 2005 Stock Incentive Plan, the 2008 Stock Incentive Plan and the 2013 Stock Incentive Plan and Idera employee stock purchase plan. Each Idera preferred stock will receive, for each share of Idera preferred stock , that number of shares of Holdco common stock equal to $1 divided by the 20-trading-day average trading price of Idera common stock, ending with the trading day prior to the third day prior to the closing date, multiplied by 0.2. Holders of Idera common stock and Idera preferred stock will not receive any fractional shares of Holdco common stock in the merger. On a pro forma, fully diluted basis, giving effect to all dilutive stock options, units and warrants, BioCryst stockholders will own 51.6% of the stock of the combined company and Idera stockholders will own 48.4%. The stock issuance in the merger is expected to be tax-free to stockholders. Post-completion, the combined company will be called Valenscion Incorporated. Upon termination of the agreement under certain specified circumstances, Idera or BioCryst may be required to pay the other party a termination fee of $25 million.

Upon the closing of the transaction, the Board of Directors of Holdco will comprise nine members, consisting of four directors designated from the Idera Board, one of them being Vincent J. Milano, current Chief Executive Officer of Idera, four directors designated from BioCryst Board, one of them being Jon P. Stonehouse, current Chief Executive Officer of BioCryst and one director to be mutually agreed upon by Idera's and BioCryst's Board. Robert A. Ingram, the current Chairman of the BioCryst Board, will be the chairman of the Holdco Board. Additionally, at least one Idera designee shall be appointed to each committee of Holdco Board. Vincent J. Milano will be the Chief Executive Officer of Holdco. Daniel S. Soland will join the combined company as Chief Operating Officer. As of June 7, 2018, the other board of directors to be constituted include James Geraghty, Mark Goldberg, Maxine Gowen, Nancy Hutson and Kenneth Lee. Post-closing, Holdco will be headquartered in Exton, Pennsylvania at the current Idera headquarters, with a consolidated research center in Birmingham, Alabama.

The transaction is subject to the approval by the stockholders of both companies, as well as regulatory approvals, the shares of Holdco common stock to be issued in the mergers being approved for listing on the NASDAQ Global Select Market, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other material government approvals, the U.S. Securities and Exchange Commission having declared effective the form S-4 Registration Statement of Holdco. The transaction has been unanimously approved by the Board of Directors of both the companies. Concurrent with the transaction, affiliates of Baker Bros. Advisors, LP have agreed to vote their shares of BioCryst common stock and Idera common stock in favor of the merger at each of the special meeting of BioCryst and Idera. A special meeting of Idera shareholders will be held on May 9, 2018 to approve the deal. As of February 15, 2018, the Federal Trade Commission granted early termination of the antitrust approval-waiting period for the transaction. As of April 10, 2018, BioCryst and Idera each rescheduled their respective special meetings of stockholders to July 10, 2018. The transaction is expected to close by the end of the second quarter of 2018. As of June 7, 2018, the transaction is expected to close in the third quarter of 2018. It is projected that the transaction would generate $20 million in cash synergies in year two, and approximately $30 million in annual pre-tax cost synergies are expected in year three after closing.

Jeffrey Kochian of Akin Gump Strauss Hauer & Feld LLP acted as a legal advisor to Baker Brothers Investments. Johan Brigham, Charles K. Ruck and R. Scott Shean of Latham & Watkins LLP acted as legal advisors to Idera and Stephen F. Arcano, Ann Beth Stebbins, Brian Krause and Erica Schohn of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to BioCryst. Jeremy Meilman, Steve Frank and Tom Monaghan of J.P. Morgan Securities LLC acted as financial advisors to BioCryst and will be paid fee of $7 million. Marshall Smith, Caitlin Pollak, Mairin Rooney, Bering Tsang, Vishal Patel and Jialin Zhang of Goldman Sachs & Co. LLC acted as financial advisors to Idera and will be paid fee of $7 million. Innisfree M&A Inc. acted as information agent for BioCryst and will receive a fee of $18,500. MacKenzie Partners, Inc. acted as information agent to Idera and will be paid fee of $17,500 million. American Stock Transfer & Trust Company, LLC acted as transfer agent for BioCryst and Computershare Trust Company NA acted as transfer agent for Idera. Brian Lane of Gibson, Dunn & Crutcher LLP acted as the legal advisor for BioCryst Pharmaceuticals, Inc. Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor to Goldman Sachs & Co. LLC.