Regeneron Pharmaceuticals, Inc. (NasdaqGS:REGN) entered into a definitive agreement to acquire remaining unknown majority stake in Decibel Therapeutics, Inc. (NasdaqGS:DBTX) on August 8, 2023. Regeneron to initiate a tender offer to acquire all outstanding shares of Decibel at a price of $4.00 per share of Decibel common stock payable in cash at closing plus one CVR. Decibel shareholders will receive a non-tradeable contingent value right (CVR) to receive up to $3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for Decibel?s lead investigational candidate, DB-OTO, within specified time periods. Regeneron currently owns 2,097,314 shares of Common Stock of Decibel. The proposed acquisition values Decibel at a total equity value of approximately $109 million based on the amount payable at closing, and a total equity value of up to approximately $213 million if the CVR milestones are achieved. The Merger Agreement also provides that, in connection with the termination of the Merger Agreement under specified circumstances, Decibel will be required to pay Regeneron a termination fee in the amount of $6,500,000.

The closing of the tender offer will be subject to certain conditions, including the tender of at least a majority of the outstanding shares of Decibel common stock and other customary closing conditions. Upon the successful completion of the tender offer, Regeneron will acquire all shares not acquired in the tender through a second-step merger for the same consideration per share paid in the tender offer. The board of directors of Decibel unanimously approved the merger agreement. The board of directors of Regeneron have also approved the transaction. In connection with execution of the Merger Agreement, Regeneron entered into Tender and Support Agreements with each of (i) OrbiMed Private Investments VIII, LP, OrbiMed Partners Master Fund Limited and OrbiMed Genesis Master Fund, L.P., (ii) Third Rock Ventures III, L.P. and (iii) Laurence Reid, which collectively own approximately 35.7% of the outstanding shares of Common Stock of Decibel, to vote all of such Supporting Stockholder?s shares of Common Stock in favor of the Merger. The transaction is expected to close in the third quarter of 2023.

Andrew R. Brownstein and Victor Goldfeld of Wachtell, Lipton, Rosen & Katz acted as legal advisors to Regeneron. Centerview Partners LLC and Leerink Partners LLC are serving as Decibel?s financial advisors and Stuart M. Falber, Joseph B. Conahan and Scott Lunin of Wilmer Cutler Pickering Hale and Dorr LLP serving as Decibel?s legal advisors. Centerview Partners LLC acted as fairness opinion provider to the board of directors of Decibel.