Page 7 of 10 – SEC Filing
| CUSIP No. 45168K306 | Page 7 of 10 Pages |
| Item 4. | Purpose of the Transaction. |
Item 4 of Amendment No. 1 is supplemented and superseded,
as the case may be, as follows:
On October 25, 2017, Idera Pharmaceuticals, Inc. (the “Issuer”)
entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Goldman,
Sachs & Co. LLC and Barclays Capital Inc., as representatives of the several underwriters listed on Schedule I thereto (the
“Underwriters”), related to an underwritten public offering (the “Offering”) of 33,333,334 shares of the
Issuer’s Common Stock at a price to the public of $1.50 per share. In addition, the Issuer granted the Underwriters an option
exercisable for 30 days from the date of the Underwriting Agreement to purchase, at the public offering price less any underwriting
discounts and commissions, up to an additional 5,000,000 shares of common stock to cover overallotments, if any. The Offering is
expected to close on October 30, 2017.
Pursuant to the Offering, on October 26, 2017, 667 and Life
Sciences (collectively the “Purchasing Funds”) purchased 795,348 shares of Common Stock and 7,204,652 shares of Common
Stock, respectively, at the offering price of $1.50 per share. The Purchasing Funds purchased the shares of the Issuer’s
Common Stock with their working capital.
Julian C. Baker, a principal of the Adviser, and Dr. Kelvin
M. Neu, an employee of the Adviser, serve on the Board of Directors of the Issuer (the “Board”), as representatives
of the Funds. Dr. Neu serves as Chairman of the Compensation Committee. Julian C. Baker and Dr. Neu hold 51,082 and 68,311 shares
of Common Stock, respectively, received as compensation for service on the Board. Of such shares, 3,837 shares were granted to
Julian C. Baker and 5,208 shares were granted to Dr. Neu on October 2, 2017, in lieu of directors retainor fees of $8,750 and $12,500,
respectively. Additionally, Julian C. Baker and Dr. Neu each hold options to purchase shares of Common Stock (“Stock Options”)
received for their service on the Board. Each of Julian C. Baker and Dr. Neu holds 225,000 Stock Options, of which 151,667 are
vested or will vest within 60 days hereof.
The policy of the Funds and the Adviser does not permit principals
or employees of the Adviser to receive compensation for serving as a directors of the Issuer and the Funds are instead entitled
to the pecuniary interest in the Stock Options or shares of Common Stock received as director compensation. Julian C. Baker and
Dr. Neu have no voting or dispositive power and no pecuniary interest in the Stock Options and Common Stock received as compensation
for their service on the Board. Other than through their control of the Adviser, Felix J. Baker and Julian C. Baker have neither
voting nor dispositive power and have no direct pecuniary interest in the Stock Options or Common Stock received as directors compensation
held by Julian C. Baker and Dr. Neu.
Baker Bros. Advisors LP has voting and investment power over
the Stock Options and Common Stock received as director compensation held by Julian C. Baker and Dr. Neu.
The Funds hold securities of the Issuer for investment purposes.
The Reporting Persons or their affiliates may purchase additional securities or dispose of securities in varying amounts and at
varying times depending upon the Reporting Persons’ continuing assessments of pertinent factors, including the availability
of shares of Common Stock or other securities for purchase at particular price levels, the business prospects of the Issuer, other
business investment opportunities, economic conditions, stock market conditions, money market conditions, the attitudes and actions
of the Board and management of the Issuer, the availability and nature of opportunities to dispose of shares in the Issuer and
other plans and requirements of the particular entities. The Reporting Persons may discuss items of mutual interest with the Issuer,
which could include items in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Depending upon their assessments of the above factors, the Reporting
Persons or their affiliates may change their present intentions as stated above and they may assess whether to make suggestions
to the management of the Issuer regarding financing, and whether to acquire additional securities of the Issuer, including shares
of Common Stock (by means of open market purchases, privately negotiated purchases, exercise of some or all of the Warrants (as
defined below), exercise of some or all of the Stock Options, or otherwise) or to dispose of some or all of the securities of the
Issuer, including shares of Common Stock, under their control.
Except as otherwise disclosed herein, at the present time, the
Reporting Persons do not have any plans or proposals with respect to any extraordinary corporate transaction involving the Issuer
including, without limitation, those matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
