13D Filing: OrbiMed Advisors and Verona Pharma PLC (VRNA)

Advisors, pursuant to its authority as the sole managing member of GP VI, the sole general partner of OPI VI, may be deemed to indirectly beneficially own the Ordinary Shares held by OPI VI.  GP VI, pursuant to its authority as the general partner of OPI VI, may be deemed to indirectly beneficially own the Ordinary Shares held by OPI VI.  Isaly, pursuant to his authority as the managing member of Advisors and owner of a controlling interest in Advisors, pursuant to its limited liability company agreement, may also be deemed to indirectly beneficially own the Ordinary Shares attributable to Advisors.  As a result, Isaly, Advisors and GP VI share the power to direct the vote and to direct the disposition of the Ordinary Shares described in Item 3 above.

(c)          Except as disclosed in Item 3, the Reporting Persons have not effected any transactions in the Ordinary Shares or ADSs during the past sixty (60) days.

(d)          Not applicable.

(e)          Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer

In addition to the relationships between the Reporting Persons described in Items 2, 3 and 5 above, GP VI is the sole general partner of OPI VI, pursuant to the terms of the limited partnership agreement of OPI VI.  Advisors is the sole managing member of GP VI, pursuant to the terms of the limited liability company agreement of GP VI.  Pursuant to these agreements and relationships, Advisors and GP VI have discretionary investment management authority with respect to the assets of OPI VI.  Such authority includes the power of GP VI to vote and otherwise dispose of securities purchased by OPI VI.  The number of Ordinary Shares attributable to OPI VI is 11,871,112 (of which 5,333,328 are represented by 666,666 ADSs and 1,867,938 are subject to Warrants).  Advisors and GP VI may each be considered to hold indirectly 11,871,112 Ordinary Shares.  Isaly, pursuant to his authority as the managing member of, and owner of a controlling interest in, Advisors, also has shared discretionary power to direct the vote and the disposition of the securities of the Issuer held by OPI V.

Rishi Gupta (“Gupta”), a Private Equity Partner of Advisors, has been a member of the Board of Directors of the Issuer since July 2016 and, accordingly, the Reporting Persons may have the ability to affect and influence control of the Issuer.  From time to time, Gupta may receive stock options or other awards of equity-based compensation pursuant to the Issuer’s compensation arrangements for non-employee directors.  Gupta is obligated to transfer any securities issued under any such stock options or other awards, or the economic benefit thereof, to the Reporting Persons, which will in turn ensure that such securities or economic benefits are provided to OPI VI.

Lock-up Agreement

In connection with the Issuer’s IPO, Jefferies International Limited and Stifel, Nicholaus & Company, Incorporated (the “Underwriters”), and OPI VI entered into an agreement (the “Lock-Up Agreement”).  The Lock-Up Agreement provides that, subject to limited exceptions, without the prior written consent of the Underwriters, OPI VI will not, for a period of 180 days after the date of the Prospectus (the “Lock-Up Period”): (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise dispose of any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares (the “Lock-Up Securities”), or request or demand that the Issuer file a registration statement with respect to any Lock-Up Securities; or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities.

After the Lock-Up Agreement expires, the Ordinary Shares held by OPI VI will be eligible for sale in the public market, subject to any applicable limitations under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and other applicable United States securities laws.  OPI VI, along with certain other holders of the Ordinary Shares party to the Registration Rights Agreement (as defined below), will be entitled to rights with respect to the registration of their shares.  Registration of these shares would result in the shares becoming freely tradable without restriction, except for shares purchased by affiliates.