Filing Details

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

 

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CUSIP No. 68235M105

Page 2 of 14 Pages

1	NAME OF REPORTING PERSONS   GMS Tenshi Holdings Pte. Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) o (b) ☒
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Singapore
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   0
		8	SHARED VOTING POWER   54,545,948 (1)
		9	SOLE DISPOSITIVE POWER   0
		10	SHARED DISPOSITIVE POWER   54,545,948 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   54,545,948 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   68.6% (2)
14	TYPE OF REPORTING PERSON (See Instructions)   IV

(1)	Represents (1) 250,000 shares of Series A Convertible Preferred Stock of Oncobiologics, Inc., a Delaware corporation (the “Issuer”), which converts into 37,795,948 shares of common stock of the Issuer (“Shares”) and (2) warrants to purchase 16,750,000 Shares.

 

CUSIP No. 68235M105

Page 3 of 14 Pages

1	NAME OF REPORTING PERSONS   Ghiath M. Sukhtian
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) o (b) ☒
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Singapore
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   0
		8	SHARED VOTING POWER   54,545,948 (1)
		9	SOLE DISPOSITIVE POWER   0
		10	SHARED DISPOSITIVE POWER   54,545,948 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   54,545,948 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   68.6%(2)
14	TYPE OF REPORTING PERSON (See Instructions)   IN

(1)	Represents (1) 250,000 shares of Series A Convertible Preferred Stock of Oncobiologics, Inc., a Delaware corporation (the “Issuer”), which converts into 37,795,948 shares of common stock of the Issuer (“Shares”) and (2) warrants to purchase 16,750,000 Shares.

 

CUSIP No. 68235M105

Page 4 of 14 Pages

1	NAME OF REPORTING PERSONS   Arun Kumar Pillai
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) o (b) ☒
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Singapore
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   0
		8	SHARED VOTING POWER   54,545,948 (1)
		9	SOLE DISPOSITIVE POWER   0
		10	SHARED DISPOSITIVE POWER   54,545,948 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   54,545,948 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   68.6%(2)
14	TYPE OF REPORTING PERSON (See Instructions)   IN

(1)	Represents (1) 250,000 shares of Series A Convertible Preferred Stock of Oncobiologics, Inc., a Delaware corporation (the “Issuer”), which converts into 37,795,948 shares of common stock of the Issuer (“Shares”) and (2) warrants to purchase 16,750,000 Shares.

 

(ii) Sukhtian is a citizen of Jordan.

 

ITEM 3.          Source and Amount of Funds or Other Consideration

 

In connection with the Purchase Agreement (as defined and described below), on October 31, 2017, the Issuer closed the final sale of 217,372 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”) to GMS Tenshi for an aggregate purchase price of approximately $21.7 million and issued GMS Tenshi warrants to acquire an aggregate of 16,750,000 Shares (“Warrants”).  The source of funds for such purchases was the working capital of GMS Tenshi and capital contributions made to GMS Tenshi.

 

As a result of the transactions described in this Item 3, the Reporting Persons may each be deemed to be the beneficial owner of approximately 68.6% of the outstanding Shares.

 

ITEM 4.          Purpose of Transaction

 

On September 7, 2017, GMS Tenshi entered into a purchase agreement with the Issuer (the “Purchase Agreement”) pursuant to which GMS Tenshi agreed to purchase, in a private placement (the “Private Placement”), $25.0 million of Preferred Stock and warrants to purchase Shares (Warrants and together with the Preferred Stock, the “Securities”).  On September 11, 2017, the Issuer closed the initial sale of 32,628 shares of Preferred Stock to GMS Tenshi (the “Initial Closing”) for an aggregate purchase price of approximately $3.3 million, and entered into an Investor Rights Agreement (as defined below) with GMS Tenshi, as described below.  On October 31, 2017, the Issuer closed the final sale of 217,372 shares of Preferred Stock to GMS Tenshi (the “Second Closing”) for an aggregate purchase price of approximately $21.7 million, and issued GMS Tenshi Warrants to acquire 16,750,000 Shares.  The source of funds for such purchases was the working capital of GMS Tenshi and capital contributions made to GMS Tenshi.

 

In connection with the Second Closing, the Company appointed two additional GMS Tenshi designated directors to its Board of Directors (the “Board”) (See Item 6 below).  The Issuer will also seek shareholder approval at its first annual meeting for, among other things, the approval of the issuance of the Securities and election of Class I directors (the Issuer has three classes of directors, the term of which expire on different dates), which will include one of the directors appointed by GMS Tenshi.

 

The Issuer intends to use the net proceeds from the Private Placement, primarily for the (i) purpose of developing ONS-3010, a biologic medical product, and (ii) other purposes set forth in an agreed budget, in each case, in accordance with such approved budget, and not for any other purpose.

 

Except as set forth in this Schedule 13D, the Reporting Persons have not formulated any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries; (d) any change in the present Board or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the Issuer’s capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer’s business or corporate structure; (g) any change in the Issuer’s charter or bylaws or other instrument corresponding thereto or other action which may impede the acquisition of control of the Issuer by any person; (h) causing a class of the Issuer’s securities to be deregistered or delisted from a national securities exchange or to cease to be authorized to be quoted in an inter‑dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) any action similar to any of those enumerated above.

 

ITEM 5.

Interest in Securities of the Issuer

 

Based upon information provided to the Reporting Persons by the Issuer, the parties to the Voting Agreements described below other than GMS Tenshi hold an aggregate of 3,970,315 Shares constituting approximately 15.9% of the currently outstanding Shares.  Such Shares when aggregated with the Shares beneficially owned by the Reporting Persons would constitute approximately 84.5% of the Shares outstanding, assuming conversion of the Preferred Stock and Warrants acquired by GMS Tenshi.  The Reporting Persons disclaim beneficial ownership of the 3,970,315 Shares held by parties to the Voting Agreements other than GMS Tenshi.

 

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

 

(d)           Not applicable.

 

(e)	Not applicable.

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer

 

The shares of Preferred Stock acquired in connection with the closing of the Private Placement are held of record by GMS Tenshi.  Tenshi, a private investment vehicle of Kumar, and GMS Pharma, a private investment company and wholly-owned subsidiary of GMS Holdings, are the 50:50 beneficial owners of GMS Tenshi, in which each of Tenshi and GMS Pharma owns 50% of the outstanding voting shares.  Kumar, a natural person, is the holder of a controlling interest in Tenshi.  Sukhtian, a natural person, is the holder of a controlling interest in GMS Holdings, which is the holder of a controlling interest in GMS Pharma.  By virtue of such relationships, Kumar and Sukhtian may be deemed to have voting and investment power with respect to the securities held by GMS Tenshi noted above and as a result may be deemed to beneficially own such securities for purposes of Rule 13d-3 under the Exchange Act.  As of the date of this Schedule 13D, the number of Shares attributable to GMS Tenshi (assuming conversion of the Preferred Stock and Warrants acquired by GMS Tenshi) is 54,545,948.  Kumar and Sukhtian may also each be considered to hold indirectly the same 54,545,948 Shares.

 

Pursuant to the Investor Rights Agreement (as defined below), GMS Tenshi has been granted the right to appoint four representatives to the Issuer’s Board of Directors (the “Board”), and accordingly, the Reporting Persons may have the ability to affect and influence control of the Issuer.

In connection with the Initial Closing, GMS Tenshi designated two representatives, currently Faisal G. Sukhtian (“Faisal Sukhtian”) (a director of both GMS Pharma and GMS Holdings) and Joe Thomas (“Thomas”) (a director and executive of a company controlled by Kumar) to serve on the Board.  Effective September 11, 2017, the Issuer appointed both Faisal Sukhtian and Thomas to the Board.  In connection with the Second Closing, GMS Tenshi designated Claudio Albrecht (a director of GMS Holdings ) and Yezan Munther Haddadin (an executive of GMS Holdings), to serve on the Issuer’s board of directors.  Effective October 31, 2017, the Issuer appointed both Claudio Albrecht and Yezan Munther to the Board.

 

Purchase Agreement

 

Item 4 above summarizes certain provisions of the Purchase Agreement and is incorporated herein by reference.  The description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2 to this Schedule 13D, and is incorporated herein by reference.

 

Voting and Lockup Agreements

 

On September 7, 2017, in connection with the Private Placement, GMS Tenshi entered into voting and lock-up agreements with Lawrence A. Kenyon, the Issuer’s Chief Financial Officer, and Kenneth M. Bahrt, M.D., the Issuer’s Chief Medical Officer, as well as the members of the Board (other than Pankaj Mohan, Ph.D., the Issuer’s Chairman and Chief Executive Officer), as well as all of the holders of the Issuer’s senior secured notes (collectively, the “Voting Agreements”) whereby they have agreed to vote in favor of the proposals to issue the Securities to GMS Tenshi pursuant the Purchase Agreement and the change in control of the Issuer.  Dr. Mohan entered into a separate lock-up agreement with GMS Tenshi (the “Lock-Up Agreement”). Pursuant to the Voting Agreements and the Lock-Up Agreement, the lock-up period for the Issuer’s executive officers and the members of Board who will continue on the Board after the closing of the sale of the remaining Securities, including Dr. Mohan, is 12 months, and the lock-up period for the members of Board who will resign from the Board in connection with the Private Placement is nine months, whereas for the senior secured noteholders the lock-up period runs through the record date for the stockholder meeting where the Issuer’s stockholders will be asked to approve the transactions contemplated by the Purchase Agreement and a purchase and exchange agreement (but such period is six months for the Shares underlying the Issuer’s Series B Convertible Preferred Stock to be issued to the noteholders pursuant to the purchase and exchange agreement).

 

Pursuant to the Voting Agreements and Lock-Up Agreement, during such lock-up periods, the parties have agreed not to, except in limited circumstances, (i) sell, transfer, pledge, assign or otherwise encumber or dispose of any of the securities (as such term is defined in the Voting Agreements and Lock-Up Agreement), or enter into any agreement, option or other arrangement or understanding with respect to any of the securities, (ii) deposit any securities into a voting trust or enter into any voting arrangement with respect to the securities, or (iii) take any other action that would in any way make any representation or warranty of the stockholder signatory untrue or incorrect in any material respect or otherwise restrict, limit or interfere in any material respect with the performance of such stockholder’s obligations under such agreement or the transactions contemplated by such agreement.

The foregoing description of the Voting Agreements and the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 3, 4, 5, 6 and 7 and incorporated herein by reference.

 

Investor Rights Agreement

 

In connection with the Private Placement, on September 11, 2017, the Issuer entered into an investor rights agreement with GMS Tenshi (the “Investor Rights Agreement”).  Pursuant to the Investor Rights Agreement, the Issuer granted GMS Tenshi certain registration rights with respect to the Shares issuable upon conversion of the Preferred Stock and exercise of the Warrants, Board designation rights, piggyback registration rights and information rights, as well as the right of first offer over future issuances of securities and a right of participation in future securities issuances.  The Issuer also agreed not to file any registration statement to register for resale the sale of any securities of a third party without GMS Tenshi’s prior consent.

 

Additionally, the Issuer agreed to appoint up to four new directors to be designated by GMS Tenshi, such that GMS Tenshi’s designees represent a majority of the Board. As long as GMS Tenshi maintains beneficial ownership of at least 5% of the Issuer’s outstanding Shares, it shall be entitled to nominate directors to the Board in proportion to its ownership stake in the Issuer.  As long as GMS Tenshi maintains beneficial ownership of at least 50% of the Issuer’s outstanding Shares but less than or equal to 57%, GMS Tenshi shall be entitled to nominate a majority of the directors for election to the Board.

 

The foregoing description of the Investor Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Investor Rights Agreement filed as Exhibit 8 to this Schedule 13D, and incorporated herein by reference.

 

ITEM 7

Material to be Filed as Exhibits

 

Exhibit

Description

 

1.	Joint Filing Agreement, among GMS Tenshi Holdings Pte. Limited, Ghiath M. Sukhtian, and Arun Kumar Pillai, dated October 30, 2017.

 

2.	Purchase Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated September 7, 2017 (incorporated by reference to Exhibit 10.1 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

 

3.

Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Director or Executive Officer of Oncobiologics, Inc. party thereto, dated September 7, 2017 (incorporated by reference to Exhibit 10.4 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

4.	Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and Todd Brady, Director Oncobiologics, Inc., dated September 7, 2017 (incorporated by reference to Exhibit 10.5 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

5.

Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Stockholder of Oncobiologics, Inc. party thereto, dated September 7, 2017 (incorporated by reference to Exhibit 10.6 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

6.	Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Noteholder named therein, dated September 7, 2017 (incorporated by reference to Exhibit 10.7 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

7.	Lock-Up Agreement by and among the Issuer, GMS Tenshi Holdings Pte. Limited and Pankaj Mohan, Ph.D, dated September 7, 2017 (incorporated by reference to Exhibit 10.8 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

8.	Investor Rights Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated September 11, 2017 (incorporated by reference to Exhibit 10.3 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF

GMS TENSHI HOLDINGS PTE. LIMITED

 

The following tables set forth certain information with respect to the directors and executive officers of GMS Tenshi Holdings Pte. Limited.

 

EXHIBIT INDEX

 

Exhibit

Description

 

1.	Joint Filing Agreement, among GMS Tenshi Holdings Pte. Limited, Ghiath M. Sukhtian, and Arun Kumar Pillai, dated September 18, 2017.

 

2.	Purchase Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated September 7, 2017 (incorporated by reference to Exhibit 10.1 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

 

3.

Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Director or Executive Officer of Oncobiologics, Inc. party thereto, dated September 7, 2017 (incorporated by reference to Exhibit 10.4 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

4.	Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and Todd Brady, Director Oncobiologics, Inc., dated September 7, 2017 (incorporated by reference to Exhibit 10.5 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

5.

Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Stockholder of Oncobiologics, Inc. party thereto, dated September 7, 2017 (incorporated by reference to Exhibit 10.6 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

6.	Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Noteholder named therein, dated September 7, 2017 (incorporated by reference to Exhibit 10.7 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

7.	Lock-Up Agreement by and among the Issuer, GMS Tenshi Holdings Pte. Limited and Pankaj Mohan, Ph.D, dated September 7, 2017 (incorporated by reference to Exhibit 10.8 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

8.	Investor Rights Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated September 11, 2017 (incorporated by reference to Exhibit 10.3 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).