Filing Details

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(1)

This percentage is calculated based upon 38,834,099 outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Aerpio Pharmaceuticals, Inc. (the “Issuer”), as set forth in the Issuer’s Rule 424(b)(5) Prospectus Supplement, filed with the Securities and Exchange Commission on June 26, 2018.

 

 

(1)

This percentage is calculated based upon 38,834,099 outstanding shares of common stock, par value $0.0001 per share (the “Shares”), of Aerpio Pharmaceuticals, Inc. (the “Issuer”), as set forth in the Issuer’s Rule 424(b)(5) Prospectus Supplement, filed with the Securities and Exchange Commission on June 26, 2018.

 

 

As a result of the transactions described in this Item 3, the Reporting Persons may be deemed to be the beneficial owners of approximately 13.37% of the outstanding Shares.  GP V, as the general partner of OPI V, may be deemed to be the beneficial owner of approximately 13.37% of the outstanding Shares.  Advisors, as the managing member of GP V, may be deemed to be the beneficial owner of approximately 13.37% of the outstanding Shares.

 

Item 4.

Purpose of Transaction

 

The Reporting Persons caused OPI V to acquire Shares of the Issuer for the purpose of making an investment in the Issuer and not with the intention of acquiring control of the Issuer’s business on behalf of OPI V.

 

The Reporting Persons from time to time intend to review their investment in the Issuer on the basis of various factors, including the Issuer’s business, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Issuer’s Shares in particular, as well as other developments and other investment opportunities.  Based upon such review, the Reporting Persons will take such actions in the future as the Reporting Persons may deem appropriate in light of the circumstances existing from time to time.  If the Reporting Persons believe that further investment in the Issuer is attractive, whether because of the market price of the Shares or otherwise, they may acquire Shares or other securities of the Issuer either in the open market or in privately negotiated transactions.  Similarly, depending on market and other factors, the Reporting Persons may determine to dispose of some or all of the Shares currently owned by the Reporting Persons or otherwise acquired by the Reporting Persons either in the open market or in privately negotiated transactions.

 

Except as set forth in this Statement, 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 of Directors 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

 

(a) — (b) As of the date of this filing, the Reporting Persons may be deemed, for purposes of Rule 13d-3 of the Act, directly or indirectly, including by reason of their mutual affiliation, to be the beneficial owners of 5,193,946 Shares held of record by OPI V.  Based upon information contained in the Issuer’s Rule 424(b)(5) Prospectus Supplement, filed with the Securities and Exchange Commission (the “SEC”) on June 26, 2018, such Shares constitutes approximately 13.37% of the issued and outstanding Shares.  Advisors, pursuant to its authority as the sole managing member of GP V, which is the sole general partner of OPI V, may be deemed to indirectly beneficially own the Shares held by OPI V.  GP V, pursuant to its authority as the general partner of OPI V, may be deemed to indirectly beneficially own the Shares held by OPI V.  As a result, Advisors and GP V share the power to direct the vote and the disposition of the Shares held of record by OPI V.  Advisors exercises this investment and voting power through a management committee comprised of Carl L. Gordon, Sven H. Borho and Jonathan T. Silverstein, each of whom disclaims beneficial ownership of the Shares held by OPI V.

 

(c)          Except as disclosed in Item 3, none of the Reporting Persons has effected any transaction during the past sixty (60) days in any Shares.

 

(d)          Not applicable.

 

(e)          As of January 24, 2018, Samuel D. Isaly, who was previously identified as a reporting person, has ceased to be the beneficial owner of more than five percent of the outstanding Shares.

 

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 V is the sole general partner of OPI V, pursuant to the terms of the limited partnership agreement of OPI V.  Advisors is the sole managing member of GP V, pursuant to the terms of the limited liability company agreement of GP V.  Pursuant to these agreements and relationships, Advisors and GP V have discretionary investment management authority with respect to the assets of OPI V.  Such authority includes the power of GP V and Advisors to vote and otherwise dispose of securities purchased by OPI V.  The number of outstanding Shares held of record by OPI V is 5,193,946.  Advisors and GP V may be considered to hold indirectly 5,193,946 Shares.

 

Chau Khuong (“Khuong”), an employee of Advisors, has been a member of the Board of Directors of the Issuer since March 15, 2017 and a member of the Board of Directors of Aerpio Therapeutics, Inc., a wholly-owned subsidiary of the Issuer (“Aerpio Therapeutics”), since April 2014, and, accordingly, the Reporting Persons may have the ability to affect and influence control of the Issuer.  From time to time, Khuong may receive stock options or other awards of equity‑based compensation pursuant to the Issuer’s compensation arrangements for non‑employee directors.  Khuong is obligated to transfer any Shares 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 Shares or economic benefits are provided to OPI V.

 

Lock-Up Agreement

 

In connection with the Offering, OPI V entered into a lock-up agreement with Guggenheim Securities, LLC, the underwriters’ representative (the “Lock-Up Agreement”).  The Lock-Up Agreement provides that, subject to limited exceptions, OPI V will not, during the period ending 90 days after the date of the Offering (the “Lock-Up Period”), directly or indirectly (1) sell, offer to sell, contract to sell or lend, effect any short sale or establish or increase a put equivalent position or liquidate or decrease any call equivalent position on, pledge, hypothecate or grant any security interest in or in any other way transfer or dispose of, any Shares or securities convertible into or exercisable or exchangeable for Shares, (2) enter into any swap or other agreement that transfers, in whole or in part, the economic risk of ownership of any such Shares or (3) engage in any short selling of the Shares or securities convertible into or exercisable or exchangeable for Shares.  Furthermore, the Lock-Up Agreement also provides that during the Lock-Up Period OPI V will not make any demand for, or exercise any right with respect to, the registration under the Securities Act of the offer and sale of any Shares or securities convertible into or exercisable or exchangeable for Shares, or cause to be filed a registration statement, prospectus or prospectus supplement (or an amendment or supplement thereto) with respect to any such registration.

After the Lock-Up Period expires, the Reporting Persons’ Shares 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 U.S. securities laws.

 

The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is filed as Exhibit 2 and incorporated herein by reference.

 

Registration Rights Agreement

 

On March 15, 2017, the Issuer closed an offering pursuant to which the Issuer agreed to issue and sell to the participants, for an aggregate price of approximately $40.25 million, 8,049,555 Shares (the “Private Placement”).  In connection with the Private Placement, OPI V entered into a registration rights agreement with the Issuer (the “Registration Rights Agreement”).  Pursuant to the Registration Rights Agreement, the Issuer agreed to prepare and file a registration statement with the SEC within 60 days after the closing of the Private Placement for purposes of registering the resale of the Shares, and any shares of common stock issued as a dividend or other distribution with respect to the Shares. The Issuer agreed to use its commercially reasonable efforts to cause this registration statement to be declared effective by the SEC within 150 days after the closing of the Private Placement.

 

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, a copy of which is filed as Exhibit 3 and incorporated herein by reference.

 

Aerpio Therapeutics, Inc. Registration Rights Agreement

 

In addition, in connection with the Private Placement, OPI V and certain other former stockholders of Aerpio Therapeutics entered into a separate registration rights agreement with the Issuer (the “Aerpio Registration Rights Agreement”).  Pursuant to the Aerpio Registration Rights Agreement and subject to the terms and conditions therein, the parties agreed that:

The holders of 30% majority of the shares covered by the Aerpio Registration Rights Agreement, or their transferees, can, on not more than two occasions, request that the Issuer register all or a portion of their shares.  The Issuer will not be required to effect a demand registration during the period that is 60 days before the Issuer’s good faith estimate of the date of filing of, and ending on a date that is 180 days after the effective date of, a company-initiated registration statement relating to an initial public offering of its securities, provided that the Issuer is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

      

The Aerpio Registration Rights Agreement further provides that, in the event that the Issuer determines to register any of its securities under the Securities Act, either for its own account or for the account of other security holders, the stockholders who are party to the Aerpio Registration Rights Agreement, including OPI V, will be entitled to certain “piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations.

Form S-3 Registration Rights

At any time when the Issuer is eligible to use a Form S-3 registration statement, the holders of at least 20% of the shares covered by the Aerpio Registration Rights Agreement or their transferees, can request that the Issuer register all or a portion of their shares on Form S-3.  The Issuer will not be required to effect a demand registration during the period that is 30 days before the Issuer’s good faith estimate of the date of filing of, and ending on a date that is 90 days after the effective date of, a company-initiated registration of its securities, provided that the Issuer is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.  In addition, the Issuer shall not be required to file more than two registrations on Form S-3 in any twelve-month period.

The Issuer will pay the registration expenses of the holders of the shares registered pursuant to the demand, Form S-3 and piggyback registration rights described above.

The Aerpio Registration Rights Agreement contains customary cross-indemnification provisions, pursuant to which the Issuer is obligated to indemnify the selling stockholders in the event of material misstatements or omissions in the registration statement attributable to the Issuer, and the selling stockholders are obligated to indemnify the Issuer for material misstatements or omissions attributable to them.

OPI V’s demand, Form S-3 and piggyback registration rights described above generally will terminate upon the earlier of: (i) the sale of all or substantially all of the assets of the Issuer on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Issuer’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity immediately upon completion of such transaction, (iii) the sale of all or substantially all of the Issuer’s assets or property to an unrelated person, entity or group, (iv) any other transaction in which the owners of the Issuer’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Issuer or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Issuer, or (v) such time as all of the shares of the Issuer held by OPI V may be sold without any restriction on volume or manner of sale in any three-month period pursuant to Rule 144 (or another similar exemption) under the Securities Act.

 

The foregoing description of the Aerpio Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Aerpio Registration Rights Agreement, a copy of which is filed as Exhibit 4 and incorporated herein by reference.

Item 7.

Materials to Be Filed as Exhibits

 

 

 

 

 

SIGNATURE

 

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: July 2, 2018

 

	OrbiMed Advisors LLC
	By:	/s/ Jonathan T. Silverstein
		Name:	Jonathan T. Silverstein
		Title:	Member of OrbiMed Advisors LLC
	By:	/s/ Sven H. Borho
		Name:	Sven H. Borho
		Title:	Member of OrbiMed Advisors LLC
	By:	/s/ Carl L. Gordon
		Name:	Carl L. Gordon
		Title:	Member of OrbiMed Advisors LLC
	OrbiMed Capital GP V LLC
	By:	OrbiMed Advisors LLC its Managing Member
	By:	/s/ Jonathan T. Silverstein
		Name:	Jonathan T. Silverstein
		Title:	Member of OrbiMed Advisors LLC
	By:	/s/ Sven H. Borho
		Name:	Sven H. Borho
		Title:	Member of OrbiMed Advisors LLC
	By:	/s/ Carl L. Gordon
		Name:	Carl L. Gordon
		Title:	Member of OrbiMed Advisors LLC

 

 

Name	Position with Reporting Person	Principal Occupation
Carl L. Gordon	Member	Member OrbiMed Advisors LLC
Sven H. Borho German and Swedish Citizen	Member	Member OrbiMed Advisors LLC
Jonathan T. Silverstein	Member	Member OrbiMed Advisors LLC
W. Carter Neild	Member	Member OrbiMed Advisors LLC
Geoffrey C. Hsu	Member	Member OrbiMed Advisors LLC
Evan D. Sotiriou	Chief Financial Officer	Chief Financial Officer OrbiMed Advisors LLC

 

Schedule II

 

The business and operations of OrbiMed Capital GP V LLC are managed by the executive officers and directors of its managing member, OrbiMed Advisors LLC, set forth on Schedule I.

 

EXHIBIT INDEX

 

 

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