Immediately after the Special Committee meeting on February 15, 2024, the Kinnate Board
held a meeting at which all disinterested and independent members of the Kinnate Board unanimously (i) determined that the terms of the Offer, the Merger and the other Transactions are fair to, and in the best interests of, the Company and the
Companys stockholders, (ii) approved and declared advisable the Merger and the execution, delivery and performance by the Company of the Merger Agreement and the CVR Agreement and the consummation of the Transactions, (iii) resolved
to recommend that the Companys stockholders accept the Offer and tender their Shares pursuant to the Offer and (iv) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL.
Accordingly, and for the reasons described in more detail below in this Item 4 under the heading Reasons for the
Recommendation of the Special Committee and the Kinnate Board, based on the recommendation of the Special Committee, the Kinnate Board recommends that the Companys stockholders accept the Offer and tender their Shares pursuant
to the Offer.
A press release, dated February 16, 2024, issued by Kinnate announcing the Offer, is included as Exhibit (a)(5)(B)
hereto and is incorporated herein by reference.
Background of the Offer and the Merger
The following background summarizes the key meetings and events that led to the signing of the Merger Agreement. This background does not
purport to catalog every conversation of or among the Special Committee, the Kinnate Board, their representatives or other parties.
The Kinnate Board, together with the Companys management, regularly evaluated the Companys strategic direction and ongoing
business plans, with a view towards strengthening the Companys business and enhancing stockholder value. This evaluation took into account several factors, including financial, industry, competitive and other considerations. As part of this
evaluation, from time to time, the Kinnate Board and the Companys management reviewed a variety of potential strategic alternatives, including the continuation of, and potential improvements to, the Companys current business plans, with
the Company remaining an independent entity; capital raising activities; and potential acquisitions, business combinations, partnerships, licenses, collaborations and other financial and strategic transactions, including the potential sale of the
Company or certain of its assets. Further, the Company regularly engaged in business development outreach around its programs, including Exarafenib, one of the Companys lead product candidates.
On April 26, 2023, the Kinnate Board held a meeting, also attended by members of management and a representative of Wilson Sonsini
Goodrich & Rosati, P.C. (Wilson Sonsini), the Companys outside counsel. During this meeting, the Kinnate Board discussed the public company life sciences market generally, as well as the particular market response to the
Companys recent disclosure of data from KN-8701 (the Companys Phase 1 clinical trial for Exarafenib). In addition, the Kinnate Board discussed, among other things, the status and prospects of the
Companys programs, the Companys financial prospects, future program milestones and how Company management should prioritize its standalone business plan. The Kinnate Board also discussed various potential strategic transactions that may
be available to the Company, such as commercial partnerships or, in light of the Companys cash position and market capitalization, a potential merger or acquisition involving the Company. As part of this discussion, the Kinnate Board reviewed
potential advisors that the Company might engage to assist the Company in identifying potential partners for, and evaluating, such transactions.
In connection with the foregoing, on May 24, 2023, the Company entered into an engagement letter with Lazard Frères & Co.
LLC (such party, Lazard, and such engagement letter, the Lazard Engagement Letter), pursuant to which Lazard would act as the Companys investment banker in connection with various possible strategic transactions
involving the Company (but excluding a sale of all or a portion of the Company, which the Company was not proactively seeking at such time, and for which Lazard had a right of first offer to be engaged as the Companys financial advisor, on
terms, conditions and fees to be mutually agreed). The Kinnate Board selected Lazard to be its investment banker in this capacity based upon, among other reasons, Lazards reputation, its expertise in advising companies in connection with
similar strategic transactions and its familiarity with the industry in which the Company operates.
In connection with its engagement by
the Company, between May and July of 2023, at the direction of the Kinnate Board, Lazard and the Company conducted a series of outreach campaigns to various private and public companies in the biotechnology and pharmaceutical industries, to gauge
such parties interest in licensing or partnership transactions with the Company involving Exarafenib (such a transaction, an Exarafenib partnership transaction). As a result of this outreach, during this time, representatives of
Lazard and the Company reached out to (or received inbound requests from) a total of thirty (30) parties to explore the possibility of an Exarafenib partnership transaction. Of these thirty (30) parties, the Company had previously entered
into, entered into during this period, or subsequently entered into, confidentiality agreements with a total of five (5) parties. One (1) of these confidentiality agreements included a customary standstill provision, including
a customary fallaway provision and the absence of any dont ask / dont waive provision (such provisions, customary standstill provisions), and the remaining four (4) of these confidentiality
agreements did not contain any standstill provision. As part of this, on June, 28, 2023, Pierre Fabre Médicament, SAS (Pierre Fabre) entered into a confidentiality agreement with customary standstill provisions.
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