Lumos Pharma Enters into Definitive Merger Agreement with Double Point Ventures to Go Private via a Tender Offer of $4.25 Cash per Share Plus Contingent Value Rights (CVR)

LUMO 10.23.2024

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Drug:LUM-201-001 LUM-201
Diseases:PGHD
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Lumos Pharma and the FDA Align on Final Design for Global, Double-blinded, Placebo-Controlled Phase 3 Trial Evaluating Oral LUM-201 in PGHD

AUSTIN, Texas,Oct. 23, 2024(GLOBE NEWSWIRE) --Lumos Pharma, Inc.(NASDAQ:LUMO) (“Lumos Pharma” or the “Company”), a clinical stage biopharmaceutical company focused on therapeutics for rare diseases, announced today that the Company has entered into a definitive merger agreement, datedOctober 22, 2024(the “Merger Agreement”) wherebyDouble Point Ventures LLC(“DPV”) will acquire 100% of Lumos Pharma’s outstanding shares of common stock for$4.25per share in cash, plus one non-transferable, unsecured Contingent Value Right (“CVR”) per share payable on achievement of certain milestones (the “Offer”).

Following a thorough review of financing and strategic alternatives, Lumos Pharma’s Board of Directors (the “Board”), with the assistance of the Board’s legal and financial advisors, unanimously determined that the acquisition by DPV is in the best interests of allLumos Pharmastockholders, has approved the Merger Agreement and related transactions, and unanimously recommends that Lumos Pharma’s stockholders tender their shares in the Offer. The transaction is expected to close before the end of 2024, subject to certain closing conditions including the tender ofLumos Pharmacommon stock representing at least a majority of the total number of outstanding shares.

Lumos Pharmaofficers, directors and shareholders holding approximately 17.7% ofLumos Pharmacommon stock have signed support agreements under which such parties have agreed to tender their shares in the Offer and support the merger transaction.

In addition,Lumos Pharmaannounced that the Company and theFood and Drug Administration(“FDA”) are aligned on the Company’s final Phase 3 trial design which will consist of a global, multi-site, double-blinded, placebo-controlled trial with two cohorts randomized 2:1 to 1.6 mg/kg/day oral LUM-201 or daily placebo, each on treatment for 12 months. The single endpoint will be the comparison of LUM-201 annualized height velocity (AHV) to placebo AHV. The Company believes this trial design significantly reduces risk for its Phase 3 program. This trial will be conducted at approximately 80 global sites and is expected to be initiated in Q2 2025.

Rick Hawkins, Lumos Pharma Chair and CEO commented, “We are pleased to have finalized the Phase 3 trial design and to sign the Merger Agreement with DPV.”Mr. Hawkinscontinued, “I wish to thank my Lumos colleagues, the endocrine community, and our investors for supporting our efforts to develop oral LUM-201 and improve the lives of children with growth hormone deficiency. I believe this transaction with DPV offers the best path forward for the further development of LUM-201.”

Transaction Details

The Merger Agreement is structured as a tender offer by a wholly owned subsidiary of DPV for 100% of the outstanding shares of common stock ofLumos Pharmafor (i) $4.25 per share in cash at closing and (ii) one CVR for each share of common stock outstanding, representing the future right to receive additional contingent cash payments upon the achievement of certain milestone events relating to the level of annual global net revenue of LUM-201 up to the year 2037, different transactions involvingLumos Pharmaor its assets that occur within 18 months of closing or certain sales, license or similar revenue-generating agreements entered into within 18 months of closing and that are related to Lumos Pharma’s legacy products other than LUM-201. There can be no assurance any payments will be made with respect to the CVRs. The purchase price of$4.25per share represents a total equity value of approximately $38 million, a premium of 7.6% to Lumos Pharma’s closing share price of $3.95 on October 22, 2024, and a premium of 10.5% to Lumos Pharma’s 30-trading-day volume weighted average price as of October 22, 2024.

The transactions contemplated by the Merger Agreement are not subject to any financing condition and DPV will fund the transactions from its existing cash resources.

Upon completion of the Merger,Lumos Pharmawill continue as an indirect wholly-owned subsidiary of DPV, and operate as a standalone business of DPV, fromLumos Pharmaheadquarters in Austin,Texas.

In light of the Offer,Lumos Pharmawill not host a third quarter 2024 financial results call. The Company will file a Quarterly Report on Form 10-Q for the period endedSeptember 30, 2024, in the ordinary course as required bySecurities and Exchange Commission(“SEC”) rules.

Advisors

Piper Sandler is serving as exclusive financial advisor to Lumos Pharma, and each ofCooley LLPandWilson Sonsini Goodrich and Rosati, P.C.are serving as legal counsel toLumos Pharma.Foley & Lardner LLPis serving as legal counsel to DPV.

Unaudited Financial Results for Q3 2024, EndingSeptember 30, 2024

Operating expenses for the third quarter endedSeptember 30, 2024, were$8.4 million. Net loss for Q3 2024 was$7.5 million.

Cash balance as ofSeptember 30, 2024, was$13.5 million. The Company is not providing any guidance at this time and withdraws its prior cash runway guidance.

AboutLumos Pharma

Lumos Pharma is a clinical stage biopharmaceutical company focused on the development and commercialization of therapeutics for rare diseases. The Company was founded and is led by a management team with longstanding experience in rare disease drug development. Lumos Pharma’s lead therapeutic candidate, LUM-201, is a novel, oral growth hormone (GH) secretagogue, seeking to transform the ~$4.7B global GH market from injectable to oral therapy. LUM-201 is currently being evaluated in multiple Phase 2 clinical studies in Pediatric Growth Hormone Deficiency (PGHD) and has received Orphan Drug Designation in both the US and EU. For more information, please visithttps://lumos-pharma.com/.

Cautionary Statement Regarding Forward Looking Statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Lumos Pharma's beliefs and expectations and statements about the proposed Offer, merger and related transactions contemplated by the Merger Agreement (the "Transactions"), including the timing of and closing conditions to the Transactions; the potential effects of the proposed Transactions onLumos Pharma; thatthis transaction with DPV offers the best path forward for the further development of LUM-201and the potential payment of proceeds to theLumos Pharmastockholders, if any, pursuant to the CVRs. Additional forward-looking statements include, among others, statements regarding our finalization of design details for a Phase 3 clinical trial; our positioning to initiate this trial in the second quarter of 2025; that we believe the trial design would reduce risk for our Phase 3 program in PGHD; the estimated global growth hormone market from injectable to oral therapy; and any other statements other than statements of historical fact.

These forward looking statements may be identified by their use of forward-looking terminology including, but not limited to, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” and “would,” and similar words expressions are intended to identify forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the possibility that the various closing conditions in the Merger Agreement may not be satisfied or waived, including uncertainties as to the percentage of shares ofLumos Pharmathat are tendered in the Offer;Lumos Pharma'sability to retain key personnel; the risk that the Transactions may not be completed in a timely manner, or at all, which may adversely affectLumos Pharma'sbusiness and the price of its common stock; significant costs associated with the proposed Transactions; the risk that any stockholder litigation in connection with the Transactions may result in significant costs of defense, indemnification and liability; the risk that activities related to the CVRs may not result in any value to theLumos Pharmastockholders; and other risks and uncertainties discussed inLumos Pharma'smost recent annual and quarterly reports filed with theSECas well as inLumos Pharma'ssubsequent filings with theSEC. As a result of such risks and uncertainties,Lumos Pharma'sactual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. There can be no assurance that the proposed Transactions will in fact be consummated.Lumos Pharmacautions investors not to unduly rely on any forward-looking statements.

The forward-looking statements contained in this release are made as of the date hereof, andLumos Pharmaundertakes no obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise, except as expressly required by law. All forward-looking statements in this document are qualified in their entirety by this cautionary statement.

Additional Information and Where to Find It

The Offer described in this release has not yet commenced, and this release is for information purposes only and is neither a recommendation, nor an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Lumos Pharma or any other securities. On the commencement date of the Offer, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, will be filed with theSECby DPV and its subsidiaries, and a Solicitation/Recommendation Statement on Schedule 14D-9 will be filed with theSECbyLumos Pharma. The offer to purchase the outstanding shares of the common stock ofLumos Pharmawill only be made pursuant to the offer to purchase, the letter of transmittal and related documents filed as a part of the Schedule TO. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE TENDER OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, A LETTER OF TRANSMITTAL AND RELATED DOCUMENTS) AND THE SOLICITATION OR RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 REGARDING THE OFFER, AS THEY MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. Investors and security holders may obtain a free copy of these statements (when available) and other documents filed with theSECat the website maintained by theSECatwww.sec.govor by directing such requests to the information agent for the Offer, which will be named in the tender offer statement. Investors and security holders may also obtain, at no charge, the documents filed or furnished to theSECbyLumos Pharmaunder the “Investors & Media” Section of Lumos’s website atwww.lumos-pharma.com.

Investor & Media Contact:

Lisa MillerLumos Pharma Investor Relations512-792-5454ir@lumos-pharma.com

Source:Lumos Pharma, Inc.

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Source: Lumos Pharma, Inc.

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