Sec Form 13D Filing - AUVEN THERAPEUTICS HOLDINGS LP filing for ADC THERAPEUTICS SA SHS (ADCT) - 2020-05-29

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Schedule 13D

CUSIP No. H0036K147

 

1		NAME OF REPORTING PERSON   C.T. Phinco Sarl
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☐        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS   AF
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Luxembourg
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:				7		SOLE VOTING POWER   23,593,730
				8		SHARED VOTING POWER   0
				9	< /td>	SOLE DISPOSITIVE POWER   23,593,730
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON   23,593,730
12		CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   33.4% (1)
14		TYPE OF REPORTING PERSON   OO

(1)

Based on 70,729,708 common shares of the Issuer outstanding as of May 19, 2020, following the closing of the Issuer’s initial public offering, as reported in the Issuer’s prospectus filed with the SEC on May 18, 2020, inclusive of the full exercise by the underwriters of the initial public offering of their option to purchase additional common shares.

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The class of equity security to which this statement on Schedule 13D relates is the common shares, par value CHF 0.08 per share (the “Common Shares”) of ADC Therapeutics SA (the “Issuer”), a Swiss corporation. The address of the principal executive offices of the Issuer is Biopôle, Route de la Corniche 3B, 1066 Epalinges, Switzerland.

Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

 

(a) The persons filing this Schedule 13D (collectively, the “Reporting Persons”) are:

1.  A.T. Holdings II Sàrl (“A.T. Holdings II”)

2.  C.T. Phinco Sàrl (“C.T. Phinco”)

4.  Auven Therapeutics Holdings L.P. (“Auven Therapeutics”)

5.  Auven Therapeutics General L.P. (“Auven Therapeutics General”)

6.  Auven Therapeutics GP Ltd. (“Auven Therapeutics GP”)

7. Stephen Evans-Freke

8. Peter B. Corr

 

The officers and directors of Auven Therapeutics GP are:

Stephen Evans-Freke – Director

Peter B. Corr – Director

(b) The business address or address of the principal office, as applicable, of the Reporting Persons is:

Auven Therapeutics General

171 Main Street

Road Town

Tortola
British Virgin Islands VG1110

Auven Therapeutics GP

171 Main Street

Road Town

Tortola
British Virgin Islands VG1110

Stephen Evans-Freke

6501 Redhook Plaza, Suite 201

St. Thomas

U.S. Virgin Islands 00802

Peter B. Corr

6501 Redhook Plaza, Suite 201

St. Thomas

U.S. Virgin Islands 00802

(c) Each of the Reporting Persons is engaged in the business of investing. The principal business of A.T. Holdings II is holding investment rights and holding a 73.77% interest in ADC Products.  The principal business of C.T. Phinco is serving as an intermediary holding company and the sole member of A.T. Holdings II.  The principal business of ADC Products is holding investment rights.  The principal business of Auven Therapeutics is operating as a private equity fund and serving as the sole member of C.T. Phinco.  The principal business of Auven Therapeutics General is serving as the general partner of Auven Therapeutics.  The principal business of Auven Therapeutics GP is serving as the general partner of Auven Therapeutics General.  The principal business of Stephen Evans-Freke is serving as a Director and 50% control person of Auven Therapeutics GP and Principal of Auven Therapeutics.  The principal business of Peter B. Corr is serving as a Director and a 50% control person of Auven Therapeutics GP and Principal of Auven Therapeutics.

(d) and (e) During the past five years, none of the Reporting Persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) The citizenship with respect to a natural person or jurisdiction of organization with respect to an entity, as applicable, of the Reporting Persons is as follows:

1. A.T. Holdings II – Switzerland

2. C.T. Phinco – Luxembourg

3. ADC Products – Switzerland

4. Auven Therapeutics – British Virgin Islands

5. Auven Therapeutics General – British Virgin Islands

6. Auven Therapeutics GP – British Virgin Islands

7. Ste phen Evans-Freke – Ireland

8. Peter B. Corr – USA

A.T. Holdings II received 1,900,000 Common Shares pursuant to the conversion on a one-for-one basis of Class A common shares of the Issuer effected immediately prior to the completion of the Issuer’s initial public offering.  In addition, A.T. Holdings II received an aggregate of 15,100,000 Common Shares pursuant to the conversion on a one-for-one basis of various classes of preferred shares of the Issuer effected immediately prior to the completion of the Issuer’s initial public offering. A.T. Holdings II also received 874,923 Common Shares from the Issuer as consideration for agreeing to convert the Class E preferred shares of the Issuer held by A.T. Holdings II immediately prior to the Issuer’s initial public offering.  Further, A.T. Holdings II purchased 395,000 Common Shares in the Issuer’s initial public offering that closed on May 19, 2020, at a purchase price of $19 per share. A.T. Holdings II used partial proceeds from the Credit and Security Agreement (the “Credit and Security Agreement”), dated as of April 27, 2020, by and among A.T. Holdings II, as Borrower, and Oaktree Fund Administration, LLC, as Agent, and the lenders from time to time party thereto, to purchase the 395,000 Common Shares purchased in the Issuer’s initial public offering.

A.T. Holdings II also beneficially owns 3,125 Common Shares held by a nominee, which were received by the nominee pursuant to the conversion on a one-for-one basis of Class A common shares of the Issuer and the conversion on a one-for-one basis of Class C preferred shares of the Issuer effected immediately prior to the completion of the Issuer’s initial public offering.

ADC Products received 3,425,000 Common Shares pursuant to the conversion on a one-for-one basis of Class A common shares of the Issuer effected immediately prior to the completion of the Issuer’s initial public offering.  In addition, ADC Products received an aggregate of 1,602,295 Common Shares pursuant to the conversion on a one-for-one basis of various classes of preferred shares of the Issuer effected immediately prior to the completion of the Issuer’s initial public offering. ADC Products also received 293,387 Common Shares from the Issuer as consideration for agreeing to convert the Class E preferred shares of the Issuer held by ADC Products immediately prior to the Issuer’s initial public offering.

 

The Reporting Persons acquired beneficial ownership of the Common Shares reported herein for investment purposes.  Based on market conditions and other factors, and subject to the consent of the underwriters of the Issuer’s initial public offering pursuant to the terms of the Lock-Up Agreement (as defined in Item 6 below), if applicable, ADC Products may consider selling some or all of the Common Shares beneficially owned by it in the near term and use the proceeds from such sales to pay back loans made by A.T. Holdings II pursuant to the Loan Agreement (as defined in Item 6 below).

Stephen Evans-Freke and Peter B. Corr serve as directors on the Issuer’s Board of Directors (the “Board”).

The Reporting Persons and their representatives have, from time to time, engaged in, and expect to continue to engage in, discussions with members of management and the Board, other current or prospective shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other third parties regarding a variety of matters relating to the Issuer, which may include, among other things, the Issuer's business, management, capital structure and allocation, corporate governance, Board composition and strategic alternatives and direction, and may take other steps seeking to bring about changes to increase shareholder value as well as pursue other plans or proposals that relate to or could result in any of the matters set forth in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons continuously assess the Issuer’s business, financial condition, results of operations and prospects, general economic conditions, other developments and additional investment opportunities. Depending on such assessments, and subject to the terms of the Lock-Up Agreement (as defined in Item 6 below), the Reporting Persons may determine to sell or otherwise dispose of all or some

of the Issuer’s securities in the open market, as applicable, in privately negotiated transactions, in transactions directly with the Issuer or otherwise. Such actions will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices, the financial condition, results of operations and prospects of the Issuer, alternative investment opportunities, general economic, financial market and industry conditions and other factors that the Reporting Persons may deem material to their investment decision. The Reporting Persons may engage in communications with one or more officers, members of the Board, representatives, shareholders of the Issuer and other relevant parties regarding the Issuer’s business and certain initiatives, which could include one or more of the items in subsections (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.

 

(a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D are incorporated herein by reference.

Set forth below is the aggregate number of Common Shares of the Issuer directly held (or held through a nominee), as of the date hereof, by the Reporting Persons.

 

C.T. Phinco may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by A.T. Holdings II as the Sole Member of A.T. Holdings II.  Auven Therapeutics may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by A.T. Holdings II as the Sole Member of C.T. Phinco.  Auven Therapeutics General may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by A.T. Holdings II as the general partner of Auven Therapeutics.  Auven Therapeutics GP may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by A.T. Holdings II as the general partner of Auven Therapeutics General.  Each of Stephen Evans-Freke and Peter B. Corr may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by A.T. Holdings II as each is a Director and a 50% control person of Auven Therapeutics GP and a Principal of Auven Therapeutics.

A.T. Holdings II may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as the 73.77% control person of ADC Products.  C.T. Phinco may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as the Sole Member of A.T. Holdings II.  Auven Therapeutics may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as the Sole Member of C.T. Phinco.  Auven Therapeutics General may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as the general partner of Auven Therapeutics.  Auven Therapeutics GP may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as the general partner of Auven Therapeutics General.  Each of Stephen Evans-Freke and Peter B. Corr may be deemed to have voting and investment power over and thus beneficial ownership of the Common Shares beneficially owned by ADC Products as each is a Director and a 50% control person of Auven Therapeutics GP and a Principal of Auven Therapeutics.

(c) The disclosure in Items 3 and 4 is incorporated herein by reference. Except as disclosed herein, there have been no transactions in securities of the Issuer during the 60 days prior to the date hereof by any of the Reporting Persons.

(d) The disclosure regarding the relationship between the Reporting Persons in Item 2(c) of this Schedule 13D is incorporated by reference herein.

(e) Not applicable.

 

The disclosure in Items 3 and 4 is incorporated herein by reference.

Pursuant to the Credit and Security Agreement, A.T. Holdings II has pledged to the lenders party thereto all of the Common Shares beneficially owned by it or afterward acquired by it to secure the lending by such lenders to A.T. Holdings pursuant to the Credit and Security Agreement.

Pursuant to the Second Amendment Agreement, dated April 27, 2020, to the Loan Agreement, dated September 15, 2017, between ADC Products, as Borrower, and A.T. Holdings II, as Lender (the “Loan Agreement”), ADC Products has pledged to A.T. Holdings II all of the Common Shares beneficially owned by it or afterward acquired by it to secure the lending by A.T. Holdings II to ADC Products pursuant to the Loan Agreement.

A.T. Holdings II and ADC Products on May 12, 2020, entered into a Lock-Up Agreement (the “Lock-Up Agreement”) with Morgan Stanley & Co. LLC and BofA Securities, Inc., underwriters of the Issuer’s initial public offering, pursuant to which A.T. Holdings II and ADC Products agreed, subject to limited exceptions, not to offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise dispose of, directly or indirectly, any Common Shares beneficially owned by them or enter into any swap or other agreement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Shares for a period from May 12, 2020, until 180 days after May 12, 2020 (the “Restricted Period”), without the prior written consent of Morgan Stanley & Co. LLC and BofA Securities, Inc. on behalf of the underwriters. The foregoing restrictions on transactions in Common Shares do not apply to transactions relating to Common Shares acquired in the Issuer’s initial public offering or in open market transactions after the completion of the initial public offering.  A.T. Holdings II and ADC Products also agreed that without the prior written consent of Morgan Stanley & Co. LLC and BofA Securities, Inc., they will not transfer, distribute or dispose of any Common Shares or securities convertible into Common Shares (other than those Common Shares or securities convertible into Common Shares for which such entity holds as nominee on behalf of equity incentive plan participants) to their partners, members, stockholders, beneficiaries or other equity holders, other than transfers, distributions or dispositions of any Common Shares to any investment fund that is controlled or managed in the same or substantially similar manner as Auven Therapeutics, and that they will not sell any Common Shares or securities convertible into Common Shares (other than those Common Shares or securities convertible into Common Shares for which such entity holds as nominee on behalf of equity incentive plan participants) prior to June 30, 2022 without the prior approval of Morgan Stanley & Co. LLC and BofA Securities, Inc., such approval not to be unreasonably withheld for any sales following the end of the Restricted Period. Morgan Stanley & Co. LLC and BofA Securities, Inc. may waive the requirements of the Lock-Up Agreement at any time in their sole discretion.

 

	A.T. HOLDINGS II SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Managing Director
	By:		/s/ Peter B. Corr
	Name:		Peter B. Corr
	Title:		Managing Director
	C.T. PHINCO SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Class A Manager
	By:		/s/ Viktor Schuh
	Name:		Viktor Schuh
	Title:		Class B Manager
	ADC PRODUCTS SWITZERLAND SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Managing Director
	By:		/s/ Peter B. Corr
	Name:		Peter B. Corr
	Title:		Managing Director
	AUVEN THERAPEUTICS HOLDINGS L.P.
	By:   By:		Auven Therapeutics General L.P., its general partner   Auven Therapeutics GP Ltd., its general partner
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	AUVEN THERAPEUTICS GENERAL L.P.
	By:		Auven Therapeutics GP Ltd., its general partner
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	AUVEN THERAPEUTICS GP LTD.
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	By:		/s/ Stephen Evans-Freke
	By:		/s/ Peter B. Corr

	A.T. HOLDINGS II SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Managing Director
	By:		/s/ Peter B. Corr
	Name:		Peter B. Corr
	Title:		Managing Director
	C.T. PHINCO SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Class A Manager
	By:		/s/ Viktor Schuh
	Name:		Viktor Schuh
	Title:		Class B Manager
	ADC PRODUCTS SWITZERLAND SÁRL
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Managing Director
	By:		/s/ Peter B. Corr
	Name:		Peter B. Corr
	Title:		Managing Director
	AUVEN THERAPEUTICS HOLDINGS L.P.
	By:   By:		Auven Therapeutics General L.P., its general partner   Auven Therapeutics GP Ltd., its general partner
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	AUVEN THERAPEUTICS GENERAL L.P.
	By:		Auven Therapeutics GP Ltd., its general partner
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	AUVEN THERAPEUTICS GP LTD.
	By:		/s/ Stephen Evans-Freke
	Name:		Stephen Evans-Freke
	Title:		Director
	By:		/s/ Stephen Evans-Freke
	By:		/s/ Peter B. Corr