Sec Form 13D Filing - AI Upstream LLC filing for UPSTREAM BIO INC (UPB) - 2024-10-22

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

Upstream Bio, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

91678A107

(CUSIP Number)

Alejandro Moreno

Langhorne S. Perrow

c/o Access Industries, Inc.

40 West 57^th Street, 28th Floor

New York, New York 10019

(212) 247-6400

with copies to:

Nicholas P. Pellicani

Debevoise & Plimpton LLP

65 Gresham Street

EC2V 7NQ

London

+ 44 20 7786 9000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 15, 2024

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rules 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. ☐

CUSIP No. 91678A107

CUSIP No. 91678A107

CUSIP No. 91678A107

CUSIP No. 91678A107

CUSIP No. 91678A107

CONTINUATION PAGES TO SCHEDULE 13D

This Schedule 13D is being filed by AI Upstream LLC (“AI Upstream”), AI Biotechnology LLC (“AI Biotechnology”), Access Industries Holdings LLC (“AIH”), Access Industries Management, LLC (“AIM”) and Len Blavatnik (collectively, the “Reporting Persons”, and each, a “Reporting Person”), in respect of the common stock, par value $0.001 per share (the “Common Stock”), of Upstream Bio, Inc. (the “Issuer”).

This Schedule 13D relates to the Common Stock of the Issuer. The address of the Issuer’s principal executive office is: 890 Winter Street, Suite 200, Waltham, MA 02451.

The agreement among the Reporting Persons relating to the joint filing of this Schedule 13D is filed as Exhibit 99.3 hereto.

None of the Reporting Persons has, during the last five years: (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) been 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.

In three closings in October 2021, October 2022 and February 2023, AI Upstream acquired an aggregate of 3,000,000 shares of Series A redeemable convertible preferred stock of the Issuer, par value $0.001 per share (the “Series A preferred stock”), at a per share price of $10.00 in cash. In two closings in June 2023 and April 2024, AI Upstream acquired a cumulative total of 1,117,646 shares of Series B redeemable convertible preferred stock of the Issuer, par value $0.001 per share (the “Series B preferred stock”), at a per share price of $17.00 in cash. AI Upstream funded these purchases using capital contributed from affiliated entities, which funded that capital using cash on hand.

On October 15, 2024, the Issuer effected a 1-for-1.049 forward stock split of its capital stock (the “Forward Stock Split”). Following the Forward Stock Split, AI Upstream held 3,147,000 shares of Series A preferred stock and 1,172,410 shares of Series B preferred stock.

Upon the completion of the Issuer’s initial public offering on October 15, 2024, each outstanding share of Series A preferred stock and Series B preferred stock automatically converted into one share of Common Stock for no consideration.

On October 15, 2024, AI Upstream purchased 1,175,000 shares of Common Stock in the Issuer’s initial public offering at the public offering price of $17.00 per share. AI Upstream funded this purchase using capital contributed from affiliated entities, which funded that capital using cash on hand.

The Reporting Persons who hold Common Stock directly acquired those securities as an investment in the regular course of their businesses. The Reporting Persons may engage in discussions with management, the Issuer’s board of directors, other stockholders of the Issuer and other relevant parties concerning the business, operations, board composition, management, strategy and future plans of the Issuer. Liam Ratcliffe, M.D., Ph.D., the Head of Biotechnology at Access Industries, Inc., which is an affiliate of AI Upstream, currently serves on the Issuer’s board of directors. Subject to the terms of the Investors’ Rights Agreement (as defined below), the Reporting Persons intend to re-examine their investment from time to time and, depending on prevailing market conditions, other investment opportunities, liquidity requirements or other investment considerations the Reporting Persons deem material, the Reporting Persons may from time to time acquire additional Common Stock in the open market, block trades, negotiated transactions, or otherwise and may also dispose of all or a portion of the Issuer’s securities, in open market or privately negotiated transactions, and/or enter into derivative transactions with institutional counterparties with respect to the Issuer’s securities, in each case, subject to limitations under applicable law. The Reporting Persons have not yet determined which, if any, of the above courses of action they may ultimately take. The Reporting Persons’ future actions with regard to the Issuer are dependent on their evaluation of the factors listed above, circumstances affecting the Issuer in the future, including prospects of the Issuer, general market and economic conditions and other factors deemed relevant. The Reporting Persons reserve the right to determine in the future whether to change the purpose or purposes described above or whether to adopt plans or proposals of the type specified above or otherwise.

(a) and (b) The responses of each of the Reporting Persons with respect to Rows 11, 12, and 13 of the cover pages of this Schedule 13D that relate to the aggregate number of shares and percentage of Common Stock (including but not limited to footnotes to such information) are incorporated herein by reference.

The responses of each of the Reporting Persons with respect to Rows 7, 8, 9, and 10 of the cover pages of this Schedule 13D that relate to the number of shares of Common Stock as to which each of the persons or entities referenced in Item 2 above has sole or shared power to vote or to direct the vote of and sole or shared power to dispose of or to direct the disposition of (including but not limited to footnotes to such information) are incorporated herein by reference.

The securities reported are held directly by AI Upstream and may be deemed to be beneficially owned by AI Biotechnology, AIH, Access AIM and Len Blavatnik because (i) Mr. Blavatnik controls AIM and AIH, (ii) AIM controls AIH, (iii) AIH owns all of the voting units of AI Biotechnology and (iv) AI Biotechnology owns all of the voting units of AI Upstream. Each of the reporting persons (other than AI Upstream) disclaims beneficial ownership of these securities, except to the extent of its or his pecuniary interest therein, and this form shall not be construed as an admission that any such reporting person is the beneficial owner of any of the securities reported on this form.

(c) The following transactions in the Issuer’s securities have been effected by Reporting Persons within the 60 days prior to this filing:

The information set forth in Item 3 of this Schedule 13D is incorporated herein by reference.

(d) Not applicable.

(e) Not applicable.

Lock-up Agreement

In connection with the Issuer’s initial public offering, on June 10, 2024, AI Upstream entered into a lock-up agreement (the “Lock-up Agreement”) with J.P. Morgan Securities LLC, TD Securities (USA) LLC, Piper Sandler & Co., and William Blair & Company, L.L.C. Pursuant to the Lock-up Agreement, AI Upstream has ag reed that it will not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exchangeable or exercisable for shares of Common Stock, request or demand that the Issuer file a registration statement related to the Common Stock or enter into any hedging, swap or other agreement or any transaction that transfers, in whole or in part, the economic consequence of ownership of the Common Stock for a period of 180 days following October 9, 2024, the date of the Issuer’s prospectus filed pursuant to Rule 424(b)(4) with the SEC, without the prior written consent of J.P. Morgan Securities LLC, TD Securities (USA) LLC, Piper Sandler & Co., and William Blair & Company, L.L.C., on behalf of the underwriters, subject to certain exceptions. J.P. Morgan Securities LLC, TD Securities (USA) LLC, Piper Sandler & Co., and William Blair & Company, L.L.C., on behalf of the underwriters, may release all or any portion of the securities subject to the Lock-up Agreement at any time and without notice before the termination of the 180-day period.

The foregoing description of the Lock-up Agreement does not purport to be complete and is qualified in its entirety by reference to such, which is filed as an exhibit and incorporated herein by reference.

Investors’ Rights Agreement

AI Upstream is party to an amended and restated investors’ rights agreement (the “Investors’ Rights Agreement”), dated June 6, 2023, by and among the Issuer and certain of its stockholders. Pursuant to the terms of the Investors’ Rights Agreement, beginning 180 days after October 9, 2024, the effective date of the registration statement for the Issuer’s initial public offering, holders who are party to the Investors’ Rights Agreement and who collectively hold a majority of the Common Stock issued or issuable upon conversion of the Series A preferred stock, the Series B preferred stock and any other securities issued or issuable upon conversion and/or exercise of any other securities of the Issuer (the “Registrable Securities”) have the right to require the Issuer to file a registration statement on Form S-1 to register all Registrable Securities that the requesting holder requested to be registered and any additional Registrable Securities requested to be included in such registration by any other holder with respect to the Registrable Securities having an anticipated aggregate offering price, net of selling expenses, that would exceed $5 million, subject to customary terms and conditions. At any time the Issuer is eligible to use a Form S-3 registration statement, holders who are party to the Investors’ Rights Agreement and who collectively hold at least 30% of the outstanding Registrable Securities have the right to require the Issuer to file a registration statement on Form S-3 to register the outstanding Registrable Securities of such holders having an anticipated aggregate offering price, net of selling expenses, of at least $1 million, subject to customary terms and conditions. Pursuant to the Investors’ Rights Agreement, AI Upstream and its permitted transferees have customary piggyback registration rights, subject to customary terms and conditions.

The foregoing description of the Investors’ Rights Agreement does not purport to be complete and is qualified in its entirety by reference to such, which is filed as an exhibit and incorporated herein by reference.

Joint Filing Agreement

A Joint Filing Agreement, dated October 22, 2024, by and among the Reporting Persons has been executed by the Reporting Persons, a copy of which is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: October 22, 2024