Rain Oncology to be Acquired by Pathos AI

Rain Oncology, a Newark-based oncology company, has announced that it will be acquired by Pathos AI. The deal includes an upfront cash consideration of $1.16 per share, representing a premium of 17% on Rain's unaffected stock price as of Oct. 13. In addition to the cash payment, the agreement also includes a contingent value right for potential further cash payments.

Shareholder Approval and Potential Cash Payments

Rain Oncology has already received approval from stockholders representing 44% of its shares to tender their shares. As part of the deal, Pathos will make two potential cash payments. The first payment of $5 million, or 14 cents per share, will be made after subtracting certain expenses and shortfalls in a target level of cash. The second payment of $1 million, or about 3 cents per share, will be made after the first patient is dosed in a clinical trial using Rain's drug candidate, milademetan. Alternatively, Pathos will pay 80% of the proceeds from any license or disposition of milademetan within two years.

Benefits for Rain Oncology and Shareholders

Rain Chief Executive Avanish Vellanki believes that the acquisition offer by Pathos AI is in the best interests of shareholders. The board of Rain Oncology has determined that the deal offers future upside potential linked to Pathos' development of milademetan.

Closure of the Deal

The closure of the deal is contingent on several conditions, including the tendering of a majority of shares, the availability of at least $49.6 million in cash and equivalents, and other requirements.