Form 4: 89bio Officer Reports Merger-Related Stock Transactions

89bio's Chief Technical Operations Officer, Quoc Le-Nguyen, reported the disposition of shares and options following the company's acquisition by Roche Holdings, Inc. for $14.50 cash plus CVRs.

Summary

• Quoc Le-Nguyen, Chief Technical Operations Officer of 89bio, Inc., reported transactions related to the company's merger with Roche Holdings, Inc.
• The merger, completed on October 30, 2025, involved a tender offer by Roche Holdings, Inc. for all outstanding shares of 89bio, Inc.
• Shareholders received an Offer Price of $14.50 per share in cash (the "Closing Amount") plus one non-tradeable Contingent Value Right (CVR).
• Each CVR represents the right to receive contingent payments of up to an aggregate of $6.00 per share upon the achievement of specified milestones.
• Immediately prior to the merger, performance-based restricted stock units (RSUs) granted to Mr. Le-Nguyen vested, resulting in the acquisition of 50,000 shares of common stock.
• Subsequently, Mr. Le-Nguyen disposed of 351,684 shares of common stock held directly and 13,694 shares held indirectly by his spouse, as these shares were cancelled in exchange for the Offer Price.
• All outstanding stock options held by Mr. Le-Nguyen also became fully vested and exercisable immediately prior to the merger.
• Options were cancelled and converted into the right to receive cash (if the exercise price was below the Closing Amount) and one CVR per share underlying the option.
• Options with an exercise price between $14.50 and $20.50 (Out of the Money Options) were converted into CVRs and potential cash payments tied to milestone achievements.
• Options with an exercise price equal to or greater than $20.50 were cancelled without any payment.

Sentiment

Score: 7

Explanation: The filing indicates the successful completion of a merger, providing shareholders with a fixed cash payment and potential additional value through CVRs. This represents a positive liquidity event for the Reporting Person's equity holdings. However, the non-tradeable nature of CVRs and the cancellation of certain out-of-the-money options introduce some limitations and potential losses.

Positives

• The Reporting Person's performance-based restricted stock units (RSUs) vested, resulting in the acquisition of 50,000 shares immediately prior to the merger.
• All outstanding stock options held by the Reporting Person became fully vested and exercisable due to the merger.
• Shareholders, including the Reporting Person, received a cash payment of $14.50 per share for their common stock.
• Shareholders also received a Contingent Value Right (CVR) per share, offering potential additional payments up to $6.00 per share based on future milestone achievements.

Negatives

• Options with an exercise price equal to or greater than $20.50 were cancelled without any payment, representing a loss of potential value for those specific options.
• The CVRs are non-tradeable, limiting liquidity and immediate valuation for the contingent portion of the consideration.
• The ultimate value of the CVRs is uncertain and dependent on the achievement of future milestones.

Risks

• The value of the Contingent Value Rights (CVRs) is uncertain and depends entirely on the achievement of specified milestones on or prior to applicable milestone outside dates.
• CVRs are non-tradeable, meaning there is no market for them, and their value cannot be realized until milestones are met, if at all.
• Options with an exercise price equal to or greater than $20.50 were cancelled without payment, indicating a risk of loss for certain equity holdings if the merger price is below the option's strike price.

Future Outlook

The future outlook for the Reporting Person's contingent compensation includes potential additional payments of up to $6.00 per share via non-tradeable Contingent Value Rights (CVRs), contingent upon the achievement of specified milestones by 89bio, Inc. as a subsidiary of Roche Holdings, Inc. These milestones must be met on or prior to applicable outside dates as defined in the CVR Agreement.

Industry Context

This transaction reflects a broader trend of consolidation within the biotechnology and pharmaceutical sectors, where larger pharmaceutical companies acquire smaller biotech firms to gain access to promising drug pipelines and technologies. The use of Contingent Value Rights (CVRs) in the deal structure is a common mechanism in biotech acquisitions to bridge valuation gaps and share future development risks and rewards, particularly for assets in clinical development.

Comparison to Industry Standards

• The use of a cash-plus-CVR structure is a common practice in biotech M&A, particularly for companies with late-stage clinical assets where future success is still uncertain. For example, similar structures have been seen in acquisitions like Sanofi's acquisition of Principia Biopharma or Bristol Myers Squibb's acquisition of MyoKardia, where CVRs were used to provide additional value tied to regulatory approvals or sales milestones.
• The $14.50 cash component, combined with a potential $6.00 CVR, offers a total potential value of $20.50 per share. This valuation would need to be compared against recent comparable biotech acquisitions on a per-asset or per-pipeline basis to assess its competitiveness, considering 89bio's specific therapeutic areas and development stage.
• The cancellation of out-of-the-money options (strike price >= $20.50) without payment is a standard outcome in mergers where the acquisition price does not exceed the option's exercise price, reflecting the economic reality that these options held no intrinsic value at the time of the merger.

Stakeholder Impact

• Shareholders: Received $14.50 cash per share plus one non-tradeable CVR with potential for up to $6.00 per share, providing a liquidity event and potential future upside.
• Option Holders (including Reporting Person): Options vested and were converted into cash (if in-the-money) and CVRs, or cancelled (if significantly out-of-the-money).
• Employees (of 89bio, Inc.): The company is now a wholly-owned subsidiary of Roche Holdings, Inc., which could lead to integration, restructuring, or changes in employment terms, though not explicitly detailed in this filing.
• Roche Holdings, Inc.: Successfully acquired 89bio, Inc., expanding its pipeline and potentially gaining access to new technologies.

Next Steps

• Achievement of specified milestones for the Contingent Value Rights (CVRs) to trigger additional payments up to $6.00 per share.
• Roche Holdings, Inc. will integrate 89bio, Inc. as a wholly owned subsidiary.

Key Dates

Recommendation

The company, 89bio, Inc., has been acquired, and its shares have been converted into cash and Contingent Value Rights (CVRs). There are no longer publicly traded shares of 89bio, Inc. to buy or sell. The recommendation for existing shareholders would be to 'hold' the CVRs, as their value is contingent on future milestones, and they are non-tradeable. For new investors, there is no direct investment opportunity in 89bio, Inc. common stock.

Keywords

89bio, ETNB, Roche Holdings, Merger, Acquisition, Form 4, Insider Trading, Stock Options, Restricted Stock Units, Contingent Value Rights, CVR, Biotechnology, Pharmaceuticals