SCHEDULE: RA Capital Divests 89bio Stake in Roche Merger

RA Capital Management has fully divested its holdings in 89bio, Inc. following the company's acquisition by Roche Holdings, Inc. for $14.50 cash plus a contingent value right.

Summary

• RA Capital Management, L.P., Peter Kolchinsky, Rajeev Shah, and RA Capital Healthcare Fund, L.P. (the "Reporting Persons") have filed Amendment No. 14 to their Schedule 13D.
• The amendment reports the full divestment of their beneficial ownership in 89bio, Inc. (the "Issuer") as of October 30, 2025.
• This divestment occurred as a result of a merger between 89bio, Inc. and Bluefin Merger Subsidiary, Inc., a wholly-owned subsidiary of Roche Holdings, Inc. ("Parent").
• The merger, effective October 30, 2025, resulted in 89bio becoming a wholly-owned subsidiary of Roche Holdings, Inc.
• Reporting Persons tendered all their shares, including 19,554,319 shares held by RA Capital Healthcare Fund, L.P. and 335,364 shares held by RA Capital Nexus Fund, L.P.
• The offer price was $14.50 per share in cash (the "Closing Amount") plus one non-tradeable contingent value right (CVR) representing the right to receive up to an aggregate of $6.00 per share upon achievement of specified milestones.
• Pre-funded warrants (PFWs), including 4,331,081 held by the Fund, were automatically exercised and converted into cash (Closing Amount minus exercise price) plus one CVR per share.
• Stock options, including 180,450 held by Derek DiRocco for RA Capital, became fully vested and were converted into cash (Closing Amount minus exercise price) plus one CVR per share, or CVRs only for certain out-of-the-money options.
• Options with an exercise price equal to or greater than $20.50 were cancelled without payment.
• The Reporting Persons ceased to beneficially own greater than 5% of 89bio's Common Stock on October 30, 2025.

Sentiment

Score: 8

Explanation: The sentiment is highly positive for the Reporting Persons and other shareholders, as the filing details a successful acquisition of 89bio by Roche, providing a significant cash payout and potential future upside through CVRs. This represents a clear and favorable exit for investors.

Positives

• Shareholders received a cash payment of $14.50 per share, providing immediate liquidity and a defined return.
• The inclusion of a Contingent Value Right (CVR) offers potential additional upside of up to $6.00 per share, contingent on future milestone achievements, allowing shareholders to participate in potential future success.
• The acquisition by Roche, a major pharmaceutical company, provides a clear exit strategy and valuation for 89bio shareholders.

Negatives

• 89bio, Inc. is no longer an independent publicly traded entity, limiting future direct investment opportunities in the company's common stock.
• The CVRs are non-tradeable, meaning their value cannot be realized until milestones are met, and they cannot be sold on the open market.
• Options with an exercise price equal to or greater than $20.50 were cancelled without any payment, resulting in a loss for those option holders.

Risks

• The contingent payments from the CVRs are subject to the achievement of specified milestones, which may not be met, potentially resulting in shareholders receiving less than the maximum $6.00 per share.
• The CVRs are non-tradeable, meaning there is no market liquidity for these rights, and their value is entirely dependent on the future performance and decisions of Roche regarding 89bio's assets.

Future Outlook

89bio, Inc. is now a wholly-owned subsidiary of Roche Holdings, Inc. Its future operations and strategic direction will be integrated within Roche's broader pharmaceutical portfolio. The contingent value rights provide a mechanism for former 89bio shareholders to benefit from the achievement of specific future milestones by the acquired entity.

Industry Context

This acquisition reflects a continuing trend of consolidation within the biotechnology and pharmaceutical sectors, where larger companies like Roche acquire smaller, innovative biotechs to expand their pipelines and therapeutic areas. Such mergers often provide a significant premium for the acquired company's shareholders and integrate promising assets into a larger development and commercialization framework.

Comparison to Industry Standards

• The acquisition price of $14.50 cash plus a CVR up to $6.00 per share represents a premium typical for biotech acquisitions, especially for companies with promising clinical assets.
• The use of CVRs is a common mechanism in biotech M&A to bridge valuation gaps and share future development risks and rewards, aligning with industry practices seen in deals like Bristol Myers Squibb's acquisition of MyoKardia or Sanofi's acquisition of Principia Biopharma.

Related Party Transactions

• Derek DiRocco held 180,450 stock options for the benefit of RA Capital, which were subject to the merger terms.

Stakeholder Impact

• Shareholders received a cash payment and CVRs for their shares, realizing value from their investment.
• 89bio employees and management will now operate under Roche's ownership, potentially leading to integration and restructuring.
• Roche Holdings, Inc. gains 89bio's assets and pipeline, expanding its therapeutic portfolio.

Next Steps

• Former 89bio shareholders will receive the initial cash payment and hold non-tradeable CVRs, awaiting potential future milestone payments.
• Roche Holdings, Inc. will integrate 89bio's operations and assets into its existing structure.

Key Dates

Keywords

89bio, RA Capital Management, Roche Holdings, Merger, Acquisition, Tender Offer, Contingent Value Rights, CVR, Biotechnology, Pharmaceuticals, Schedule 13D/A