Form 4: Elevation Oncology Director Disposes Options Amidst Concentra Biosciences Merger

Elevation Oncology director Steve Elms disposed of all stock options on July 23, 2025, as part of the company's merger with Concentra Biosciences, receiving cash and contingent value rights for eligible options.

Summary

• Elevation Oncology, Inc. (ELEV) director Steve Elms disposed of all his stock options on July 23, 2025.
• This disposal was a direct consequence of the Agreement and Plan of Merger, dated June 8, 2025, between Elevation Oncology, Concentra Biosciences, LLC, and Concentra Merger Sub VI, Inc.
• On July 23, 2025, Concentra Biosciences completed a tender offer for all outstanding shares of Elevation Oncology common stock at an offer price of $0.36 per share in cash plus one non-transferable contractual contingent value right (CVR).
• Following the tender offer, Concentra Merger Sub VI, Inc. merged with Elevation Oncology, resulting in Elevation Oncology becoming a wholly-owned subsidiary of Concentra Biosciences.
• Immediately prior to the merger's effective time, all outstanding stock options became fully vested and exercisable.
• Unexercised options were cancelled and converted into the right to receive cash equal to the product of (1) the excess of the $0.36 Cash Amount over the option's exercise price and (2) the number of shares underlying the option, plus one CVR per underlying share.
• Options with an exercise price equal to or greater than the $0.36 Cash Amount were cancelled for no consideration.
• Mr. Elms held options with exercise prices of $16, $1.31, $1.47, $3.35, and $0.3051.
• Only the option with an exercise price of $0.3051 (35,000 shares) would have yielded a cash payment ($0.36 $0.3051 = $0.0549 per share) in addition to CVRs. The other options were out-of-the-money relative to the cash component of the offer and were cancelled for no cash consideration.
• Mr. Elms' beneficial ownership of these options was indirect, as they were granted to him in his capacity as a director, but Aisling Capital (his employer) is entitled to all pecuniary interest.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the very low cash offer price per share and the cancellation of multiple out-of-the-money stock options for no consideration. While the merger provides an exit, the terms suggest a distressed valuation for the company's equity, with future value tied to uncertain CVRs.

Positives

• Merger completion indicates a definitive strategic outcome for Elevation Oncology, providing an exit for shareholders.
• Shareholders received a cash component ($0.36 per share) and a Contingent Value Right (CVR), offering potential future value tied to specific milestones.
• Stock options became fully vested upon merger, allowing for potential payout for in-the-money options.

Negatives

• Several stock options held by the director had exercise prices significantly higher than the cash offer price ($0.36), resulting in their cancellation for no cash consideration.
• The cash component of the offer ($0.36 per share) is relatively low, suggesting a low valuation for the company's common stock.
• The CVR component introduces uncertainty regarding future value realization, as its value is contingent on future events or milestones.

Risks

• The value of the Contingent Value Rights (CVRs) is uncertain and dependent on future events or milestones, which may not be achieved.
• Shareholders are subject to the terms and conditions of the CVR Agreement, which may limit their ability to realize value.
• Options with exercise prices above the cash offer price were cancelled without cash consideration, representing a loss for those option holders.

Future Outlook

The filing indicates the completion of the merger, with Elevation Oncology becoming a wholly-owned subsidiary of Concentra Biosciences, suggesting its future operations will be integrated under the new parent company. The Contingent Value Rights (CVRs) represent potential future payments tied to specific milestones or events.

Management Comments

• "Disposed of pursuant to the Agreement and Plan of Merger (the 'Merger Agreement'), dated as of June 8, 2025, by and among Elevation Oncology, Inc. (the 'Issuer'), Concentra Biosciences, LLC ('Parent') and Concentra Merger Sub VI, Inc., a wholly owned subsidiary of Parent ('Merger Sub')."
• "On July 23, 2025, Parent and Merger Sub completed a tender offer pursuant to the terms of the Merger Agreement for all outstanding shares of common stock of the Issuer... for an offer price of (i) $0.36 per Share in cash... and (ii) one non-transferable contractual contingent value right..."
• "Merger Sub thereafter merged with and into the Issuer, with the Issuer continuing as the surviving corporation and a wholly owned subsidiary of Parent."
• "As of immediately prior to and conditioned upon the effective time of the Merger, pursuant to the Merger Agreement, each outstanding option to purchase Shares... became fully vested and exercisable, and to the extent not exercised prior to the effective time of the Merger, was cancelled and converted into the right to receive (a) an amount in cash... equal to the product of (1) the excess, if any, of the Cash Amount over the exercise price per share of each such Option and (2) the number of Shares underlying such Option... and (b) one CVR in respect of each Share underlying such Option; provided, however, that if the exercise price per Share of any Option was equal to or greater than the Cash Amount that was then outstanding, it was cancelled for no consideration."
• "This stock option was granted to Steven Elms, an employee of Aisling Capital, in his capacity as a director of the Issuer. Pursuant to the policies of Aisling Capital, Mr. Elms does not have any right to any of the Issuer's securities issued as part of his service on the Board and Aisling Capital is entitled to receive all of the pecuniary interest in the securities issued."

Industry Context

This filing reflects a common trend in the biotechnology and pharmaceutical sectors where smaller, often clinical-stage, companies are acquired by larger entities. Such mergers can provide an exit strategy for investors and access to capital/resources for the acquired company's pipeline, while the acquirer gains new assets or technologies. The use of CVRs is also common in biotech mergers, allowing acquirers to tie a portion of the purchase price to the achievement of future clinical or regulatory milestones, thereby mitigating risk.

Comparison to Industry Standards

• The acquisition price of $0.36 per share in cash, plus a CVR, represents a specific valuation for Elevation Oncology. Without detailed financial performance or pipeline data for Elevation Oncology, direct comparisons to other biotech acquisitions are difficult. However, CVRs are a standard mechanism in biotech M&A, used when there is significant future value tied to clinical or regulatory success that is not fully de-risked at the time of acquisition.
• The cancellation of out-of-the-money options is standard practice in mergers where the offer price is below the option's exercise price.
• The structure of the deal (tender offer followed by a short-form merger) is a common and efficient method for acquiring public companies.

Corporate Governance

Related Party Transactions

• The stock options were granted to Steven Elms in his capacity as a director, but Aisling Capital, his employer, is entitled to all pecuniary interest in the securities. This indicates a pre-existing arrangement regarding compensation for board service.

Stakeholder Impact

• Shareholders: Received $0.36 per share in cash and one CVR per share. Shareholders who bought at higher prices likely incurred significant losses. The CVR offers potential future value but is uncertain.
• Employees: The merger likely impacts employees through integration into Concentra Biosciences, potentially leading to changes in roles, structure, or employment.
• Option Holders (Aisling Capital): Received cash for the in-the-money options and CVRs, but out-of-the-money options were cancelled for no consideration, representing a loss on those specific grants.

Next Steps

• Integration of Elevation Oncology into Concentra Biosciences, LLC as a wholly-owned subsidiary.
• Potential future payments to CVR holders upon achievement of specified milestones as per the CVR Agreement.

Key Dates

Recommendation

The company has been acquired, and its shares are no longer publicly traded. Shareholders would have received the tender offer consideration ($0.36 cash + CVR) and should no longer hold the stock. The recommendation is 'sell' in the context of the tender offer completion, as the shares would have been tendered. For those who might still hold shares (e.g., if they missed the tender), the company is now a private entity, and there is no public market for its shares.

Keywords

Elevation Oncology, ELEV, Concentra Biosciences, Merger, Tender Offer, Stock Options, Form 4, SEC Filing, Corporate Governance, Contingent Value Right, CVR, Aisling Capital, Director Compensation