Form 4: HilleVax Director Reports Share Disposition Post-Merger

HilleVax Director Gary Dubin reported the disposition of 17,199 common shares following the company's merger into a wholly-owned subsidiary of XOMA Royalty Corporation.

Summary

• Gary Dubin, a Director of HilleVax, Inc., reported the disposition of 17,199 shares of common stock.
• This transaction occurred on September 17, 2025, as a result of HilleVax, Inc. merging with XRA 4 Corp., a wholly-owned subsidiary of XOMA Royalty Corporation.
• HilleVax, Inc. is now a wholly-owned subsidiary of XOMA Royalty Corporation.
• Shareholders received $1.95 in cash per share plus one Contingent Value Right (CVR) for each share.
• Outstanding Restricted Stock Units (RSUs) vested fully and were canceled, with holders receiving equivalent cash and CVRs.

Sentiment

Score: 7

Explanation: The filing reports the completion of a merger where HilleVax shareholders received cash and CVRs, providing liquidity and potential future value. While the company is no longer independent, the terms appear to be a structured exit.

Positives

• The merger provides a clear exit strategy and liquidity for HilleVax shareholders.
• Shareholders received a cash payment of $1.95 per share, providing immediate value.
• The inclusion of Contingent Value Rights (CVRs) offers potential for future contingent cash payments, aligning with potential future performance or milestones.

Negatives

• HilleVax, Inc. is no longer an independent publicly traded entity, limiting direct investment opportunities in its equity.
• The disposition of shares by a director, even due to a merger, signifies the end of their direct equity stake in the former public company.
• The value of the CVRs is contingent and not guaranteed, introducing uncertainty for a portion of the merger consideration.

Risks

• The value of the Contingent Value Rights (CVRs) is uncertain and depends on future events or milestones, which may not materialize as expected.
• Shareholders no longer have direct exposure to HilleVax's operational performance as an independent entity.
• Integration risks associated with HilleVax becoming a wholly-owned subsidiary of XOMA Royalty Corporation.

Future Outlook

HilleVax, Inc. will continue as the surviving corporation and a wholly-owned subsidiary of XOMA Royalty Corporation, indicating its future operations will be integrated under the Parent company's structure. The CVRs represent potential future contingent cash payments.

Industry Context

This merger reflects ongoing consolidation within the biotechnology or pharmaceutical sector, where larger entities acquire smaller companies for their assets, pipelines, or market position. The use of CVRs is a common mechanism in biotech M&A to bridge valuation gaps and share future risks/rewards.

Comparison to Industry Standards

• The use of Contingent Value Rights (CVRs) in biotech mergers is a common practice, seen in deals like Sanofi's acquisition of Kadmon Holdings or Bristol Myers Squibb's acquisition of MyoKardia, where CVRs are tied to regulatory approvals or sales milestones.
• The cash component of $1.95 per share would need to be compared to HilleVax's pre-merger stock price and analyst price targets to assess its premium, similar to how analysts evaluate premiums in other biotech acquisitions.

Stakeholder Impact

• Shareholders: Received cash and CVRs, gaining liquidity but losing direct equity in HilleVax.
• Employees: HilleVax continues as a subsidiary, implying continuity for employees, though integration into XOMA's structure may occur.
• Management: Gary Dubin, as a director, participated in the transaction, and his beneficial ownership in the former public entity is now zero.

Next Steps

• XOMA Royalty Corporation will integrate HilleVax, Inc. as a wholly-owned subsidiary.
• CVR holders will await potential future contingent cash payments based on the terms of the CVR Agreement.

Key Dates

Keywords

HilleVax, HLVX, XOMA Royalty Corporation, Merger, Acquisition, Form 4, Insider Transaction, Contingent Value Right, CVR, Restricted Stock Units, RSU, Tender Offer, Corporate Action