Form 4: Kronos Bio Director Disposes of Shares and Options Following Concentra Biosciences Merger Completion

Kronos Bio, Inc. Director Joshua A. Kazam has reported the disposition of all his common stock and the cancellation of all stock options following the completion of the merger with Concentra Biosciences, LLC.

Summary

• Kronos Bio, Inc. (KRON) has been acquired by Concentra Biosciences, LLC, with Concentra Merger Sub IV, Inc. merging into Kronos Bio, making it a wholly-owned subsidiary of Concentra Biosciences.
• The merger was completed following a tender offer that concluded on June 18, 2025.
• Shareholders received an offer price of $0.57 per share in cash (the 'Cash Amount') plus one non-transferable contractual contingent value right (CVR) for each share.
• Joshua A. Kazam, a Director of Kronos Bio, disposed of 94,481 shares of common stock on June 20, 2025, at the merger price of $0.57 per share.
• 68,815 of the disposed shares were held jointly with his spouse.
• All of Mr. Kazam's outstanding stock options were cancelled at the effective time of the merger.
• Options were converted into a right to receive cash equal to the product of (1) the excess of the Cash Amount ($0.57) over the option's exercise price and (2) the number of shares underlying the option, plus one CVR per underlying share.
• However, options with an exercise price equal to or greater than the Cash Amount ($0.57) were cancelled for no consideration.
• All of Mr. Kazam's reported options (20,600 shares at $24.18, 34,000 shares at $3.53, 34,000 shares at $1.48, and 34,000 shares at $0.95) had exercise prices greater than the $0.57 Cash Amount, and thus were cancelled for no cash consideration, though they would be eligible for CVRs.

Sentiment

Score: 2

Explanation: The sentiment is largely negative due to the very low cash acquisition price and the cancellation of all stock options for no cash consideration, indicating a significant loss of value for option holders and likely many shareholders. While a CVR offers potential future value, its contingent and non-transferable nature adds uncertainty.

Positives

• The completion of the merger provides liquidity to Kronos Bio shareholders, allowing them to exit their investment.
• The inclusion of a Contingent Value Right (CVR) offers shareholders potential future upside based on the achievement of specific milestones, beyond the initial cash payment.

Negatives

• The cash component of the merger consideration was very low at $0.57 per share.
• All of the reporting person's stock options, totaling 122,600 shares, were cancelled for no cash consideration because their exercise prices were significantly higher than the $0.57 cash offer price.
• The non-transferable nature of the CVR limits shareholders' ability to monetize this contingent value immediately.

Risks

• The value of the Contingent Value Right (CVR) is uncertain and contingent upon future events, meaning there is no guarantee of additional payments beyond the initial cash amount.
• The CVRs are non-transferable, limiting their liquidity and the ability of holders to sell them.

Future Outlook

Kronos Bio, Inc. is now a wholly-owned subsidiary of Concentra Biosciences, LLC, meaning its independent public operations and financial reporting will cease. The future financial outcome for former shareholders holding CVRs is contingent on the terms and milestones specified in the CVR Agreement.

Industry Context

This transaction represents a typical acquisition in the biotechnology sector, where companies with promising but unproven assets are often acquired by larger entities. The use of a Contingent Value Right (CVR) is common in biotech mergers to bridge valuation gaps and share future risks and rewards related to drug development milestones, especially when the target company's pipeline has significant but uncertain potential.

Comparison to Industry Standards

• The structure of the acquisition, combining an upfront cash payment with a Contingent Value Right (CVR), is a common mechanism in the biotechnology industry, particularly for companies with clinical-stage assets where future value is tied to regulatory approvals or commercialization milestones.
• The low cash offer price of $0.57 per share, especially when compared to the significantly higher exercise prices of the reported stock options (ranging from $0.95 to $24.18), suggests a challenging valuation for Kronos Bio prior to the acquisition, potentially reflecting difficulties in its clinical programs or market conditions.
• The cancellation of out-of-the-money options for no cash consideration is standard practice in mergers when the acquisition price is below the option's exercise price, though it represents a negative outcome for option holders.

Corporate Governance

Stakeholder Impact

• Shareholders: Received $0.57 per share in cash and one non-transferable CVR for each share, effectively liquidating their investment in Kronos Bio.
• Employees (with options): Those holding options with exercise prices above $0.57 received no cash for their options, but are eligible for CVRs based on underlying shares.
• Company Operations: Kronos Bio's independent operations and strategic direction will now be determined by Concentra Biosciences, LLC.

Next Steps

• Former Kronos Bio shareholders will receive the cash consideration and CVRs as per the merger agreement.
• The value of the CVRs will depend on the achievement of specific milestones outlined in the Contingent Value Rights Agreement.

Key Dates

Recommendation

Keywords

Kronos Bio, KRON, Concentra Biosciences, Merger, Acquisition, Tender Offer, Form 4, Insider Transaction, Stock Disposition, Contingent Value Right, CVR, Biotechnology, Pharmaceuticals