Form 4: SCPH CFO Nokes Sells Shares Post-Merger

scPharmaceuticals CFO Rachael Nokes reported the disposition of common stock and stock options following the company's acquisition by MannKind Corporation.

Summary

• Rachael Nokes, CFO and Treasurer of scPharmaceuticals Inc. (SCPH), reported changes in her beneficial ownership of company securities on October 7, 2025.
• The changes resulted from the completion of a tender offer and subsequent merger, where scPharmaceuticals Inc. became a wholly-owned subsidiary of MannKind Corporation.
• Tendering stockholders received $5.35 in cash per share, plus one non-tradable Contingent Value Right (CVR) with potential payments up to $1.00 per CVR, upon achievement of certain regulatory and net sales milestones.
• Nokes disposed of 125,675 shares of common stock, resulting in zero direct beneficial ownership.
• Outstanding restricted stock unit (RSU) awards, including 30,386 shares, became fully vested and were converted into cash ($5.35 per share) and one CVR per share.
• Stock options with exercise prices less than $5.35 were cancelled and converted into cash (equal to the difference between $5.35 and the exercise price, multiplied by the number of shares) and one CVR per share.
• Nokes disposed of stock options totaling 132,670 shares (exercise price $3.34), 54,700 shares (exercise price $4.31), 6,426 shares (exercise price $3.81), and 13,850 shares (exercise price $4.88).

Sentiment

Score: 7

Explanation: The filing details the successful completion of an acquisition, providing liquidity and potential upside for shareholders through cash and CVRs. While the reporting person's direct ownership is now zero, this is a direct outcome of a positive corporate event for shareholders.

Positives

• The acquisition by MannKind Corporation provided liquidity to scPharmaceuticals Inc. shareholders at a cash consideration of $5.35 per share.
• Shareholders and equity award holders received Contingent Value Rights (CVRs) offering potential additional payments of up to $1.00 per CVR based on future milestones.
• The merger represents a successful exit for scPharmaceuticals Inc. as an independent entity.

Negatives

• scPharmaceuticals Inc. ceased to be an independent publicly traded company, becoming a wholly-owned subsidiary of MannKind Corporation.
• Rachael Nokes' direct beneficial ownership of scPharmaceuticals Inc. common stock is now zero following the transactions.

Risks

• The Contingent Value Rights (CVRs) are non-tradable and their payments are contingent upon the achievement of specific regulatory and net sales milestones, which are not guaranteed.

Future Outlook

scPharmaceuticals Inc. is now a wholly-owned subsidiary of MannKind Corporation. The future value for former scPharmaceuticals Inc. shareholders holding CVRs depends on the achievement of specified regulatory and net sales milestones by the applicable outside dates.

Management Comments

• The Merger Agreement stipulated that each restricted stock unit award outstanding immediately prior to the Effective Time, whether vested or not, became fully vested and was converted into the right to receive $5.35 in cash per underlying share and one CVR per underlying share.
• The Merger Agreement also stipulated that each outstanding and unexercised stock option with an exercise price less than $5.35, whether vested or not, was cancelled and converted into the right to receive cash equal to the difference between $5.35 and the exercise price, multiplied by the number of shares, and one CVR per underlying share.

Industry Context

This acquisition reflects ongoing consolidation within the pharmaceutical and biotechnology sectors, where larger companies often acquire smaller firms to expand their product pipelines, gain market access, or achieve strategic synergies. The use of CVRs is a common mechanism in biotech M&A to bridge valuation gaps and share future development risks/rewards.

Comparison to Industry Standards

• The acquisition structure, combining an upfront cash payment with Contingent Value Rights (CVRs), is a standard approach in the pharmaceutical and biotechnology industry for transactions involving companies with products in development or early commercialization stages. This allows the acquirer (MannKind Corporation) to mitigate risk associated with future product performance while offering potential upside to the acquired company's (scPharmaceuticals Inc.) shareholders.
• Comparable transactions often include similar CVR structures tied to regulatory approvals (e.g., FDA approval) or sales targets, as seen in various biotech acquisitions over the past decade.

Stakeholder Impact

• Shareholders of scPharmaceuticals Inc. received cash and CVRs, providing immediate liquidity and potential future value.
• Employees holding equity awards had their awards converted into cash and CVRs, aligning with the merger terms.
• scPharmaceuticals Inc. as a corporate entity is now a wholly-owned subsidiary, impacting its operational independence.

Next Steps

• Monitoring the achievement of regulatory and net sales milestones for the Contingent Value Rights (CVRs).
• Integration of scPharmaceuticals Inc. operations into MannKind Corporation.

Key Dates

Recommendation

The company, scPharmaceuticals Inc., has been acquired by MannKind Corporation, and its common stock is no longer independently traded. Shareholders would have already received their consideration (cash and CVRs) as part of the tender offer and merger. There is no independent stock to buy or sell based on this filing, but CVR holders would 'hold' their CVRs awaiting milestone achievements.

Keywords

scPharmaceuticals, SCPH, MannKind Corporation, Merger, Tender Offer, Form 4, Insider Transaction, Rachael Nokes, CFO, Stock Options, RSU, Contingent Value Right, CVR, Acquisition