Form 4: Baker Bros. Funds Boost Stake in vTv Therapeutics

Baker Bros. Advisors-managed funds acquired significant equity and warrant positions in vTv Therapeutics through a private placement, increasing their beneficial ownership.

Summary

• Baker Bros. Advisors LP and affiliated entities, including 667, L.P. and Baker Brothers Life Sciences, L.P., participated in a private placement by vTv Therapeutics Inc.
• The private placement, which closed on September 3, 2025, involved the acquisition of Units.
• Each Unit consists of either one share of Class A Common Stock or a prefunded warrant, along with a common warrant.
• 667, L.P. acquired 221,452 Units, while Baker Brothers Life Sciences, L.P. acquired 2,400,605 Units.
• The per-Unit price was $15.265 for Units including Common Stock and $15.255 for Units including a Prefunded Warrant.
• Following the transaction, 667, L.P. beneficially owns 12,368 shares of Common Stock, 472,092 Prefunded Warrants, and 221,452 Common Warrants.
• Baker Brothers Life Sciences, L.P. beneficially owns 135,946 shares of Common Stock, 5,176,974 Prefunded Warrants, and 2,400,605 Common Warrants.
• Julian C. Baker and Felix J. Baker, managing members of Baker Bros. Advisors (GP) LLC, may be deemed to have an indirect pecuniary interest in these securities.
• Prefunded Warrants and Common Warrants are exercisable 1-for-1 into Common Stock, subject to a 4.99% beneficial ownership limitation, which can be increased to 19.99% with notice.
• Common Warrants have an exercise price of $22.71 for Common Stock or $22.70 for a Prefunded Warrant and expire on September 3, 2030, or 90 days after positive top-line data from the CATT1 clinical trial.

Sentiment

Score: 8

Explanation: The significant investment by a prominent biotech-focused institutional investor and its affiliates, including board representation, signals strong confidence in vTv Therapeutics' future, particularly its clinical pipeline. This capital infusion is a positive development for a company in the R&D phase, despite potential future dilution.

Positives

• Significant investment by a major institutional investor (Baker Bros. Advisors) and its affiliates, signaling confidence in vTv Therapeutics.
• The private placement provides capital to vTv Therapeutics, which is crucial for biotech companies, especially those with ongoing clinical trials.
• The acquisition of warrants provides potential for further capital infusion upon exercise.
• The involvement of directors (by deputization) in the transaction aligns their interests with shareholders.

Negatives

• The issuance of new shares and warrants could lead to dilution for existing shareholders, although the specific impact depends on the total outstanding shares and future warrant exercises.

Risks

• The value of the acquired securities is subject to the performance of vTv Therapeutics' Common Stock.
• The expiration of Common Warrants is tied to the CATT1 clinical trial results, introducing clinical trial risk. If the trial results are negative, the warrants may lose value or expire worthless.
• Potential dilution from the exercise of Prefunded Warrants and Common Warrants could impact the per-share value for existing shareholders.

Future Outlook

The expiration of the Common Warrants is linked to the announcement of positive top-line data from vTv Therapeutics' ongoing CATT1 clinical trial, indicating a future milestone for the company.

Management Comments

• Julian C. Baker and Felix J. Baker each may be deemed to have an indirect pecuniary interest in the Common Stock reported in column 5 of Table I or securities reported in column 9 of Table II directly held by 667, a limited partnership of which the sole general partner is Baker Biotech Capital, L.P., a limited partnership of which the sole general partner is Baker Biotech Capital (GP), LLC, due to their interest in 667 and Baker Biotech Capital, L.P.'s right to receive an allocation of a portion of the profits from 667.
• Julian C. Baker, Felix J. Baker, the Adviser GP and the Adviser disclaim beneficial ownership of the securities held directly by the Funds except to the extent of their pecuniary interest therein, and this report shall not be deemed an admission that any of Julian C. Baker, Felix J. Baker, the Adviser GP or the Adviser is a beneficial owner of such securities for purposes of Section 16 or any other purpose.
• Dr. Raymond Cheong, a full-time employee of Baker Bros. Advisors LP is a director of vTv Therapeutics Inc. By virtue of their representation on the board of directors of the Issuer, the reporting persons are deemed directors by deputization of the Issuer for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

Industry Context

This private placement by a specialized biotech investor group (Baker Bros. Advisors) into a clinical-stage company like vTv Therapeutics is common in the biotechnology sector. Such investments provide crucial funding for research and development, particularly for companies with ongoing clinical trials (like CATT1), which are capital-intensive. The structure with warrants is also typical, offering upside potential while providing additional funding upon exercise.

Comparison to Industry Standards

• Private placements are a standard financing mechanism for biotech companies, especially those with significant R&D needs and limited revenue.
• The involvement of a dedicated life sciences investment firm like Baker Bros. Advisors, known for its deep expertise in the sector, is a positive signal, often seen as a validation of the company's pipeline or technology.
• The inclusion of warrants is a common feature in such deals, providing investors with additional upside potential and companies with future funding opportunities.
• The beneficial ownership limitation (4.99% initially, expandable to 19.99%) is a standard practice to avoid triggering certain regulatory thresholds (e.g., Schedule 13D filing requirements) immediately, while allowing for future flexibility.

Corporate Governance

Related Party Transactions

• The private placement involves vTv Therapeutics Inc. and entities advised by Baker Bros. Advisors LP (667, L.P. and Baker Brothers Life Sciences, L.P.).
• Dr. Raymond Cheong, an full-time employee of Baker Bros. Advisors LP, is a director of vTv Therapeutics Inc., and the reporting persons are deemed directors by deputization, establishing a related party relationship for the transaction.

Stakeholder Impact

• Shareholders: Potential dilution from the issuance of new shares and warrants, but also a positive signal from a significant institutional investment. The capital raise strengthens the company's financial position.
• Employees: A stronger financial position may provide more stability and resources for ongoing projects.
• Customers/Suppliers: Indirect positive impact from a more financially stable company, potentially leading to continued operations and product development.
• Creditors: Improved financial health and capital base could reduce credit risk.

Next Steps

• Continued progress and eventual announcement of top-line data from the CATT1 clinical trial, which will impact the expiration of the Common Warrants.
• Potential future exercise of Prefunded Warrants and Common Warrants by the investors.

Key Dates

Recommendation

The substantial investment by Baker Bros. Advisors, a highly respected and specialized life sciences investor, through a private placement, signals strong confidence in vTv Therapeutics' future prospects and its CATT1 clinical trial. This capital infusion significantly strengthens the company's financial position, which is critical for a biotech firm. While there is potential for future dilution from warrant exercises, the strategic backing and capital provided outweigh this, making it a compelling investment signal.

Keywords

vTv Therapeutics, VTVT, Baker Bros. Advisors, private placement, common stock, prefunded warrants, common warrants, equity investment, biotech, clinical trial, CATT1, insider transaction, SEC Form 4