Biotech Values

[mouton29]

Firm underwriting:

the agreement is here https://www.sec.gov/Archives/edgar/data/1479290/000119312519306290/d843333dex11.htm

The key phrase is:

2. Subject to the terms and conditions herein set forth, (a) the Company agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $15.98, the number of Firm Shares as set forth opposite the name of such Underwriter in Schedule I hereto

There are dozens of terms and conditions but the only one any of my corporate colleagues have seen used on the very rare ocassioins when a priced deal did close is the "material adverse change" or "MAC" out:

(dd) No Material Adverse Change in Business. Except as disclosed in the General Disclosure Package, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package (i) there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its subsidiaries, taken as a whole that is material and adverse, . . .

Merely trading lower is not a MAC.

Someone once told me of an IPO a long time ago where the CEO was so pleased with the pricing that he bought a Ferrari (red, of course) and took it for a drive -- off a cliff or maybe into a tree. Dead CEO in that case was a MAC.

As you say, had the underwriters weaseled out for some reason, that would have to be announced.