Correspondence 0001104659-24-032743 from GILEAD SCIENCES, INC. (GILD) (CIK 0000882095) (GILD)
GILEAD SCIENCES, INC. (GILD) (CIK 0000882095)
Date: March 11, 2024 · CIK: 0000882095 · Accession: 0001104659-24-032743
AI Filing Summary & Sentiment
Referenced dates: March 1, 2024
Letter
VIA EDGAR SUBMISSION Division of Corporation Finance Office of Mergers and Acquisitions United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549-3628
Dear Mr. Duchovny:
This letter responds to comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the letter from the Staff dated March 1, 2024 (the “Comment Letter”) regarding the above-referenced Schedule TO-T of Gilead Sciences, Inc. (“Parent” or “Gilead”) and Pacific Merger Sub, Inc. (“Purchaser”) as filed with the Commission on February 23, 2024 (the “Schedule TO”). In conjunction with this letter, Parent and Purchaser are filing via EDGAR, for review by the Staff, Amendment No. 2 to the Schedule TO (“Amendment No. 2”).
Please find enclosed three copies of Amendment No. 2. The changes reflected in Amendment No. 2 include those made in response to the comments of the Staff in the Comment Letter. The responses set forth in this letter are numbered to correspond to the numbered comments in the Comment Letter.
Due to the commercially sensitive nature of information contained in this letter, this submission is accompanied by Parent’s request for confidential treatment for selected portions of this letter. Parent has filed a separate letter with the Office of Freedom of Information and Privacy Act Operations in connection with the confidential treatment request pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. For the Staff’s reference, we have enclosed a copy of Parent’s letter to the Office of Freedom of Information and Privacy Act Operations as well as a copy of this correspondence, marked to show the portions redacted from the version filed via EDGAR and for which Parent is requesting confidential treatment.
For your convenience, we have also included the text of the applicable comment in the Comment Letter in bold immediately before each response. All defined terms in this letter have the same meaning as ascribed to them in the Schedule TO, unless otherwise indicated.
Schedule TO-T
1. We note that Ms. Dorling is both an executive at Gilead and a director at CymaBay. Please provide us your detailed legal analysis of the application of Rule 13e-3 with respect to the current transaction, given your affiliation with CymaBay.
For the reasons set forth below, Parent respectfully advises the Staff that, after careful consideration of Rule 13e-3 of the Securities Exchange Act of 1934 (the “Exchange Act”), Rule 13e-3 does not apply to the current transaction because (a) Parent is not an affiliate of CymaBay Therapeutics, Inc. (“CymaBay” or the “Company”), (b) Ms. Dorling is not an affiliate of Parent, (c) Ms. Dorling is not an affiliate of CymaBay, (d) Parent is not under common control with CymaBay, (e) the Merger and the other Transactions were negotiated vigorously at arm’s-length and do not implicate the policy concerns of Rule 13e-3 of the Exchange Act, and (f) CymaBay directors and management were not “engaged” in the current transaction. In addition, (1) CymaBay, and not Parent, is the issuer of the Shares and (2) CymaBay is not a bidder in the tender offer in the current transaction. Set forth below is Parent’s detailed legal analysis as to why Rule 13e-3 of the Exchange Act does not apply to the current transaction.
CONFIDENTIAL TREATMENT REQUESTED
BY GILEAD SCIENCES, INC.
Rule 13e-3 of the Exchange Act applies to transactions to acquire securities of an issuer by the issuer or an affiliate of the issuer. Rule 13e-3(a)(1) defines an affiliate of an issuer as “a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with such issuer.” Rule 12b-2 of the Exchange Act defines “control” to include “the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.” We note that the element of “control” that is fundamental to the concept of “affiliate” as defined by Rule 13e-3 is dependent upon specific facts and circumstances.
a. Parent does not control CymaBay and is not an affiliate of CymaBay.
Parent has no ability to direct or cause the direction of the management or policies of CymaBay, through ownership of voting securities, contract or otherwise. Thus, Parent does not control CymaBay and is not an affiliate of CymaBay.
· Parent holds no equity or debt ownership stake in CymaBay. As noted by the Commission in Exchange Act Release No. 34-17719 (April 13, 1981) (the “Interpretive Release”), as well as by the Staff in various telephone interpretations and compliance and disclosure interpretations (“CD&I”) of Rule 13e-3 of the Exchange Act over the years (including without limitation in CD&I 102.01, 201.01, 201.03, 201.05 and 201.06), a touchstone of “control” (and therefore of “affiliate” status) is ownership by the entity that is alleged to be a purported affiliate of the issuer of a significant percentage of voting equity securities of the issuer. However, as described in the section of the Offer to Purchase entitled “Certain Information Concerning Parent and Purchaser”, as of the date of the Merger Agreement and the date of the Schedule TO, none of Parent, Purchaser, or any majority-owned subsidiary of Parent or Purchaser beneficially owns or has any right to acquire, directly or indirectly, any Shares or other equity securities and no such person effected any transaction in the Shares or other equity securities during the 60-day period preceding the date of the Offer to Purchase. As a result, Parent may not participate in any vote of CymaBay’s stockholders on the election of directors or any other matter. Also as of the date of the Merger Agreement and the date of the Schedule TO, none of Parent, Purchaser, or any majority-owned subsidiary of Parent or Purchaser beneficially owned any debt securities of CymaBay or its subsidiaries. As a result, because there is no ownership by Parent of CymaBay equity or debt securities, Parent does not control CymaBay and Parent is not an affiliate of CymaBay.
· Parent has no representation on, or ability to appoint or remove members of, the Company Board. Parent has no (and has never had any) power, contractual or otherwise, to appoint or remove any director to the Company Board (or any committee thereof) or any other direct or indirect power over the composition of the Company Board (or any committee thereof).
March 11, 2024 2
CONFIDENTIAL TREATMENT REQUESTED
BY GILEAD SCIENCES, INC.
· Ms. Dorling is not a Parent representative on the Company Board. Ms. Dorling is not a Parent representative on the Company Board and Parent has never appointed Ms. Dorling or any other representative to the Company Board (or any committee thereof). The fact that Ms. Dorling serves on the Company Board is solely and entirely due to CymaBay independently nominating Ms. Dorling to, and her agreeing to serve on, the Company Board. Parent was not (and is not) involved in that decision by CymaBay to nominate Ms. Dorling or in Ms. Dorling’s decision to serve and has had no discussions of such matters with CymaBay or Ms. Dorling whatsoever. The Nominating and Corporate Governance Committee of CymaBay, which is composed entirely of directors with no relationship to Parent, identifies and nominates directors to the Company Board and Parent does not have any control or influence over such committee.1 Furthermore, we note that there have been numerous situations over the years where neither the Commission nor the Staff has found the existence of control by a first party over a second party merely because a person related to the first party is a director on the second party’s board of directors.2 Moreover, we note that there have been several instances over the years where, as part of a hostile takeover of a target company, an acquiror nominates and successfully elects several directors to a target company’s board of directors in order to put pressure on the target board of directors to accept the acquiror’s hostile tender offer. A hostile bidder electing directors to a target company’s board in connection with a hostile tender offer potentially raises numerous concerns, including among others, coercion, inadequate price, and illiquidity for target stockholders who do not tender into the acquiror’s tender offer—none of which concerns are present in the current transaction. In those situations, neither the Commission nor the Staff has determined that the hostile acquiror, by virtue of having nominated and
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FOIA CONFIDENTIAL TREATMENT REQUEST
CONFIDENTIAL
TREATMENT REQUESTED
The entity requesting confidential treatment is:
BY
GILEAD SCIENCES, INC.
Gilead Sciences, Inc.
333 Lakeside Drive
Foster City, California 94404
Telephone: 650-574-3000
CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION
FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR
VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.
VIA EDGAR SUBMISSION
Pursuant to Rule 83 by Gilead Sciences, Inc.
March 11, 2024
Re:
CymaBay Therapeutics, Inc.
Schedule TO-T filed on February 23, 2024
Filed by Pacific Merger Sub, Inc. and Gilead Sciences, Inc.
File No. 005-87950
Mr. Daniel Duchovny
Special Counsel
Division of Corporation Finance
Office of Mergers and Acquisitions
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-3628
Dear Mr. Duchovny:
This letter responds to comments of the Staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) contained in the letter from the Staff dated March 1,
2024 (the “Comment Letter”) regarding the above-referenced Schedule TO-T of Gilead Sciences, Inc. (“Parent”
or “Gilead”) and Pacific Merger Sub, Inc. (“Purchaser”) as filed with the Commission on February 23,
2024 (the “Schedule TO”). In conjunction with this letter, Parent and Purchaser are filing via EDGAR, for review by
the Staff, Amendment No. 2 to the Schedule TO (“Amendment No. 2”).
Please find enclosed three copies of Amendment No. 2. The changes
reflected in Amendment No. 2 include those made in response to the comments of the Staff in the Comment Letter. The responses set
forth in this letter are numbered to correspond to the numbered comments in the Comment Letter.
Due to the commercially sensitive nature of information contained in
this letter, this submission is accompanied by Parent’s request for confidential treatment for selected portions of this letter.
Parent has filed a separate letter with the Office of Freedom of Information and Privacy Act Operations in connection with the confidential
treatment request pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. For the Staff’s
reference, we have enclosed a copy of Parent’s letter to the Office of Freedom of Information and Privacy Act Operations as
well as a copy of this correspondence, marked to show the portions redacted from the version filed via EDGAR and for which Parent
is requesting confidential treatment.
For your convenience, we have also included the text of the applicable
comment in the Comment Letter in bold immediately before each response. All defined terms in this letter have the same meaning as ascribed
to them in the Schedule TO, unless otherwise indicated.
Schedule TO-T
1. We note that Ms. Dorling is both an executive at Gilead and a director at CymaBay. Please provide us your detailed legal analysis
of the application of Rule 13e-3 with respect to the current transaction, given your affiliation with CymaBay.
For the reasons set forth below, Parent respectfully advises
the Staff that, after careful consideration of Rule 13e-3 of the Securities Exchange Act of 1934 (the “Exchange Act”),
Rule 13e-3 does not apply to the current transaction because (a) Parent is not an affiliate of CymaBay Therapeutics, Inc.
(“CymaBay” or the “Company”), (b) Ms. Dorling is not an affiliate of Parent, (c) Ms. Dorling
is not an affiliate of CymaBay, (d) Parent is not under common control with CymaBay, (e) the Merger and the other Transactions
were negotiated vigorously at arm’s-length and do not implicate the policy concerns of Rule 13e-3 of the Exchange Act, and
(f) CymaBay directors and management were not “engaged” in the current transaction. In addition, (1) CymaBay, and
not Parent, is the issuer of the Shares and (2) CymaBay is not a bidder in the tender offer in the current transaction. Set forth
below is Parent’s detailed legal analysis as to why Rule 13e-3 of the Exchange Act does not apply to the current transaction.
CONFIDENTIAL
TREATMENT REQUESTED
BY
GILEAD SCIENCES, INC.
Rule 13e-3 of the Exchange Act applies to transactions
to acquire securities of an issuer by the issuer or an affiliate of the issuer. Rule 13e-3(a)(1) defines an affiliate of an
issuer as “a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common
control with such issuer.” Rule 12b-2 of the Exchange Act defines “control” to include “the possession, direct
or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise.” We note that the element of “control” that is fundamental to the concept
of “affiliate” as defined by Rule 13e-3 is dependent upon specific facts and circumstances.
a. Parent does not control CymaBay and is not an affiliate of CymaBay.
Parent has no ability to direct or cause the direction of the
management or policies of CymaBay, through ownership of voting securities, contract or otherwise. Thus, Parent does not control CymaBay
and is not an affiliate of CymaBay.
· Parent holds no equity or debt ownership stake in CymaBay. As
noted by the Commission in Exchange Act Release No. 34-17719 (April 13, 1981) (the “Interpretive
Release”), as well as by the Staff in various telephone interpretations and compliance and disclosure interpretations
(“CD&I”) of Rule 13e-3 of the Exchange Act over the years (including without limitation in CD&I 102.01,
201.01, 201.03, 201.05 and 201.06), a touchstone of “control” (and therefore of “affiliate” status) is
ownership by the entity that is alleged to be a purported affiliate of the issuer of a significant percentage of voting equity
securities of the issuer. However, as described in the section of the Offer to Purchase entitled “Certain Information
Concerning Parent and Purchaser”, as of the date of the Merger Agreement and the date of the Schedule TO, none of Parent,
Purchaser, or any majority-owned subsidiary of Parent or Purchaser beneficially owns or has any right to acquire, directly or
indirectly, any Shares or other equity securities and no such person effected any transaction in the Shares or other equity
securities during the 60-day period preceding the date of the Offer to Purchase. As a result, Parent may not participate in any vote
of CymaBay’s stockholders on the election of directors or any other matter. Also as of the date of the Merger Agreement and
the date of the Schedule TO, none of Parent, Purchaser, or any majority-owned subsidiary of Parent or Purchaser beneficially owned
any debt securities of CymaBay or its subsidiaries. As a result, because there is no ownership by Parent of CymaBay equity or debt
securities, Parent does not control CymaBay and Parent is not an affiliate of CymaBay.
· Parent has no representation on, or ability to appoint or remove members
of, the Company Board. Parent has no (and has never had any) power, contractual or otherwise, to appoint or remove any director to
the Company Board (or any committee thereof) or any other direct or indirect power over the composition of the Company Board (or any committee
thereof).
March 11, 2024 2
CONFIDENTIAL
TREATMENT REQUESTED
BY
GILEAD SCIENCES, INC.
· Ms. Dorling is not a Parent representative on the Company
Board. Ms. Dorling is not a Parent representative on the Company Board and Parent has never appointed Ms. Dorling or
any other representative to the Company Board (or any committee thereof). The fact that Ms. Dorling serves on the Company Board
is solely and entirely due to CymaBay independently nominating Ms. Dorling to, and her agreeing to serve on, the Company Board.
Parent was not (and is not) involved in that decision by CymaBay to nominate Ms. Dorling or in Ms. Dorling’s
decision to serve and has had no discussions of such matters with CymaBay or Ms. Dorling whatsoever. The Nominating and
Corporate Governance Committee of CymaBay, which is composed entirely of directors with no relationship to Parent, identifies and
nominates directors to the Company Board and Parent does not have any control or influence over such committee.1 Furthermore,
we note that there have been numerous situations over the years where neither the Commission nor the Staff has found the existence
of control by a first party over a second party merely because a person related to the first party is a director on the second
party’s board of directors.2 Moreover, we note that there have been several instances over the years where, as part
of a hostile takeover of a target company, an acquiror nominates and successfully elects several directors to a target
company’s board of directors in order to put pressure on the target board of directors to accept the acquiror’s hostile
tender offer. A hostile bidder electing directors to a target company’s board in connection with a hostile tender offer
potentially raises numerous concerns, including among others, coercion, inadequate price, and illiquidity for target stockholders
who do not tender into the acquiror’s tender offer—none of which concerns are present in the current transaction. In
those situations, neither the Commission nor the Staff has determined that the hostile acquiror, by virtue of having nominated and