SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 Gibson, Dunn & Crutcher LLP

3161 Michelson Drive

 Irvine, CA 92612-4412

www.gibsondunn.com

James J. Moloney

 Direct: +1 949.451.4343

Fax: +1 949.475.4756

 JMoloney@gibsondunn.com

 VIA ELECTRONIC MAIL AND EDGAR FILING

Ms. Christina Chalk and Mr. Blake Grady

 Office of
Mergers and Acquisitions

 Division of Corporation Finance

United States Securities and Exchange Commission

 100 F Street NE

 Washington, D.C. 20549

 April 19, 2023

Re:
 Jounce Therapeutics, Inc.

Schedule TO-T filed on April 5, 2023

File No. 005-89831

Dear Ms. Chalk and Mr. Grady:

 On
behalf of Concentra Biosciences, LLC (the “Parent”) and Concentra Merger Sub, Inc. (“Purchaser”), please find our responses to comments received from the staff of the Division of Corporation Finance (the
“Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated April 14, 2023 (“Letter”), with respect to its Schedule TO-T filed on April 5, 2023 (the “Schedule
TO”) and the Offer to Purchase, dated April 5, 2023 (the “Offer to Purchase” and, together with the Schedule TO, the “Tender Offer Materials”). Additionally, we are supplementally providing the Staff with (i) an
appendix (the “Appendix”) that includes draft proposed changes to the Tender Offer Materials in response to the Staff’s comments and (ii) a draft Supplement to the Offer to Purchase (the “Supplement”) providing
a summary of the changes to the Tender Offer Materials. Following confirmation of no additional comments from the Staff with respect thereto, Parent and Purchaser will undertake to promptly file with the Commission an amendment to the Schedule TO
(including the Supplement) and to disseminate the Supplement to the stockholders of Jounce Therapeutics, Inc. (the “Company”). Any terms not defined in this letter are as defined in the Offer to Purchase.

For your convenience, we have restated below in bold each comment from the Letter and supplied our responses immediately thereafter. Unless
otherwise specified, all references to page numbers and captions correspond to the Schedule TO and all capitalized terms used but not defined herein have the same meaning as in the Tender Offer Materials.

 Summary Term Sheet, page 6

1.
 Here and throughout the Offer to Purchase, disclose the approximate amount of the additional payment that
could be received by tendering shareholders pursuant to the terms of the CVR. In addition, here and where you discuss the CVR terms later in the offer materials, expand to discuss the specific risks and uncertainties concerning the events that must
occur (or not occur) in order for payments to be issued under the terms of the CVRs. As an example only, provide specific disclosure about the current status of the development of the drugs or products referenced in the CVR Agreement, any agency
from which approvals must be received, and provide shareholders with a greater understanding of where you are in the development process and the likelihood that any such products could be commercialized and generate revenue.

 Response: Parent and Purchaser acknowledge the Staff’s comment. By way of background, Parent and
Purchaser note for the Staff that, at the time of their decision to offer to purchase the Company, as previously disclosed in Jounce’s SEC filings, the Company was in a process of seeking strategic alternatives for the Company after the
Company’s Phase II SELECT trial assessing a combination treatment for non-small cell lung cancer did not meet its primary endpoint in August 2022, and due to a lack of early signs of broad activity of JTX-8064 in preliminary data from the INNATE trial, as well as challenges in the financing market. In a sense, the Company was seeking strategic alternatives to a wind-up of
the Company. The Offer by Parent and Purchaser was not made in contemplation that it would purchase the Company and then continue to pursue development of the Company’s legacy assets. Indeed, the Offer, and in particular the CVR, is to provide
cash to Jounce stockholders up front at closing, additionally passing on to Jounce’s stockholders through the CVR a portion of savings or proceeds from Dispositions of the Company’s legacy assets.

It is currently anticipated that an aggregate of approximately 60,134,202 CVRs will be issued, representing one CVR to be issued as part of
the consideration for each of the issued and outstanding Shares, as well as for each share of common stock underlying outstanding Company RSUs and Company Stock Options. The CVR represents the contractual right to receive certain contingent cash
payments, that come from two distinct potential sources, which for purposes of this comment response letter, Parent and Purchaser identify as falling within two “buckets”:

•

 First Bucket: Only with respect to CVRs originally issued in respect of shares of Jounce Common Stock,
Jounce RSUs and In-the-Money Options, if, during the Pre-Closing Period, any of Jounce’s leases are terminated, amended,
modified or replaced, the difference between (i) 100% of the amount by which the aggregate value of the expected financial obligations under the revised lease(s) as terminated, amended, modified or replaced (the “Final Lease
Amount”) is less than $12,600,000 (the “Initial Lease Amount”), and (ii) if any, the amount by which the Company Net Working Capital as finally determined pursuant to clause (b)(iv) of Exhibit A to the Merger Agreement
is less than $110 million prior to application of the adjustment anticipated by the proviso in clause (iii) of the defined term Company Net Working Capital; and

 -2-

•

 Second Bucket: 80% of the Net Proceeds in the case of a sale, transfer, license or other disposition by
Parent or its Affiliates, including Jounce (after the Merger), during the Disposition Period, of all or any part of the CVR Products.

Parent and Purchaser are able to estimate a maximum potential distribution under the first bucket of the CVR using assumptions based on
Jounce’s expectations with respect to the contemplated lease adjustments. Parent and Purchaser have proposed revisions to the Tender Offer Materials (see Section 1 of the Appendix) to disclose, along with customary and appropriate caveats,
that the maximum amount payable with respect to the first bucket of the CVR would be approximately $0.2360 per CVR.

 With
respect to the second bucket, however, Parent and Purchaser respectfully submit that it would be extremely difficult, and could potentially be misleading, to attempt to quantify an approximate amount expected to be distributed. By way of background,
Purchaser and Parent note that their tender offer bid was a superior topping bid over the existing proposed transaction between Jounce and Redx Pharma, plc (the “Redx Transaction”), which featured a substantially identical CVR
structure to the current proposed CVR (with the exception of the addition of the first bucket, which was the result of negotiations between Jounce and Parent and Purchaser). Indeed, in its negotiation strategy with Jounce, Parent and Purchaser chose
to match the CVR from the proposed RedX Transaction (with the exception noted above), so that their negotiation could focus on the cash consideration portion of the deal; by providing Jounce an “apples-to-apples” comparison on the CVR, Parent and Purchaser believed its offer to be more compelling than the Redx Transaction based on its proposal including upfront cash consideration.

As the CVR payouts under the second bucket are based on a distribution of Net Proceeds from Dispositions (rather than operating the Company as
a business), it is not possible to predict whether Dispositions will occur at all, or at what price they may be effected. Parent and Purchaser note that the Tender Offer Materials include risk factor disclosures (see revised Summary Term Sheet in
the proposed amended Schedule TO), specifically noting the possibility that no payments would be made under the CVR despite Parent’s, Purchaser’s and the Company’s planned efforts to effect Dispositions during the Disposition Period
following the closing of the Merger in accordance with the terms of the CVR Agreement.

 Pursuant to the terms of the proposed CVR
Agreement, Parent and Purchaser will commit to conducting business development efforts designed to effect Dispositions of the identified Jounce assets covered by the CVR, which efforts will be tailored to effect one or more Dispositions of certain
of Jounce’s legacy programs (JTX-8064, vopratelimab, pimivalimab, JTX-1484 and JTX-2134) but not to pursue new clinical,
manufacturing or enabling development work with respect to such programs. Parent and Purchaser note that continued development of the drugs or products referenced in the CVR Agreement, or agency approvals thereof, are not a factor in effecting the
Dispositions. So, while Parent and Purchaser are committed to undertake the business development efforts provided in the CVR Agreement, they are unable to provide a meaningful estimation of Net Proceeds or amounts that may be distributed to CVR
holders under the second bucket because it is not feasible to predict the extent of the expected return on Dispositions, if any.

 -3-

 Accordingly, in response to the Staff’s comment, Parent and Purchaser supplementally
provide proposed disclosures regarding the potential payments that could be made under the first bucket of the CVR, and clarify the nature and risks of the CVR, as well as a description of what constitutes Commercially Reasonable Efforts (as defined
in the CVR Agreement) under the CVR Agreement (see Section 1 of the Appendix and the Supplement).

2.
 The disclosure, which is phrased in the negative regarding the circumstances under which CVR payments will
not be issued, is extremely confusing. For example, the reference to both “conditions set forth above” being met is confusing because the conditions are phrased in the negative, as events which may not occur in order for there to be a CVR
payment. Please revise.

 Response: In response to the Staff’s comment, Parent and Purchaser
supplementally provide proposed disclosures addressing the Staff’s comment as requested (see Section 2 of the Appendix).

 Certain
Information Concerning Parent and Purchaser, page 32

3.
 Please revise your disclosure to include the information required by Item 3 of Schedule TO and Item 1003(c)
of Regulation M-A, including material occupations, positions, offices or employment during the past five years for any person specified in General Instruction C of Schedule TO. Your revised disclosure should
include the date of incorporation of Parent.

 Response: In response to the Staff’s comment, Parent and
Purchaser supplementally provide proposed disclosures addressing the Staff’s comment as requested (see Section 3 of the Appendix).

4.
 Disclose where and how the transactions listed on page 32 were effected. See Item 8 of Schedule TO and Item
1008(b)(5) of Regulation M-A.

 Response: In response to the
Staff’s comment, Parent and Purchaser supplementally provide proposed disclosures addressing the Staff’s comment as requested (see Section 4 of the Appendix).

Source and Amount of Funds, page 50

5.
 Because you take the position that your financial condition is not relevant to a decision by a shareholder
whether to tender Shares and accept the Offer, please disclose the risk that your financial condition could deteriorate such that you would not have the necessary cash or cash equivalents to make the required payments in connection with the CVRs.
Please also clarify the priority in right of payment that the holders of CVRs would have in relation to your other creditors and holders of your capital stock. Finally, please discuss the possible effect of a bankruptcy filing on the CVR payment
obligation.

 Response: Parent and Purchaser acknowledge the Staff’s comment, and respectfully submit
that a change in the financial condition of the Company following closing should not be expected to impact the potential payments, if any, under the CVRs, because the CVR payments are not based on future operations of the Company in the operation of
its business or the development of their clinical programs, but instead are based on achieving (i) savings under existing lease arrangements during the Pre-Closing Period (with respect to the first
bucket) and (ii) proceeds from Dispositions of the Company’s legacy programs during the Disposition Period, in the case of the second bucket. Accordingly, CVR payments, if any, would not depend on the Company having its own cash on hand to
make payments, since the proceeds from the savings or Dispositions, as the case may be, would be passed on to the CVR holder and handled by the paying agent under the CVR Agreement.

 -4-

 In response to the Staff’s comment, Parent and Purchaser supplementally provide
proposed disclosures to make clear that the CVRs will be general unsecured obligations of the Company (see Section 5 of the Appendix and the Supplement).

6.
 We note the following disclosure here: “The funds to pay for all Shares accepted for payment in the
Offer and the consideration in connection with the Merger are expected to come from Parent’s available cash on hand as of Closing.” Clarify whether the funds to pay for tendered Shares and in connection with the Merger were available when
the Offer commenced, or whether they were expected to become available later, before expiration. If the latter, revise to explain where they came or will come from, and to provide the disclosure required by Item 10 of Schedule TO.

 Response: In response to the Staff’s comment, Parent and Purchaser confirm that, through the Equity
Commitment and Guarantee Letter, Parent and Purchaser (through TCP) have access to the cash needed in order to effect the Closing, and such funds will be deposited with Parent or Purchaser prior to Closing. Parent and Purchaser also respectfully
submit that the Tender Offer Materials comply with Item 10 of Schedule TO because the financial statements of Parent, Purchaser and TCP are not material to Jounce stockholders in considering whether to tender into the Offer. Parent, Purchaser and
TCP will have the funds to consummate the Offer, the Offer is not subject to any financing condition, and (as discussed in the response to Comment #5 above) payments, if any, under the CVRs will be based on proceeds from savings achieved from lease
amendments during the Pre-Closing Period, in the case of the first bucket, or Net Proceeds from Dispositions, in the case of the second bucket. Parent and Purchaser do not believe that a material change in the
Company’s financial position post-closing would have a material impact on its ability to make payments, if any, under the CVR Agreement.

Conditions of the Offer, page 52

7.
 We note your disclosure on page 52 that “[a]ll conditions (except for the Minimum Condition) may be
waived by Parent or Purchaser in their sole discretion in whole or in part at any applicable time or from time to time, in each case subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the
SEC.” If an Offer condition is “triggered” while the Offer is pending, in our view, the bidder must promptly inform shareholders whether it will assert the condition and terminate the Offer, or waive it and continue. Reserving the
right to waive a condition “at any applicable time or from time to time” is inconsistent with your obligation in this regard. While you have clarified that this discretion is “subject to … the applicable rules and regulations of
the SEC,” it is not clear what this means in this context. Please revise the language cited above and the following statement in the last sentence of this section: “The failure of Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right