CORRESP 1 filename1.htm

September 14, 2021
VIA EDGAR
 
Office of Life Sciences
Division of Corporation Finance
United States Securities and Exchange Commission
100 F Street N.E.
Washington, D.C. 20549
Attn: Kristin Lochhead
  Terence O’Brien
  Jessica Ansart
  Suzanne Hayes  

 

  Re: FS Development Corp. II
    Registration Statement on Form S-4
    Filed on August 4, 2021
    File No. 333-258442

 

Ladies and Gentlemen:

 

This letter is being submitted on behalf of FS Development Corp. II (the “Company”) in response to comments contained in the letter dated September 3, 2021 (the “Letter”) from the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) to Jim Tananbaum, Chief Executive Officer of the Company, with respect to the Company’s submission of the Registration Statement on Form S-4 that was submitted on August 4, 2021 (the “Registration Statement”). The Company is concurrently filing Amendment No. 1 to the Registration Statement on Form S-4/A (the “Amendment”), including changes in response to the Staff’s comments.

 

The responses set forth below have been organized in the same manner in which the Commission’s comments were organized and, unless otherwise indicated, all page references in the recitations of the Staff’s comments refer to the Registration Statement and page references in the Company’s response refer to the Amendment as marked.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 2

 

Exhibit 23.1 Consent of WithumSmith+Brown, PC, independent registered public accounting firm of FS Development Corp. II, page 1

 

1.The audit report date of February 18, 2021 in the auditors' consent does not agree with the audit report date of January 26, 2021 on page F-16. Please revise for consistency in your next amendment.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has corrected the discrepancy in the revised consent filed with the Amendment.

 

Market and Industry Data, page 2

 

2.Please amend your disclosure to clarify that you are liable for the market and industry data you included in your registration statement.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 2 of the Amendment to address the Staff’s comment.

 

Questions and Answers About the Proposals

 

What equity stake will current stockholders of FS Development II and Pardes Equityholders hold in the Combined Entity after the Closing?, page 9

 

3.We note your disclosure regarding the ownership percentage with respect to the combined entity following the business combination. Please revise your disclosure to clarify the sponsor and its affiliates' total potential ownership interest in the combined company, assuming exercise and conversion of all securities.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 9 of the Amendment to address the Staff’s comment.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 3

 

What interests do PS Development II's current officers and directors have in the Business Combination?, page 12

 

4.We note your disclosure regarding current investments by the sponsor and its affiliates that are at risk and depend on completion of a business combination. Please revise your disclosure here and throughout the prospectus, as appropriate, to quantify the aggregate dollar amount and describe the nature of what the sponsor and its affiliates have at risk that depends on completion of a business combination. Include the current value of securities held, loans extended, fees due, and out-of-pocket expenses for which the sponsor and its affiliates are awaiting reimbursement. Provide similar disclosure for the company's officers and directors, if material.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 13, 32, 89 and 155 and 156 to address the Staff’s comment.

 

5.We note your disclosure here and throughout the prospectus that entities affiliated with the sponsor and FS Development II's officers and directors have made an investment in shares of Series A Preferred Stock of the target. Please expand your disclosure regarding the sponsor's ownership interest in the target company. Disclose the approximate dollar value of the interest based on the transaction value and recent trading prices as compared to the price paid.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 13, 32, 89 and 155 to address the Staff’s comment.

 

Summary of the Proxy Statement/Prospectus, page 19

 

6.Revise your summary to clearly state that PBI-0451 is currently in a pre-clinical stage and that you have not yet submitted an IND to the FDA. Additionally, determinations regarding safety, efficacy and approval are within the sole authority of the FDA. Remove all statements regarding the safety and efficacy of your product candidate, imply safety or efficacy, or predict safety, efficacy or FDA approval throughout your prospectus. For example:

 

●“Potential to address an area of high unmet medical need (page 21);”
●“Lead product candidate PBI-0451... may have significant benefits as an antiviral able to treat or prevent infection with SARS-CoV-2 and important emerging variants of concern (page 22):”
●“Pardes is well positioned to become a leader in treatment of prevention of infection with SARS-CoV2(page 22):”
●“Robust preclinical activity observed (page 22);”
●“Preclinical safety studies support entry into human trials (page 22);” and
●“in preclinical studies PBI-0451 demonstrated the potential to inhibit replication of a broad range of coronaviruses...(page 22).”

 

Please note that this list is for illustrative purposes and your filing contains additional inappropriate statements regarding safety, efficacy and lily FDA approval. You may replace statements of safety and efficacy with objective information about observations from your preclinical trials, as opposed to your conclusions drawn from such trials.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised its disclosure on pages 21, 22, 23, 24, 130, 131, 194, 195, 196, 201, 203, 204 and 238 of the Amendment to address the Staff’s comment. Please note that, in August 2021, Pardes initiated its Phase 1, first in human clinical trial of PBI-0451 in New Zealand.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 4

 

7.We note that on pages 233 and 234 you state there is an indication that substantial doubt exists related to the ability of Pardes to continue as a going concern. Please expand your disclosure in your Prospectus Summary as well as in your Risk Factors to include this information.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 24, 42 and 132 of the Amendment to address the Staff’s comment.

 

8.Please delete your statements that the financial and other terms of the Merger Agreement and the transactions contemplated thereby were the product of arm’s length negotiations between FS Development II and Pardes. Such statements are inappropriate given Dr. Tananbaum’s affiliation with both FS Development II and Pardes.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has deleted such references on pages 24 and 132 of the Amendment to address the Staff’s comment.

 

Impact of the Business Combination on FS Development II’s Public Float, page 26

 

9.Revise your disclosure to show the potential impact of redemptions on the per share value of the shares owned by non-redeeming shareholders by including a tabular presentation relating to redemptions showing a range of redemption scenarios, including an interim redemption level in addition to the minimum and maximum levels that you are already showing.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 27 and 38 of the Amendment to address the Staff’s comment.

 

10.Please revise to disclose all possible sources and extent of dilution that shareholders who elect not to redeem their shares may experience in connection with the business combination. Provide disclosure of the impact of each significant source of dilution, including the amount of equity held by founders, convertible securities, including warrants retained by redeeming shareholders, at each of the redemption levels detailed in your sensitivity analysis, including any needed assumptions.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 26 of the Amendment to address the Staff’s comment.

 

11.It appears that underwriting fees remain constant and are not adjusted based on redemptions. Revise your disclosure to disclose the effective underwriting fee on a percentage basis for shares at each redemption level presented in your sensitivity analysis related to dilution.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised its disclosure on page 27 of the Amendment to address the Staff’s comment.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 5

 

Risk Factors
The Amended Bylaws will provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States, page 96

 

12.Please revise this risk factor to disclose that there is also a risk that your exclusive forum provision may result in increased costs for investors to bring a claim.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 99 of the Amendment to address the Staff’s comment.

 

Special Meeting of FS Development II
Stockholders Vote of the Sponsor,
Directors and Officers, page 101

 

13.We note that certain shareholders agreed to waive their redemption rights. Please describe any consideration provided in exchange for this agreement.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 104 of the Amendment to clarify that our Sponsor, directors and officers did not receive any additional consideration in connection therewith.

 

Background of the Business Combination, page 117

 

14.Please disclose when you retained White & Case and engage Jeffries, SVB Leerink and Cooley.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 120 of the Amendment to address the Staff’s comment.

 

15.We note that your IPO priced on February 16, 2021 and you decided to pursue a business combination with Pardes on February 17, 2021. Please expand the discussion to disclose any efforts to solicit interest in a business combination or accumulate a list of potential candidates. Your discussion should explain how the initial list of companies considered was produced.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 122 of the Amendment to address the Staff’s comment.

 

16.Please expand your disclosure to quantify the number of acquisition candidates considered, explain how the list was narrowed to Pardes and the additional two candidates, and the information you had with respect to the candidates being considered. For example, your disclosure should explain if interested potential candidates submitted information about products/product candidates, financial statements, etc. and provide more information about the comparisons between the three candidates that were considered further scientific and those that were not with respect to the factors identified.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 122 of the Amendment to address the Staff’s comment.

 

17.To what extent was the very early development stage of PBI-0451 considered in the decision to pursue Pardes as an acquisition candidate? Please disclose the number of product candidates the other acquisition candidates had in their respective pipelines and the development stages of such candidates.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 122 of the Amendment to address the Staff’s comment.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 6

 

18.Please clarify whether Dr. Tananbaum was involved in the determination of an enterprise value of $546 million.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 123 of the Amendment to address the Staff’s comment.

 

The Business Combination Proposal
Reasons for Approval of the Business Combination, page 126

 

19.We note your disclosure here that “each of the Transaction Committee and the Board also considered that the Sponsor and certain of the officers and directors of FS Development II may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of our stockholders generally.” Please revise to clarify how the board considered those conflicts in negotiating and recommending the business combination.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has updated the disclosure on page 134 of the Amendment to address the Staff’s comment.

 

Opinion of H.C. Wainwright & Co., LLC, page 131

 

20.Please revise the selected companies analysis to identify the criteria used to select the companies used in the analysis. To the extent there were other companies that met the criteria used but were not included in the analysis, please disclose this information and explain why they were excluded from the analysis.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 137 of the Amendment to address the Staff’s comment. The Company supplementally advises the Staff that Wainwright consistently applied the selection criteria that was used and no companies identified by Wainwright as meeting its selection criteria were excluded from the selected companies analysis.

 

21.We note your disclosure regarding the selection criteria of the precedent transaction analysis. To the extent there were other transactions that met the criteria but were excluded from the analysis, please disclose this information and provide the basis for the exclusion.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 138 of the Amendment to address the Staff’s comment. The Company supplementally advises the Staff that Wainwright consistently applied the selection criteria that was used and no transactions identified by Wainwright as meeting its selection criteria were excluded from the precedent transactions analysis.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 7

 

Conditions to Closing , page 145

 

22.Please clarify which conditions are subject to waiver.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 150 of the Amendment to identify the closing conditions that are not subject to waiver.

 

Registration Rights Agreement, page 149

 

23.Please file this registration rights agreement as an exhibit to the registration statement, or, in the alternative, please tell us why you believe that you are not required to file the agreement. Refer to Item 601 of Regulation S-K.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has added the Registration Rights Agreement as an Exhibit to the Amendment.

 

Executive Officers and Directors of FS
Development II Conflicts of Interest,
page 181

 

24.Your charter waived the corporate opportunities doctrine. Please address this potential conflict of interest and whether it impacted your search for an acquisition target.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on page 185 of the Amendment to address the Staff’s comment, and confirms that the potential conflict of interest relating to the waiver of the corporate opportunity doctrine did not impact FS Development II’s search for an acquisition target.

 

Information about Pardes
Overview, page 190

 

25.We note your disclosure that in preclinical studies, PBI-0451 has “demonstrated activity supporting its potential to be an effective oral direct acting antiviral” and that you believe that “PBI-0451 has the potential to be an effective oral DAA.” Conclusions regarding efficacy and safety are determinations that only the FDA or a foreign government equivalent has the authority to make. Please revise your disclosure throughout your document, including but not limited to the statements noted above, to eliminate the implication that your product candidates have been or will ultimately be determined safe and/or effective or have demonstrated safety and/or efficacy for purposes of approval by the FDA or comparable agency. Alternatively, we advise you that you may present the objective data from pre-clinical and clinical trials without drawing a conclusion from the results. For example, you may note that a candidate was well tolerated, the absence of serious adverse events or the number of trial participants who met the identified trial endpoints.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 21, 22, 23, 24, 130, 131, 133, 194, 195, 196, 201, 203, 204 and 238 of the Amendment to address the Staff’s comment.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 8

 

Our Approach, page 197

 

26.Your statement that you believe your platform allows you to rapidly find potentially “best-in-class” compounds implies the likelihood of regulatory approval and comparisons to other product candidates. Please remove the “best-in-class” reference as the statement is speculative in light of the regulatory status of the product candidate you are currently pursing.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 196, 201 and 238 of the Amendment to address the Staff’s comment.

 

27.In your discussion of the non-clinical and preclinical trials for PBI-0451 conducted to date as well as the phase 1 clinical trials that you are planning for this lead program, please revise your disclosure to specify the primary and secondary endpoints of the different trials, the results as they relate to the endpoints and any statistical analysis that was done or will be done.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 22, 194, 203 and 204 of the Amendment to address the Staff’s comment. The Company further respectfully advises the Staff that as it has just initiated its Phase 1 clinical trial, there are no trial results to report at this time. The Phase 1 trial is not designed for statistical analysis and therefore no statistical analysis has been done or will be done.

 

28.We note your tables 1 and 2 showing the biochemical activity and cell culture activity of PBI-0451, respectively. Please revise to include an explanation of the measurement ranges shown in the tables and their significance with respect to the biochemical and cell culture activity of PBI-0451. For example, please explain why the line for SARS-CoV-2 is shown in bold in Table 1.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 201 and 202 of the Amendment to address the Staff’s comment.

 

Intellectual Property, page 201

 

29.We note your disclosure of your pending patent estate for PBI-0451 as well as for your platform and discovery pipeline. Please revise to disclose for each material patent and patent application the specific product(s) to which such patents or patent applications relate, the type of patent protection, the expiration dates, and applicable material jurisdictions, including specific foreign jurisdictions.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has revised the disclosure on pages 206 and 207 of the Amendment to address the Staff’s comment.

 

 

 

 

United States Securities and Exchange Commission
September 14, 2021
Page 9

 

Certain Relationships and Related Person Transactions
FS Development II, page 264

 

30.We note your discussion here regarding how the number of founders shares outstanding was determined to represent 20% of the issued and outstanding shares of common stock after the IPO. We also note your disclosure on page F-14 that “In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock issued and outstanding (excluding the Private Placement Shares) after such conversion.” We understand the sponsor may receive additional securities pursuant to an anti-dilution adjustment based on the company’s additional financing activities. Please quantify the number and value of securities the sponsor will receive. In addition, disclose the ownership percentages in the company before and after the additional financing to highlight dilution to public stockholders.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has updated the disclosure on pages 12, 31, 89, and 155 of the Amendment to clarify that in connection with the execution of the Parent Support Agreement each of the Initial Stockholders has (subject to the consummation of the Merger) waived the provisions of Section 4.3(b)(i) of the FS Development II Certificate of Incorporation to have the Parent Class B Shares convert to Parent Class A Shares at a ratio of greater than one-for-one.

 

31.We note in your disclosure on page 265 that certain affiliates of the sponsor will participate in a private placement PIPE investment that will occur concurrently with the consummation of the business combination. Please highlight material differences, if any, in the terms and price of securities issued at the time of the IPO as compared to private placements contemplated at the time of the business combination.

 

RESPONSE: The Company respectfully acknowledges the Staff’s comment and has updated the disclosure on page 270 to address the Staff’s comment, and confirms that there are no material differences in the terms and price of securities issued at the time of the IPO as compared to the PIPE Investment contemplated at the time of the business combination, apart from the fact that the private placement shares, so long as they are held by the Sponsor and its permitted transferees, subject to certain limited exceptions, may not be transferred, assigned, or sold until 30 days after the completion of a business combination.

 

Please do not hesitate to contact Patti Marks at (212) 819-7019 of White & Case LLP with any questions or comments regarding this letter.

 

  Sincerely,
   
  /s/ White & Case LLP
  White & Case LLP
Enclosures:  
cc: Dennis Ryan, FS Development Corp. II