On November 1, 2023 MEI Pharma, Inc. (NASDAQ: MEIP) (the "Company") and Anson Funds and Cable Car Capital ("Anson and Cable Car") reported that they have entered into a cooperation agreement (Press release, MEI Pharma, NOV 1, 2023, View Source [SID1234636645]). Key terms of the agreement include:

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

•
Capital Return to Stockholders: The Company intends to promptly pay a dividend in the amount of $1.75 per share of common stock to all stockholders.

Additionally, a second return of capital of approximately $9.33 million in the aggregate will be authorized by the Board if either (i) at least 17 patients in Cohort 1 of the Company’s ongoing ME-344 phase 1b study have disease progression prior to week 16 of treatment (a threshold consistent with the bar set forth in the phase 1b clinical trial protocol needed to continue the study by enrolling Cohort 2 of the phase 1b study), or (ii) at least six months after the date of the cooperation agreement, and prior to the initiation of Cohort 2 of the phase 1b study, the Company’s Board determines not to proceed with Cohort 2. This second return of capital may take the form of a dividend or tender offer, will be subject to the proper exercise by the Board of its fiduciary duties under applicable law and is subject to modification to the extent necessary to comply with appliable requirements under Delaware law.

•
Stockholder Designees Added to the Board: The Company has appointed two directors designated by Anson and Cable Car: Mr. James Flynn and Mr. Taheer Datoo. Additionally, Mr. Steven Wood, as mutually agreed upon by the Company and Anson and Cable Car, has been appointed as an additional MEI stockholder representative designated by the Board. These appointments are effective immediately and the new directors will be nominated for election by the Company in connection with the upcoming fiscal 2024 Annual Meeting of Stockholders ("2024 Annual Meeting"), to serve for a three-year term if elected.

Current MEI directors Daniel P. Gold, Ph.D., Tamar D. Howson and Sujay R. Kango have resigned from the Board concurrently with the execution of the cooperation agreement and will not seek reelection at the 2024 Annual Meeting. Assuming all directors nominated by the Board are elected at the 2024 Annual Meeting, the Board will continue to comprise eight directors, six of whom will be independent pursuant to the applicable stock exchange listing standards.

•
Formation of a Capital Allocation Committee: MEI’s Board has formed a Capital Allocation Committee, comprising five directors including the three new directors. The Capital Allocation Committee will advise the full Board on the Company’s strategic allocation of capital to support (i) the development of its drug candidate programs and (ii) other value creation or preservation measures, with a view toward maximizing stockholder value.

Additionally, as part of the cooperation agreement, Anson and Cable Car have agreed to withdraw their consent solicitation and will vote for the Company’s slate of director nominees in connection with the 2024 Annual Meeting and the fiscal 2025 Annual Meeting of Stockholders. Anson and Cable Car will also abide by customary standstill provisions.

"Today’s announcement reflects our ongoing engagement with our stockholders, and we are pleased to reach an agreement that we believe is in the best interest of all stockholders," said David M. Urso, president and chief executive officer of MEI Pharma. "This agreement enables MEI to support stockholder value by returning capital via a near-term cash dividend, with the potential for additional capital return, while allowing us to devote resources to advance our two promising programs, voruciclib and ME-344, through key upcoming data readouts – and avoid the costs associated with a consent solicitation and proxy contest. With important near-term data expected during the first half of 2024, we remain focused on executing our development programs and the potential to deliver differentiated and improved therapeutic options to cancer patients."

"We believe that MEI has the opportunity to create value for stockholders by advancing its programs and judiciously returning capital to stockholders – and the agreement we reached today is a positive step forward for MEI stockholders," said Moez Kassam of Anson Funds and Jacob Ma-Weaver of Cable Car. "We are pleased to reach this constructive resolution that we believe will add important perspectives to the Board and ensure the Company is best positioned to maximize value for stockholders."

The complete agreement will be included as an exhibit to a Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission ("SEC").