Benzinga | Jan 6, 2021 05:54AM EST

Pixium Vision, Second Sight Medical Products Announced Agreement to Merge in All-Stock Transaction

Pixium Vision (Euronext Growth Paris - FR0011950641) and Second Sight Medical Products, Inc. ("Second Sight") (NASDAQ:EYES) announced today that they have entered into a definitive business combination agreement pursuant to which Pixium Vision will, following the contribution to Second Sight of all of its assets and liabilities in relation to its neuromodulation technology used in the treatment of blindness, become the controlling shareholder of the new combined company, owning 60% of the total equity before the capital raise. The combined company will focus on retinal stimulation through the Prima System.

As part of the transaction, a new subsidiary will be created to focus on cortical stimulation through Orion. The new combined company will own 40% of the new subsidiary and will also have a first option to exclusive global marketing rights for Orion.

Complementary businesses to lead global sight restoration market

The primary mission of the new combined company will be to create a leader in the sight restoration market. Pixium Vision's Prima System, which started its European pivotal trial in 2020, has the potential to significantly restore visual perception, improve the quality of life and restore a level of independence for people with dry age-related macular degeneration. Second Sight, the leader in implantable neuromodulation devices to treat blindness created Argus II, the world's first FDA and CE Mark approved device for artificial vision in people with late-stage retinitis pigmentosa, and is developing Orion, a cortical stimulation device that bypasses the diseased eye and could provide a new form of vision.

"Our planned business combination with Second Sight will bring exciting opportunities for both companies, given our synergistic business models and complementary presence in Europe and the U.S. Pixium Vision is well positioned to continue development of the promising Prima System: we have now launched the pivotal PRIMAvera study and have funding in place through the end of 2021. This transaction, including closing of the proposed financing, should provide us with sufficient resources to extend our cash runway beyond 2022, covering results from PRIMAvera." said Lloyd Diamond, Chief Executive Officer of Pixium Vision. "This transaction comes after Pixium Board of Directors evaluated numerous attractive financing proposals and concluded that the business combination with Second Sight is an ideal opportunity for two very complementary businesses to further develop our promising treatments in areas where there is a significant unmet medical need and comes with the full strategic alignment of both Boards of Directors."

The complementary technologies have the potential to treat many forms of blindness including degenerative retinal diseases as well as glaucoma, optic nerve disease and trauma, and will also target a broader audience including ophthalmologists, surgeons and neuroscientists. Moreover, the expanded size of the combined entity is expected to allow for easier access to capital, thereby facilitating and accelerating technological and clinical development to bring these transformative technologies to patients.

"The new organization provides for a new subsidiary, to focus exclusively on cortical vision and the Orion platform, which has the potential to treat nearly all forms of blindness," said Matt Pfeffer, Chief Executive Officer of Second Sight. "The new organization should accelerate the Orion program."

"285 million people worldwide suffer some form of visual impairment of which roughly 40 million are completely blind. There are many causes for blindness and the combination of Pixium Vision and Second Sight has the potential to bring novel treatments to patients, for whom today, there are no clinical treatment options," stated Professor Jos-Alain Sahel, Chair of the Department of Ophthalmology at the University of Pittsburgh School of Medicine, Director of the UPMC Eye Center, and the Eye and Ear Foundation Chair of Ophthalmology, Founder of both the Institut de la Vision and of Pixium Vision, and primary investigator of the Argus clinical trials.

Brandford Griffith & Associs, Fenwick & West LLP and Bird & Bird AARPI acted as legal advisors to Pixium Vision and DLA Piper LLP acted as legal advisor to Second Sight Medical.

Key Transaction Terms

The business combination will be effected pursuant to the Memorandum of Understanding entered into between Pixium Vision and Second Sight, pursuant to which (i) Pixium Vision will contribute to Second Sight all of its assets and liabilities in relation to its neuromodulation technology used in the treatment of blindness in exchange for 34,876,043 newly issued shares of Second Sight common stock representing approximately 60% of the fully diluted outstanding stock of Second Sight (excluding out of the money options and warrants) on a post transaction/pre-financing basis, (ii) approximately $25 million will be raised in a private placement at the level of the new combined company, and (iii) Second Sight will transfer its Orion assets to its new subsidiary, of which approximately 60% of the shares would be spun off by Second Sight to its shareholders of record as of a date prior to the closing of the business combination.

Pixium Vision would become a holding company and would be the combined company's largest shareholder.

Governance of the combined company

Pixium Vision CEO, Lloyd Diamond, will serve as executive Chairman and CEO of the combined company and subject to affirmative vote of the shareholders of Second Sight, its Board of Directors will consist of seven members:

Three directors nominated by Pixium Vision, including Lloyd Diamond;Two directors nominated by Second Sight, who will be selected from the current directors of Second Sight; andTwo independent directors to be appointed by Pixium Vision and Second Sight together.Lloyd Diamond will also remain General Director of Pixium Vision and Matt Pfeffer will be CEO of the new subsidiary focused on cortical vision and the Orion platform.

Next steps

The Pixium Vision Board of Directors has approved the transaction and the Second Sight Board of Directors has unanimously determined that the transaction and the execution of the Memorandum of Understanding is in the best interests of Second Sight, that the shares to be issued to Pixium Vision as consideration for its contribution of assets and liabilities is fair, from a financial point of view, to Second Sight and has unanimously recommended that, among other matters, the Second Sight shareholders vote in favor of the resolution approving the issuance of the shares of Second Sight common stock as consideration for Pixium Vision's contribution. New Century Capital Partners has provided the Second Sight board of directors with a fairness opinion stating that, as of the date thereof and subject to the assumptions, limitations, and qualifications set forth therein, the 34,876,043 newly issued shares of Second Sight common stock to be paid to Pixium Vision is fair, from a financial point of view, to Second Sight. Certain directors and officers of Second Sight have entered into agreements with Pixium Vision pursuant to which they have agreed to vote their shares of Second Sight stock in favor of the share issuance and otherwise support the transaction.

The transaction is expected to close near the end of the first quarter or the beginning of the second quarter of 2021 and is subject to customary closing conditions, including:

Appointment by the Commercial court of Paris of valuing auditor(s)1 to confirm that the value of the assets being contributed by Pixium Vision to Second Sight is at least equal to the aggregate par value and issuance premium of the new Second Sight shares to be issued in consideration for the contribution; andSatisfaction of the conditions to the transaction closing, including:Approval of the transaction by each of Pixium Vision and Second Sight shareholders (currently expected by the end of March 2021)Clearance from the French Minister for the Economy2Closing of the $25 million financingConference CallA conference call in English will take place on January 6, 2021 at 5pm CET/11am ET to discuss the transaction and answer potential questions.