ITEM 1.          Security and Issuer

 

This Amendment No. 2 (“Amendment No. 2”) to Schedule 13D supplements and amends the Statement on Schedule 13D of GMS Tenshi Holdings Pte. Limited, a Singapore private limited company (“GMS Tenshi”), Ghiath M. Sukhtian (“Sukhtian”), and Arun Kumar Pillai (“Kumar”) originally filed with the Securities and Exchange Commission (the “SEC”) on September 18, 2017 (the “Statement”) and amended by Amendment No. 1 thereto filed with the SEC on November 1, 2017.  The Statement relates to the common stock, par value $0.01 per share (the “Shares”), of Oncobiologics, Inc., a Delaware corporation (the “Issuer”), with its principal executive offices located at 7 Clarke Drive, Cranbury, New Jersey 08512.  The Shares are listed on the Nasdaq Capital Market under the ticker symbol “ONS”.  Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

 

ITEM 2.          Identity and Background

 

(a)          This Amendment No. 2 is being filed by GMS Tenshi, Sukhtian, and Kumar (collectively, the “Reporting Persons”).

 

(b)–(c)    Tenshi Life Sciences Private Limited (“Tenshi”), a private investment vehicle of Kumar, and GMS Pharma (Singapore) Pte. Limited (“GMS Pharma”), a private investment company and wholly-owned subsidiary of GMS Holdings, a private investment company (“GMS Holdings”), are the 50:50 beneficial owners of GMS Tenshi, in which each of Tenshi and GMS Pharma owns 50% of the outstanding voting shares.  Kumar, a natural person, is the holder of a controlling interest in Tenshi.  Sukhtian, a natural person, is the holder of a controlling interest in GMS Holdings, which is the holder of a controlling interest in GMS Pharma.

 

The principal office address of GMS Tenshi is 36 Robinson Road, #13-01, City House, Singapore 068877.  The principal office address of Kumar is #30, “Galaxy”, 1st Main, J.P. Nagar, 3rd Phase, Bangalore, India 560078.  The principal office address of Sukhtian is Zahran Street, 7th Circle Zahran Plaza Building, 4th Floor P.O. Box 142904, Amman, Jordan 11844.

 

The directors and executive officers of GMS Tenshi are set forth on Schedule I, attached hereto.  Schedule I sets forth the following information with respect to each such person:

 

(i)

name;

 

(ii)

business address;

 

(iii)

present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted; and

 

(iv)

citizenship.

 

 

(f)          (i)  Kumar is a citizen of India.

 

(ii) Sukhtian is a citizen of Jordan.

 

ITEM 3.          Source and Amount of Funds or Other Consideration

 

In connection with the 2018 Purchase Agreement (as defined and described below), on May 14, 2018, the Issuer closed the initial sale of 6,377,383 Shares and warrants (“Warrants”) to acquire an aggregate of 10,256,410 Shares to GMS Tenshi for an aggregate purchase price of $7.5 million.  In connection with the 2018 Purchase Agreement, on June 8, 2018, the Issuer closed the final sale of 6,377,383 Shares and Warrants to acquire 10,256,410 Shares to GMS Tenshi for an aggregate purchase price of $7.5 million.  The source of funds for such purchases was the working capital of GMS Tenshi and capital contributions made to GMS Tenshi.

 

On June 20, 2018, GMS Tenshi converted 208,836 shares of the Issuer’s Series A Convertible Preferred Stock it held into 31,572,617 Shares.

 

As a result of the transactions described in this Item 3, the Reporting Persons may each be deemed to be the beneficial owner of approximately 77.5% of the outstanding Shares.

 

ITEM 4.          Purpose of Transaction

 

On May 11, 2018, GMS Tenshi entered into a purchase agreement with the Issuer (the “2018 Purchase Agreement”) pursuant to which GMS Tenshi agreed to purchase, in a private placement (the “Private Placement”), $15 million of Shares and Warrants.  On May 14, 2018, the Issuer closed the initial sale of 6,377,383 Shares and Warrants to acquire 10,256,410 Shares to GMS Tenshi (the “Initial Closing”) for an aggregate purchase price of $7.5 million, and amended its Investor Rights Agreement (as defined below) with GMS Tenshi, as described below.  On June 8, 2018, the Issuer closed the final sale of 6,377,383 Shares and Warrants to acquire 10,256,410 Shares to GMS Tenshi (the “Second Closing”) for an aggregate purchase price of $7.5 million.  The source of funds for such purchases was the working capital of GMS Tenshi and capital contributions made to GMS Tenshi.

 

The Issuer intends to use the net proceeds from the Private Placement primarily for the (i) purpose of initiating clinical trials for ONS-5010, a drug product candidate, (ii) the expansion of the BioSymphony Platform for providing contract development and manufacturing services, and (iii) for working capital and general corporate purposes.

 

Except as set forth in this Schedule 13D, the Reporting Persons have not formulated any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries; (d) any change in the present Board or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the Issuer’s capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer’s business or corporate structure; (g) any change in the Issuer’s charter or bylaws or other instrument corresponding thereto or other action which may impede the acquisition of control of the Issuer by any person; (h) causing a class of the Issuer’s securities to be deregistered or delisted from a national securities exchange or to cease to be authorized to be quoted in an inter‑dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) any action similar to any of those enumerated above.

 

ITEM 5.

Interest in Securities of the Issuer

 

(a)–(b)     As of the date of this filing, the Reporting Persons may be deemed, for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, including by reason of their mutual affiliation, to be the beneficial owners of the Shares described in Item 3 above.  Based upon information contained in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 15, 2018, such Shares deemed to be indirectly beneficially owned by the Reporting Persons constitutes approximately 77.5% of the issued and outstanding Shares.

 

 

Sukhtian, as the holder of a controlling interest in GMS Holdings, the holder of a controlling interest in GMS Pharma, which owns 50% of the outstanding voting shares of GMS Tenshi, may be deemed to indirectly beneficially own the Shares held by GMS Tenshi.  Kumar, as the holder of a controlling interest in Tenshi, which owns 50% of the outstanding voting shares of GMS Tenshi, may also be deemed to indirectly beneficially own the Shares held by GMS Tenshi.  As a result, Kumar and Sukhtian share the power to direct the vote and to direct the disposition of the Shares described in Item 3 above.

 

(c)          Except as disclosed in Item 3, the Reporting Persons have not effected any transactions in the Shares during the past sixty (60) days.

 

(d)          Not applicable.

 

(e)	Not applicable.

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer

 

The Shares and Warrants acquired in connection with the Initial Closing and Second Closing of the Private Placement are held of record by GMS Tenshi.  Tenshi, a private investment vehicle of Kumar, and GMS Pharma, a private investment company and wholly-owned subsidiary of GMS Holdings, are the 50:50 beneficial owners of GMS Tenshi, in which each of Tenshi and GMS Pharma owns 50% of the outstanding voting shares.  Kumar, a natural person, is the holder of a controlling interest in Tenshi.  Sukhtian, a natural person, is the holder of a controlling interest in GMS Holdings, which is the holder of a controlling interest in GMS Pharma.  By virtue of such relationships, Kumar and Sukhtian may be deemed to have voting and investment power with respect to the securities held by GMS Tenshi noted above and as a result may be deemed to beneficially own such securities for purposes of Rule 13d-3 under the Exchange Act.  As of the date of this Schedule 13D, the number of Shares attributable to GMS Tenshi (assuming conversion of the Preferred Stock and Warrants acquired by GMS Tenshi) is 89,483,358.  Kumar and Sukhtian may also each be considered to hold indirectly the same 89,483,358 Shares.

 

Pursuant to the Investor Rights Agreement (as defined below), GMS Tenshi was granted the right to appoint four representatives to the Issuer’s Board of Directors (the “Board”), and accordingly, the Reporting Persons may have the ability to affect and influence control of the Issuer.  GMS Tenshi has designated four representatives to serve on the Board.

 

2018 Purchase Agreement

 

Item 4 above summarizes certain provisions of the 2018 Purchase Agreement and is incorporated herein by reference.  The description of the 2018 Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the 2018 Purchase Agreement, a copy of which is attached as Exhibit 2 to this Schedule 13D, and is incorporated herein by reference.

 

Voting and Lockup Agreements

 

Prior to and in connection with the purchase agreement entered into between the Issuer and GMS Tenshi on September 11, 2017 (the “2017 Purchase Agreement”), on September 7, 2017, GMS Tenshi entered into voting and lock-up agreements with Lawrence A. Kenyon, the Issuer’s Chief Financial Officer, and Kenneth M. Bahrt, M.D., the Issuer’s Chief Medical Officer, as well as the members of the Board (other than Pankaj Mohan, Ph.D., a member of the Board and the Issuer’s former Chairman and Chief Executive Officer) (collectively, the “Voting Agreements”) whereby they agreed to vote in favor of the proposals to issue the securities to GMS Tenshi pursuant the 2017 Purchase Agreement and the change in control of the Issuer. 

 

 

Dr. Mohan entered into a separate lock-up agreement with GMS Tenshi (the “Lock-Up Agreement”).  Pursuant to the Voting Agreements and the Lock-Up Agreement, the lock-up period for the Issuer’s executive officers and the members of Board who will continue on the Board after the closing of the sale of the remaining securities pursuant to the 2017 Purchase Agreement, including Dr. Mohan, is 12 months, and the lock-up period for the members of Board who will resign from the Board in connection with the 2017 Purchase Agreement is nine months.

Pursuant to the Voting Agreements and Lock-Up Agreement, during such lock-up periods, the parties have agreed not to, except in limited circumstances, (i) sell, transfer, pledge, assign or otherwise encumber or dispose of any of the securities (as such term is defined in the Voting Agreements and Lock-Up Agreement), or enter into any agreement, option or other arrangement or understanding with respect to any of the securities, (ii) deposit any securities into a voting trust or enter into any voting arrangement with respect to the securities, or (iii) take any other action that would in any way make any representation or warranty of the stockholder signatory untrue or incorrect in any material respect or otherwise restrict, limit or interfere in any material respect with the performance of such stockholder’s obligations under such agreement or the transactions contemplated by such agreement.

The foregoing descriptions of the Voting Agreements and the Lock-Up Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 3, 4, 5 and 6 and incorporated herein by reference.

 

Investor Rights Agreement

 

On September 11, 2017, the Issuer entered into an investor rights agreement with GMS Tenshi (the “Investor Rights Agreement”) in connection with the 2017 Purchase Agreement.  Pursuant to the Investor Rights Agreement, the Issuer granted GMS Tenshi certain registration rights with respect to the Shares issuable upon conversion of the Series A Convertible Preferred Stock and exercise of the Warrants, Board designation rights, piggyback registration rights and information rights, as well as the right of first offer over future issuances of securities and a right of participation in future securities issuances.  The Issuer also agreed not to file any registration statement to register for resale the sale of any securities of a third party without GMS Tenshi’s prior consent.

 

Additionally, the Issuer agreed to appoint up to four new directors to be designated by GMS Tenshi, such that GMS Tenshi’s designees represent a majority of the Board. As long as GMS Tenshi maintains beneficial ownership of at least 5% of the Issuer’s outstanding Shares, it shall be entitled to nominate directors to the Board in proportion to its ownership stake in the Issuer.  As long as GMS Tenshi maintains beneficial ownership of at least 50% of the Issuer’s outstanding Shares but less than or equal to 57%, GMS Tenshi shall be entitled to nominate a majority of the directors for election to the Board.

 

 

 

The foregoing descriptions of the Investor Rights Agreement and the Investor Rights Agreement Amendment, do not purport to be complete and are qualified in their entirety by reference to the full text of the Investor Rights Agreement and the Investor Rights Agreement Amendment, copies of which are filed as Exhibits 6 and 7 to this Schedule 13D, and incorporated herein by reference.

 

ITEM 7

Material to be Filed as Exhibits

 

Exhibit

Description

 

1.	Joint Filing Agreement, among GMS Tenshi Holdings Pte. Limited, Ghiath M. Sukhtian, and Arun Kumar Pillai, dated June 25, 2018.

 

2.	Purchase Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated May 11, 2018 (incorporated by reference to Exhibit 10.1 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on May 15, 2018).

 

3.

Form of Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and the Director or Executive Officer of Oncobiologics, Inc. party thereto, dated September 7, 2017 (incorporated by reference to Exhibit 10.4 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

4.	Voting and Lock-up Agreement by and between GMS Tenshi Holdings Pte. Limited and Todd Brady, Director Oncobiologics, Inc., dated September 7, 2017 (incorporated by reference to Exhibit 10.5 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

5.	Lock-Up Agreement by and among the Issuer, GMS Tenshi Holdings Pte. Limited and Pankaj Mohan, Ph.D, dated September 7, 2017 (incorporated by reference to Exhibit 10.8 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

6.	Investor Rights Agreement by and between Oncobiologics, Inc. and GMS Tenshi Holdings Pte. Limited, dated September 11, 2017 (incorporated by reference to Exhibit 10.3 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on September 11, 2017).

7.	Amendment to Investor Rights Agreement (incorporated by reference to Exhibit 10.2 to the Issuer’s Form 8-K (SEC File No. 001-37759), filed with the SEC on May 15, 2018).