Filed Pursuant to Rule 424(b)(3)
Registration No.: 333-258442

FS Development Corp. II
900 Larkspur Landing Circle, Suite 150
Larkspur, California 94939

To the Stockholders of FS Development Corp. II:

On behalf of the board of directors of FS Development Corp. II (“FS Development II”), we are pleased to enclose the proxy statement/prospectus relating to the proposed merger of Orchard Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of FS Development II (“Merger Sub”), with and into Pardes Biosciences, Inc., a Delaware corporation (“Pardes”), with Pardes surviving the merger as a wholly-owned subsidiary of FS Development II (the “Combined Entity”), pursuant to the terms of a merger agreement, dated June 29, 2021, among FS Development II, Merger Sub, Pardes and Shareholder Representative Services LLC (as amended on November 7, 2021 and as it may be further amended from time to time, the “Merger Agreement” and such merger and the other transactions contemplated by the Merger Agreement, the “Business Combination”). In connection with the Business Combination, FS Development II will be renamed “Pardes Biosciences, Inc.” A copy of the Merger Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

In connection with the Business Combination and the other matters described herein, you are cordially invited to attend the Special Meeting of Stockholders (the “Special Meeting”) of FS Development II. The Special Meeting will be held on December 23, 2021, at 9:00 a.m. Eastern time, via a virtual meeting. In light of the novel coronavirus (referred to as “COVID-19”) pandemic and to support the well-being of FS Development II’s stockholders, directors and management, the Special Meeting will be completely virtual. You may attend the Special Meeting and vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/fsdevelopmentcorpii/2021. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. FS Development II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person.

At the Special Meeting, FS Development II stockholders will be asked to consider and vote upon the following proposals (the “Proposals”):

(1)    to (a) adopt and approve the Merger Agreement and (b) approve the Business Combination (the “Business Combination Proposal”);

(2)    to approve, assuming the Business Combination Proposal is approved and adopted, for purposes of complying with the applicable provisions of Nasdaq Stock Exchange Listing Rule 5635 (each, a “Nasdaq Listing Rule”), (a) the issuance of 32,500,000 newly issued shares of FS Development II Class A Common Stock, par value $0.0001 per share, in the Business Combination, (b) the issuance and sale of 7,500,000 newly issued shares of FS Development II Class A Common Stock in a private placement concurrent with the Business Combination (the “PIPE Investment”) and (c) the issuance and sale of up to 2,000,000 newly issued shares of FS Development II Class A Common Stock to the Sponsor, or affiliates of the Sponsor, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000, plus any additional shares pursuant to subscription agreements we may enter into prior to Closing, to the extent such issuances would require a stockholder vote under the applicable Nasdaq Listing Rule (the “Nasdaq Stock Issuance Proposal”);

(3)    to amend and restate, and further amend, FS Development Corp. II’s certificate of incorporation as follows (such amended and restated and further amended certificate of incorporation referred to herein as the “Proposed Charter”) (the following proposals, the “Charter Amendment Proposals”):

(a)     Charter Amendment Proposal A — to approve, assuming the Business Combination Proposal is approved and adopted, a proposed second amended and restated certificate of incorporation, which will amend and restate FS Development Corp. II’s current certificate of incorporation, dated February 16, 2021 (the “Current Charter”), and which proposed second amended and restated certificate of incorporation will be in effect upon the closing of the Business Combination (the “Closing”); and

 

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(b)    Charter Amendment Proposal B — to approve and adopt a proposed amendment to the second amended and restated certificate of incorporation to increase the number of shares of FS Development II Class A Common stock from 100,000,000 to 250,000,000 and the total number of authorized shares from 110,000,000 (following approval of Charter Amendment Proposal A) to 260,000,000, which proposed amendment to the second amended and restated certificate of incorporation will be in effect upon the Closing;

(4)     to approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the Securities and Exchange Commission as five separate sub-proposals (the “Advisory Charter Proposals”):

(a)     Advisory Charter Proposal A — to increase the authorized shares of FS Development II Class A Common Stock to 250,000,000 shares (if Charter Amendment Proposal B passes). If Charter Amendment Proposal B does not pass, the authorized shares of FS Development II Class A Common Stock will remain 100,000,000 shares;

(b)    Advisory Charter Proposal B — to increase the authorized shares of “blank check” preferred stock that the Combined Entity’s board of directors could issue to discourage a takeover attempt to 10,000,000 shares;

(c)     Advisory Charter Proposal C — to provide that certain amendments to provisions of the Proposed Charter will require the approval of at least 66⅔% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

(d)    Advisory Charter Proposal D — to make the Combined Entity’s corporate existence perpetual as opposed to FS Development II’s corporate existence, which is required to be dissolved and liquidated 24 months following the closing of its initial public offering and to remove from the Proposed Charter the various provisions applicable only to specified purpose acquisition corporations contained in the Current Charter; and

(e)     Advisory Charter Proposal E — to provide that any amendment to the Amended Bylaws will require the approval of at least 66⅔% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment, provided that if the board of directors of the Combined Entity recommends approval of such amendment, such amendment will require the approval of a majority of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

(5)    to approve, assuming the Business Combination Proposal is approved and adopted, the 2021 Stock Option and Incentive Plan (the “Equity Incentive Plan”), a copy of which is appended to the accompanying proxy statement/prospectus as Annex E, which will become effective the day prior to the Closing (the “Incentive Plan Proposal”); and

(6)    to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, or the Incentive Plan Proposal, or we determine that one or more of the closing conditions under the Business Combination is not satisfied or waived (the “Adjournment Proposal”).

The Merger Agreement provides for the merger of Merger Sub with and into Pardes, with Pardes continuing as the surviving entity. Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Business Combination (the “Effective Time”):

(i)     all shares of Pardes’s Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and Common Stock (collectively, “Pardes Stock”) issued and outstanding immediately prior to the Effective Time, whether vested or unvested, will be converted into the right to receive the Merger Consideration (as defined below), with each stockholder of Pardes Stock being entitled to receive a number of shares of FS Development II Class A Common Stock equal to (A) the Consideration Ratio multiplied by (B) the number of shares of Pardes Stock held by such holder as of immediately prior to the Effective Time; and

 

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(ii)    each option exercisable for Pardes Stock that is outstanding immediately prior to the Effective Time shall be assumed and continue in full force and effect on the same terms and conditions as are currently applicable to such options, subject to adjustments to exercise price and number of shares of FS Development II Class A Common Stock issued upon exercise.

Following completion of the Business Combination and assuming no holders of FS Development II Class A Common Stock issued in FS Development II’s initial public offering (the “FS Development II IPO”, and such stock, the “Public Shares”) elect to redeem their shares, FS Development Holdings II, LLC (the “Sponsor”) and the other initial stockholders of FS Development II, the public stockholders, the PIPE Investment investors (including certain affiliates of the Sponsor) and holders of Pardes Stock, which include certain affiliates of the Sponsor (the “Pardes Equityholders”) will own approximately 8.6%, 30.6%, 11.4% and 49.4% of the outstanding common stock of the Combined Entity, respectively. These percentages are calculated based on a number of assumptions (described in the accompanying proxy statement/prospectus) and are subject to adjustment in accordance with the terms of the Merger Agreement.

Approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the issued and outstanding shares of FS Development II Class A Common Stock and Class B Common stock (collectively, “FS Development II Common Stock”) as of the record date (the “Record Date”) for the Special Meeting, voting together as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of FS Development II Class A Common Stock as of the Record Date, voting as a separate class. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of FS Development II Common Stock cast by the stockholders represented in person (which would include presence at a virtual meeting) or by proxy and entitled to vote thereon at the Special Meeting, voting together as a single class. If the Business Combination Proposal is not approved, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, and the Incentive Plan Proposal will not be presented to the FS Development II stockholders for a vote. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal are preconditions to the Closing. Approval of Charter Amendment Proposal B is not a condition to Closing.

Pursuant to the Current Charter, FS Development II is providing its public stockholders with the opportunity to redeem, upon the Closing, the Public Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in the trust account (the “Trust Account”) that holds the proceeds (including interest but less franchise and income taxes payable) of the FS Development II IPO. For illustrative purposes, based on funds in the Trust Account of approximately $201,262,000 on September 30, 2021, the estimated per share redemption price would have been approximately $10.00. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. Any stockholders requesting redemption of their shares will be required to provide beneficial ownership information. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to 20% or more of the shares of FS Development II Class A Common Stock issued in the FS Development II IPO. The Sponsor and FS Development II’s other initial stockholders have agreed to waive their redemption rights with respect to any shares of FS Development II Common Stock they may hold in connection with the Closing, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor and FS Development II’s other initial stockholders have agreed to vote any shares of FS Development II Common Stock owned by them in favor of the Business Combination Proposal, which represent approximately 21.9% of the voting power of FS Development II.

FS Development II is providing the accompanying proxy statement/prospectus and accompanying proxy card to FS Development II stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Whether or not you plan to attend the Special Meeting, FS Development II urges you to read the accompanying proxy statement/prospectus (and any documents incorporated into the accompanying proxy statement/prospectus by reference) carefully. Please pay particular attention to the section titled “Risk Factors.”

After careful consideration, the board of directors of FS Development II has unanimously approved and adopted the Merger Agreement and the transactions contemplated therein and has determined that each of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, the Advisory

 

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Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal are in the best interests of FS Development II and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” each of these Proposals. When you consider the board of directors’ recommendation of these Proposals, you should keep in mind that the directors and officers of FS Development II have interests in the Business Combination that may conflict with your interests as a stockholder. See the section titled “The Business Combination Proposal — Interests of FS Development II’s Directors and Officers and Others in the Business Combination.”

Each redemption of Public Shares by FS Development II public stockholders will decrease the amount in the Trust Account, which held total assets of approximately $201,262,000 as of September 30, 2021. FS Development II will not redeem Public Shares in an amount that would cause it to have net tangible assets of less than $5,000,001.

Your vote is very important. If you are a registered stockholder, please vote your shares as soon as possible to ensure that your vote is counted, regardless of whether you expect to attend the Special Meeting virtually, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal are approved at the Special Meeting. Approval of the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and satisfaction of other closing conditions. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the Proposals.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT FS DEVELOPMENT II REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO FS DEVELOPMENT II’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY TO THE TRANSFER AGENT USING DEPOSITORY TRUST COMPANY’S DEPOSIT WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. ANY STOCKHOLDERS REQUESTING REDEMPTION OF THEIR SHARES WILL BE REQUIRED TO PROVIDE BENEFICIAL OWNERSHIP INFORMATION.

On behalf of FS Development II’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

   

/s/ James B. Tananbaum 

   

James B. Tananbaum, M.D.

   

Chief Executive Officer, President and Director

   

FS Development Corp. II

   

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying proxy statement/prospectus or determined that the accompanying proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated December 1, 2021 and is first being mailed to the stockholders of FS Development II on or about December 1, 2021.

 

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FS Development Corp. II
900 Larkspur Landing Circle, Suite 150
Larkspur, California 94939

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF FS DEVELOPMENT CORP. II

To Be Held On December 23, 2021

To the Stockholders of FS Development Corp. II:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of FS Development Corp. II, a Delaware corporation (“FS Development II,” “we,” “our” or “us”), will be held on December 23, 2021, at 9:00 a.m., Eastern Time, via live webcast at the following address: https://www.cstproxy.com/fsdevelopmentcorpii/2021. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. FS Development II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person. You are cordially invited to attend the Special Meeting for the following purposes (the “Proposals”):

1.      to (a) adopt and approve the Merger Agreement, dated as of June 29, 2021 (as amended on November 7, 2021 and as it may be further amended from time to time, the “Merger Agreement”), among FS Development II, Orchard Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of FS Development II (“Merger Sub”), Pardes Biosciences, Inc., a Delaware corporation (“Pardes”), and Shareholder Representative Services LLC, pursuant to which Merger Sub will merge with and into Pardes, with Pardes surviving the merger as a wholly-owned subsidiary of FS Development II (the “Combined Entity”) and (b) approve such merger and the other transactions contemplated by the Merger Agreement (the “Business Combination”). In connection with the Business Combination, FS Development II will be renamed “Pardes Biosciences, Inc.” Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Business Combination (the “Effective Time”):

(i)     all shares of Pardes’s Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and Common Stock (collectively, “Pardes Stock”) issued and outstanding immediately prior to the Effective Time, whether vested or unvested, will be converted into the right to receive the Merger Consideration (as defined below), with each stockholder of Pardes Stock being entitled to receive a number of shares of FS Development II Class A Common Stock equal to (A) the Consideration Ratio multiplied by (B) the number of shares of Pardes Stock held by such holder as of immediately prior to the Effective Time; and

(ii)    each option exercisable for Pardes Stock that is outstanding immediately prior to the Effective Time shall be assumed and continue in full force and effect on the same terms and conditions as are currently applicable to such options, subject to adjustments to exercise price and number of shares of FS Development II Class A Common Stock issued upon exercise.

We refer to this proposal as the “Business Combination Proposal.” A copy of the Merger Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

2.      to approve, assuming the Business Combination Proposal is approved and adopted, for purposes of complying with the applicable provisions of Nasdaq Stock Exchange Listing Rule 5635 (each, a “Nasdaq Listing Rule”), (a) the issuance of 32,500,000 newly issued shares of FS Development II Class A Common Stock, par value $0.0001 per share, in the Business Combination, (b) the issuance and sale of 7,500,000 newly issued shares of FS Development II Class A Common Stock in a private placement concurrent with the Business Combination (the “PIPE Investment”) and (c) the issuance and sale of up to 2,000,000 newly issued shares of FS Development II Class A Common Stock to the Sponsor, or affiliates of the Sponsor, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000, plus any additional shares pursuant to subscription agreements we may enter into prior to Closing, to the extent such issuances would require a stockholder vote under the applicable Nasdaq Listing Rule (the “Nasdaq Stock Issuance Proposal”);

 

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3.      to amend and restate, and further amend, FS Development Corp. II’s certificate of incorporation as follows (such amended and restated and further amended certificate of incorporation referred to herein as the “Proposed Charter”) (the following proposals, the “Charter Amendment Proposals”):

(a)     Charter Amendment Proposal A — to approve, assuming the Business Combination Proposal is approved and adopted, a proposed second amended and restated certificate of incorporation (the “Proposed Charter”), which will amend and restate FS Development Corp. II’s current certificate of incorporation, dated February 16, 2021 (the “Current Charter”), and which proposed second amended and restated certificate of incorporation will be in effect upon the closing of the Business Combination (the “Closing”); and

(b)    Charter Amendment Proposal B — to approve and adopt a proposed amendment to the second amended and restated certificate of incorporation to increase the number of shares of FS Development II Class A Common Stock from 100,000,000 to 250,000,000 and the total number of authorized shares from 110,000,000 (following approval of Charter Amendment Proposal A) to 260,000,000 which proposed amendment to the second amended and restated certificate of incorporation will be in effect upon the Closing;

4.      to approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the Securities and Exchange Commission as five separate sub-proposals (the “Advisory Charter Proposals”):

(a)     Advisory Charter Proposal A — to increase the authorized shares of FS Development II Class A Common Stock to 250,000,000 shares (if Charter Amendment Proposal B passes). If Charter Amendment Proposal B does not pass, the authorized shares of FS Development II Class A Common Stock will remain 100,000,000 shares;

(b)    Advisory Charter Proposal B — to increase the authorized shares of “blank check” preferred stock that the Combined Entity’s board of directors could issue to discourage a takeover attempt to 10,000,000 shares;

(c)     Advisory Charter Proposal C — to provide that certain amendments to provisions of the Proposed Charter will require the approval of at least 66⅔% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

(d)    Advisory Charter Proposal D — to make the Combined Entity’s corporate existence perpetual as opposed to FS Development II’s corporate existence, which is required to be dissolved and liquidated 24 months following the closing of its initial public offering and to remove from the Proposed Charter the various provisions applicable only to specified purpose acquisition corporations contained in the Current Charter; and

(e)     Advisory Charter Proposal E — to provide that any amendment to the Amended Bylaws will require the approval of at least 66⅔% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment, provided that if the board of directors of the Combined Entity recommends approval of such amendment, such amendment will require the approval of a majority of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

5.      to approve, assuming the Business Combination Proposal is approved and adopted, the 2021 Stock Option and Incentive Plan (the “Equity Incentive Plan”), a copy of which is appended to the accompanying proxy statement/prospectus as Annex E, which will become effective the day prior to the Closing (the “Incentive Plan Proposal”); and

6.      to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, or the Incentive Plan Proposal, or we determine that one or more of the closing conditions under the Business Combination is not satisfied or waived (the “Adjournment Proposal”).

 

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Only holders of record of FS Development II Common Stock at the close of business on November 18, 2021 (the “Record Date”) are entitled to notice of the Special Meeting and to vote at the Special Meeting and any adjournments or postponements of the Special Meeting. A complete list of FS Development II stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at the principal executive offices of FS Development II for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

Pursuant to the Current Charter, FS Development II is providing its public stockholders with the opportunity to redeem, upon the Closing, the shares of FS Development II Class A Common Stock issued in FS Development II’s initial public offering (the “FS Development II IPO” and such shares, the “Public Shares”) then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest but less franchise and income taxes payable) of the FS Development II IPO. For illustrative purposes, based on funds in the Trust Account of approximately $201,262,000 on September 30, 2021, the estimated per share redemption price would have been approximately $10.00. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to 20% or more of the shares of FS Development II Class A Common Stock issued in the FS Development II IPO. The Sponsor and FS Development II’s other initial stockholders have agreed to waive their redemption rights with respect to any shares of FS Development II Common Stock they may hold in connection with the Closing, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor and FS Development II’s other initial stockholders have agreed to vote any shares of FS Development II Common Stock owned by them in favor of the Business Combination Proposal, which represent approximately 21.9% of the voting power of FS Development II.

The approval of each of the Charter Amendment Proposals require the affirmative vote of holders of a majority of the issued and outstanding shares of FS Development II Common Stock as of the Record Date for the Special Meeting, voting together as a single class. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of outstanding shares of FS Development II Class A Common Stock as of the Record Date, voting as a separate class. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of FS Development II Common Stock cast by the stockholders represented in person (which would include presence at a virtual meeting) or by proxy and entitled to vote thereon at the Special Meeting, voting together as a single class. If the Business Combination Proposal is not approved, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, the Advisory Charter Proposals, and the Incentive Plan Proposal will not be presented to the FS Development II stockholders for a vote. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal are preconditions to the Closing. Approval of Charter Amendment Proposal B is not a condition to Closing.

As of September 30, 2021, there was approximately $201,262,000 in the Trust Account. Each redemption of Public Shares by its public stockholders will decrease the amount in the Trust Account. FS Development II will not redeem Public Shares in an amount that would cause it to have net tangible assets of less than $5,000,001.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call us at (415) 877-4887.

December 1, 2021

By Order of the Board of Directors

   

/s/ James B. Tananbaum 

   

James B. Tananbaum, M.D.
Chief Executive Officer, President and Director

   

 

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TABLE OF CONTENTS

 

Page

ABOUT THIS PROXY STATEMENT/PROSPECTUS

 

1

FREQUENTLY USED TERMS

 

3

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

 

6

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

20

SUMMARY FINANCIAL AND OTHER DATA OF PARDES

 

35

SUMMARY FINANCIAL AND OTHER DATA OF FS DEVELOPMENT II

 

36

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

37

COMPARATIVE SHARE INFORMATION

 

39

RISK FACTORS

 

41

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

103

SPECIAL MEETING OF FS DEVELOPMENT II STOCKHOLDERS

 

105

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

110

THE BUSINESS COMBINATION PROPOSAL

 

121

THE NASDAQ STOCK ISSUANCE PROPOSAL

 

166

THE CHARTER AMENDMENT PROPOSALS

 

168

THE CHARTER AMENDMENT ADVISORY PROPOSALS

 

172

THE INCENTIVE PLAN PROPOSAL

 

174

THE ADJOURNMENT PROPOSAL

 

181

INFORMATION ABOUT FS DEVELOPMENT II

 

182

EXECUTIVE OFFICERS AND DIRECTORS OF FS DEVELOPMENT II

 

185

SELECTED FINANCIAL AND OTHER DATA OF FS DEVELOPMENT II

 

191

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FS DEVELOPMENT II

 

192

INFORMATION ABOUT PARDES

 

197

EXECUTIVE OFFICERS AND DIRECTORS OF PARDES

 

223

EXECUTIVE COMPENSATION OF PARDES

 

227

DIRECTOR COMPENSATION

 

235

MANAGEMENT AFTER THE BUSINESS COMBINATION

 

237

SELECTED FINANCIAL AND OTHER DATA OF PARDES

 

241

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF PARDES

 

242

DESCRIPTION OF SECURITIES AFTER THE BUSINESS COMBINATION

 

255

SHARES ELIGIBLE FOR FUTURE SALE

 

258

COMPARISON OF STOCKHOLDER RIGHTS

 

260

TICKER SYMBOL, MARKET PRICE AND DIVIDEND POLICY

 

269

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

270

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

273

ADDITIONAL INFORMATION

 

277

WHERE YOU CAN FIND MORE INFORMATION

 

279

INDEX TO FINANCIAL STATEMENTS

 

F-1

     

ANNEX A

 

Merger Agreement

 

A-1

ANNEX B

 

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

 

B-1

ANNEX C

 

Form of Amended and Restated Certificate of Incorporation of Pardes

 

C-1

ANNEX D

 

Form of Amended and Restated Bylaws of Pardes

 

D-1

ANNEX E

 

2021 Stock Option and Incentive Plan

 

E-1

ANNEX F

 

Form of Subscription Agreement

 

F-1

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by FS Development II (File No. 333-258442) (the “Registration Statement”), constitutes a prospectus of FS Development II under Section 5 of the Securities Act, with respect to the shares of FS Development II Class A Common Stock to be issued to Pardes Equityholders if the Business Combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act with respect to the Special Meeting, at which FS Development II stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Merger Agreement, among other matters.

You should rely only on the information contained or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to FS Development II Stockholders nor the issuance by FS Development II of its FS Development II Class A Common Stock in connection with the Business Combination will create any implication to the contrary.

Information contained in this proxy statement/prospectus regarding FS Development II has been provided by FS Development II and information contained in this proxy statement/prospectus regarding Pardes has been provided by Pardes.

This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

FS Development II files reports, proxy statements/prospectuses and other information with the SEC as required by the Exchange Act. You can read FS Development II’s SEC filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.

If you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination or the proposals to be presented at the Special Meeting, you should contact us by telephone or in writing:

FS Development Corp. II
900 Larkspur Landing Circle, Suite 150
Larkspur, California 94939

Attn: Chief Financial Officer
Tel: (415) 877-4887

You may also obtain these documents by requesting them in writing or by telephone from our proxy solicitor at:

Morrow Sodali LLC
470 West Avenue
Stamford CT 06902

Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658
-9400
Email: FSII.info@investor.morrowsodali.com

If you are a stockholder of FS Development II and would like to request documents, please do so by December 16, 2021 to receive them before the Special Meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means.

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MARKET AND INDUSTRY DATA

We are responsible for the disclosure contained in this proxy statement/prospectus. Certain information contained in this document, however, relates to or is based on studies, publications, surveys and other data obtained from third-party sources and FS Development II’s own internal estimates and research. While we believe these third-party sources to be reliable as of the date of this proxy statement/prospectus, we have not independently verified the market and industry data contained in this proxy statement/prospectus or the underlying assumptions relied on therein. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” and “FS Development II” refer to FS Development Corp. II

In this document:

Aggregate Fully Diluted Company Shares” means the sum, without duplication, of (a) the aggregate number of shares of common stock of Pardes (including restricted stock) that are (i) issued and outstanding immediately prior to the Effective Time, (ii) issuable upon the exercise or settlement of options exercisable for Pardes Stock (whether or not then vested or exercisable), in each case, that are outstanding immediately prior to the Effective Time or (iii) issuable upon the exercise or settlement of any option to purchase common stock of Pardes that, as of immediately prior to the Effective Time, Pardes is obligated to grant to any person, plus (b) the aggregate number of shares of Pardes Preferred Stock (on an as converted to common stock basis) that are issued and outstanding immediately prior to the Effective Time, plus (c) without duplication, equity interests that are issued and outstanding immediately prior to the Effective Time, the aggregate number of shares of common stock of Pardes into which such equity interests are convertible, for which such equity interests are exercisable or exchangeable or on which the economic benefit of such equity interests are otherwise based (in each case, directly or indirectly).

Amended Bylaws” means the Amended and Restated Bylaws of Pardes, a Form of which is attached hereto as Annex D.

Board” means the board of directors of FS Development II.

Business Combination” means the business combination pursuant to the Merger Agreement.

Closing” means the closing of the Business Combination.

Closing Payment Shares” means 32,500,000 shares of FS Development II Class A Common Stock.

Code” means the Internal Revenue Code of 1986, as amended.

Combined Entity” means FS Development II after the event in which Pardes becomes a wholly-owned subsidiary of FS Development II.

Common Stock” means the Common Stock of the Combined Entity following the Closing.

Consideration Ratio” means the quotient obtained by dividing (a) the Closing Payment Shares by (b) the Aggregate Fully Diluted Company Shares.

Current By-laws” means FS Development II’s by-laws as currently in effect.

Current Charter” means FS Development II’s current amended and restated certificate of incorporation as filed with the Secretary of State of the State of Delaware on February 16, 2021.

DGCL” means the Delaware General Corporation Law.

Effective Time” means the time at which the Business Combination became effective pursuant to the terms of the Merger Agreement.

Equity Incentive Plan” means the Pardes Biosciences, Inc. 2021 Stock Option and Incentive Plan.

Exchange Act” means the Securities Act of 1934, as amended from time to time.

Founders Shares” means the outstanding shares of our Class B Common Stock held by the Sponsor, our directors and affiliates of our management team since August 26, 2020.

FS Development II” means FS Development Corp. II

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FS Development II Class A Common Stock” or “Class A Common Stock” means the shares of Class A Common Stock, par value $0.0001 per share, of FS Development II.

FS Development II Class B Common Stock” or “Class B Common Stock” means the shares of Class B Common Stock, par value $0.0001 per share, of FS Development II.

FS Development II Common Stock” means, collectively, the FS Development II Class A Common Stock and FS Development II Class B Common Stock.

FS Development II IPO” means FS Development II’s initial public offering.

FS Development II Support Agreement” means the FS Development II Support Agreement, dated as of June 29, 2021, by and among FS Development II, Pardes, the Sponsor and certain supporting stockholders of FS Development II.

Initial Stockholders” means the Sponsor and FS Development II’s executive officers and directors who were holders of Founders Shares prior to the FS Development II IPO.

Merger Agreement” means the Merger Agreement, dated as of June 29, 2021, by and among FS Development II, Merger Sub, Pardes and the Stockholders’ Representative, as amended on November 7, 2021 and as it may be further amended from time to time.

Merger Consideration” means the Closing Payment Shares to be issued as the consideration for the Business Combination.

Merger Sub” means Orchard Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of FS Development II.

Pardes” means Pardes Biosciences, Inc., a Delaware corporation, which shall refer to the Combined Entity following the Business Combination, as the context requires.

Pardes Equityholders” means the holders of equity interests in Pardes as of the time immediately before the Business Combination.

Pardes Preferred Stock” means, collectively, all shares of Pardes’s Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-3 Preferred Stock.

Pardes Stock” means, collectively, all shares of Pardes’s Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock and Common Stock.

PIPE Investment” refers to the sale of 7,500,000 newly issued shares of FS Development II Class A Common Stock in a private placement concurrent with the Business Combination.

Proposal” means any of the proposals being presented to the FS Development II stockholders at the Special Meeting.

Proposed Charter” means the Amended and Restated Certificate of Incorporation of Pardes, a Form of which is attached hereto as Annex C.

Public Shares” means FS Development II Class A Common Stock issued in the FS Development II IPO.

Redemption” means the right of the holders of FS Development II Class A Common Stock to have their shares redeemed in accordance with the procedures set forth in this proxy statement/prospectus.

Registration Rights Agreement” means the Registration Rights Agreement to be entered into in connection with the Closing with Pardes, the Initial Stockholders and certain Pardes Equityholders.

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SEC” means the Securities Exchange Commission or any successor organization.

Securities Act” means the Securities Act of 1933, as amended from time to time.

Special Meeting” means the special meeting of the stockholders of FS Development II, to be held on December 23, 2021, at 9:00 a.m., Eastern Time, via live webcast at the following address: https://www.cstproxy.com/fsdevelopmentcorpii/2021.

Sponsor” means FS Development Holdings II, LLC, a Delaware limited liability company.

Stockholders’ Representative” means Shareholder Representative Services LLC.

Trust Account” means the Trust Account of FS Development II, which holds the net proceeds of the FS Development II IPO, together with interest earned thereon, less amounts released to pay franchise and income tax obligations.

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following questions and answers briefly address some commonly asked questions about the Business Combination and the Special Meeting of FS Development II stockholders. The following questions and answers do not include all the information that is important to stockholders of FS Development II. We urge the stockholders of FS Development II to read carefully this entire proxy statement/prospectus, including the annexes and other documents referred to herein.

Q.     Why am I receiving this proxy statement/prospectus?

A.      FS Development II stockholders are being asked to consider and vote upon a proposal to approve and adopt the Merger Agreement, among other proposals. FS Development II has entered into the Merger Agreement as a result of which Merger Sub, a wholly-owned subsidiary of FS Development II, shall merge with and into Pardes with Pardes surviving such merger, and as a result of which Pardes will become a wholly-owned subsidiary of FS Development II. We refer to this merger as the “Business Combination.” FS Development II urges its stockholders to read the Merger Agreement in its entirety, which is attached to this proxy statement/prospectus as Annex A.

YOUR VOTE IS IMPORTANT. YOU ARE ENCOURAGED TO SUBMIT YOUR PROXY AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS AND ITS ANNEXES AND CAREFULLY CONSIDERING EACH OF THE PROPOSALS BEING PRESENTED AT THE MEETING.

Q:     Why is FS Development II proposing the Business Combination?

A:     FS Development II was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses.

Based on its due diligence investigations of Pardes and the industries in which it operates, including the financial and other information provided by Pardes in the course of FS Development II’s due diligence investigations, the Board believes that the Business Combination with Pardes is in the best interests of FS Development II and its stockholders.

See the section titled “The Business Combination Proposal — Board’s Reasons for Approval of the Business Combination” for a discussion of the factors considered by the Board in making its decision.

Q:     What matters will be considered at the Special Meeting?

A:     The following is a list of proposals upon which FS Development II stockholders will be asked to vote at the Special Meeting:

1.      The Business Combination Proposal — To adopt and approve the Merger Agreement and approve the Business Combination.

2.      The Nasdaq Stock Issuance Proposal — To approve, assuming the Business Combination Proposal is approved and adopted, for purposes of complying with the applicable provisions of Nasdaq Stock Exchange Listing Rule 5635 (each, a “Nasdaq Listing Rule”), (a) the issuance of 32,500,000 newly issued shares of Class A Common Stock in the Business Combination, (b) the issuance and sale of 7,500,000 newly issued shares of Class A Common Stock in the PIPE Investment and (c) the issuance and sale of up to 2,000,000 newly issued shares of FS Development II Class A Common Stock to the Sponsor, or affiliates of the Sponsor, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000, plus any additional shares pursuant to subscription agreements we may enter into prior to Closing, to the extent such issuances would require a stockholder vote under the applicable Nasdaq Listing Rule.

3.      The Charter Amendment Proposals — To amend and restate, and further amend, FS Development Corp. II’s certificate of incorporation as follows (such amended and restated and further amended certificate of incorporation referred to herein as the “Proposed Charter”) (the following proposals, the “Charter Amendment Proposals”):

(a)     Charter Amendment Proposal A — to approve, assuming the Business Combination Proposal is approved and adopted, a proposed second amended and restated certificate of incorporation (which

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will amend and restate FS Development Corp. II’s current certificate of incorporation, dated February 16, 2021 (the “Current Charter”), and which proposed second amended and restated certificate of incorporation will be in effect upon the Closing; and

(b)    Charter Amendment Proposal B — to approve and adopt a proposed amendment to the second amended and restated certificate of incorporation to increase the number of shares of FS Development II Class A Common stock from 100,000,000 to 250,000,000 and the total number of authorized shares from 110,000,000 (following approval of Charter Amendment Proposal A) to 260,000,000, which proposed amendment to the second amended and restated certificate of incorporation will be in effect upon the Closing.

4.      The Advisory Charter Proposals — To approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the SEC as five separate sub-proposals:

(a)     Advisory Charter Proposal A — to increase the authorized shares of Class A Common Stock to 250,000,000 shares (if Charter Amendment Proposal B passes). If Charter Amendment Proposal B does not pass, the authorized shares of FS Development II Class A Common Stock will remain 100,000,000 shares;

(b)    Advisory Charter Proposal B — to increase the authorized shares of “blank check” preferred stock that the Combined Entity’s board of directors could issue to discourage a takeover attempt to 10,000,000 shares;

(c)     Advisory Charter Proposal C — to provide that certain amendments to provisions of the Proposed Charter will require the approval of at least 6623% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

(d)    Advisory Charter Proposal D — to make the Combined Entity’s corporate existence perpetual as opposed to FS Development II’s corporate existence, which is required to be dissolved and liquidated 24 months following the closing of its initial public offering and to remove from the Proposed Charter the various provisions applicable only to specified purpose acquisition corporations contained in the Current Charter; and

(e)     Advisory Charter Proposal E — to provide that any amendment to the Amended Bylaws will require the approval of at least 6623% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment, provided that if the board of directors of the Combined Entity recommends approval of such amendment, such amendment will require the approval of a majority of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment.

5.      Incentive Plan Proposal — to approve, assuming the Business Combination Proposal is approved and adopted, the Pardes Biosciences, Inc. 2021 Stock Option and Incentive Plan (the “Equity Incentive Plan”), a copy of which is appended to this proxy statement/prospectus as Annex E, which will become effective as of the date immediately preceding the date of the Closing.

6.      Adjournment Proposal — to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, or the Incentive Plan Proposal, or we determine that one or more of the closing conditions under the Business Combination is not satisfied or waived.

Q:     When and where will the Special Meeting take place?

A:     The FS Development II Special Meeting will be held on December 23, 2021, at 9:00 a.m. Eastern Time, via live webcast at the following address: https://www.cstproxy.com/fsdevelopmentcorpii/2021, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

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Q:     Is my vote important?

A:     Yes. The Business Combination cannot be completed unless the Merger Agreement is adopted by the FS Development II stockholders holding a majority of the votes cast on such proposal and the other condition precedent proposals achieve the necessary vote outlined below. Only FS Development II stockholders as of the close of business on November 18, 2021, the record date for the Special Meeting (the “Record Date”) are entitled to vote at the Special Meeting. The Board unanimously recommends that such FS Development II stockholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Nasdaq Stock Issuance Proposal, “FOR” the approval of each of the Charter Amendment Proposals, “FOR” the approval, on an advisory basis, of each of the Advisory Charter Proposals, “FOR” the approval of the Incentive Plan Proposal and “FOR” the approval of the Adjournment Proposal, if presented.

Q:     If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A:     No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. FS Development II believes the proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your bank, broker or other nominee to vote your shares in accordance with directions you provide.

Q:     What vote is required to approve the Proposals presented at the Special Meeting?

A:     The approval of each of the Charter Amendment Proposals requires the affirmative vote of holders of a majority of the issued and outstanding shares of FS Development II Common Stock voting together as a single class as of the Record Date. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of FS Development II Class A Common Stock as of the Record Date, voting as a separate class. Accordingly, a FS Development II stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or an abstention will have the same effect as a vote “AGAINST” each of the Charter Amendment Proposals.

The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of FS Development II Common Stock cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Special Meeting, voting together as a single class. A FS Development II stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting will not be counted towards the number of shares of FS Development II Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals the Incentive Plan Proposal, or the Adjournment Proposal.

Q:     Are the Proposals conditioned on one another?

A:     Unless the Business Combination Proposal is approved, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, the Advisory Charter Proposals, and the Incentive Plan Proposal will not be presented to the stockholders of FS Development II at the Special Meeting. The approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal are preconditions to the Closing. Approval of Charter Amendment Proposal B is not a condition to Closing. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, then we will not consummate the Business Combination. If FS Development II does not consummate the Business Combination and fails to complete an initial business combination by February 19, 2023, FS Development II will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its public stockholders.

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Q:     What conditions must be satisfied to complete the Business Combination?

A:     There are a number of closing conditions in the Merger Agreement, including the approval by the stockholders of FS Development II of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal. The Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, and the Incentive Plan Proposal are subject to and conditioned on the approval of the Business Combination Proposal. The Business Combination Proposal is subject to and conditioned on the approval of the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal. For a summary of the conditions that must be satisfied or waived prior to the Closing of the Business Combination, see the section titled “The Business Combination Proposal — The Merger Agreement.”

Q:     What will happen in the Business Combination?

A:     At the closing of the Business Combination, Merger Sub will merge with and into Pardes, with Pardes surviving such merger as the surviving entity. Upon the Closing, Pardes will become a wholly-owned subsidiary of FS Development II. In connection with the Business Combination, the cash held in the Trust Account after giving effect to any redemption of shares by FS Development II’s public stockholders and the proceeds from the PIPE Investment will be used to pay (i) FS Development II stockholders who properly exercise their redemption rights, (ii) the underwriters their deferred underwriting commissions from the FS Development II IPO, (iii) certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by FS Development II or Pardes in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement, (iv) unpaid franchise and income taxes of FS Development II, and (v) for general corporate purposes including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions.

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

A:     The table below illustrates the anticipated ownership interest upon completion of the Business Combination assuming (i) a no redemptions scenario, (ii) an interim redemption scenario and (iii) a maximum redemption scenario:

 

No redemption scenario

 

Interim redemption scenario

 

Maximum redemption scenario

   

Shares

 

%

 

Shares

 

%

 

Shares

 

%

FS Development Corp. II public stockholders

 

20,125,000

 

30.6

%

 

10,062,500

 

18.1

%

 

 

0.0

%

FS Development Corp. II Sponsor and Directors

 

5,633,750

 

8.6

%

 

5,633,750

 

10.1

%

 

7,633,750

 

16.0

%

Pardes Stockholders – Affiliates of FS Development Corp. II Sponsor

 

7,998,659

 

12.1

%

 

7,998,659

 

14.3

%

 

7,998,659

 

16.8

%

Pardes Stockholders (excluding affiliates of FS Development Corp II Sponsor)

 

24,501,341

 

37.3

%

 

24,501,341

 

44.0

%

 

24,501,341

 

51.4

%

PIPE – Affiliates of FS Development Corp. II Sponsor

 

1,000,000

 

1.5

%

 

1,000,000

 

1.8

%

 

1,000,000

 

2.1

%

PIPE – Other Investors

 

6,500,000

 

9.9

%

 

6,500,000

 

11.7

%

 

6,500,000

 

13.7

%

Total

 

65,758,750

 

100

%

 

55,696,250

 

100.0

%

 

47,633,750

 

100

%

         The foregoing ownership percentages with respect to the Combined Entity following the Business Combination assumes the conversion ratio of 1.4377 of Pardes’s shares to Class A Common Stock in the Merger and the exercise and conversion of all securities, including 1,747,433 unissued shares underlying outstanding and contractually committed stock options as of November 3, 2021, and does not take into account the issuance of any shares upon the Closing under the Equity Incentive Plan, which is intended to be adopted immediately prior to the Closing. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by FS Development II’s existing stockholders in the Combined Entity will be different.

See the section titled “Summary Unaudited Pro Forma Condensed Combined Financial Information” for further information.

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Q.     Did the Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A.     The Board believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. However, in light of the Sponsor affiliates’ existing interest in Pardes, the Board also obtained a third-party fairness opinion in connection with its determination to approve the Business Combination. The Board determined, based upon its own financial skills and background together with the valuation from a third-party financial advisor, that Pardes’s fair market value was at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account). Accordingly, investors will be relying on the judgment of the Board as described above in valuing Pardes’s business and assuming the risk that the Board may not have properly valued such business. See the section titled “The Business Combination Proposal — Opinion of H.C. Wainwright & Co., LLC” for further information regarding the third-party fairness opinion.

Q:     Why is FS Development II providing stockholders with the opportunity to vote on the Business Combination?

A:     Under the Current Charter, FS Development II must provide all holders of its Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of FS Development II’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, FS Development II has elected to provide its stockholders with the opportunity to have their Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, FS Development II is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow its public stockholders to effectuate redemptions of their Public Shares in connection with the Closing.

Q:     Are there any arrangements to help ensure that the Combined Company will have sufficient funds, together with the proceeds in its Trust Account, to fund the Business Combination?

A:     Yes. On June 29, 2021, FS Development II entered into Subscription Agreements with the investors named therein providing for the issuance by FS Development II of 7,500,000 shares of FS Development II Class A Common Stock through the PIPE Investment (subject to certain conditions, including that all conditions precedent to the Closing will have been satisfied or waived (other than those conditions that are to be satisfied at the Closing) for gross proceeds to FS Development II of $75,000,000.

Additionally, on June 29, 2021, Sponsor entered into the FS Development II Support Agreement, pursuant to which Sponsor agreed that in the event that both (i) the Aggregate Parent Closing Cash is less than $100,000,000 and (ii) the Net Trust Fund Balance is less than $25,000,000, Sponsor will purchase from FS Development II, and FS Development II hereby agrees to sell to Sponsor, a number of FS Development II Class A Common Stock equal to: (x) $25,000,000 minus the Net Trust Fund Balance; divided by (y) $10.00. The term “Net Trust Fund Balance” means the aggregate cash proceeds available for release to FS Development II from the Trust Fund in connection with the Transactions (net of the Parent Redemption Amount).

To the extent not utilized to consummate the Business Combination, the proceeds from the Trust Account will be used for general corporate purposes, including, but not limited to, working capital for operations, capital expenditures and future acquisitions. FS Development II will agree that it (or its successor) will file with the SEC a registration statement registering the resale of the shares purchased in the PIPE Investment and maintain an effective registration statement under the Securities Act covering such securities and certain other securities of the Combined Entity.

Q:     How many votes do I have at the Special Meeting?

A:     FS Development II stockholders are entitled to one vote at the Special Meeting for each share of FS Development II Common Stock held as of the Record Date. As of the close of business on the Record Date, there were 25,758,750 outstanding shares of FS Development II Common Stock.

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Q:     May FS Development II, the Sponsor or FS Development II’s directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination?

A:     In connection with the stockholder vote to approve the proposed Business Combination, the Sponsor, directors, officers or advisors or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of FS Development II’s Sponsor, directors, officers or advisors or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of FS Development II shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that the Sponsor, directors, officers or advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per-share pro rata portion of the Trust Account.

Q:     What constitutes a quorum at the Special Meeting?

A:     Holders of a majority in voting power of FS Development II Common Stock issued and outstanding and entitled to vote at the Special Meeting constitute a quorum. In the absence of a quorum, the chairman of the meeting has power to adjourn the Special Meeting. As of the Record Date, 12,879,376 shares of FS Development II Common Stock would be required to achieve a quorum. For Charter Amendment Proposal B, a quorum will be present at the Special Meeting if the holders of a majority of the FS Development II Class A Common Stock outstanding and entitled to vote at the Special Meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the Special Meeting. As of the Record Date, 10,363,751 shares of FS Development II Class A Common Stock would be required to achieve a quorum with respect to the vote on Charter Amendment Proposal B.

Q:     How will the Sponsor, directors and officers vote?

A:     The Sponsor and each of the other Initial Stockholders have agreed to vote their respective Founders Shares (as well as any Public Shares purchased during or after the FS Development II IPO) in favor of the Business Combination. As of the date of this proxy statement/prospectus, the Sponsor and the other Initial Stockholders own approximately 21.9% of the issued and outstanding shares of FS Development II Common Stock, including all of the Founders Shares, and will be able to vote all such shares at the Special Meeting. The Sponsor holds 602,500 shares of Class A Common Stock, representing approximately 2.9% of the issued and outstanding Class A Common Stock, and the other Initial Stockholders do not own any shares of FS Development II Class A Common Stock. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor and the other Initial Stockholders agreed to vote their Founders Shares in accordance with the majority of the votes cast by FS Development II’s public stockholders.

Q:     What interests do FS Development II’s current officers and directors have in the Business Combination?

A:     The Sponsor, members of the Board and its executive officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interest. These interests include, among other things:

•        Unless FS Development II consummates an initial business combination by February 19, 2023, FS Development II will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay FS Development II’s taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as

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reasonably possible following such redemption, subject to the approval of FS Development II’s remaining stockholders and the Board, liquidate and dissolve, subject in each case to FS Development II’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;

•        There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if FS Development II fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares prior to the FS Development II IPO for an aggregate purchase price of $25,000, and transferred 30,000 Founders Shares to each of Owen Hughes, Daniel Dubin, M.D. and Deepa Pakianathan. Ph.D.

•        Simultaneously with the closing of the FS Development II IPO, FS Development II consummated the sale of 602,500 shares of FS Development II Class A Common Stock (the “Private Placement Shares”) at a price of $10.00 per share in a private placement to the Sponsor. If FS Development II does not consummate a business combination transaction by February 19, 2023, then the proceeds from the sale of the Private Placement Shares will be part of the liquidating distribution to the public stockholders and the shares held by the Sponsor will be worthless.

•        As of the date hereof, Sponsor and its affiliates have invested an aggregate of approximately $6.05 million in FS Development II and, assuming consummation of the Business Combination and assuming no redemptions, have committed to invest $10 million in the PIPE Investment (collectively, the “Total Commitment”). Assuming the issuance of all securities underlying the Total Commitment, and utilizing a per share price of $12.49 (the closing sale price of FS Development II Class A common stock on November 11, 2021), the Total Commitment would have an approximate value of $80.9 million. If a business combination is not consummated by February 19, 2023, Sponsor and its affiliates will lose approximately $6.05 million of their amounts already invested. There are no outstanding loans or material fee or reimbursement arrangements among FS Development II, Sponsor, its affiliates or the FS Development II directors or officers.

•        Additionally, in connection with the FS Development II Support Agreement, Sponsor agreed that in the event that both (i) the Aggregate Parent Closing Cash is less than $100,000,000 and (ii) the Net Trust Fund Balance is less than $25,000,000, Sponsor will purchase from FS Development II, and FS Development II hereby agrees to sell to Sponsor, a number of FS Development II Class A Common Stock equal to: (x) $25,000,000 minus the Net Trust Fund Balance; divided by (y) $10.00. The term “Net Trust Fund Balance” means the aggregate cash proceeds available for release to FS Development II from the Trust Fund in connection with the Transactions (net of the Parent Redemption Amount).

•        Certain of FS Development II’s officers and directors may continue to serve as officers and/or directors of the Combined Entity after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers.

•        The Sponsor, officers and directors collectively (including entities controlled by officers and directors) have made an aggregate average investment per share of $1.074 (including the Founders Shares and Private Placement Shares) as of the consummation of the FS Development II IPO. As a result of the significantly lower investment per share of our Sponsor, officers and directors as compared with the investment per share of our public stockholders, a transaction which results in an increase in the value of the investment of our Sponsor, officers and directors may result in a decrease in the value of the investment of our public stockholders.

•        FS Development II’s Initial Stockholders and officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares and Private Placement Shares if FS Development II fails to complete a business combination by February 19, 2023.

•        In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to FS Development II if and to the extent any claims by a vendor for services rendered or products sold to FS Development II, or a prospective target business with which FS Development II has entered into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under FS Development II’s indemnity of the underwriters of the offering against certain liabilities, including liabilities under the Securities Act.

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•        Following the Closing, the Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to FS Development II and remain outstanding. As of the date of this proxy statement/prospectus, the Sponsor has not made any advances to us for working capital expenses. If FS Development II does not complete an initial business combination within the required period, FS Development II may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans.

•        Following the Closing, FS Development II will continue to indemnify FS Development II’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

•        Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, FS Development II’s officers and directors and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans, if any, and on such terms as to be determined by FS Development II from time to time, made by the Sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination.

•        The Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to stockholders than liquidate.

•        Given the differential in purchase price that our Sponsor paid for the Founders Shares as compared to the price of the units sold in the FS Development II IPO and the substantial number of shares of Class A Common Stock that our Sponsor will receive upon conversion of the Founders Shares in connection with the Business Combination, our Sponsor and its affiliates may realize a positive rate of return on such investments even if other FS Development II stockholders experience a negative rate of return following the Business Combination.

•        Upon the signing of the Merger Agreement, our Sponsor and the other founders entered into the FS Development II Support Agreement with Pardes, pursuant to which our Sponsor and the other Initial Stockholders agreed to waive (subject to the consummation of the Merger) 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.

•        Up to 2,000,000 newly issued shares of FS Development II Class A Common Stock may be issued and sold to the Sponsor, or affiliates of the Sponsor, at $10.00 per share, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000, pursuant to the terms of the FS Development II Support Agreement.

•        James B. Tananbaum, M.D., an executive officer and director of FS Development II, is also a director of Pardes and affiliates of the Sponsor have invested in the Series A Preferred Stock of Pardes and the PIPE Financing.

•        Entities affiliated with the Sponsor and FS Development II’s officers and directors own 5,596,642 shares of Series A Preferred Stock of Pardes, acquired for a purchase price of approximately $25.5 million. Such shares of Series A Preferred Stock of Pardes, which will be exchanged in the Merger for shares of FS Development II Class A Common Stock, would be valued (on an as converted basis) at approximately $80.5 million, based on the assumed conversion ratio of 1.4377 of Pardes’s shares to Class A Common Stock in the Merger as of November 3, 2021 and based on a $10.00 per share price of the FS Development II Class A Common Stock in the PIPE Investment, and approximately $100.5 million, based on the assumed conversion ratio and based on the closing sale price of the FS Development II common stock on November 11, 2021, of $12.49 per share. If the Business Combination is not consummated, such affiliates could be at risk of losing the value of their investment in Pardes.

•        Entities affiliated with the Sponsor and FS Development II’s officers and directors have entered into a convertible note purchase agreement providing for loans to Pardes of up to $25.0 million, which loans will be evidenced by unsecured convertible promissory term notes (the “Convertible Notes”) at one or more closings. As of the initial closing, Pardes has issued Convertible Notes for an aggregate principal amount of $10.0 million, consisting of $10.0 million from such affiliated entities. The Convertible Notes

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accrue interest at the annual rate of 4% per annum, mature on October 31, 2022 and will be due and payable at the earlier of the closing under the Merger Agreement, the closing of a “corporate transaction” and at any time on or after the maturity date at Pardes’s election or upon demand of a purchaser. If the Merger Agreement is terminated, the Convertible Notes will be convertible at a fifteen percent (15%) discounted price into Pardes’s equity securities sold in the next round of equity financing by Pardes that meets certain requirements.

These interests may influence FS Development II’s directors in making their recommendation that you vote in favor of the approval of the Business Combination.

Q:     What happens if I sell my shares of FS Development II Common Stock before the Special Meeting?

A:     The Record Date is earlier than the date of the Special Meeting. If you transfer your shares of FS Development II Common Stock after the Record Date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to deliver them for cancellation upon Closing. If you transfer your shares of FS Development II Common Stock prior to the Record Date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

Q:     What happens if I vote against the Business Combination Proposal?

A:     Pursuant to the Current Charter, if the Business Combination Proposal is not approved and FS Development II does not otherwise consummate an alternative business combination by February 19, 2023, FS Development II will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the public stockholders.

Q:     Do I have redemption rights?

A:     Pursuant to the Current Charter, holders of Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with the Current Charter. As of September 30, 2021, based on funds in the Trust Account of approximately $201,262,000, this would have amounted to approximately $10.00 per share. If a holder exercises its redemption rights, then such holder will be exchanging its Public Shares for cash. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to FS Development II’s transfer agent prior to the Special Meeting. See the section titled “Special Meeting of FS Development II Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Q:     Will how I vote affect my ability to exercise redemption rights?

A:     No. You may exercise your redemption rights whether you vote your Public Shares “FOR” or “AGAINST” the Business Combination Proposal or any other proposal described by this proxy statement/prospectus. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the Nasdaq Capital Market or such other applicable stock exchange on which the shares may be listed.

Q:     How do I exercise my redemption rights?

A:     In order to exercise your redemption rights, you must prior to 5:00 PM, Eastern Time, on December 21, 2021 (two (2) business days before the scheduled date of the Special Meeting), tender your shares physically or electronically and submit a request in writing that FS Development II redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30
th Floor
New York, New York 10004
Attn: Mark Zimkind
E
-mail: mzimkind@continentalstock.com

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Any stockholders requesting redemption of their shares will be required to provide beneficial ownership information. In the written request to redeem your Public Share for cash to Continental Stock Transfer & Trust Company, please provide a “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of FS Development II Class A Common Stock. Notwithstanding the foregoing, a holder of the Public Shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to an aggregate of 20% or more of the shares of FS Development II Class A Common Stock issued in the FS Development II IPO, which is referred to as the “20% threshold” in this proxy statement/prospectus. Accordingly, all Public Shares in excess of the 20% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is FS Development II’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, FS Development II does not have any control over this process, and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with FS Development II’s consent, until the closing of the Business Combination. If you delivered your shares for redemption to FS Development II’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that FS Development II’s transfer agent return the shares (physically or electronically). You may make such request by contacting FS Development II’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

Q:     What are the U.S. federal income tax consequences of exercising my redemption rights?

A:     The U.S. federal income tax consequences of FS Development II stockholders who exercise their redemption rights to receive cash in exchange for their Public Shares depend on the stockholder’s particular facts and circumstances. Such stockholder generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the Public Shares redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. The redemption, however, may be treated as a distribution to a redeeming stockholder for U.S. federal income tax purposes if the redemption does not effect a sufficient reduction (as determined under applicable federal income tax law) in the redeeming stockholder’s percentage ownership in us (whether such ownership is direct or through the application of certain attribution and constructive ownership rules). Any amounts treated as such a distribution will constitute a dividend to the extent not in excess of our current and accumulated earnings and profits as measured for U.S. federal income tax purposes. Any amounts treated as a distribution and that are in excess of our current and accumulated earnings and profits will reduce the redeeming stockholder’s basis in his or her redeemed Public Shares, and any remaining amount will be treated as gain realized on the sale or other disposition of Public Shares. These tax consequences are described in more detail in the section titled “The Business Combination Proposal — The Merger Agreement — Certain Material U.S. Federal Income Tax Considerations of the Redemption.” We urge you to consult your tax advisor regarding the tax consequences of exercising your redemption rights.

Q:     Do I have dissenter rights if I object to the proposed Business Combination?

A:     No. FS Development II stockholders are not entitled to exercise dissenters’ rights under Delaware law in connection with the Business Combination. Dissenters’ rights are unavailable under Delaware law in connection with the Business Combination to holders of FS Development II Class A Common Stock because it is currently listed on a national securities exchange and such holders are not required to receive any consideration (other than continuing to hold their shares of FS Development II Class A Common Stock, which will become an equal number of shares of Common Stock of the Combined Entity after giving effect to the Business Combination). Holders of FS Development II Class A Common Stock may vote against the Business Combination Proposal or redeem their Public Shares if they are not in favor of the adoption of the Merger Agreement or the Business

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Combination. Dissenters’ rights are unavailable under Delaware law in connection with the Business Combination to holders of FS Development II Class B Common Stock because they have agreed to vote in favor of the Business Combination.

Q:     What happens to the funds held in the Trust Account upon Closing?

A:     If the Business Combination is consummated, the funds held in the Trust Account will be released to pay:

•        FS Development II stockholders who properly exercise their redemption rights;

•        the underwriters their deferred underwriting commissions;

•        certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by FS Development II or Pardes in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement;

•        unpaid franchise and income taxes of FS Development II; and

•        for general corporate purposes including, but not limited to, working capital for operations, capital expenditures and future potential acquisitions.

Q:     What happens if the Business Combination is not consummated?

A:     There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “The Business Combination Proposal — The Merger Agreement — Termination” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, FS Development II is unable to complete the Business Combination or another initial business combination transaction by February 19, 2023, the Current Charter provides that it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to FS Development II to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FS Development II’s remaining stockholders and the Board, dissolve and liquidate, subject in each case to FS Development II’s obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law.

FS Development II expects that the amount of any distribution its public stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to FS Development II’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of Founders Shares have waived any right to any liquidating distribution with respect to those shares.

Q:     When is the Business Combination expected to be completed?

A:     The Closing is expected to take place (a) the second business day following the satisfaction or waiver of the conditions described below under the section titled “The Business Combination Proposal — The Merger Agreement — Conditions to Closing”; or (b) such other date as agreed to by FS Development II and Pardes in writing, in each case, subject to the satisfaction or waiver of the closing conditions. The Merger Agreement may be terminated by either FS Development II or Pardes if the Closing has not occurred by January 28, 2022, subject to certain exceptions.

For a description of the conditions to the completion of the Business Combination, see the section titled “The Business Combination Proposal — The Merger Agreement — Conditions to Closing.”

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Q:     What do I need to do now?

A:     You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q:     How do I vote?

A.     If you were a holder of record of FS Development II Common Stock on November 18, 2021, the Record Date, you may vote with respect to the applicable proposals online at the Special Meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you choose to participate in the Special Meeting, you can vote your shares electronically during the Special Meeting via live webcast by visiting https://www.cstproxy.com/fsdevelopmentcorpii/2021. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. FS Development II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts.

If on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Special Meeting online. However, since you are not the stockholder of record, you may not vote your shares online at the Special Meeting unless you first request and obtain a valid legal proxy from your broker or other agent. You must then e-mail a copy (a legible photograph is sufficient) of your legal proxy to Continental Stock Transfer & Trust Company (“CST”) at proxy@continentalstock.com. Beneficial owners who e-mail a valid legal proxy will be issued a 12-digit meeting control number that will allow them to register to attend and participate in the Special Meeting. Beneficial owners who wish to attend the special meeting online should contact CST no later than December 20, 2021 to obtain this information.

Q:     What will happen if I abstain from voting or fail to vote at the Special Meeting?

A:     At the Special Meeting, FS Development II will count a properly executed proxy card marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. The failure to vote, abstentions and broker non-votes will have the same effect as a vote “AGAINST” each of the Charter Amendment Proposals. The failure to vote, abstentions and broker non-votes will not be counted as votes cast and will have no effect on any of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal.

Q:     What will happen if I sign and return my proxy card without indicating how I wish to vote?

A:     Signed and dated proxies received by FS Development II without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

Q.     How can I attend the Special Meeting?

A:      You may attend the Special Meeting and vote your shares online during the Special Meeting via live webcast by visiting https://www.cstproxy.com/fsdevelopmentcorpii/2021. As a registered stockholder, you received a proxy card from CST, which contains instructions on how to attend the Special Meeting online, including the URL address, along with your 12-digit meeting control number. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. If you do not have your 12-digit meeting control number, contact CST at 917-262-2373 or e-mail CST at proxy@continentalstock.com. Please note that you will not be able to physically attend the special meeting in person, but may attend the Special Meeting online by following the instructions below.

You can pre-register to attend the Special Meeting online starting December 18, 2021. Enter the URL address into your browser, and enter your 12-digit meeting control number, name and email address. Once you pre-register you can vote or enter questions in the chat box. Prior to or at the start of the Special Meeting you will need to

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re-log in using your 12-digit meeting control number and will also be prompted to enter your 12-digit meeting control number if you vote online during the Special Meeting. FS Development II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts.

If your shares are held in “street name,” you may attend the Special Meeting. You will need to contact CST at the number or email address above, to receive a 12-digit meeting control number and gain access to the Special Meeting or otherwise contact your broker, bank, or other nominee as soon as possible, to do so. Please allow up to 72 hours prior to the Special Meeting for processing your 12-digit meeting control number.

If you do not have Internet capabilities, you can listen only to the Special Meeting by dialing 1 877-770-3647 (U.S. and Canada) or +1 312-780-0854 (outside of the U.S. and Canada), when prompted enter the pin # 0562828#. This is listen only, you will not be able to vote or enter questions during the Special Meeting.

Q:     If I am not going to attend the Special Meeting, should I return my proxy card instead?

A:     Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

In order to exercise your redemption rights, you must properly demand redemption and deliver your shares (either physically or electronically) to our transfer agent at least two business days prior to the Special Meeting. See “— How do I exercise my redemption rights” above.

Q:     May I change my vote after I have mailed my signed proxy card?

A:     Yes. If you are a stockholder of record of FS Development II Common Stock as of the close of business on the Record Date, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

•        submit a new proxy card bearing a later date;

•        give written notice of your revocation to FS Development II’s Corporate Secretary, which notice must be received by FS Development II’s Corporate Secretary prior to the vote at the Special Meeting; or

•        vote electronically at the Special Meeting by visiting https://www.cstproxy.com/fsdevelopmentcorpii/2021 and entering the control number found on your proxy card, voting instruction form or notice you previously received. Please note that your attendance at the Special Meeting will not alone serve to revoke your proxy.

If your shares are held in “street name” by your broker, bank or another nominee as of the close of business on the Record Date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.

Q:     What should I do if I receive more than one set of voting materials?

A:     You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q:     Who will solicit and pay the cost of soliciting proxies?

A:     FS Development II will pay the cost of soliciting proxies for the Special Meeting. FS Development II has engaged Morrow Sodali LLC, which we refer to as “Morrow Sodali LLC,” to assist in the solicitation of proxies for the Special Meeting. FS Development II has agreed to pay Morrow Sodali LLC a fee of $30,000, plus disbursements. FS Development II will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. FS Development II will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of FS Development II Common Stock for their expenses in forwarding

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soliciting materials to beneficial owners of the FS Development II Common Stock and in obtaining voting instructions from those owners. FS Development II’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q:     Are there any risks that I should consider as a FS Development II stockholder in deciding how to vote or whether to exercise my redemption rights?

A:     Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors” in this proxy statement/prospectus.

Q:     Who can help answer my questions?

A:     If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, please call us at (415) 877-4887.

You may also contact our proxy solicitor at:

Morrow Sodali LLC
470 West Avenue
Stamford CT 06902
Individuals call toll-free (800) 662-5200
Banks and brokers call (203) 658-9400
Email: FSII.info@investor.morrowsodali.com

To obtain timely delivery, FS Development II stockholders must request the materials no later than five (5) business days prior to the Special Meeting.

You may also obtain additional information about FS Development II from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to FS Development II’s transfer agent prior to the Special Meeting in accordance with the procedures detailed under the question “— How do I exercise my redemption rights” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary, together with the section titled “Questions and Answers About the Proposals”, summarizes certain information contained in this proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the Special Meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

Unless otherwise indicated or the context otherwise requires, references in this Summary of the Proxy Statement/Prospectus to the “Combined Entity” refer to FS Development II and its consolidated subsidiaries after giving effect to the Business Combination. References to the “Company,” “FS Development II”, “we”, “us” or “our” generally refer to FS Development Corp. II

Unless otherwise specified, all share calculations assume no exercise of redemption rights by the Company’s public stockholders.

Parties to the Business Combination

FS Development Corp. II

FS Development II is a blank check company incorporated on August 21, 2020 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving FS Development II and one or more businesses. Upon the Closing, we intend to change our name from “FS Development Corp. II” to “Pardes Biosciences, Inc.”

The mailing address of our principal executive office is 900 Lakspur Landing Circle, Suite 150, Larkspur, CA 94939.

Merger Sub

Merger Sub is a Delaware corporation and wholly-owned subsidiary of FS Development II, which was formed on June 17, 2021 to consummate the Business Combination. Following the Business Combination, Pardes will merge with Merger Sub with Pardes surviving the merger. As a result, Pardes will become a wholly-owned subsidiary of FS  Development II.

The mailing address of Merger Sub’s principal executive office is c/o FS Development Corp. II, 900 Lakspur Landing Circle, Suite 150, Larkspur, CA 94939.

Pardes

Pardes is a Delaware corporation, which was formed on February 27, 2020. Pardes is an agile clinical-stage biopharmaceutical company committed to solving some of the world’s most pressing public health challenges. Pardes leverages structure-based drug design and a tunable, reversible covalent chemistry platform for novel drug discovery. In August 2021, Pardes initiated in New Zealand its Phase 1, first in human clinical trial for its lead product candidate, PBI-0451, which is being developed as a potential direct-acting, oral antiviral drug to treat and prevent SARS-CoV-2 infections. PBI-0451 is designed to inhibit the coronavirus main protease, an essential protein for SARS-CoV-2. This protease is highly similar across all coronaviruses, including emerging coronavirus variants. Following the Business Combination, Pardes will merge with Merger Sub with Pardes surviving the merger. As a result, Pardes will become a wholly-owned subsidiary of FS Development II.

The mailing address of Pardes’s principal executive office is 2173 Salk Ave, Suite 250, PMB#052, Carlsbad, CA 92008.

For additional information about Pardes, see the section titled “Information about Pardes.”

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The Proposals

The Business Combination Proposal

FS Development II and Pardes have agreed to a Business Combination under the terms of the Merger Agreement. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the Closing, Merger Sub will merge with and into Pardes, with Pardes continuing as the surviving entity and becoming a wholly-owned subsidiary of FS Development II. See the section titled “The Business Combination Proposal.”

The Merger Agreement

On June 29, 2021, FS Development II entered into the Merger Agreement by and among FS Development II, Merger Sub, Pardes and the Stockholders’ Representative. The Merger Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Pardes, with Pardes surviving as a wholly-owned subsidiary of FS Development II (the “Merger”). Upon the Closing, it is anticipated that FS Development II will change its name to “Pardes Biosciences, Inc.”

Under the Merger Agreement, FS Development II has agreed to acquire all of the outstanding equity interests of Pardes in exchange for 32,500,000 shares of FS Development II Class A Common Stock, to be paid at the Effective Time.

Pursuant to the Merger Agreement, at or prior to the Effective Time, each option exercisable for Pardes equity that is outstanding immediately prior to the Effective Time shall be assumed by FS Development II and continue in full force and effect on the same terms and conditions as are currently applicable to such options, subject to adjustments to exercise price and number of shares of Common Stock issued upon exercise.

For additional information and a summary of the terms of the Merger Agreement and the other agreements executed, or to be executed, in connection with the Business Combination, see the sections titled “The Business Combination Proposal — The Merger Agreement” and “The Business Combination Proposal — Ancillary Agreements Related to the Business Combination.”

Classified Board of Directors

The Combined Entity’s board of directors will consist of seven (7) members upon the Closing. In accordance with the Proposed Charter to be filed, immediately after the Closing, the board of directors will be divided into three classes. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. The directors will be divided among the three classes as follows:

•        the Class I directors will be J. Jay Lobell and Deborah M. Autor, and their terms will expire at the annual meeting of stockholders to be held in 2022;

•        the Class II directors will be Michael D. Varney, Ph.D. and Laura J. Hamill, and their terms will expire at the annual meeting of stockholders to be held in 2023; and

•        the Class III directors will be Uri A. Lopatin, M.D., Mark Auerbach and James B. Tananbaum, M.D., and their terms will expire at the annual meeting of stockholders to be held in 2024.

The Combined Entity expects that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

Board’s Reasons for Approval of the Business Combination

FS Development II was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. FS Development II sought to do this by utilizing the networks and industry experience of both its management team and the Board to identify, acquire and operate one or more businesses within or outside of the United States.

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This explanation of the Board’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”

As described in greater detail under the section titled “The Business Combination ProposalBackground of the Business Combination,” the Transaction Committee and the Board, in evaluating the Business Combination, consulted with its management and legal and financial advisors, and, in reaching its decision to recommend approval of the Business Combination, considered a variety of factors. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Transaction Committee and the Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. Each of the Transaction Committee and the Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

On March 1, 2021, the Board formed the Transaction Committee comprised solely of members of the Board that were determined to be independent and disinterested with respect to the potential Business Combination transaction with Pardes. The Transaction Committee was empowered to, among other things, evaluate the terms of such potential transaction, obtain a fairness opinion from an independent financial advisor, report to the Board its recommendations and conclusions with respect to such potential transaction, and, if the committee determined that it was advisable and in the best interests of FS Development II, approve and recommend that the Board approve such transaction.

Recommendation of the Transaction Committee

The Transaction Committee, with the advice and assistance of our financial and legal advisors, and in consultation with FS Development II’s senior management team, evaluated the terms of the Merger Agreement, the Business Combination and the other transactions contemplated by the Merger Agreement. The Transaction Committee was actively engaged in the process on a continuous and regular basis.

After careful consideration, on June 27, 2021, the Transaction Committee unanimously (i) determined that the terms and conditions of the Merger Agreement and the Business Combination were advisable, fair to and in the best interests of FS Development II and its stockholders and (ii) resolved to recommend that the Board approve the Merger Agreement, the Business Combination and the other agreements and transactions contemplated thereby.

Recommendation of the Board

The Board, in evaluating the Business Combination, consulted with FS Development II’s management and its legal counsel, financial advisors and other advisors, taking into account the recommendation of the Transaction Committee. After careful consideration, on June 27, 2021, the Board (except for Dr. Tananbaum, who recused himself from this meeting) (i) determined that the terms and conditions of the Merger Agreement and the Business Combination were advisable, fair to and in the best interests of FS Development II and its stockholders and (ii) resolved to recommend that the stockholders adopt the Merger Agreement and approve the Business Combination and other Proposals.

Reasons for Approval of the Business Combination

Each of the Transaction Committee and the Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the transactions contemplated thereby, including the following material factors (which are not weighted or in any order of significance):

•        Vaccines are likely not sufficient to address the pandemic caused by SARS-CoV-2, which remains an area of unmet medical need.    Treatment and prevention of infection with SARS-CoV-2 remains an area of unmet medical need. Multiple vaccines have emerged as potential tools to protect individuals from SARS-CoV-2 infection. These vaccines target the “spike” protein on the surface of the virus particle, have largely demonstrated the ability to protect against severe disease; and will be an important component of any global response to this or future SARS-CoV-2 pandemics. Global distribution, however, has emerged as a challenge with a majority of the world’s countries receiving insufficient doses to provide protection to their populations. The requirement for extreme cold storage for some of these vaccines also presents a barrier to worldwide distribution. Reluctance to vaccination has also emerged as a significant impediment to controlling the pandemic, with vulnerable persons providing a reservoir for sustained transmission

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and subsequent waves of infection. Simultaneously, multiple viral variants involving changes in the SARS-CoV-2 spike protein have been identified, with worrisome potential for reduced susceptibility to both antibody therapies and vaccines, along with an increase in transmission. It is anticipated that these variants will continue to emerge because the spike protein is not “conserved” across coronavirus species and is susceptible to evolutionary change under selective pressure from the immune system — as we have seen in this pandemic.

•        Lead product candidate PBI-0451 is an oral, pan-coronaviral protease inhibitor that inhibits viral replication by targeting the coronavirus main protease (Mpro), an area of the virus that is highly conserved among the SARS-CoV-2 virus and important emerging variants of concern.    PBI-0451 is being designed as an orally administered direct acting antiviral, or DAA, whose mechanism of action is inhibition of the coronaviral Mpro, a viral protein with no direct human equivalent that is both highly conserved and essential for replication of all known coronaviruses. Given the highly conserved nature of the Mpro target, which is shared among all known coronaviruses, including emerging variants of concern, we believe emerging variants of SARS-CoV-2 will likely retain this target for PBI-0451.

•        To date no oral direct acting anti-viral protease inhibitor for the treatment or prevention of SARS-CoV-2 has been approved by any regulatory agency.    There are currently several protease inhibitors being explored as therapeutic options for SARS-CoV-2, including PBI-0451, which is in phase 1 human studies, and two other programs in Phase 2/3 clinical studies. To our knowledge, however, as of November 1, 2021, no coronaviral protease inhibitor that can be orally administered has been approved by any regulatory agency.

•        SARS-CoV-2 represents a potentially significant commercial opportunity.    Pardes plans to develop PBI-0451 for both oral treatment and prophylaxis of pandemic COVID-19. Such treatments are required both for SARS-CoV-2 as well as to develop the means to prevent future pandemics. As a result, we believe governments are likely to stockpile an effective oral treatment for SARS-CoV-2 and potential future coronavirus outbreaks. Given the unprecedented nature of COVID-19, the rapidly evolving response to its treatment, the ongoing evolution of coronavirus variants with reduced susceptibility to vaccines, and the unknown extent of subsequent waves of infection, the market opportunity for a COVID-19 therapeutic is difficult to predict but represents a potentially significant commercial opportunity.

•        Broad in vitro preclinical activity against SARS-CoV-2 and other coronaviruses observed.    In vitro, PBI-0451 has demonstrated inhibition of function against every coronavirus protease against which it has been tested to date, including both human pandemic, common cold, and non-human-infecting coronaviruses. Similarly, PBI-0451 has demonstrated the ability to prevent SARS-CoV-2 replication in multiple cell models. The potency against SARS-CoV2 in cell-based models, in combination with the lack of toxicity observed in the treated cells, suggests that if PBI-0451 can achieve therapeutic levels in human infected tissues, it may have similar potential to inhibit SARS-CoV-2 replication in vivo, in humans.

•        Oral bioavailability in all species tested to date and a favorable preclinical pharmacokinetic (PK) profile.    On the basis of the pre-clinical pharmacokinetic and toxokinetic studies, we believe that orally administered PBI-0451 has the potential to achieve and maintain concentrations above the concentration required to inhibit SARS-CoV-2 based on in vitro (biochemical and cellular) studies. In animal studies, PBI-0451 has been observed to distribute into lung tissue.

•        Generally well-tolerated in animal studies.    Single and multiple doses of PBI-0451 have been administered to animals at doses ranging from 0.5 to 1000 mg/kg/day. PBI-0451 did not have clinically relevant effects on the cardiovascular, CNS, or respiratory systems in safety pharmacology assessments. In a 14-day repeat dose GLP toxicity study in mice, the only PBI-0451 related finding was increased liver weights at the high dose, which was reversible, had no microscopic correlate, and was considered non-adverse. In a 14-day repeat dose GLP toxicology study in dogs, there were no test article-related findings. Based on results in an Ames assay and an in vitro micronucleus study, PBI-0451 was not observed to be genotoxic.

•        PBI-0451 demonstrated anti-viral activity against all coronaviruses tested.    In preclinical studies, PBI-0451 demonstrated ability to inhibit both protease function in biochemical assays and inhibit viral replication in cell-based assays designed to evaluate activity against SARS-CoV-2 as well as “common

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cold” strains of coronavirus. We believe the broad antiviral activity seen supports its potential to inhibit replication of a broad range of coronaviruses, including SARS-CoV-2, and its variants. This belief will be tested in clinical trials.

•        Intellectual property/patents.    As of November 16, 2021, Pardes has two issued patents, nineteen (19) provisional patent applications, three (3) non-provisional U.S. patent applications, and two (2) PCT filings and related foreign patent applications filed. Pardes owns four (4) patent application families that include patent claims directed to PBI-0451, pharmaceutical compositions, combination therapy, solid forms, formulation, process/manufacturing and methods for the treatment of coronaviruses, including SARS-CoV-2, using PBI-0451. As of November 16, 2021, the patent application families directed to PBI-0451 include one issued U.S. patent, one PCT application, three provisional patent applications and related foreign patent applications in Argentina, Bangladesh, China, India, Lebanon, Pakistan, Taiwan and United Kingdom. The expected year of expiration for the issued U.S. patent and for other patents issued from the PCT application, if valid and enforceable, is 2041, without regard to any extensions, adjustments, or restorations of term that may be available under U.S. or other national laws.

•        Potential for key industry partnerships.    The Pardes board of directors and management team includes individuals with relationships across the industry that the Board believes allows Pardes to strategically create synergistic collaborations and partnerships with other companies and healthcare systems in the industry.

•        Backed by top-tier healthcare and institutional investors.    Pardes’s existing investors include affiliates of Foresite Capital Management, LLC (“FCM”), Khosla Ventures and GMF Capital, which the Board believes provides additional validation to Pardes’s clinical and business strategies.

•        Financial condition.    The Board also considered factors such as Pardes’s business model, general outlook, and cash runway, as well as valuations and trading of comparable companies. Pardes’s management expects that proceeds from the Trust Account and from the PIPE Investment will provide Pardes with approximately $258 million at Closing, less any redemptions.

•        Financial analysis conducted by FS Development II.    The financial analysis conducted by FS Development II’s management team and reviewed by the Board supported the equity valuation of Pardes.

•        Fairness Opinion.    The financial analysis reviewed by H.C. Wainwright & Co., LLC (“Wainwright”) as well as the oral opinion of Wainwright rendered to the Transaction Committee on June 27, 2021 (which was subsequently confirmed by delivery of Wainwright’s written opinion addressed to the Transaction Committee dated June 29, 2021) to the effect that the consideration to be paid by FS Development II pursuant to the Merger Agreement was fair, from a financial point of view, to FS Development II. See the section titled “The Business Combination Proposal — Opinion of H.C. Wainwright & Co., LLC.”

•        PIPE equity commitment.     A group of institutional and accredited investors, including certain existing Pardes stockholders, and affiliates of our Sponsor have committed $75,000,000 in PIPE subscriptions, $60,000,000 of which are from investors not associated with our Sponsor. This was viewed as support from institutional investors for the opportunities represented by the transaction, and provides for additional capital for the execution by Pardes of its business plan after the transaction is completed. In addition, participation by Gilead Sciences, Inc. in the PIPE provides further support for Pardes’s approach, technology and preclinical data to date. See the section titled “The Business Combination Proposal — Ancillary Agreements Related to the Business Combination — Subscription Agreements.”

•        Sellers’ retained interest.     Pardes’s stockholders’ retention of a large stake in the Business Combination shows ongoing commitment and support for the Combined Entity.

•        Lock-Up.    The FCM Funds and certain other significant equity holders of Pardes have agreed to be subject to a 180-day lockup in respect of their shares of the Combined Entity’s common stock received in the Business Combination as a result of the Merger Agreement (subject to certain customary exceptions), which will provide important stability to the leadership and governance of the Combined Entity.

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•        Negotiated transaction.    The financial and other terms of the Merger Agreement and the transactions contemplated thereby, including the Business Combination, and the fact that such terms and conditions are reasonable.

•        Pardes has a strong Advisory Board.    Pardes’s scientific and commercial advisors consist of leading individuals with a history of accomplishment in the fields of drug discovery, infectious disease, and commercialization fields, which the Board believes provides additional validation to Pardes clinical and business strategies.

•        Experienced management team.    The Board believes that Pardes has a proven and experienced team that will effectively lead the company after the Business Combination. The Board believes that the senior management of Pardes, led by Uri A. Lopatin, M.D., Pardes’s Chief Executive Officer, intend to remain with the Combined Entity in the capacity of officers and/or directors, which is expected to provide important continuity in advancing Pardes’s strategic and growth goals.

•        Familiarity of Management with Pardes.    Certain members of management of FS Development II associated with FCM have familiarity with Pardes because FCM has been an active investor in the life sciences industry for over 10 years. James B. Tananbaum, M.D., who has served as a director of Pardes since January 2021 (upon being designated by the holders of Pardes’s Series A preferred stock pursuant to the terms of the Series A Financing), currently serves as the Chief Executive Officer of FS Development II. Because of this familiarity, FCM’s due diligence of Pardes in connection with its previous investment in Pardes and Dr. Tananbaum’s position at Pardes, FS Development II was familiar with the information about Pardes’s business and growth opportunities.

Each of the Transaction Committee and the Board also identified and considered a variety of uncertainties, risks and other potentially negative factors weighing against pursuing the Business Combination, including the following material factors (which are not weighted or in any order of significance):

•        Business risks.    The risk that Pardes is an early-stage company with a history of losses and expects significant losses for the foreseeable future. Further, Pardes’s recurring losses from operations and financial condition raise substantial doubt about its ability to continue as a going concern.

•        Competition.    There are numerous approaches that pharmaceutical and biotechnology companies are taking to address the SARS-CoV-2 virus that has caused COVID-19 disease. Commercial opportunity for any of our product candidates could be reduced or eliminated if Pardes’s competitors develop and commercialize products that are more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours and may commercialize products more quickly than we are able to.

•        Market opportunity for a COVID-19 therapeutic is difficult to predict.    Given the unprecedented nature of COVID-19, the rapidly evolving response to its treatment, the ongoing evolution of coronavirus variants with reduced susceptibility to vaccines, and the unknown extent of subsequent waves of infection, the market opportunity for a COVID-19 therapeutic is difficult to predict.

•        Benefits may not be achieved.    The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe.

•        Risks associated with early-stage compound.    PBI-0451, Pardes’s lead candidate, is in early stage clinical development. Accordingly, there is significant uncertainty around the development of PBI-0451 as a potential treatment for coronavirus generally, and COVID-19 specifically.

•        Clinical development risks.    PBI-0451 and any other product candidates must undergo rigorous clinical trials and regulatory approvals, and success in nonclinical studies or earlier-stage clinical trials may not be indicative of results in future clinical trials. Clinical development is uncertain and Pardes’s planned clinical trials for PBI-0451, and any other product candidates require the preparation and submission to, and approval of, an investigational new drug application, or IND, to the FDA in the United States or similar

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applications in relevant jurisdictions to comparable foreign regulatory bodies and may experience delays, which would adversely affect its ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on its business.

•        Manufacturing risks.    Pardes is subject to many manufacturing risks, any of which could substantially increase its costs, delay clinical programs and limit supply of its products

•        Commercializing products.    Pardes does not have a sales force in place and would need to bring on a team to commercialize their product(s) should they receive regulatory approval.

•        Impact of COVID-19.    Uncertainties regarding the potential impacts of and disruptions related to the COVID-19 virus, including with respect to productivity, Pardes’s business and delays of clinical programs and timelines.

•        Exclusivity.    The fact that the Merger Agreement includes an exclusivity provision that prohibits FS Development II from soliciting or engaging in discussions regarding other business combination proposals, which restricts FS Development II’s ability, so long as the Merger Agreement is in effect, to consider other potential business combinations.

•        Stockholder vote.    The risk that FS Development II’s stockholders may fail to provide the votes necessary to effect the Business Combination.

•        Redemption risk.    The potential that a significant number of FS Development II stockholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Current Charter, which would potentially make the Business Combination more difficult or impossible to complete, and/or reduce the amount of cash available to the Combined Entity following the Closing, which could hinder the Combined Entity’s ability to pursue its clinical development plans.

•        Closing conditions.    The fact that completion of the Business Combination is conditioned on the satisfaction of certain Closing conditions that are not within FS Development II’s control, including approval by FS Development II stockholders, approval by Nasdaq of the initial listing application in connection with the Business Combination, and a minimum cash condition.

•        Listing Risks.    The challenges associated with preparing Pardes, a privately held entity, for the applicable disclosure, controls and listing requirements to which the Combined Entity will be subject as a publicly traded company on the Nasdaq.

•        Litigation.    The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

•        Fees and expenses.    The fees and expenses associated with completing the Business Combination, some of which would be payable regardless of whether the Business Combination is ultimately consummated.

•        Other risks.    Various other risks associated with the Business Combination, the business of FS Development II and the business of Pardes described under the section titled “Risk Factors.”

In addition to considering the factors described above, 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 see the section titled “The Business Combination — Interests of FS Development II’s Directors and Officers and Others in the Business Combination”). As a result of such considerations, the Board established the Transaction Committee to assess and evaluate the ongoing negotiations being conducted by management. Also, Dr. Tananbaum did not participate in any meetings of Pardes’s board of directors at which the Business Combination was discussed (except as explicitly noted in the section titled “The Business Combination Proposal — Background of the Business Combination”). Further, the Board approved and recommended the Business Combination (i) during a meeting from which Dr. Tananbaum was recused and (ii) only after the Board received the Fairness Opinion and the approval of the Transaction Committee. FS Development II’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the

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Transaction Committee and of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination, and in recommending to our stockholders that they vote in favor of the Proposals presented at the Special Meeting, including the Business Combination Proposal.

The Transaction Committee and the Board concluded that the potential benefits that it expected FS Development II and its stockholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the Board, upon the unanimous recommendation of the Transaction Committee, unanimously (except for Dr. Tananbaum, who recused himself from the meeting) determined that the Business Combination and the transactions contemplated by the Merger Agreement, were advisable and in the best interests of FS Development II and its stockholders. For more information about our decision-making process, please see the section titled “The Business Combination ProposalBackground of the Business Combination.

Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States of America, or GAAP. Under this method of accounting, FS Development II has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on existing Pardes Equityholders comprising a relative majority of the voting power of the Combined Entity, Pardes’s operations prior to the Merger comprising the only ongoing operations of the Combined Entity, and Pardes’s senior management comprising the senior management of the Combined Entity. Accordingly, for accounting purposes, the financial statements of the Combined Entity will represent a continuation of the financial statements of Pardes with the Business Combination being treated as the equivalent of Pardes issuing stock for the net assets of FS Development II accompanied by a recapitalization. The net assets of FS Development II will be stated at historical cost, with no goodwill or other intangible assets recorded.

Dissenter Rights

Dissenter rights are not available to FS Development II stockholders in connection with the Business Combination.

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

It is anticipated that, upon the Closing, FS Development II’s public stockholders (other than the PIPE Investment investors) will retain an ownership interest of approximately 30.6% in the Combined Entity, the PIPE Investment investors (excluding certain affiliates of the Sponsor) will own approximately 9.9% of the Combined Entity (such that public stockholders, including PIPE Investment investors not affiliated with the Sponsor, will own approximately 40.5% of the Combined Entity), the Sponsor, the other Initial Stockholders and the PIPE Investment investors that are affiliates of the Sponsor will retain an ownership interest of approximately 10.1% in the Combined Entity, Pardes Equityholders that are affiliates of Sponsor will retain an ownership interest of 12.1% and the Pardes Equityholders (excluding affiliates of the Sponsor) will own approximately 37.3% of the outstanding common stock of the Combined Entity. The ownership percentage with respect to the Combined Entity following the Business Combination does not take into account the redemption of any shares by FS Development II’s public stockholders. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the FS Development II’s existing stockholders in the Combined Entity will be different. FS Development II’s public stockholders will experience dilution, as illustrated below, from the a) other FS Development II public stockholders’ redemptions via the shares retained by the Sponsor and Directors, b) issuance of shares to Pardes Stockholders and c) the PIPE Investment. No warrants are outstanding nor is it anticipated that, upon the Closing, warrants will be issued. FS Development II’s public stockholders may experience further dilution from the Equity Incentive Plan described beginning on page 174.

The table below illustrates varying fully-diluted ownership levels in FS Development II assuming the factors mentioned above, and further assumes:

•        for the maximum redemption scenario only, that the maximum amount of 20,125,000 Public Shares have been redeemed and that the Sponsor, or affiliates of the Sponsor, have purchased an additional 2,000,000 shares of Class A Common Stock pursuant to the terms of the FS Development II Support Agreement;

•        for the interim redemption scenario only, 10,062,500 Public Shares have been redeemed; and

•        the 32,500,000 shares issued to Pardes Stockholders include 1,747,433 unissued shares underlying outstanding and contractually committed stock options as of November 3, 2021.

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Upon Closing, the FS Development II underwriting fees and certain other estimated transaction costs are not dependent on the amount of redemptions by FS Development II shareholders. The table below also illustrates the effective underwriting fee on a percentage basis for shares at each redemption level by shareholder category.

 

No redemption scenario

 

Interim redemption scenario

 

Maximum redemption scenario

   

Shares

 

%

 

Underwriting Fee per Shareholder Category

 

Shares

 

%

 

Underwriting Fee per Shareholder Category

 

Shares

 

%

 

Underwriting Fee per Shareholder Category

FS Development Corp. II public stockholders

 

20,125,000

 

30.6

%

 

$

3,349,323

 

10,062,500

 

18.1

%

 

$

1,981,136

 

 

0.0

%

 

$

FS Development Corp. II Sponsor and Directors

 

5,633,750

 

8.6

%

 

 

941,313

 

5,633,750

 

10.1

%

 

 

1,105,496

 

7,633,750

 

16.0

%

 

 

1,751,280

Pardes Stockholders (including affiliates of FS Development Corp. II Sponsor)

 

32,500,000

 

49.4

%

 

 

5,407,076

 

32,500,000

 

58.4

%

 

 

6,392,171

 

32,500,000

 

68.2

%

 

 

7,464,830

PIPE – Affiliates of FS Development
Corp. II Sponsor

 

1,000,000

 

1.5

%

 

 

164,183

 

1,000,000

 

1.8

%

 

 

197,019

 

1,000,000

 

2.1

%

 

 

229,856

PIPE – Other Investors

 

6,500,000

 

9.9

%

 

 

1,083,605

 

6,500,000

 

11.6

%

 

 

1,269,678

 

6,500,000

 

13.7

%

 

 

1,499,534

Total

 

65,758,750

 

100

%

 

$

10,945,500

 

56,696,250

 

100.0

%

 

$

10,945,500

 

47,633,750

 

100

%

 

$

10,945,500

Upon Closing, the Board anticipates having seven (7) directors, with each Class I director having an initial term that expires at the Combined Entity’s annual meeting of stockholders in 2022, each Class II director having an initial term that expires at the Combined Entity’s annual meeting of stockholders in 2023, and each Class III director having an initial term that expires at the Combined Entity’s annual meeting of stockholders in 2024, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. See the section titled “Management After the Business Combination” for additional information.

The Nasdaq Stock Issuance Proposal

As the consideration for the Business Combination, FS Development II is obligated to issue 32,500,000 shares of FS Development II Class A Common Stock to the Pardes Equityholders. In addition, in connection with the Business Combination, FS Development II entered into the Subscription Agreements with investors to purchase 7,500,000 shares of Class A Common Stock for an aggregate amount of $75,000,000, subject to certain conditions, including that all conditions precedent to the Closing will have been satisfied or waived (other than those conditions that are to be satisfied at Closing) and entered into the FS Development II Support Agreement, pursuant to which FS Development will sell up to 2,000,000 newly issued shares of FS Development II Class A Common Stock to the Sponsor, or affiliates of the Sponsor, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000.

FS Development II stockholders will be asked to approve, for purposes of complying with the Nasdaq Listing Rules, the issuance of 32,500,000 newly issued shares of FS Development II Class A Common Stock pursuant to the Business Combination,7,500,000 newly issued shares of FS Development II Class A Common Stock in the PIPE Investment and up to 2,000,000 newly issued shares of FS Development II Class A Common Stock to the Sponsor, or affiliates of the Sponsor, in the event that the Trust Account has a cash balance of less than $25,000,000 immediately prior to the Closing. See the section titled “The Nasdaq Stock Issuance Proposal.”

The Charter Amendment Proposals

FS Development II stockholders will be asked to approve and adopt, subject to and conditional on (but with immediate effect therefrom) approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Incentive Plan Proposal and with effect at the Closing, an amendment and restatement of FS Development II’s Certificate of Incorporation and, if Charter Amendment Proposal B is approved, a further amendment to such amended and restated charter, as set out in the Proposed Charter appended to this proxy statement/prospectus as Annex C. See the section titled “The Charter Amendment Proposals.”

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Table of Contents

The Charter Amendment Advisory Proposals

FS Development II stockholders will be asked to approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the SEC as five separate sub-proposals (the “Advisory Charter Proposals”):

(a)     Advisory Charter Proposal A — to increase the authorized shares of FS Development II Class A Common Stock to 250,000,000 shares (if Charter Amendment Proposal B passes). If Charter Amendment Proposal B does not pass, the authorized shares of FS Development II Class A Common Stock will remain 100,000,000 shares;

(b)    Advisory Charter Proposal B — to increase the authorized shares of “blank check” preferred stock that the Combined Entity’s board of directors could issue to discourage a takeover attempt to 10,000,000 shares;

(c)     Advisory Charter Proposal C — to provide that certain amendments to provisions of the Proposed Charter will require the approval of at least 66⅔% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment;

(d)    Advisory Charter Proposal D — to make the Combined Entity’s corporate existence perpetual as opposed to FS Development II’s corporate existence, which is required to be dissolved and liquidated 24 months following the closing of its initial public offering and to remove from the Proposed Charter the various provisions applicable only to specified purpose acquisition corporations contained in the Current Charter; and

(e)     Advisory Charter Proposal E — to provide that any amendment to the Amended Bylaws will require the approval of at least 6623% of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment, provided that if the board of directors of the Combined Entity recommends approval of such amendment, such amendment will require the approval of a majority of the Combined Entity’s then-outstanding shares of capital stock entitled to vote on such amendment.

The Incentive Plan Proposal

FS Development II is proposing that its stockholders approve and adopt the Equity Incentive Plan of the Combined Entity, which will become effective as of the date immediately preceding the date of the Closing and will have the following principal features:

•        Types of Awards:    The Equity Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, unrestricted stock awards, and dividend equivalent rights, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of the Combined Entity and its affiliates. Additionally, the Equity Incentive Plan provides for the grant of performance-based cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants.

•        Shares Available for Awards:    Initially, the aggregate number of shares of Common Stock that may be issued pursuant to stock awards under the Equity Incentive Plan after the Equity Incentive Plan becomes effective will not exceed 13,000,000 shares. Additionally, the number of shares of Common Stock reserved for issuance under the Equity Incentive Plan will automatically increase on January 1 of each year, beginning on January 1, 2022 by five percent (5%) of the total number of shares of Common Stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the administrator of the Equity Incentive Plan.

•        Non-Employee Director Compensation:    The value of all awards awarded under the Equity Incentive Plan and all other cash compensation paid by the Combined Entity to any non-employee director in any calendar year for services as a non-employee director will not exceed $750,000, or $1,000,000 for the year in which a non-employee director is first appointed or elected to the Combined Entity’s board of directors.

A summary of the Equity Incentive Plan is set forth in the “The Incentive Plan Proposal” section of this proxy statement/prospectus and a complete copy of the Equity Incentive Plan is attached hereto as Annex E.

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Table of Contents

Date, Time and Place of Special Meeting

The Special Meeting will be held on December 23, 2021, at 9:00 a.m., Eastern Time, conducted via live webcast at the following address https://www.cstproxy.com/fsdevelopmentcorpii/2021. You will need the 12-digit meeting control number that is printed on your proxy card to enter the Special Meeting. FS Development II recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the Special Meeting starts. Please note that you will not be able to attend the Special Meeting in person.

Only holders of record of issued and outstanding FS Development II Common Stock as of the close of business on November 18, 2021, the Record Date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement of the Special Meeting. You may cast one vote for each share of FS Development II Common Stock that you owned as of the close of business on the Record Date.

Proxy Solicitation

Proxies may be solicited by mail. We have engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares online if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section titled “Special Meeting of FS Development II Stockholders — Revoking Your Proxy.”

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of FS Development II stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if the holders of a majority of the FS Development II Common Stock outstanding and entitled to vote at the Special Meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the Special Meeting. Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum.

The approval of the Charter Amendment Proposal A requires the affirmative vote of holders of a majority of the issued and outstanding FS Development II Common Stock voting together as a single class as of the Record Date. In addition, Charter Amendment Proposal B requires the affirmative vote of holders of a majority of the outstanding shares of FS Development II Class A Common Stock as of the Record Date, voting as a separate class. For Charter Amendment Proposal B, a quorum will be present at the Special Meeting if the holders of a majority of the FS Development II Class A Common Stock outstanding and entitled to vote at the Special Meeting is represented in person (which would include presence at a virtual meeting) or by proxy at the Special Meeting. Accordingly, a FS Development II stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or an abstention will have the same effect as a vote “AGAINST” each of the Charter Amendment Proposals.

Approval of the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal each require the affirmative vote of the holders of a majority of the shares of FS Development II Common Stock cast by the stockholders represented in person (which would include presence at a virtual meeting) or by proxy and entitled to vote thereon at the Special Meeting, voting together a single class. A FS Development II stockholder’s failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting will not be counted towards the number of shares of FS Development II Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, and the Adjournment Proposal.

Approval of the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal and the Business Combination Proposal is conditioned on the approval of the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal. Unless the Business Combination Proposal is approved, the Nasdaq Stock Issuance Proposal, the Charter Amendment Proposals, and the Incentive Plan Proposal will not be presented to the stockholders of FS Development II at the Special Meeting. The Adjournment Proposal is not conditioned on any other Proposal and does not require the approval of any other Proposal to be effective. It is important for you to note that in the event the Business Combination Proposal, the Nasdaq Stock Issuance Proposal, Charter Amendment Proposal A, and the Incentive Plan Proposal do not receive the requisite vote for approval, then FS Development II will not consummate the

____________

1        9,825,000 (13% of Pro Forma) + Assumed Awards.

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Table of Contents

Business Combination. If FS Development II does not consummate the Business Combination and fails to complete an initial business combination by February 19, 2023, it will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its public stockholders.

Recommendation to FS Development II Stockholders

The Board believes that the Proposals to be presented at the Special Meeting are in the best interests of FS Development II and its stockholders and unanimously recommends that FS Development II stockholders vote “FOR” the Proposals.

When you consider the recommendation of the Board in favor of approval of these Proposals, you should keep in mind that FS Development II directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests as a stockholder. These interests include, among other things:

•        Unless FS Development II consummates an initial business combination by February 19, 2023, FS Development II will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay FS Development II’s taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FS Development II’s remaining stockholders and the Board, liquidate and dissolve, subject in each case to FS Development II’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

•        There will be no liquidating distributions from the Trust Account with respect to the Founders Shares if FS Development II fails to complete a business combination within the required period. Our Sponsor purchased the Founders Shares prior to the FS Development II IPO for an aggregate purchase price of $25,000, and transferred 30,000 Founders Shares to each of Mr. Hughes, Dr. Dubin and Dr. Pakianathan.

•        Simultaneously with the closing of the FS Development II IPO, FS Development II consummated the sale of 602,500 Private Placement Shares at a price of $10.00 per share in a private placement to the Sponsor. If FS Development II does not consummate a business combination transaction by February 19, 2023, then the proceeds from the sale of the Private Placement Shares will be part of the liquidating distribution to the public stockholders and the shares held by the Sponsor will be worthless.

•        As of the date hereof, Sponsor and its affiliates have invested an aggregate of approximately $6.05 million in FS Development II and, assuming consummation of the Business Combination and assuming no redemptions, have committed to invest $10 million in the PIPE Investment. Assuming the issuance of all securities underlying the Total Commitment, and utilizing a per share price of $12.49 (the closing sale price of FS Development II Class A common stock on November 11, 2021), the Total Commitment would have an approximate value of $80.9 million. If a business combination is not consummated by February 19, 2023, Sponsor and its affiliates will lose approximately $6.05 million of their amounts already invested. There are no outstanding loans or material fee or reimbursement arrangements among FS Development II, Sponsor, its affiliates or the FS Development II directors or officers.

•        Additionally, in connection with the FS Development II Support Agreement, Sponsor agreed that in the event that both (i) the Aggregate Parent Closing Cash is less than $100,000,000 and (ii) the Net Trust Fund Balance is less than $25,000,000, Sponsor will purchase from FS Development II, and FS Development II hereby agrees to sell to Sponsor, a number of FS Development II Class A Common Stock equal to: (x) $25,000,000 minus the Net Trust Fund Balance; divided by (y) $10.00. The term “Net Trust Fund Balance” means the aggregate cash proceeds available for release to FS Development II from the Trust Fund in connection with the Transactions (net of the Parent Redemption Amount).

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Table of Contents

•        Certain of FS Development II’s Officers and Directors may continue to serve as officers and/or directors of the Combined Entity after the Closing. As such, in the future they may receive any cash fees, stock options or stock awards that the Board determines to pay to its directors and/or officers.

•        The Sponsor, officers and directors collectively (including entities controlled by officers and directors) have made an aggregate average investment per share of $1.074 (including the Founders Shares and Private Placement Shares) as of the consummation of the FS Development II IPO. As a result of the significantly lower investment per share of our Sponsor, officers and directors as compared with the investment per share of our public stockholders, a transaction which results in an increase in the value of the investment of our Sponsor, officers and directors may result in a decrease in the value of the investment of our public stockholders.

•        FS Development II’s Initial Stockholders and officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founders Shares and Private Placement Shares if FS Development II fails to complete a business combination by February 19, 2023.

•        In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to FS Development II if and to the extent any claims by a vendor for services rendered or products sold to FS Development II, or a prospective target business with which FS Development II has entered into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under FS Development II’s indemnity of the underwriters of the offering against certain liabilities, including liabilities under the Securities Act.

•        Following the Closing, the Sponsor would be entitled to the repayment of any working capital loan and advances that have been made to FS Development II and remain outstanding. As of the date of this proxy statement/prospectus, the Sponsor has not made any advances to us for working capital expenses. If FS Development II does not complete an initial business combination within the required period, FS Development II may use a portion of its working capital held outside the Trust Account to repay the working capital loans, but no proceeds held in the Trust Account would be used to repay the working capital loans.

•        Following the consummation of the Business Combination, FS Development II will continue to indemnify FS Development II’s existing directors and officers and will maintain a directors’ and officers’ liability insurance policy.

•        Upon the Closing, subject to the terms and conditions of the Merger Agreement, the Sponsor, FS Development II’s officers and directors and their respective affiliates may be entitled to reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and consummating an initial business combination, and repayment of any other loans, if any, and on such terms as to be determined by FS Development II from time to time, made by the Sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination.

•        The Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to stockholders than liquidate.

•        Given the differential in purchase price that our Sponsor paid for the Founders Shares as compared to the price of the units sold in the FS Development II IPO and the substantial number of shares of Class A Common Stock that our Sponsor will receive upon conversion of the Founders Shares in connection with the Business Combination, our Sponsor and its affiliates may realize a positive rate of return on such investments even if other FS Development II stockholders experience a negative rate of return following the Business Combination.

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Table of Contents

•        Upon the signing of the Merger Agreement, our Sponsor and the other founders entered into the FS Development II Support Agreement with Pardes, pursuant to which our Sponsor and the other Initial Stockholders agreed to waive (subject to the consummation of the Merger) 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.

•        Up to 2,000,000 newly issued shares of FS Development II Class A Common Stock may be issued and sold to the Sponsor, or affiliates of the Sponsor, at $10.00 per share, concurrent with the Business Combination, in the event that the Trust Account (after giving effect to redemptions by stockholders of FS Development II) has a cash balance of less than $25,000,000, pursuant to the terms of the FS Development II Support Agreement.

•        James B. Tananbaum, M.D., an executive officer and director of FS Development II, is also a director of Pardes and affiliates of the Sponsor have invested in the Series A Preferred Stock of Pardes and the PIPE Financing.

•        Entities affiliated with the Sponsor and FS Development II’s officers and directors own 5,596,642 shares of Series A Preferred Stock of Pardes, acquired for a purchase price of approximately $25.5 million. Such shares of Series A Preferred Stock of Pardes, which will be exchanged in the Merger for shares of FS Development II Class A Common Stock, would be valued (on an as converted basis) at approximately $80.5 million, based on the assumed conversion ratio of 1.4377 of Pardes’s shares to Class A Common Stock in the Merger as of November 3, 2021 and based on a $10.00 per share price of the FS Development II Class A Common Stock in the PIPE Investment, and approximately $100.5 million, based on the assumed conversion ratio and based on the closing sale price of the FS Development II common stock on November 11, 2021, of $12.49 per share. If the Business Combination is not consummated, such affiliates could be at risk of losing the value of their investment in Pardes.

•        Entities affiliated with the Sponsor and FS Development II’s officers and directors have entered into a convertible note purchase agreement providing for loans to Pardes of up to $25.0 million, which loans will be evidenced by unsecured convertible promissory term notes (the “Convertible Notes”) at one or more closings. As of the initial closing, Pardes has issued Convertible Notes for an aggregate principal amount of $10.0 million, consisting of $10.0 million from such affiliated entities. The Convertible Notes accrue interest at the annual rate of 4% per annum, mature on October 31, 2022 and will be due and payable at the earlier of the closing under the Merger Agreement, the closing of a “corporate transaction” and at any time on or after the maturity date at Pardes’s election or upon demand of a purchaser. If the Merger Agreement is terminated, the Convertible Notes will be convertible at a fifteen percent (15%) discounted price into Pardes’s equity securities sold in the next round of equity financing by Pardes that meets certain requirements.

Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section titled “Risk Factors.”

Stock Exchange Listing

FS Development II’s Class A Common Stock is publicly traded on Nasdaq, under the symbol “FSII.” FS Development II intends to apply to list the common stock of the Combined Entity on Nasdaq under the symbol “PRDS”, upon the Closing.

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Table of Contents

Sources and Uses for the Business Combination

The following tables summarizes the sources and uses for funding the Business Combination based on (i) the assumption that there will be no redemptions and (ii) the assumption that there will be maximum redemptions. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

(i)     No redemptions

Sources of Funds

 

Uses

(in thousands)

Existing Cash in Trust Account

 

$

201,262

 

Pardes Equityholders’ Retained Equity Value

 

$

325,000

PIPE Investment

 

 

75,000

 

Remaining Cash on Balance Sheet

 

 

257,755

Pardes Equityholders’ Retained Equity Value

 

 

325,000

 

FS Development II and Pardes Estimated Transaction Costs

 

 

18,507

Total Sources

 

$

601,262

 

Total Uses

 

$

601,262

(ii)    Maximum redemptions

Sources of Funds

 

Uses

(in thousands)

Existing Cash in Trust Account

 

$

25,000

 

Pardes Equityholders’ Retained Equity Value

 

$

325,000

PIPE Investment

 

 

75,000

 

Remaining Cash on Balance Sheet

 

 

81,493

Pardes Equityholders’ Retained Equity Value

 

 

325,000

 

FS Development II and Pardes Estimated Transaction Costs

 

 

18,507

Total Sources

 

$

425,000

 

Total Uses

 

$

425,000

Comparison of Stockholder Rights

Following the Closing, the rights of the Combined Entity’s Stockholders will be governed by the Proposed Charter and the Amended Bylaws. See the section titled “Comparison of Stockholder Rights.”

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Smaller Reporting Company

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.

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Table of Contents

SUMMARY FINANCIAL AND OTHER DATA OF PARDES

The following tables summarize Pardes’s financial and other data. Pardes has derived the summary statements of operations data for the period February 27, 2020 (inception) through December 31, 2020 and the balance sheet data as of December 31, 2020 from its audited financial statements included elsewhere in this proxy statement/prospectus. The summary statements of operations data for the period February 27, 2020 (inception) through September 30, 2020 and the nine months ended September 30, 2021 and the summary balance sheet data as of September 30, 2021 are derived from Pardes’s unaudited interim condensed financial statements included elsewhere in this proxy statement/prospectus. Pardes’s unaudited interim condensed financial statements were prepared on a basis consistent with its audited financial statements and include, in management’s opinion, all adjustments, consisting only of normal recurring adjustments, that Pardes considers necessary for a fair presentation of the financial information set forth in those statements included elsewhere in this proxy statement/prospectus. Pardes’s historical results are not necessarily indicative of the results that may be expected in any future period, and interim financial results are not necessarily indicative of the results that may be expected for the full year.

You should read this data together with Pardes’s financial statements and related notes included elsewhere in this proxy statement/prospectus and the sections titled “Selected Financial and Other Data of Pardes” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Pardes.”

Statements of Operations and Comprehensive Loss Data

(In thousands)

 

FOR THE
PERIOD
FEBRUARY 27,
2020
(INCEPTION)
THROUGH
DECEMBER 31,
2020

 

FOR THE
PERIOD
FEBRUARY 27,
2020
(INCEPTION)
THROUGH
SEPTEMBER 30,
2020

 

FOR THE
NINE
MONTHS
ENDED
SEPTEMBER 30,
2021

   

(Audited)

 

(Unaudited)

 

(Unaudited)

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

4,563

 

 

$

2,197

 

 

$

17,792

 

General and administrative

 

 

750

 

 

 

583

 

 

 

6,389

 

Total operating expenses

 

 

5,313

 

 

 

2,780

 

 

 

24,181

 

Loss from operations

 

 

(5,313

)

 

 

(2,780

)

 

 

(24,181

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

10

 

Change in fair value of SAFEs liability

 

 

(7,693

)

 

 

(885

)

 

 

 

Total other expense

 

 

(7,693

)

 

 

(885

)

 

 

10

 

Net loss and comprehensive loss

 

$

(13,006

)

 

$

(3,665

)

 

$

(24,171

)

Statements of Balance Sheet Data

(In thousands)

 

December 31,
2020

 

September 30,
2021

   

(Audited)

 

(Unaudited)

Cash and cash equivalents

 

$

3,410

 

 

$

26,384

 

Total assets

 

 

3,604

 

 

 

28,581

 

Working capital (deficit)

 

 

(13,006

)

 

 

21,089

 

Total liabilities

 

 

16,610

 

 

 

5,971

 

Convertible preferred stock

 

 

 

 

 

59,132

 

Accumulated deficit

 

 

(13,006

)

 

 

(37,177

)

Total stockholders’ deficit

 

 

(13,006

)

 

 

(36,522

)

35

Table of Contents

SUMMARY FINANCIAL AND OTHER DATA OF FS DEVELOPMENT II

The following tables contain summary historical financial data for FS Development II for the period ended and as of September 30, 2021 and as of December 31, 2020. Only balance sheet data is presented as of December 31, 2020 as we did not have any significant operations as of and for the period ended on such date. The selected historical financial information as of December 31, 2020 has been derived from the audited balance sheet of the Company, and the selected historical financial information as of September 30, 2021 has been derived from the unaudited condensed financial statements of the Company, both of which are included elsewhere in this proxy statement/prospectus.

This information is only a summary and should be read in conjunction with FS Development II’s financial statements and related notes included elsewhere in this proxy statement/prospectus and the sections titled “Selected Financial and Other Data of FS Development II” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FS Development II.”

(In thousands, except share and per share amounts)

 

For The Nine
Months Ended
September 30,
2021

Statement of Operations Data:

 

 

 

 

Loss from operations

 

$

(3,564

)

Net loss

 

$

(3,552

)

Weighted average shares outstanding of Class A common stock, basic and diluted

 

 

17,083,104

 

Basic and diluted net income per share, Class A common stock

 

$

(0.16

)

Weighted average shares outstanding of Class B common stock, basic and diluted

 

 

4,915,865

 

Basic and diluted net loss per share, Class B common stock

 

$

(0.16

)

   

 

 

 

Statement of Cash Flows Data:

 

 

 

 

Net cash used in operating activities

 

$

(1,760

)

Net cash used in investing activities

 

$

(201,250

)

Net cash provided by financing activities

 

$

203,049

 

(In thousands)

 

September 30,
2021

 

December 31,
2020

   

(Unaudited)

 

(Audited)

Balance Sheet Data:

 

 

 

 

 

 

 

Total assets

 

$

201,833

 

 

$

92