-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CVbiAM6s6i1ugva1aThHUndCeF18faDczKeltfimO04p5euOQ322n0rJq30Ym3VP YV0glHv/ef64hinhO8nDhA== 0000950123-02-000667.txt : 20020414 0000950123-02-000667.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950123-02-000667 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020122 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20020125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000729922 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 133159796 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15190 FILM NUMBER: 02517828 BUSINESS ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553 BUSINESS PHONE: 5162220023 MAIL ADDRESS: STREET 1: 106 CHARLES LINDBERGH BLVD CITY: UNIONDALE STATE: NY ZIP: 11553-3649 FORMER COMPANY: FORMER CONFORMED NAME: ONCOGENE SCIENCE INC DATE OF NAME CHANGE: 19920703 8-K 1 y56946e8-k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 January 22, 2002 Date of Report (Date of earliest event reported) OSI PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-15190 13-3159796 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 58 SOUTH SERVICE ROAD MELVILLE, NY 11747 (Address of principal executive offices) (631) 962-2000 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS On January 22, 2002, OSI Pharmaceuticals, Inc., a Delaware corporation ("OSI") announced a reorganization of its senior research and development management team following the recent acquisition of the oncology assets of Gilead Sciences, Inc. On January 22, 2002, OSI also announced that Nicholas G. Bacopoulos, Ph.D., former President and Head of Research and Development, has accepted the post of Chief Executive Officer of Aton Pharma, Inc., a New York based, privately held company. Details regarding the new research and management team are contained in OSI's press release, dated January 22, 2002, which is attached as Exhibit 99 and incorporated herein by reference. ITEM 7. EXHIBITS
EXHIBIT NO. DESCRIPTION ----------- ----------- 99 Press release, dated January 22, 2002.
ITEM 9. REGULATION FD DISCLOSURE On January 7, 2002, OSI filed a Form 8-K with respect to the acquisition of certain oncology assets from Gilead Sciences, Inc. ("Gilead") in December 2001. Set forth below is unaudited pro forma financial information with respect to the acquisition which is disclosed in a preliminary offering memorandum describing OSI's offer of Convertible Subordinated Notes to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. 1 UNAUDITED PRO FORMA FINANCIAL INFORMATION On December 21, 2001, we acquired certain assets from Gilead. The assets purchased by us include: (a) a pipeline of three clinical oncology candidates, (b) certain related intellectual property, and (c) rights to Gilead's leased facilities located in Boulder, Colorado, as well as leasehold improvements and certain fixed assets. In connection with the acquisition, we have retained 121 Gilead employees. In consideration for such assets, we paid Gilead $130 million in cash and issued to Gilead 924,984 shares of common stock, valued at $40 million as of the closing date of the transaction. We would also be obligated to pay to Gilead up to an additional $30 million in either cash or common stock or a combination of cash or common stock, at our option, upon the achievement of certain milestones related to the development of OSI-211, the most advanced of Gilead's oncology product candidates acquired by us. Additionally, we have assumed Gilead's royalty and milestone obligations to third parties in connection with the oncology candidates acquired. The following unaudited pro forma condensed combined statement of operations give effect to the acquisition of the Gilead oncology assets as if such acquisition occurred on October 1, 2000. The condensed combined pro forma statements are derived from the audited consolidated financial statements of OSI for the fiscal year ended September 30, 2001 and the unaudited financial statements of the Gilead oncology assets for the 12-month period ended September 30, 2001. The purchase method of accounting for the acquisition of a business was used in preparation of the pro forma condensed combined statements. In July 2001, the Financial Accounting Board issued SFAS No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 is effective for acquisitions and other intangibles acquired on or after July 1, 2001. We will adopt the applicable provisions of SFAS No. 142 for the accounting of the acquisition of the Gilead oncology assets, which occurred after July 1, 2001. For the purpose of the pro forma condensed combined statements, the applicable provisions of SFAS No. 142 have been applied to the accounting of the Gilead oncology assets. As such, no goodwill amortization expense has been recorded. The pro forma statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the acquisition of the Gilead oncology assets been consummated on the dates assumed and are not necessarily indicative of our future operating results or financial position. 2 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS DATA(b)
TWELVE MONTHS ENDED SEPTEMBER 30, 2001 -------------------------------------------------------------------------------- GILEAD PRO FORMA OSI(a) ONCOLOGY PRO FORMA COMBINED ASSETS ADJUSTMENTS RESULTS -------------------------------------------------------------------------------- Revenues ...................................... $ 26,021,916 $ -- $ -- $ 26,021,916 ------------- ------------- ------------- ------------- Expenses: Research & development ........................ 56,038,070 25,676,448 574,202(c) 82,288,720 Production and service costs .................. 262,080 -- -- 262,080 Selling, general & administrative ............. 15,770,805 5,412,838 152,636(c) 21,336,279 Amortization of intangibles ................... 741,910 -- -- 741,910 ------------- ------------- ------------- ------------- 72,812,865 31,089,286 726,838 104,628,989 ------------- ------------- ------------- ------------- Loss from operations .......................... $ (46,790,949) $ (31,089,286) $ (726,838) $ (78,607,073) ------------- ------------- ------------- ------------- Interest and other income (expense) ........... 25,660,515 -- (7,507,232)(d) 18,153,283 Loss before cumulative effect of change in accounting policy ....................... $ (21,130,434) $ (31,089,286) $ (8,234,070) $ (60,453,790) ============= ============= ============= ============= Basic and diluted loss per share before cumulative effect of accounting change ..... $ (0.62) N/A N/A $ (1.74) ============= ============= ============= ============= Basic and diluted weighted average number of shares of common stock outstanding ................................... 33,851,735 -- 924,984(e) 34,776,719 ============= ============= ============= =============
3 SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET DATA The following selected balance sheet data as of September 30, 2001 are derived from the audited consolidated financial statements of OSI and from the unaudited financial statements of the Gilead oncology assets. The balance sheet data are presented: - on an actual basis, and - on a pro forma basis assuming the acquisition of the Gilead oncology assets had occurred on September 30, 2001. With assistance from a third party valuation firm, we have estimated that the purchase price for the Gilead oncology assets exceeded the fair value of the net tangible assets acquired by approximately $166 million. We have preliminarily allocated approximately $130 million and $36 million of this excess to in-process research and development and goodwill, respectively. The unaudited pro forma condensed combined balance sheet data includes a reduction in stockholders' equity as a result of the charge for in-process research and development. The unaudited pro forma financial information reflects adjustments which are based upon preliminary estimates of the allocation of the purchase price to the acquired Gilead oncology assets. The final allocation of the purchase price, which may be significantly different from the current estimate, will be based upon appraisals prepared by a third-party valuation firm and a comprehensive final evaluation of the fair value of the acquired intangible and tangible assets and in-process research and development as of the closing date of the acquisition. The final determination of tangible and intangible assets may result in depreciation and amortization expenses that are different than the preliminary estimates of these amounts.
AS OF SEPTEMBER 30, 2001 UNAUDITED ------------------------------------- PRO FORMA OSI(a) COMBINED ------------ ------------------ Cash, cash equivalents, investment securities and restricted investment securities ......... $551,478,461 $416,535,961(f) Total assets .................................... 591,689,187 503,666,787(g) Long-term liabilities ........................... 14,060,528 14,241,093(h) Stockholders' equity ............................ 549,832,346 459,632,346(b)(e)
4 NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (a) The fiscal 2001 consolidated financial statements include a cumulative effect of the change in accounting principle of $2.6 million relating to the adoption of SAB No. 101; the acquisition of certain assets from British Biotech for $13.9 million; $25 million in upfront fees received upon the execution of collaboration agreements with Genentech, Inc. and Roche; net proceeds of approximately $404 million from a public offering of common stock in November 2000; the sale of newly-issued shares of common stock to Genentech and Roche for an aggregate purchase price of $35 million each and a charge to operations of $5.1 million for the estimated cost of closing our Tarrytown, New York and Birmingham, England facilities. (b) The estimated charge to earnings of $130.2 million resulting from purchased in-process research and development costs has been reflected as a reduction of stockholders' equity in the pro forma balance sheet as of September 30, 2001. This same charge has been excluded from the pro forma statement of operations for the 12 months ended September 30, 2001 since the charge is non-recurring and directly related to the acquisition. A third-party valuation firm was used to assess and value the purchased in-process research and development from the acquisition. The value was determined by estimating the projected net cash flows related to products under development based upon future revenues to be earned upon commercialization of such products. These cash flows were discounted back to their net present value. The resulting projected net cash flows from such projects were based on management's estimates of revenues and operating profits related to such products. (c) Represents additional depreciation expense totaling ($727,000) relating to the mark-up to fair value of the fixed assets acquired. The depreciation expense is allocated to research and development expense ($574,202) and to selling, general and administrative expense ($152,636). (d) Represents a reduction of interest income as a result of the cash payment of approximately $134.9 million relating to the acquisition of the Gilead oncology assets and the net decrease in cash related to the operations of the Gilead oncology assets, which is assumed to have occurred evenly over the 12 month period. (e) Reflects shares issued to Gilead valued at $40 million as part of the purchase price for the acquisition of the Gilead oncology assets. (f) Reflects the cash payment of $134.9 million related to the acquisition of the Gilead oncology assets. 5 (g) Reflects (f) and the fair value of the assets acquired resulting from the allocation of the purchase price. This preliminary purchase price allocation was determined with assistance from a valuation performed by a third-party valuation firm. The preliminary purchase price and purchase-price allocation of the acquisition are as follows: Purchase Price Paid Cash, including estimated transaction expenses...................... $134,942,500 Common Stock........................................................ 40,000,000 ------------ $174,942,500 Purchase Price allocation In-process research and development ................................ $130,200,000 Notes receivable ................................................... 622,500 Other assets ....................................................... 41,000 Fixed assets ....................................................... 10,528,700 Liabilities assumed ................................................ (2,177,600) ------------ Total allocation.................................................... $139,214,600 Excess purchase price over identifiable assets and liabilities..................................................... $ 35,727,900 ============
(h) Reflects the estimated fair value of long-term liabilities acquired resulting from the allocation of the purchase price. 6 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 25, 2002 OSI PHARMACEUTICALS, INC. By: /s/ Robert L. Van Nostrand ----------------------------------------- Robert L. Van Nostrand Vice President and Chief Financial Officer (Principal Financial Officer) 7 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- 99 Press release, dated January 22, 2002.
1 EX-99 3 y56946ex99.txt PRESS RELEASE EXHIBIT 99 OSI PHARMACEUTICALS ANNOUNCES NEW RESEARCH & DEVELOPMENT MANAGEMENT TEAM FOLLOWING ACQUISITION OF ONCOLOGY ASSETS FROM GILEAD MELVILLE, N.Y.-- (BW HealthWire)--Jan. 22, 2002--OSI Pharmaceuticals, Inc. (NASDAQ: OSIP) announced today a reorganization of its senior research and development management team following the recent acquisition of the oncology assets from Gilead Sciences. With the acquisition, OSI added an oncology and drug development group consisting of 140 scientists and business professionals based in Boulder, Colorado to its existing research and development staff located in Uniondale, New York and Oxford, United Kingdom and significantly strengthened the Company's focus in oncology. Nicole Onetto, M.D., Executive Vice President, Oncology will lead OSI's efforts in product development and will report directly to Dr. Goddard, Chairman and Chief Executive Officer. Dr. Onetto previously served as Senior Vice President of Medical Affairs at Gilead and formerly was a Senior Executive in the Bristol-Myers Squibb oncology organization. Reporting to Dr. Onetto are Mr. Robert Simon, Vice President, Global Regulatory Affairs, Pedro Santabarbara, M.D., Ph.D., Vice President, Clinical Research/Oncology (both Gilead and Bristol-Myers Squibb alumni), and John A. Slack, Ph.D., Vice President, Development. Raymond Bendele, D.V.M., Ph.D., who previously held leadership positions at Gilead and Eli Lilly and Company in toxicology, will serve as Vice President, Pharmaceutical Development. Arthur M. Bruskin, Ph.D., Executive Vice President, Global Research heads OSI's pre-clinical research program and reports directly to Dr. Goddard. Reporting to Dr. Bruskin are Neil Gibson, Ph.D., Vice President, U.S. Research, who previously held positions with The Bayer Corporation and Pfizer Inc., Arlindo L. Castelhano, Ph.D., Senior Director, U.S. Chemistry, formerly with Cadus Pharmaceuticals Corp. and Syntex Inc., and John Murray, Ph.D., Vice President, UK Chemistry, who joined OSI from Glaxo Wellcome. David Laskow-Pooley will join OSI as Vice President and General Manager of OSI's UK operations in April and will report to Dr. Goddard. Prior to joining OSI, Mr. Laskow-Pooley served as Vice President of Business Improvements at Nycomed Amersham Plc in the UK. "With over 500 research and business professionals, modern infrastructure and experienced leadership, we are well equipped to pursue our goal of becoming a world class oncology franchise," stated Colin Goddard, Ph.D., Chairman and Chief Executive Officer, OSI Pharmaceuticals. OSI also announced that Nicholas G. Bacopoulos, Ph.D., former President and Head of Research and Development, has accepted the post of Chief Executive Officer at Aton Pharma, Inc., a New York-based, privately held drug discovery and development company focused on novel targeted therapies for cancer and other diseases. "Nick has made a solid contribution to OSI through a challenging and exciting year of transition," stated Dr. Goddard. "We wish him well in his new leadership role at Aton." -1- OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development and commercialization of innovative products for the treatment of cancer. OSI has built a pipeline of discovery programs and drug candidates addressing major, unmet medical needs in cancer and selected opportunities, including diabetes, arising from the Company's extensive drug discovery research programs that represent significant commercial opportunities outside of cancer. OSI's most advanced drug candidate, Tarceva(TM), a small molecule inhibitor of the EGFR gene, is currently in Phase III clinical trials for lung and pancreatic cancers. This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, uncertainties related to the identification of lead compounds, the successful pre-clinical development thereof, the completion of clinical trials, the FDA review process and other governmental regulation, pharmaceutical collaborators' ability to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, product pricing and third party reimbursement, and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. Additional information on OSI Pharmaceuticals is available at www.osip.com CONTACT: OSI Pharmaceuticals Kathy Galante, 631/962-2000 or Burns McClellan (representing OSI) Ethan Denkensohn (investors) Kathy Jones, Ph.D. (media) 212/213-0006 -2- -----END PRIVACY-ENHANCED MESSAGE-----