-----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, PyQUdPBVZkJg6EpbFUZCUL76b0bKSfiX09ckqdbqrxxDbNWwfFy5zbcPSNgpw0QI FOpHWEYsgcOCUKHBxRfDKQ== 0000936392-98-000828.txt : 19980518 0000936392-98-000828.hdr.sgml : 19980518 ACCESSION NUMBER: 0000936392-98-000828 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMYLIN PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000881464 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 330266089 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19700 FILM NUMBER: 98623863 BUSINESS ADDRESS: STREET 1: 9373 TOWNE CENTRE DR CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6195522200 MAIL ADDRESS: STREET 1: 9373 TOWNE CENTRE DR CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For The Quarterly Period Ended March 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission File Number: 0-19700 AMYLIN PHARMACEUTICALS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 33-0266089 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9373 Towne Centre Drive, San Diego, California 92121 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (619) 552-2200 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 31,1998 ----- ---------------------------- Common Stock, $.001 par value 32,492,478 2 AMYLIN PHARMACEUTICALS, INC. TABLE OF CONTENTS
PAGE NO. -------- COVER PAGE..................................................................1 TABLE OF CONTENTS...........................................................2 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997...................................3 Condensed Consolidated Statements of Operations for the three months March 31, 1998 and 1997...........................4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997.....................5 Notes to Condensed Consolidated Financial Statements...................6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..........................8 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings..............................................* ITEM 2. Changes in Securities..........................................* ITEM 3. Defaults upon Senior Securities................................* ITEM 4. Submission of Matters to a Vote of Security Holders...............................................* ITEM 5. Other Information..............................................* ITEM 6. Exhibits and Reports on Form 8-K..............................16 SIGNATURE..................................................................17
* No information provided due to inapplicability of item. 3 AMYLIN PHARMACEUTICALS, INC. Condensed Consolidated Balance Sheets
March 31, December 31, 1998 1997 (unaudited) (Note) ------------- ------------- Assets Current Assets: Cash and cash equivalents $ 34,991,000 $ 46,903,000 Short-term investments -- 5,845,000 Receivable from related party 528,000 966,000 Other current assets 863,000 1,298,000 ------------- ------------- Total current assets 36,382,000 55,012,000 Property and equipment, at cost: Equipment 15,395,000 14,707,000 Leasehold improvements 5,570,000 4,763,000 ------------- ------------- 20,965,000 19,470,000 Less accumulated depreciation and amortization (11,760,000) (10,860,000) ------------- ------------- 9,205,000 8,610,000 Patents and other assets, net 1,818,000 1,716,000 ------------- ------------- $ 47,405,000 $ 65,338,000 ============= ============= Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Accounts payable $ 2,067,000 $ 5,278,000 Accrued liabilities 9,436,000 10,606,000 Deferred revenue from related party 5,233,000 6,357,000 Current portion of obligation under capital leases and equipment notes payable 1,407,000 1,468,000 ------------- ------------- Total current liabilities 18,143,000 23,709,000 Obligation under capital leases and equipment notes payable 3,308,000 3,047,000 Notes payable to related party, net of discount 35,358,000 33,933,000 Stockholders' equity (deficit): Common stock, $.001 par value, 50,000,000 shares authorized, 32,492,478 and 32,394,433 issued and outstanding at March 31, 1998 and December 31, 1997, respectively 32,000 32,000 Additional paid-in capital 215,973,000 215,246,000 Accumulated deficit (224,551,000) (209,732,000) Deferred compensation (857,000) (893,000) Unrealized gains/(losses)on short-term investments (1,000) (4,000) ------------- ------------- Total stockholders' equity (deficit) (9,404,000) 4,649,000 ------------- ------------- $ 47,405,000 $ 65,338,000 ============= =============
Note: The condensed consolidated balance sheet at December 31, 1997 has been derived from audited condensed consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. 4 AMYLIN PHARMACEUTICALS, INC. Condensed Consolidated Statements of Operations (unaudited)
Three months ended March 31, ------------------------------- 1998 1997 ------------ ------------ Revenues under collaborative agreements from related party $ 7,086,000 $ 12,358,000 Operating Expenses: Research and development 18,169,000 16,530,000 General and administrative 2,923,000 2,847,000 ------------ ------------ 21,092,000 19,377,000 ------------ ------------ Loss from operations (14,006,000) (7,019,000) Interest and other income 512,000 686,000 Interest and other expense (1,325,000) (316,000) ------------ ------------ Net loss $(14,819,000) $ (6,649,000) ============ ============ Net loss per share - basic and diluted $ (0.46) $ (0.21) ============ ============ Shares used in computing net loss per share basic and diluted 32,438,000 32,023,000 ============ ============
See accompanying notes. 5 AMYLIN PHARMACEUTICALS, INC. Condensed Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31, ------------------------------- 1998 1997 ------------ ------------ Operating Activities: Net loss $(14,819,000) $ (6,649,000) Adjustments to reconcile net loss to net cash used for operating activities: Depreciation and amortization 931,000 713,000 Deferred revenue from related party (1,124,000) 4,906,000 Deferred rent and other expense 0 (6,000) Amortization of deferred compensation 202,000 130,000 Amortization of warrants issued with debt 299,000 -- Changes in assets and liabilities: Receivable from related party 438,000 1,534,000 Other current assets 435,000 (99,000) Accounts payable (3,211,000) (2,839,000) Accrued liabilities (1,170,000) 158,000 ------------ ------------ Net cash flows used for operating activities (18,019,000) (2,152,000) Investing activities: Decrease in short-term investments 5,847,000 11,000 Purchase of equipment and leasehold improvements (1,495,000) (2,074,000) Increase in deposits, patents and other assets (132,000) (89,000) ------------ ------------ Net cash flows provided by (used for) investing activities 4,220,000 (2,152,000) Financing activities: Issuance of notes payable 1,771,000 1,625,000 Principal payments on capital leases and equipment notes payable (445,000) (330,000) Issuance of common stock, net 561,000 489,000 ------------ ------------ Net cash flows provided by financing activities 1,887,000 1,784,000 ------------ ------------ Decrease in cash and cash equivalents (11,911,000) (2,520,000) Cash and cash equivalents at beginning of period 46,903,000 42,654,000 ------------ ------------ Cash and cash equivalents at end of period $ 34,991,000 $ 40,134,000 ============ ============ Supplemental disclosure of cash flow information: Interest paid $ 122,000 $ 89,000
See accompanying notes. 6 AMYLIN PHARMACEUTICALS, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 (unaudited) 1. Summary of Significant Accounting Policies Basis of Presentation The information contained herein has been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. The information at March 31, 1998, and for the three months ended March 31, 1998 and 1997, is unaudited. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. For a presentation including all disclosures required by generally accepted accounting principles, these financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report to Shareholders on Form 10-K for the year ended December 31, 1997. Per Share Data Basic and diluted net loss per share is computed using the weighted average number of shares outstanding during the periods. Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Amylin Europe Limited. All significant intercompany transactions and balances have been eliminated. 2. Stockholders' Equity In early May 1998, the Company distributed a supplement to its Notice of Annual Meeting and Proxy Statement requesting that stockholders approve a partial option-exchange program which was further restricted to non-executive officer employees of the Company. Under the program, which was approved by the Company's Board of Directors in late April 1998, only options held by qualifying employees are eligible to be exchanged for new options to purchase the same number of shares at an option price equal to the closing price of the Company's Common Stock on the date the offers of employees to exchange such options are accepted by the Company. Subject only to certain limited exceptions, no exchanged options will be exercisable until June 30, 1999, at which time they will continue to vest according to the same schedule as the old options surrendered therefor. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for the historical information contained herein, the discussion in this report contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed in this report due to, among other things, the results of the Company's ongoing and planned clinical studies of pramlintide, the Company's ability to raise additional capital to finance its business operations through and following the first quarter of 1999, and the timing of filing for regulatory approval of pramlintide. Additional factors that could cause or contribute to such differences include, without limitation, those discussed in the section entitled "Liquidity and Capital Resources" herein as well as those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 under the heading "Risk Factors". Since its inception in September 1987, Amylin has devoted substantially all of its resources to its research and development programs. Substantially all of the Company's revenues to date have been derived from fees and expense reimbursements under collaborative agreements and from interest income. Amylin has no product sales and has not received any revenues from the sale of products. The Company has been unprofitable since its inception and expects to incur additional operating losses for the next several years. As of March 31, 1998, the Company's accumulated deficit was approximately $225 million. Since June 1995, the Company and Johnson & Johnson have been collaborating on the development and commercialization of pramlintide, a diabetes drug candidate that was invented and patented by the Company and which is now in Phase III clinical trials. Through March 31, 1998 Johnson & Johnson entities made various financial payments to the Company totaling $170 million. In late February 1998, Johnson & Johnson provided the Company with six-months notice of its intention to terminate their collaboration with the Company. Johnson & Johnson's financial and other obligations under the Collaboration Agreement will continue during the termination notice period. Based upon Johnson & Johnson's decision, in early March 1998 Amylin initiated the process of restructuring its operations by reducing its workforce by approximately 25% and reducing other non-personnel related expenses. The Company believes that its ongoing restructuring will permit the Company to finance its current operations into the first quarter of 1999. RESULTS OF OPERATIONS Revenue The Company had $7.1 million of revenue for the three months ended March 31, 1998 as compared to $12.4 million for the same period in 1997. The revenues recognized in 1998 and 1997 were related to the Company's Collaboration Agreement dated as of June 8 20, 1995 (the Collaboration Agreement") with LifeScan, Inc., a wholly owned subsidiary of Johnson & Johnson (hereinafter referred to as Johnson & Johnson). Revenues in 1998 were comprised of Johnson & Johnson's reimbursement of its one-half share of pramlintide development expenses incurred by Amylin during the first quarter. Revenues in the first quarter of 1997 were comprised of Johnson & Johnson's reimbursement of its one-half share of pramlintide development expenses incurred by Amylin and a $6.0 million option fee payment made by Johnson & Johnson. Operating Expenses The Company's total operating expenses for the quarter ended March 31, 1998 increased to $21.1 million from $19.4 million for the same period in 1997. Research and development expenses increased to $18.2 million for the three months ended March 31, 1998 as compared to $16.5 million for the same period in 1997. The increase in these expenditures was primarily due to the costs of the Company's ongoing pramlintide clinical development efforts. In addition to increased clinical trial expenses, the Company also incurred increased personnel expenses and facilities related expenses in support of the pramlintide program. General and administrative expenses increased slightly to $2.9 million for the three months ended March 31, 1998 as compared to $2.8 million for the same period in 1997. The increase was primarily due to increased personnel expenses. Other Income and Expense Interest and other income is principally comprised of interest income from investment of the Company's cash reserves. Interest and other income was $0.5 million for the quarter ended March 31, 1998 as compared to $0.7 million for the same period in 1997. The decrease in interest and other income was primarily due to lower average cash reserves available for investment for the three months ended March 31, 1998 as compared to the same period in 1997. Interest and other expense is principally comprised of interest expense resulting from long-term debt obligations. Debt financing has been utilized by the Company to acquire laboratory and other equipment, to fund tenant improvements to the Company's facilities, and for other working capital purposes. In addition, in accordance with the terms of the Collaboration Agreement, Johnson & Johnson has advanced Amylin's share of pramlintide pre-launch marketing expenses incurred since the date of the collaboration. Separately, in September 1997, the Company received proceeds of approximately $30.6 million from a draw down under its Development Loan Facility with Johnson & Johnson. The proceeds were used to fund the Company's one-half share of development expenses for its pramlintide invention during the second through fourth quarters of 1997. In conjunction with the borrowing under the Development Loan 9 Facility, the Company issued warrants to Johnson & Johnson to purchase 1,530,950 shares of the Company's common stock. The estimated value of the warrants will be amortized to interest expense over the life of the Development Loan Facility. Both the development loan and the pre-marketing loan were provided under the terms and conditions of the Company's Loan and Security Agreement with Johnson & Johnson and will be repaid with interest over time out of the Company's share of future pramlintide profits, if any, subject to certain exceptions set forth in the Loan Agreement. Interest and other expense increased to $1.3 million for the three months ended March 31, 1998 from $0.3 million for the same period in 1997. The increase in interest and other expense was primarily due to the interest associated with the development loan debt, amortization of the valuation placed on the warrants, and interest expense related to the pre-marketing loan. Net Loss The net loss for the quarter ended March 31, 1998 was $14.8 million compared to a net loss for the same quarter in 1997 of $6.6 million. The increase in the net loss was due to decreased collaborative revenues, increased operating expenses and increased interest expense. Amylin expects to incur substantial operating losses over the next several years due to continuing expenses associated with its research and development programs, including clinical development of pramlintide, preclinical and potential clinical testing of additional product candidates, and related general and administrative support. Operating losses may fluctuate from quarter to quarter as a result of differences in the timing of expenses incurred and revenues recognized. LIQUIDITY AND CAPITAL RESOURCES Since its inception, the Company has financed its operations primarily through private placements of preferred stock, sales of common stock, reimbursement of pramlintide development expenses through its collaboration with Johnson & Johnson, and debt financings. In June 1995, the Company entered into the Collaboration Agreement for the development and commercialization of pramlintide, a diabetes drug candidate which was invented and patented by the Company and is currently in Phase III clinical trials. In conjunction with the Collaboration Agreement, the Company simultaneously entered into a Stock Purchase Agreement with Johnson & Johnson Development Corporation (a wholly owned subsidiary of Johnson & Johnson and hereinafter referred to as "Johnson & Johnson")and the Loan Agreement. In September 1997, the Company received proceeds of approximately $30.6 million from a draw down under its Development Loan Facility with Johnson & Johnson. The proceeds were applied 10 against the Company's one-half share of development expenses for pramlintide incurred during the second through fourth quarters of 1997. The loan carries an interest rate of 9.0%. In conjunction with the borrowing, the Company issued warrants to Johnson & Johnson to purchase 1,530,950 shares of the Company's common stock with a fixed exercise price of $12 per share and a 10-year exercise period. The loan is repayable 12 months after approval of a new drug application for pramlintide out of 50% of the Company's pramlintide profits, subject to certain exceptions set forth in the Loan Agreement. The loan is secured by the Company's issued patents and pending patent applications relating to amylin. In late February 1998, Johnson & Johnson provided the Company six-months notice of its intention to terminate their collaboration. All product rights held by the collaboration will be returning to Amylin following the termination of the collaboration. Johnson & Johnson's financial and other obligations under the Collaboration Agreement will continue during the termination notice period. Based upon Johnson & Johnson's decision, in early March 1998 Amylin initiated the process of restructuring its operations by reducing its workforce by approximately 25% and reducing other non-personnel related expenses. The Company believes that the restructuring will permit the Company to finance its current operations into the first quarter of 1999. Prior to Johnson & Johnson's notification of its intent to terminate the collaboration, the regulatory strategy for pramlintide was based on plans for global filings in both type 1 and type 2 diabetes during the first half of 2000. However, as the Phase III trials have proceeded, Amylin scientists and advisors have concluded that available data should support an earlier filing for use by type 1 patients. In the major pharmaceutical markets, there are about two-million type 1 patients for whom the only important glucose-control drug is insulin. The Company believes that Europe offers the earliest market opportunity. Thus, Amylin aims to file its first marketing application in Europe for type 1 diabetes during the first half of 1999 and, subject to the approval of this indication and the results of its ongoing clinical trials, plans to submit regulatory filings in Europe for type 2 diabetes in the first half of 2000. The Company plans to file a New Drug Application in the United States during the first half of 2000 for type 1 and type 2 diabetes. The acceleration of the regulatory filing in Europe for type 1 diabetes will require a significant dedication of resources, including financial resources, to that program. At March 31, 1998, the Company had $35.0 million in cash, cash equivalents and short-term investments as compared to $52.7 million at December 31, 1997. The Company invests its cash in U.S. government and other highly rated liquid debt instruments. The Company intends to use its financial resources for the ongoing development of its pramlintide invention, including the 11 Phase III clinical trials, for its exendin research program, and for other general corporate purposes. To the extent that clinical trials of the Company's compounds progress as planned, research and development expenses will include costs of supplying materials for and conducting pramlintide clinical trials, research activities to further explore amylin biology, and research and development of other compounds targeted at metabolic diseases. The amounts actually expended for each purpose may vary significantly depending upon numerous factors, including the progress of the Company's research and development programs, the results of preclinical and clinical studies, the timing of regulatory submissions and approvals, if any, technological advances, determinations as to commercial potential of the Company's compounds, and the status of competitive products. Expenditures will also depend upon the availability of additional sources of funds, the establishment of collaborative arrangements with other companies, and other factors. As of March 31, 1998, the Company leased or sub-leased approximately 141,000 square feet of space. In association with the Company's process of restructuring its operations, the Company intends on reducing its ongoing facilities lease expense during 1998. The Company does not intend on renewing a sub-lease which expires at the end of June 1998 for 14,000 square feet. The Company also believes that it should be able to sub-lease an additional 42,000 square feet of space during 1998. At this time, the Company expects to incur less than $1.0 million of capital expenditures in the remainder of 1998. These expenditures will primarily be directed toward the purchase of new equipment to support its research and development efforts and for tenant improvements. The Company does not expect to generate a positive internal cash flow for several years due to substantial additional research and development costs, including costs related to drug discovery, preclinical testing, clinical trials, manufacturing costs, and general and administrative expenses necessary to support such activities. The Company cash resources will be directed toward the funding of the Phase III studies and other ancillary studies in its pramlintide clinical program. The Company plans to continue advancing its expanded research and development pipeline when resources permit. The Company anticipates that pending completion of its corporate restructuring, that its existing cash, including interest income from cash investments, and financial commitments from Johnson & Johnson during the termination notice period, will be adequate to satisfy the Company's capital requirements into the first quarter of 1999. The Company believes that if the results of its two six-month European clinical trials for pramlintide are positive it should be able to raise additional funds through other corporate partnerships, equity offerings, debt offerings, and/or investor partnerships. However, there can be no assurance that additional financial resources will be raised in the necessary time frame or on terms favorable to the Company. In the event that Amylin is unable to obtain additional financing, the Company will not have the financial resources to continue research and development of pramlintide or any of the Company's other product candidates. 12 The Company cannot assure that any of its drug candidates will successfully meet any or all of their development goals. Important technical milestones remain to be achieved before the Company can commercialize any of its products, and failure to achieve these milestones could seriously jeopardize the Company's chances of success and its financial condition would be adversely affected. The Company's future capital requirements will depend on many factors, including continued scientific progress in its research and development programs, the magnitude of these programs, progress with preclinical and clinical trials, the time and costs involved in preparing regulatory submissions and seeking regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, and enforcing patents, the costs of defending against litigation, competing technological and market developments, the ability of the Company to establish collaborative arrangements for its other research and development programs, and the cost of manufacturing scale-up. Prior to marketing, any drug developed by the Company must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process mandated by the Food and Drug Administration (FDA) and equivalent foreign authorities. Human clinical testing is now underway on the Company's first product candidate, pramlintide. Subject to compliance with FDA and foreign authorities regulations, the Company plans to undertake extensive clinical testing in an effort to demonstrate optimal dose, safety, and efficacy for its product candidates in humans. Although the Company believes the initial Phase III clinical data about pramlintide's clinical value warrants continuing with the Phase III development program, there can be no assurance that these studies will confirm or improve the results of the initial Phase III studies to date or that the data will support regulatory approval of pramlintide. Further testing of pramlintide and the Company's other product candidates in research or development may reveal undesirable and unintended side effects or other characteristics that may prevent or limit their commercial use. The Company or the regulatory authorities may suspend clinical trials at any time if the subjects or patients participating in such trials are being exposed to unacceptable health risks. There can be no assurance that the Company will not encounter problems in clinical trials which will cause the Company or the regulatory authorities to delay or suspend clinical trials. In addition, there can be no assurance that any of the Company's products will obtain regulatory approval for any indication. Products, if any, resulting from Amylin's research and development programs are not expected to be commercially available for a number of years. The Company believes that patent and other proprietary rights are important to its business, and in this regard intends to file applications as appropriate for patents covering both its products and processes. The Company currently owns 24 issued United States Patents and a number of other still-pending U.S. applications, three of which have been allowed but are not yet issued. Included within the Company's patent portfolio are issued patents for (1) pramlintide and other amylin agonist analogues invented by Company 13 researchers; (2) the amylin molecule, which was discovered by University of Oxford researchers Tony Willis and Garth Cooper, a co-founder of the Company; (3) amylin agonist pharmaceutical compositions, including a)compositions containing pramlintide, b)compositions containing pramlintide and insulin, c)compositions containing amylin, and d)compositions containing amylin and insulin; (4) methods for treating diabetes using any amylin agonist; (5) methods for synthesis of amylin and amylin analogues; and, (6) methods for preparing products that include an amylin agonist in composition for parenteral administration. Litigation, which could result in substantial cost to the Company, may also be necessary to enforce patents issued to the Company. Litigation, whether or not there is any basis for it, may also be required to determine the scope and validity of third-party proprietary rights. The Company has received letters from the University of Minnesota (the "University")and Per Westermark ("Westermark") asserting that the Company's patented pramlintide invention is covered by a patent (the "University Patent") which was licensed to the Company before it issued, while it was still pending as an application, pursuant to a License Agreement dated November 11, 1991 among the Company, the University and Westermark (the "University License Agreement"). The University Patent is directed to a different, tumor-derived molecule called "Insulinoma Amyloid Polypeptide." In its letters, the University and Westermark claim that they are entitled to 50% of any sublicense fees received by the Company from sublicensing the University Patent to Johnson & Johnson pursuant to the Collaboration Agreement, as well as future royalties as specified in the University License Agreement. The Company has informed the University and Westermark that no such sublicensing moneys have been received by the Company from Johnson & Johnson, who is not a sublicensee under the University Patent. On December 5, 1996, the Company filed a complaint against the University and Westermark in the U.S. District Court for the Southern District of California seeking a declaratory judgment that its patented pramlintide invention is not covered by the University Patent and that no moneys are owed to the University or Westermark. Although discussions were underway with the University and Westermark, they did not result in any agreement regarding the litigation. The Company's complaint was served on the University and Westermark in April 1997. The Company believes that the University's and Westermark's assertions are without merit and intends to defend vigorously against the claims that have now been brought against the Company related to the foregoing. In addition, should any of the Company's competitors have prepared and filed patent applications in the United States which claim technology also invented by the Company, Amylin may have to participate in interference proceedings declared by the U.S. Patent and Trademark Office in order to determine priority of invention and, thus, the right to a patent for the technology, all of which could result in substantial cost to the Company to determine its rights. To date, no such interferences have been declared. It is uncertain whether any third-party patents will require the Company to alter its products or processes, obtain licenses, or cease certain activities. If any licenses are required, there can be no 14 assurances that the Company will be able to obtain any such license on commercially favorable terms, if at all. Failure by the Company to obtain a license to any technology that it may require to commercialize its products may have a material adverse impact on the Company. YEAR 2000 ISSUE The Company is currently developing a plan to provide assurances that its systems and software infrastructure are Year 2000 compliant. Key financial, information and operation systems will be assessed and plans will be developed to address required system modifications. Given the relatively small size of the Company's systems and the relatively new hardware, software and operating systems, management does not anticipate any significant delays in becoming Year 2000 compliant. However, the Company is unable to control whether the firms and vendors that it does business with currently and in the future have systems that are Year 2000 compliant. To the extent that these firms and vendors would be unable to provide services and ship products, the Company's operations could be affected. However, management does not believe that Year 2000 changes will have a material impact on the Company's business and financial condition or results of operations. 15 ITEM 6 Exhibits and Reports Submitted on Form 8-K (a) EXHIBITS. The exhibits listed below are filed with this report.
Exhibit Number Description ------- ----------- 10.42 Registrant's Employee Stock Purchase Plan, as amended on November 20, 1997. 10.43 Special Form of Incentive Stock Option Agreement under the Option Plan of the Registrant. (1) 10.44 Employee Phantom Stock Salary Deferral Plan (the "Deferral Plan"). (1) 10.45 Form of Deferred Compensation Agreement under the Deferral Plan. - ------------------------------------------------------------------------------------
(1) Filed as an exhibit to the Registrant's Registration Statement on Form S-8 (No. 333-51577) or amendments thereto and incorporated herein by reference. (b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the quarter for which this report is filed. 16 AMYLIN PHARMACEUTICALS, INC. March 31, 1998 SIGNATURES 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 thereunto duly authorized. Amylin Pharmaceuticals, Inc. Date: May 13, 1998 By: /s/ Joseph C. Cook, Jr. ------------------------------------ Joseph C. Cook, Jr. Chairman of the Board and Chief Executive Officer (on behalf of the registrant and as the registrant's principal financial officer) EX-10.42 2 EXHIBIT 10.42 1 EXHIBIT 10.42 AMYLIN PHARMACEUTICALS, INC. EMPLOYEE STOCK PURCHASE PLAN Adopted November 20, 1991 Amended by the Board of Directors on May 29, 1997 Amended by the Compensation Committee on November 19, 1997 1. PURPOSE (a) The purpose of the Employee Stock Purchase Plan (the "Plan") is to provide a means by which employees of Amylin Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b), may be given an opportunity to purchase stock of the Company. (b) The word "Affiliate" as used in the Plan means any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the "Code"). (c) The Company, by means of the Plan, seeks to retain the services of its employees, to secure and retain the services of new employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company. (d) The Company intends that the rights to purchase stock of the Company granted under the Plan be considered options issued under an "employee stock purchase plan" as that term is defined in Section 423(b) of the Code. 1. ADMINISTRATION. (a) The Plan shall be administered by the Board of Directors (the "Board") of the Company unless and until the Board delegates administration to a Committee, as provided in subparagraph 2(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. (b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: (i) To determine when and how rights to purchase stock of the Company shall be granted and the provisions of each offering of such rights (which need not be identical). (ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 1. 2 (iv) To amend the Plan as provided in paragraph 13. (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company. (c) The Board may delegate administration of the Plan to a Committee composed of not fewer than two (2) members of the Board (the "Committee"). If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 2. SHARES SUBJECT TO THE PLAN. (a) Subject to the provisions of paragraph 12 relating to adjustments upon changes in stock, the stock that may be sold pursuant to rights granted under the Plan shall not exceed in the aggregate five hundred thousand (500,000) shares of the Company's common stock (the "Common Stock"). If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for the Plan. (b) The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 3. GRANT OF RIGHTS; OFFERING. The Board or the Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an "Offering") on a date or dates (the "Offering Date(s)") selected by the Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate. If an employee has more than one right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (1) each agreement or notice delivered by that employee will be deemed to apply to all of his or her rights under the Plan, and (2) a right with a lower exercise price (or an earlier-granted right, if two rights have identical exercise prices), will be exercised to the fullest possible extent before a right with a higher exercise price (or a later-granted right, if two rights have identical exercise prices) will be exercised. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the Offering or otherwise) the substance of the provisions contained in paragraphs 5 through 8, inclusive. 4. ELIGIBILITY. (a) Rights may be granted only to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall not be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous 2. 3 period preceding such grant as the Board or the Committee may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years. In addition, unless otherwise determined by the Board or the Committee and set forth in the terms of the applicable Offering, no employee of the Company or any Affiliate shall be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee's customary employment with the Company or such Affiliate is at least twenty (20) hours per week and at least five (5) months per calendar year. (b) The Board or the Committee may provide that, each person who, during the course of an Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an eligible employee or occurs thereafter, receive a right under that Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that: (i) the date on which such right is granted shall be the "Offering Date" of such right for all purposes, including determination of the exercise price of such right; (ii) the Purchase Period (as defined below) for such right shall begin on its Offering Date and end coincident with the end of such Offering; and (iii) the Board or the Committee may provide that if such person first becomes an eligible employee within a specified period of time before the end of the Purchase Period (as defined below) for such Offering, he or she will not receive any right under that Offering. (c) No employee shall be eligible for the grant of any rights under the Plan if, immediately after any such rights are granted, such employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any employee, and stock which such employee may purchase under all outstanding rights and options shall be treated as stock owned by such employee. (d) An eligible employee may be granted rights under the Plan only if such rights, together with any other rights granted under "employee stock purchase plans" of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee's rights to purchase stock of the Company or any Affiliate to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any time. (e) Officers of the Company and any designated Affiliate shall be eligible to participate in Offerings under the Plan, provided, however, that the Board may provide in an Offering that certain employees who are highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate. 5. RIGHTS; PURCHASE PRICE. (a) On each Offering Date, each eligible employee, pursuant to an Offering made under the Plan, shall be granted the right to purchase up to the number of shares of Common 3. 4 Stock of the Company purchasable with a percentage designated by the Board or the Committee not exceeding fifteen percent (15%) of such employee's Earnings (as defined in Section 7(a)) during the period which begins on the Offering Date (or such later date as the Board or the Committee determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no more than twenty-seven (27) months after the Offering Date (the "Purchase Period"). In connection with each Offering made under this Plan, the Board or the Committee shall specify a maximum number of shares which may be purchased by any employee as well as a maximum aggregate number of shares which may be purchased by all eligible employees pursuant to such Offering. In addition, in connection with each Offering which contains more than one Exercise Date (as defined in the Offering), the Board or the Committee may specify a maximum aggregate number of shares which may be purchased by all eligible employees on any given Exercise Date under the Offering. If the aggregate purchase of shares upon exercise of rights granted under the Offering would exceed any such maximum aggregate number, the Board or the Committee shall make a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. (b) The purchase price of stock acquired pursuant to rights granted under the Plan shall be not less than the lesser of: (i) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Offering Date; or (ii) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Exercise Date. 6. PARTICIPATION; WITHDRAWAL; TERMINATION. (a) An eligible employee may become a participant in an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board or the Committee of such employee's Earnings during the Accounting Period (as defined in subparagraph 8(a)). "Earnings" is defined as the total compensation paid to an employee, including all salary, wages (including amounts elected to be deferred by the employee, that would otherwise have been paid, under any cash or deferred arrangement established by the Company), overtime pay, commissions, bonuses, and other remuneration paid directly to the employee, but excluding profit sharing, the cost of employee benefits paid for by the Company, education or tuition reimbursements, imputed income arising under any Company group insurance or benefit program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company under any employee benefit plan, and similar items of compensation, or such other inclusions or exclusions as the Board or the Committee may determine for one or more specified Offerings. The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds of the Company. A participant may reduce (including to zero), increase or begin such payroll deductions after the beginning of any Purchase Period only as provided for in the Offering. A participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the participant has not had the maximum amount withheld during the Purchase Period. (b) At any time during a Purchase Period a participant may terminate his or her 4. 5 payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Purchase Period except as provided by the Board or the Committee in the Offering. Upon such withdrawal from the Offering by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the Offering, without interest, and such participant's interest in that Offering shall be automatically terminated. A participant's withdrawal from an Offering will have no effect upon such participant's eligibility to participate in any other Offerings under the Plan but such participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan. (c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating employee's employment with the Company and any designated Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the terminated employee), under the Offering, without interest. (d) Rights granted under the Plan shall not be transferable, and shall be exercisable only by the person to whom such rights are granted. 7. EXERCISE. (a) On each exercise date, as defined in the relevant Offering (an "Exercise Date"), each participant's accumulated payroll deductions for the Accounting Period and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of whole shares of stock of the Company, up to the maximum number of shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. For purposes of this subparagraph 8(a), "Accounting Period" shall mean (i) the payroll period ending no later than five (5) days after the immediately preceding Exercise Date and (2) each subsequent payroll period which ends before the relevent Exercise Date. No fractional shares shall be issued upon the exercise of rights granted under the Plan. The amount, if any, of accumulated payroll deductions remaining in each participant's account after the purchase of shares which is less than the amount required to purchase one share of stock on the final Exercise Date of an Offering shall be held in each such participant's account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering, as provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to the participant after said final Exercise Date, without interest. The amount, if any, of accumulated payroll deductions remaining in any participant's account after the purchase of shares which is equal to the amount required to purchase whole shares of stock on the final Exercise Date of an Offering shall be distributed in full to the participant after such Exercise Date, without interest. (b) No rights granted under the Plan may be exercised to any extent unless the Plan (including rights granted thereunder) is covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the "Securities Act"). If on an Exercise Date of any Offering hereunder the Plan is not so registered, no rights granted under the Plan or any Offering shall be exercised on said Exercise Date and the Exercise Date shall be delayed until the Plan is 5. 6 subject to such an effective registration statement, except that the Exercise Date shall not be delayed more than two (2) months and the Exercise Date shall in no event be more than twenty-seven (27) months from the Offering Date. If on the Exercise Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the purchase period (reduced to the extent, if any, such deductions have been used to acquire stock) shall be distributed to the participants, without interest. 8. COVENANTS OF THE COMPANY. (a) During the terms of the rights granted under the Plan, the Company shall keep available at all times the number of shares of stock required to satisfy such rights. (b) The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such rights unless and until such authority is obtained. 9. USE OF PROCEEDS FROM STOCK. Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the Company. 10. RIGHTS AS A STOCKHOLDER. A participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to rights granted under the Plan unless and until certificates representing such shares shall have been issued. 11. ADJUSTMENTS UPON CHANGES IN STOCK. (a) If any change is made in the stock subject to the Plan, or subject to any rights granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan and outstanding rights will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock subject to outstanding rights. (b) In the event of: (1) a dissolution or liquidation of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company's Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (4) any other capital reorganization in which more than fifty percent (50%) of the shares of the Company entitled to vote are exchanged, then, as determined by the Board in its sole discretion (i) any surviving corporation may assume outstanding rights or substitute similar rights for those under the Plan, 6. 7 (ii) such rights may continue in full force and effect, or (iii) participants' accumulated payroll deductions may be used to purchase Common Stock immediately prior to the transaction described above and the participants' rights under the ongoing Offering terminated. 12. AMENDMENT OF THE PLAN. (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will: (i) Increase the number of shares reserved for rights under the Plan; (ii) Modify the provisions as to eligibility for participation in the Plan (to the extent such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code; or (iii) Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under it into compliance therewith. (b) Rights and obligations under any rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such rights were granted or except as necessary to comply with any laws or governmental regulation. 13. TERMINATION OR SUSPENSION OF THE PLAN. (a) The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on November 19, 2001. No rights may be granted under the Plan while the Plan is suspended or after it is terminated. (b) Rights and obligations under any rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except with the consent of the person to whom such rights were granted or except as necessary to comply with any laws or governmental regulation. 14. EFFECTIVE DATE OF PLAN. The Plan shall become effective as determined by the Board, but no rights granted under the Plan shall be exercised unless and until the Plan has been approved by the stockholders of the Company. 7. EX-10.43 3 EXHIBIT 10.43 1 EXHIBIT 10.43 INCENTIVE STOCK OPTION _____________________, Optionee: Amylin Pharmaceuticals, Inc. (the "Company"), pursuant to its 1991 Stock Option Plan (the "Plan") has this day granted to you, the optionee named above, an option to purchase shares of the common stock of the Company ("Common Stock"). This option is intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). The details of your option are as follows: 1. The total number of shares of Common Stock subject to this option is _________________ (_________). Subject to the limitations contained herein, this option shall become exercisable ("vest") according to the following vesting schedule: If you continue as an employee of the Company or an affiliate (as defined in the Plan) through June 30, 1999 (the "Initial Vesting Date") this option shall become exercisable on the Initial Vesting Date with respect to one-half (1/2) of the total number of shares subject to this option; Thereafter, for as long as you continue as an employee of the Company or an affiliate, the balance of the shares subject to this option will become exercisable in equal daily installments for each day of continuous employment occurring after the Initial Vesting Date through the date that is four years from the date this option was granted. Notwithstanding the foregoing paragraphs, in the event of the occurrence of a "Change in Control" (defined below) of the Company, then immediately prior to the effective date of such Change in Control, the foregoing vesting schedule shall be accelerated and this option shall become fully vested. For purposes of the preceding paragraph, "Change in Control" is defined as any of the following: (i) any merger, acquisition, consolidation, reorganization or other similar transaction pursuant to which the shareholders of the Company immediately prior to such merger, consolidation, reorganization or other similar transaction do not, immediately thereafter, own more than 50% of the outstanding voting securities of the resulting entity or (ii) any liquidation or dissolution of the Company or any sale of all or substantially all of the assets of the Company. 2. (a) The exercise price of this option is ______________ ($____) per share, being not less than the fair market value of the Common Stock on the date of grant of this option. (b) Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: i. Payment of the exercise price per share in cash (including check) at the time of exercise; ii. Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt of cash (or check) by the Company prior to the issuance of Common Stock; iii. Provided that at the time of exercise the Company's Common Stock is publicly traded and quoted regularly in the Wall Street Journal, payment by delivery of already-owned shares of Common Stock of the Company, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens, claims, encumbrances or security interests, which Common Stock of the Company shall be valued at its fair market value (determined in accordance with the Plan) on the date of exercise; 2 iv. Payment by a combination of the methods of payment permitted by subparagraph 2(b)(i) through 2(b)(iii) above. 3. The minimum number of shares with respect to which this option may be exercised at any one time is one hundred (100), except that this minimum shall not apply with respect to the final exercise of this option. In no event may this option be exercised for any number of shares which would require the issuance of anything other than whole shares. 4. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Act or , if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Act. 5. The term of this option commences on the date hereof and, unless sooner terminated as set forth below or in the Plan, terminates on ___________ (which date shall be no more than ten (10) years from the date this option is granted). In no event may this option be exercised on or after the date on which it terminates. This option shall terminate prior to the expiration of its term as follows: three (3) months after the termination of your employment with the Company or an affiliate of the Company (as defined in the Plan) for any reason or for no reason unless: (a) such termination of employment is due to your permanent and total disability (within the meaning of Section 422(c)(6) of the Code), in which event the option shall terminate on the earlier of the termination date set forth above or one (1) year following such termination of employment; or (b) such termination of employment is due to your death, in which event the option shall terminate on the earlier of the termination date set forth above or eighteen (18) months after your death; or (c) during any part of such three (3) month period the option is not exercisable solely because of the condition set forth in paragraph 4 above, in which event the option shall not terminate until the earlier of the termination date set forth above or until it shall have been exercisable for an aggregate period of three (3) months after the termination of employment; or (d) exercise of the option within three (3) months after termination of your employment with the Company or with an affiliate would result in liability under section 16(b) of the Securities Exchange Act of 1934, in which case the option will terminate on the earlier of the termination date set forth above, the tenth (10th) day after the last date upon which exercise would result in such liability or six (6) months and ten (10) days after the termination of your employment with the Company or an affiliate. However, this option may be exercised following termination of employment only as to that number of shares as to which it was exercisable on the date of termination of employment under the provisions of paragraph I of this option. 6. (a) This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to subparagraph 6(f) of the plan. 3 (b) By exercising this option you agree that: (i) the Company may require you to enter an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of the exercise of this option; the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or the disposition of shares acquired upon such exercise; and (ii) you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of this option that occurs within two (2) years after the date of this option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of this option. 7. This option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. 8. This option is not an employment contract and nothing in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. 9. Any notices provided for in this option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 10. This option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of paragraph 5 of the Plan relating to option provisions, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this option and those of the Plan, the provisions of the Plan shall control. Dated: ___________, 1998 Very Truly Yours, AMYLIN PHARMACEUTICALS, INC. By:_____________________________ Duly authorized on behalf of the Board of Directors 4 The undersigned: Acknowledges receipt of the foregoing option and the attachments referenced therein and understands that all rights and liabilities with respect to this option are set forth in the option and the Plan; and Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned optionee and the Company and its affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of the options previously granted and delivered to the undersigned, if any, under the Stock Option Plans of the Company and the rights of the undersigned under the 1992 Employee Stock Purchase Plan of the Company and the agreements to purchase restricted stock, if any, made prior to the Company's Initial Public Offering. ___________________________________ Optionee Address: ________________________ ________________________ EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AS FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q. 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 34,991,000 0 0 0 0 36,382,000 20,965,000 11,760,000 47,405,000 18,143,000 0 0 0 32,000 (9,436,000) 47,405,000 0 7,598,000 0 0 21,092,000 0 1,325,000 (14,819,000) 0 (14,819,000) 0 0 0 (14,819,000) (0.46) (0.46)
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