-----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, M8RIeaUwM3R0Z1+qFfWHdb4qF6fk2+MQPE6rtgsBFvD6tDw+KGpoiWwNYDupFFxP dRDGESt9GFg/YI2O3e1nVQ== 0000891618-96-001733.txt : 19960814 0000891618-96-001733.hdr.sgml : 19960814 ACCESSION NUMBER: 0000891618-96-001733 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANGSTAT MEDICAL CORP CENTRAL INDEX KEY: 0000913610 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 943076069 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22890 FILM NUMBER: 96611182 BUSINESS ADDRESS: STREET 1: 1505 ADAMS DR CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 4153280300 MAIL ADDRESS: STREET 1: 1505 ADAMS DR CITY: MENLO PARK STATE: CA ZIP: 94025 10-Q 1 FORM 10-Q FOR THE PERIOD ENDED JUNE 30,1996 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-22890 SANGSTAT MEDICAL CORPORATION (Exact name of registrant as specified in its charter) California 94-3076-069 (State of incorporation) (IRS Employer Identification No.) 1505 Adams Drive Menlo Park, CA 94025 (Address of principal executive office, Zip Code) Registrant's telephone number, including area code: 415-328-0300 None (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. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 1996. CLASS NUMBER OF SHARES ----- ---------------- Common Stock 13,078,983 Exhibit Index is located on page 12 -1- 2 SANGSTAT MEDICAL CORPORATION FORM 10-Q INDEX PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE CONDENSED CONSOLIDATED BALANCE SHEETS........................... 3 June 30, 1996 and December 31, 1995 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS................. 4 Three and Six Months Ended June 30, 1996 and 1995 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS................. 5 Six Months Ended June 30, 1996 and 1995 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS............ 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................... 7-9 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............. 10 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................ 10 SIGNATURES................................................................. 11 EXHIBIT INDEX.............................................................. 12 EXHIBIT 10.24...................................................13-15 -2- 3 SANGSTAT MEDICAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1996 December 31, 1995 ------------- ----------------- ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 24,012,840 $ 4,609,186 Short-term Investments 23,990,656 4,612,565 Accounts Receivable 217,406 406,153 Other Receivables 538,258 170,118 Inventories 936,338 766,124 Prepaid Expenses 217,328 73,531 ------------ ------------ Total Current Assets 49,912,826 10,637,677 PROPERTY AND EQUIPMENT -- NET 662,472 528,962 OTHER ASSETS 383,138 393,238 ------------ ------------ TOTAL $ 50,958,436 $ 11,559,877 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 1,183,052 $ 1,041,389 Accrued Liabilities 435,661 652,742 Capital Lease Obligations -- Current 191,057 238,651 Notes Payable -- Current 254,105 254,249 ------------ ------------ Total Current Liabilities 2,063,875 2,187,031 ------------ ------------ CAPITAL LEASE OBLIGATIONS 470,749 286,558 ------------ ------------ NOTES PAYABLE 679,662 804,811 ------------ ------------ Common Stock 81,357,413 36,275,765 Accumulated Deficit (33,772,691) (28,051,991) Accumulated Translation Adjustment 19,791 46,811 Unrealized Gain on Investment 139,637 10,892 ------------ ------------ Total Shareholders' Equity 47,744,150 8,281,477 ------------ ------------ TOTAL $ 50,958,436 $ 11,559,877 ============ ============
-3- 4 SANGSTAT MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, Six Months Ended June 30, --------------------------- -------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Revenues: Net Product Sales $ 381,243 $ 572,302 $ 1,092,588 $ 1,274,206 Collaborative Agreement 0 375,000 0 1,125,000 ----------- ----------- ----------- ----------- Total Revenues 381,243 947,302 1,092,588 2,399,206 ----------- ----------- ----------- ----------- Operating Expenses Cost of Sales and Manufacturing 593,501 638,170 1,288,639 1,315,149 Research and Development 1,825,795 1,590,077 4,055,231 2,924,365 Selling, General & Administrative 1,337,947 1,010,689 2,340,650 1,781,415 ----------- ----------- ----------- ----------- Total Operating Expenses 3,757,243 3,238,936 7,684,520 6,020,929 ----------- ----------- ----------- ----------- Loss from Operations (3,376,000) (2,291,634) (6,591,932) (3,621,723) Other Income (Expense) Interest Income 734,626 250,730 937,926 461,934 Interest & Other Expense (36,341) (37,898) (66,694) (68,221) ----------- ----------- ----------- ----------- Other Income, Net 698,285 212,832 871,232 393,713 ----------- ----------- ----------- ----------- Net Loss $(2,677,715) $(2,078,802) $(5,720,700) $(3,228,010) =========== =========== =========== =========== Net Loss per Common and Equivalent Share $ (0.20) $ (0.22) $ (0.49) $ (0.35) =========== =========== =========== =========== Common and Equivalent Shares used in Computing per Share Amounts 13,064,643 9,486,408 11,695,412 9,187,844 =========== =========== =========== ===========
-4- 5 SANGSTAT MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, -------------------------------- 1996 1995 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (5,720,700) $(3,228,010) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 169,012 190,750 Changes in assets and liabilities Accounts receivable 188,764 (216,281) Other receivables (370,169) (154,354) Inventories (169,943) (243,399) Prepaid expenses (144,094) (98,115) Accounts payable 150,141 41,014 Accrued liabilites (209,037) (254,928) ------------ ----------- Net cash used in operating activities (6,106,026) (3,963,323) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Sale of Common stock and warrants 45,081,648 5,256,727 Note payable borrowings 134,277 269,700 Note payable repayments (243,612) (262,651) Repayment of capital lease obligations (141,818) (120,595) ------------ ----------- Net cash provided by financing activities 44,830,495 5,143,181 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (25,835) (15,364) Maturities of short-term cash investments 7,799,722 6,000,000 Purchase of short-term cash investments (27,054,975) (9,191,686) Deposits and other assets (13,165) 148,781 ------------ ----------- Net cash used in investing activities (19,294,253) (3,058,269) ------------ ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (26,562) 23,291 ------------ ----------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 19,403,654 (1,855,120) CASH AND EQUIVALENTS, BEGINNING OF PERIOD 4,609,186 9,828,928 ------------ ----------- CASH AND EQUIVALENTS, END OF PERIOD $ 24,012,840 $ 7,973,808 ============ =========== NONCASH INVESTING AND FINANCING ACTIVITIES: Property acquired under capital leases $ 278,415 $ 188,758 ============ =========== Unrealized gain on investments $ 128,745 $ 79,211 ============ =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION-- Cash paid during the year for interest $ 87,529 $ 70,597 ============ ===========
-5- 6 SANGSTAT MEDICAL CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Basis of Presentation The consolidated financial statements include the accounts of SangStat Medical Corporation and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated. While the quarterly financial information in this filing is unaudited, the financial statements presented reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for a fair presentation of the results of operations for the interim periods covered and of the financial condition of the Company at the dates of the interim balance sheets. These results for interim periods are not necessarily indicative of the results for the entire year. The information included in this report should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company's 1995 Annual Report to Shareholders. Per Share Information Net loss per common and equivalent share is computed using the weighted average number of common shares outstanding during the period. Options and warrants granted by the Company have been excluded in the calculation of common and common equivalent shares outstanding since they would serve to reduce the net loss per share. Inventories Inventories, valued at the lower of cost (first-in, first-out) or market consist of:
June 30, December 31, 1996 1995 -------- ------------ Raw materials $514,193 $432,549 Work-in-progress 239,468 213,863 Finished goods 182,677 119,712 -------- -------- Total $936,338 $766,124 ======== ========
-6- 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS -- THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 Net product sales were $1,093,000 in the first half of 1996 compared with $1,274,000 in the first half of 1995. This primarily reflects continued demand for THYMOGLOBULIN(R) under Canada's Emergency Drug Release (EDR) Program as reflected in an increase in SangStat Canada's therapeutic sales in the first half of 1996 compared with the same period in 1995 and offset by a decrease in revenues for certain contract manufacturing, OEM and other products for research use. In May,1996 SangStat announced that it would buy back the exclusive commercial rights for its monitoring products PRA-STAT(R) and CROSS-STAT(R) from Baxter Healthcare Corporation effective July 1, 1996. Net product sales decreased to $381,000 in the second quarter 1996 from $572,000 in the corresponding quarter in 1995, reflecting a return of inventory from Baxter and a temporary effect on sales while sales and marketing responsibilities were being transferred between the two companies. As expected, no collaborative agreement milestone payments were received in 1996, reflecting completion of the final milestones for PRA-STAT and CROSS-STAT in 1995. These final payments of $1,125,000 in the first six months of 1995 represented the completion of $10.0 million received by SangStat for milestones, license fees and equity in 1993 through 1995 under its collaborative agreement with Baxter. Cost of sales and manufacturing expenses decreased to $594,000 for the second quarter 1996 from $638,000 in the corresponding quarter of 1995. Cost of sales and manufacturing expenses decreased to $1,289,000 in the first half of 1996 from $1,315,000 in the first half of 1995. These decreases are primarily attributable to lower costs of goods sold of the Company's first therapeutic product, THYMOGLOBULIN. The Company's monitoring products business does not currently generate a profit, because certain sales are made on a cost recovery basis and the Company has not yet achieved a scale of production which allows it to cover fixed manufacturing costs. Sales of these monitoring products however, partially offset fixed costs and serve as a prototype for manufacture for further products as well as to further the Company's reputation and presence in the industry. Notwithstanding these losses, the Company's strategy is to obtain regulatory approval for certain of these and other monitoring products and to produce and sell these products on a commercially profitable basis. The Company accordingly obtained FDA 510(k) approval for its PRA-STAT product in September 1994 and obtained FDA 510(k) approval for CROSS-STAT in May 1995. Research and development expenses increased to $1,826,000 in the second quarter of 1996 from $1,590,000 in the same period in 1995 and also increased to $4,055,000 in the first half of 1996 from $2,924,000 in the first half of 1995. This increase reflects several significant clinical development achievements. In May the Company completed patient enrollment in its pivotal Phase III clinical trial for THYMOGLOBULIN(R). The last patient will complete this trial in late August and trial results are currently expected to be presented in the autumn of 1996. SangStat also expects to submit the PLA regulatory submission for -7- 8 THYMOGLOBULIN to the FDA by the end of 1996. The Company also initiated pivotal bioequivalence trials for CYCLOSPORINE and bioequivalence trials for AZATHIOPRINE. SangStat also initiated a second Phase II dose-finding safety and surrogate end-point trial for its proprietary peptide ALLOTRAP(R) 2702 and increased expenditures for the three and six month periods ended June 1996 for XENOJECT research as compared to respective periods in 1995. Selling, general and administrative expenses increased to $1,338,000 in the second quarter of 1996 from $1,011,000 from the same quarter of the previous year and also increased to $2,341,000 in the first six months of 1996 from $1,781,000 in the first six months in 1995. These increases primarily reflect planned increases in expenses for distribution of THYMOGLOBULIN(R) and other increases in expenses for sales and marketing activities for the Company's monitoring products, investor relations, business development activities and patents. Interest income increased in the second quarter of 1996 to $735,000 from $251,000 in the second quarter of the previous year and increased to $938,000 from $462,000 for the first six months of 1996 and 1995, respectively. This reflects interest earned from investment of the cash proceeds from the Company's public offering in March 1996. Interest and other expense for capital lease obligations and long term notes remained essentially unchanged at $36,000 in the second quarter of 1996 compared with $38,000 in the same quarter of the previous year and $67,000 in the first half of 1996 compared with $68,000 in the first half of 1995. The Company's net loss was $2,678,000 or $0.20 per share in the second quarter of 1996, compared with a net loss of $2,079,000 or $0.22 per share in the second quarter of 1995. The net loss was $5,721,000 for the first half of 1996 compared to a net loss of $3,228,000 for the first half of 1995. These changes are primarily the combined result of completion of milestone revenue payments in 1995 from the collaborative agreement with Baxter in combination with higher operating expenses in the three and six month periods ended June 30, 1996 compared with the same periods in 1995. FINANCIAL CONDITION Total assets as of June 30, 1996 were $50,958,000, an increase of $39,399,000 from December 31, 1995. This increase is primarily due to an increase of cash and investments of $38,782,000, an increase of accounts receivable and other receivables of $179,000 and an increase in inventory of $170,000 for monitoring products and THYMOGLOBULIN. -8- 9 Total liabilities were $3,214,000 as of June 30, 1996, compared to $3,278,000 as of December 31, 1995. This decline of $64,000 was a result of declines in current liabilities of $123,000 and notes payable of $125,000, offset in part by an increase of capital lease obligations of $184,000. Stockholders' equity increased by $39,463,000 from year end 1995. This increase consisted primarily of $45,061,000 in net proceeds from the Company's public offering in March 1996, offset partially by the net loss of $5,721,000 for the first six months of 1996. LIQUIDITY The Company has cash, cash equivalents and investments of $48,003,000 as of June 30, 1996. The Company expects to incur significant costs related to continued research and development programs, preclinical and clinical testing and regulatory approval activities in the years ahead. In addition, in the event the Company receives regulatory approval for any of its therapeutic products, the Company may then need to raise additional funds through additional financings, including private or public equity offerings and collaborative research and development arrangements with corporate partners. There can be no assurance that funds will be raised on favorable terms, if at all, or that discussions with potential collaborative partners will result in any agreements. The Company believes that its existing capital resources, together with product sales and interest income will be sufficient to meet the Company's operating and capital requirements through at least 1997. The Company's future capital requirements will depend on many factors, including: continued scientific progress in its research and development programs; progress in clinical trials; the time and costs involved in obtaining regulatory approvals; the costs involved in obtaining and enforcing patents; the ability of the Company to establish development and commercialization relationships; and the costs of manufacturing scale-up. This document contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. For a discussion of factors that might result in different outcomes, see the Company's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on March 7, 1996, in particular "Risk Factors" set forth therein, and the Company's Form 10-K and Annual Report for the year ended December 31, 1995, filed with the Securities and Exchange Commission. -9- 10 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS The Company distributed its Definitive Proxy Statement, Proxy and Annual Report to Shareholders on or about May 13, 1996 to each shareholder of record as of April 26, 1996, for its Annual Meeting of Shareholders held June 18, 1996. At the Company's Annual Meeting, the shareholders were asked to consider three proposals. The first proposal involved the election of directors. The existing Board of Directors selected six nominees, all of whom ran unopposed and all of whom were then serving as directors of the Company. The nominees of the Board, and the voting results with respect thereto, were:
Name Votes For Against ---- --------- ------- Philippe Pouletty 10,628,302 0 Gordon Russell 10,628,302 0 Fredric Feldman 10,628,302 0 Richard Murdock 10,628,302 0 Vincent Worms 10,628,302 0 Andrew Perlman 10,628,302 0
The second proposal concerned an amendment to the Company's 1993 Stock Option Plan which increased the number of shares of Common Stock reserved for issuance thereunder by 500,000 shares. The number of votes cast for, against, abstentions and broker non-votes were 8,283,273; 1,673,466; 3,163 and 668,400 respectively. The third and final proposal concerned the ratification of the Company's independent auditors, Deloitte & Touche LLP, for the fiscal year ending December 31, 1996. The number of votes cast for, against, and the number of abstentions were 10,624,889; 2,300 and 1,113, respectively. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.24 Amended and Restated Collaborative Agreement. (b) There were no reports on Form 8-K filed during the period covered by this report. -10- 11 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. SANGSTAT MEDICAL CORPORATION (REGISTRANT) DATE: August 13, 1996 BY: ------------------------------------------- DAVID L. WINTER, M.D. PRESIDENT AND CHIEF OPERATING OFFICER DATE: August 13, 1996 BY: ------------------------------------------- HENRY N. EDMUNDS, PH.D. VICE PRESIDENT AND CHIEF FINANCIAL OFFICER -11- 12 EXHIBIT INDEX 10.24 Amended and Restated Collaborative Agreement 27 Financial Data Schedule -12- EX-10.24 2 AMENDED AND RESTATED COLLABORATIVE AGREEMENT 1 Exhibit 10.24 April 4, 1996 AMENDED AND RESTATED COLLABORATIVE AGREEMENT This Amended and Restated Collaborative Agreement (the "Restated Agreement"), dated April 3, 1996, amends and restates that certain Collaborative Agreement dated as of April 19, 1993 (the "Collaborative Agreement") by and between Baxter Healthcare Corporation, including its Nextran business unit ("Baxter") and SangStat Medical Corporation ("SangStat"). Terms not otherwise defined herein shall have the meaning set forth in the Collaborative Agreement. The parties agree as follows: 1. Effective as of July 1, 1996 (the "Transfer Date"), the Collaborative Agreement shall be amended and restated in its entirety and from such date the rights and obligations of the parties to the Collaborative Agreement shall be governed entirely by this Restated Agreement. The parties agree to release each other from any and all existing obligations relating to the Collaborative Agreement and performance by the parties thereunder as of the Transfer Date, except as specifically set forth herein. 2. a. In consideration for the release of SangStat from any and all obligations under the Collaborative Agreement, including but not limited to the repayment of amounts that are or may otherwise become due and owing, SangStat agrees to pay to Baxter [ * ] (or until Baxter receives [ * ] from SangStat in respect to paragraph 2, whichever occurs first) [ * ] of any Licensed Product or Licensed Product Improvement (collectively "SangStat Products") by SangStat and its Affiliates. Notwithstanding the foregoing, the [ * ] for Clinical Trial Sales shall be equal to [ * ] of Clinical Trial Sales by SangStat and its Affiliates. "Clinical Trial Sales" shall mean sales made for use in a study conducted in accordance with Good Clinical Practices where the product is to be used under a pre-defined trial protocol; provided that sales will not be considered Clinical Trial Sales if the price for such SangStat Product [ * ] in the most recent preceding calendar quarter for non-Clinical Trial Sales in the geographic area. *CONFIDENTIAL TREATMENT REQUESTED FOR DELETED PORTION. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC. 2 b. For the first five (5) years after the date of this Restated Agreement, should SangStat develop and subsequently market a product that would be defined as a "New Soluble HLA Product", such Product shall be deemed a SangStat product hereunder, [ * ] of this Restated Agreement. However, should Baxter market a product that competes with a SangStat Product during [ * ], then the obligation of [ * ] with respect to such SangStat product will terminate. The definition of [ * ] shall have the meaning set forth in [ * ] except that the term "Baxter" shall be replaced by the term "SangStat", the term "Baxter Affiliate" shall be replaced by the term "SangStat Affiliate", and the term "Licensed Product" shall be replaced by the term "SangStat Product". c. In the event that SangStat sublicenses substantially all of its rights in a geographic area to make, use, or sell the SangStat Products to a third party, the parties will use all diligent efforts [ * ] so that Baxter and SangStat will receive, relatively, the same economic benefit as contemplated by this Paragraph 2. In the event that the parties cannot agree on the [ * ], the parties will submit the dispute to mutually agreeable third party Certified Public Accountant who is a member of a "Big Six" public accounting firm. 3. SangStat agrees that it will offer employment to [ * ] employees on terms comparable to those provided to other similarly situated employees of SangStat. The parties will cooperate for the smooth transfer of those employees to SangStat with an effort to minimize costs to the parties consistent with the parties' business interests. The transfer will be effective as soon as reasonably practicable, but in no event later than the Transfer Date. Other than those employees made offers as contemplated herein, SangStat agrees that it will not solicit or hire any Nextran employees or an employee of Baxter assigned to the Nextran business unit, whether as a SangStat employee or consultant, for a period of one year from the date of this Restated Agreement without the prior written consent of Baxter; provided that this obligation shall cease if Baxter announces its intent to sell products competitive with the SangStat Products. 4. SangStat shall purchase Baxter's saleable inventory of SangStat products existing on the Transfer Date for the same amount paid by Baxter for such products plus any shipping, taxes, duties, levies, or third-party fees imposed to transfer the inventory to SangStat's facilities. Payment shall be made within thirty (30) days of the shipment of the inventory to SangStat. SangStat shall also purchase the [ * ] owned by Baxter and used in connection with the marketing and sales of SangStat Products ("Equipment") for their net book value. [ * ] Baxter shall pay for any shipping, taxes, duties, levies, or third-party *CONFIDENTIAL TREATMENT REQUESTED FOR DELETED PORTION. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC. 2. 3 fees imposed on the sale of the Equipment to SangStat. The purchase price for the Equipment, plus imputed interest on any outstanding amount [ * ] (as published in the Wall Street Journal on the Transfer Date) will be paid [ * ] in equal quarterly payments, with quarterly payments beginning on the Transfer Date. Baxter will deliver the SangStat Products and the Equipment, other than Equipment in the possession of customers, to SangStat at its principal distribution center located at 1505 Adams Drive, Menlo Park, California. 5. Baxter agrees to cooperate for the purpose of providing a smooth transition to SangStat by providing reasonably detailed information concerning its marketing and sales effort, including but not limited to customer lists, a detailed accounting and inventory report with respect to the Equipment and SangStat Product inventory, sales information, ongoing beta site and clinical studies information, product complaint files, consulting agreement lists, and compensation packages for the sales and marketing force dedicated to selling the SangStat Products in the United States and Europe. This information relating to employees and consultants' payments shall be subject to the confidentiality provisions of the Collaborative Agreement. Use of all other information shall not be subject to such confidentiality provisions. 6. [ * ] shall be paid quarterly during each calendar year based upon SangStat's and its Affiliates [ * ] at the end of each calendar quarter. Such quarterly payments shall be made within sixty (60) days after the end of each calendar quarter. The payment terms shall be made in accordance with [ * ] except that all references to "Baxter" shall mean "SangStat" and all references to "SangStat" shall mean "Baxter" for purposes of that Section 5.6. 7. The parties agree to execute such other agreements and to make such other arrangements as may be necessary in order to effectuate the terms and conditions of this Restated Agreement, including the execution of mutual releases. 8. In order to facilitate the smooth and orderly transition of the reasons relating to their respective business plans and interests, the parties agree that on or before June 10, 1996 they will issue a mutually agreeable press release describing the restructure business relationship under the Collaborative Agreement. Until such joint press release is issued by both parties, neither party will publicly disclose the existence or terms of this Restated Agreement, and both parties will use all reasonable efforts to prevent their respective employees and agents from making any such disclosure, provided that nothing shall prevent either party from making such disclosures as required by applicable laws, including securities laws. *CONFIDENTIAL TREATMENT REQUESTED FOR DELETED PORTION. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE SEC. 3. 4 9. In addition to the provisions specifically discussed above, the provisions of Sections 5.5, 7.1, 7.3, 7.5 (however, with respect to subsection 7.5(g), the restriction set forth therein shall not be construed after the Transfer Date in a manner that could limit SangStat's marketing of the Products), 7.8, 7.9, 7.10 and 7.11 of the Collaborative Agreement shall remain in full force and effect. BAXTER HEALTHCARE CORPORATION By:/s/ Donald W. Joseph Name: Donald W. Joseph Title: Group Vice President, Renal SANGSTAT MEDICAL CORPORATION By:/s/ Philippe Pouletty Name: Philippe Pouletty, M.D. Title: Chairman and CEO 4. EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED CONSOLIDATED BALANCE SHEETS OF JUNE 30, 1996/95 (UNAUDITED) AND THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF JUNE 30, 1996/95. 1 3-MOS DEC-31-1996 APR-01-1996 JUN-30-1996 24012840 23990656 755664 16000 936338 49912826 2092658 1430186 50958436 2063875 0 0 0 81357413 0 50958436 381243 381243 593501 3757243 0 0 36341 (2677715) 0 0 0 0 0 (2677715) (0.20) (0.19)
-----END PRIVACY-ENHANCED MESSAGE-----