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Delaware | 2834 | 22-3159793 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Steven D. Singer, Esq. Jay E. Bothwick, Esq. Cynthia T. Mazareas, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109 Tel:(617) 526-6000 Fax:(617) 526-5000 | Errol B. De Souza, Ph.D. President and Chief Executive Officer Archemix Corp. 300 Third Street Cambridge, Massachusetts 02142 Tel:(617) 621-7700 | Jeffrey M. Wiesen, Esq. Scott A. Samuels, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, Massachusetts 02111 Tel:(617) 542-6000 Fax:(617) 542-2241 |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company þ |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount | Offering | Aggregate | Registration | ||||||||
Securities to be Registered | to be Registered(*) | Price per Share | Offering Price | Fee | ||||||||
Common Stock, $0.01 par value per share | 128,550,149(1) | N/A | $410,772.66(2) | $17 | ||||||||
Common Stock, $0.01 par value per share | 82,949,317(3) | N/A | N/A | (4) | ||||||||
Options to Purchase Shares of Common Stock | 4,058,719(5) | $0.33(6) | $1,339,377.27(6) | $53 | ||||||||
Common Stock, $0.01 par value per share | 4,058,719(7) | N/A | N/A | (7) | ||||||||
(1) | Represents the estimated maximum number of shares of common stock, $0.01 par value per share, of NitroMed, Inc., a Delaware corporation (“NitroMed”), issuable in the proposed merger of Newport Acquisition Corp., a wholly-owned subsidiary of NitroMed, with and into Archemix Corp., a Delaware corporation (“Archemix”) or following such merger: (i) to holders of common stock, $0.001 par value per share, and preferred stock, $0.01 par value per share, of Archemix; (ii) upon exercise of outstanding warrants to purchase shares of common stock or preferred stock of Archemix that are assumed by NitroMed in connection with the merger; (iii) upon exercise of outstanding options to purchase shares of common stock of Archemix under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (the “Archemix Stock Plan”), that are assumed by NitroMed in connection with the merger. | |
(2) | Estimated solely for purposes of calculation of the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended (the “Securities Act”), based upon one third of the aggregate par value ($0.001) of up to 26,545,950 shares of Archemix common stock and the par value ($0.01) of up to 120,571,202 shares of Archemix preferred stock to be cancelled in the merger or underlying options and warrants being assumed in the merger. | |
(3) | Represents the estimated maximum number of shares of NitroMed common stock being registered for resale by affiliates of Archemix named as selling stockholders herein, all of which are issuable (i) in exchange for their shares of Archemix common stock or preferred stock being issued in connection with the merger or (ii) upon exercise of outstanding options to purchase shares of common stock of Archemix being assumed in connection with the merger as of December 1, 2008. | |
(4) | No filing fee is required with respect to the registration of the resale of these shares of common stock pursuant to Rule 457(f)(5) and 457(h)(3). | |
(5) | Represents the estimated maximum number of retention options to purchase shares of NitroMed common stock that are to be issued by NitroMed in connection with the merger to specified employees of Archemix who remain employees or on the board of directors of the combined company following the merger (the “Retention Options”) under the Archemix Stock Plan or the NitroMed Amended and Restated 2003 Stock Incentive Plan, as amended, to be issued in connection with the proposed merger. | |
(6) | This calculation is made solely for the purpose of determining the registration fee pursuant to the provisions of Rule 457(c) and (h) under the Securities Act on the basis of the average of the high and low sale prices per share of the common stock on The NASDAQ Global Market as of a date (December 16, 2008) within five business days prior to filing this registration statement. | |
(7) | Represents shares of Nitromed common stock issuable upon exercise of the Retention Options. Pursuant to Rule 457(i), a separate registration fee is not payable. | |
(*) | NitroMed anticipates that prior to the completion of the distribution of the securities covered by this registration statement, all of NitroMed’s common stock, including the securities covered by this registration statement, will be combined by a reverse stock split into a lesser amount of NitroMed common stock, and the amount of undistributed common stock deemed to be covered by this registration statement, including the number of Retention Options being separately registered, shall be proportionately reduced. |
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The information in this joint proxystatement/prospectus is not complete and may be changed. NitroMed may not sell its securities pursuant to the proposed transaction until the Registration Statement filed with the Securities and Exchange Commission is effective. This joint proxystatement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
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YOUR VOTE IS VERY IMPORTANT
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• | based upon the unanimous recommendation of a committee of disinterested directors, the NitroMed board of directors has unanimously approved the merger agreement and the respective proposals described in the accompanying joint proxy statement/prospectus relating to the merger, has determined that they are advisable, fair to and in the best interests of NitroMed’s stockholders, and unanimously recommends that NitroMed’s stockholders vote “FOR” the proposals relating to the merger and the certificates of amendment described in the accompanying joint proxy statement/prospectus. | |
• | the Archemix board of directors has unanimously approved the merger agreement and the respective proposals described in the accompanying joint proxy statement/prospectus relating to the merger, has determined that they are advisable, fair to and in the best interests of Archemix’s stockholders, and unanimously recommends that Archemix’s stockholders vote “FOR” the proposals relating to the merger described in the accompanying joint proxy statement/prospectus. |
Kenneth M. Bate | Errol B. De Souza, Ph.D. | |
President, Chief Executive Officer and Interim Chief Financial Officer | President and Chief Executive Officer | |
NITROMED, INC. | ARCHEMIX CORP. |
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45 Hayden Avenue, Suite 3000
Lexington, Massachusetts 02421
(781) 266-4000
TO BE HELD ON , 2009
Interim Chief Financial Officer
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300 Third Street
Cambridge, Massachusetts 02142
(617) 621-7700
TO BE HELD ON , 2009
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NitroMed, Inc. | Archemix Corp. | |
45 Hayden Avenue, Suite 3000 | 300 Third Street | |
Lexington, Massachusetts 02421 | Cambridge, Massachusetts 02142 | |
(781)266-4000 | (617) 621-7700 | |
Attn: Corporate Secretary | Attn: Chief Financial Officer |
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SPECIAL MEETING AND THE MERGER
Q: | What proposals will be voted on at the NitroMed special meeting? | |
A: | The following proposals will be voted on at the NitroMed special meeting: | |
• The first proposal to be voted on is whether to approve the issuance of NitroMed common stock in connection with the merger of NitroMed and Archemix pursuant to the terms of the merger agreement attached asAnnex A. See “The Merger” for a more detailed description of the transaction. | ||
• The second proposal to be voted on is whether to approve an amendment to NitroMed’s certificate of incorporation to effect a reverse stock split of NitroMed’s common stock. See “NitroMed Proposal No. 2: Approval of the Reverse Stock Split” for a more detailed description of the reverse stock split. | ||
• The third proposal to be voted on is whether to approve an amendment to NitroMed’s certificate of incorporation to change the name of NitroMed to “Archemix Corp.” See “NitroMed Proposal No. 3: Approval of Name Change” for a more detailed description of the name change. | ||
• The fourth proposal to be voted on is whether to adjourn the meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the first, second and third proposals. | ||
Q: | What is the merger? | |
A: | NitroMed and Archemix have entered into an Agreement and Plan of Merger, dated as of November 18, 2008, which is referred to in this joint proxy statement/prospectus as the merger agreement, that contains the terms and conditions of the proposed business combination of NitroMed and Archemix. Under the merger agreement, Archemix and Newport Acquisition Corp., a wholly owned subsidiary of NitroMed, which is referred to in this joint proxy statement/prospectus as the merger sub, will merge, with Archemix surviving as a wholly owned subsidiary of NitroMed. This transaction is referred to as the merger. | |
An aggregate of approximately 110.9 million shares of NitroMed’s common stock will be issued or issuable pursuant to the merger, subject to adjustment as a result of a reverse stock split of NitroMed’s common stock to occur in connection with the merger. Immediately following the effective time of the merger, Archemix’s securityholders will own approximately 70%, and NitroMed’s current securityholders will own approximately 30%, of NitroMed’s common stock, after giving effect to shares issuable pursuant to Archemix’s outstanding options, warrants and the retention options and after giving effect to any shares issuable pursuant to NitroMed’s outstanding options. The number of shares to be issued or issuable in connection with the merger and these percentages assume that NitroMed’s net cash balance at closing is $45 million and Archemix’s cash and cash equivalent balance at closing is at least $30 million. The exact percentages will be determined in accordance with a formula that takes into account both NitroMed’s actual net cash balance and Archemix’s cash and cash equivalents at closing and will not be calculated until that time. | ||
Q: | What is the reverse stock split and why is it necessary? | |
A: | Immediately prior to the effective time of the merger, the outstanding shares of NitroMed’s common stock will be reclassified and combined into a lesser number of shares to be determined by NitroMed’s board of directors prior to the effective time and publicly announced by NitroMed. Because The NASDAQ Global Market’s initial listing standards require NitroMed to have, among other things, a $5.00 per share minimum bid price, the reverse stock split is necessary to consummate the merger. |
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Q: | What will happen to NitroMed if, for any reason, the merger with Archemix does not close? | |
A: | NitroMed has invested significant time and incurred, and expects to continue to incur, significant expenses related to the proposed merger with Archemix. In the event the merger does not close, NitroMed will review all strategic alternatives, including seeking to identify and effect an alternative business combination or other strategic transaction. However, NitroMed may not be able to consummate an alternative transaction on favorable terms, or at all. If NitroMed is not able to successfully consummate an alternative strategic transaction, NitroMed’s board of directors may take steps to liquidate or dissolve NitroMed’s business and remaining assets. | |
Q: | How does NitroMed’s board of directors recommend that NitroMed’s stockholders vote? | |
A: | After careful consideration and based upon a recommendation of a committee of disinterested directors, NitroMed’s board of directors has unanimously approved the merger agreement and each of the proposals described in this joint proxy statement/prospectus that the stockholders of NitroMed are being asked to consider, and has determined that they are advisable, fair to and in the best interests of NitroMed’s stockholders. Accordingly, NitroMed’s board of directors unanimously recommends that NitroMed’s stockholders vote FOR each such proposal. | |
Q: | How did Archemix’s board of directors recommend that Archemix’s stockholders vote? | |
A: | After careful consideration, Archemix’s board of directors has unanimously recommended that Archemix’s stockholders vote to adopt the merger agreement. | |
Q: | What NitroMed stockholder approvals are required to consummate the merger? | |
A: | To consummate the merger, NitroMed’s stockholders must approve: | |
• the issuance of shares of NitroMed’s common stock in connection with the merger, which requires the affirmative vote of the holders of a majority of the shares of NitroMed’s common stock present in person or represented by proxy and voting on such matter at the special meeting; | ||
• the amendment to NitroMed’s certificate of incorporation to effect the reverse stock split of NitroMed’s common stock, which requires the affirmative vote of holders of a majority of the outstanding shares of NitroMed’s common stock as of the record date for the special meeting; and | ||
• the amendment to NitroMed’s certificate of incorporation to change the name of NitroMed to “Archemix Corp.,” which requires the affirmative vote of holders of a majority of the outstanding shares of NitroMed’s common stock as of the record date for the special meeting. | ||
In connection with the execution of the merger agreement, NitroMed and Archemix entered into stockholder agreements with certain funds affiliated with HealthCare Ventures LLC, Rho Ventures, Invus Public Equities, L.P. and Care Capital LLC that together own or control an aggregate of approximately 31% of NitroMed’s common stock. Pursuant to the stockholder agreements, each of the funds agreed to vote its shares of NitroMed common stock in favor of approval of the proposals relating to the merger and related transactions and against the approval or adoption of any alternative transactions. Each of the funds also granted to Archemix a proxy to vote its shares of NitroMed common stock in favor of the proposals relating to the merger and agreed not to solicit proposals relating to alternative transactions or enter into discussions in connection with proposals for alternative transactions. In addition, each of the funds has agreed not to transfer or otherwise dispose of any of the shares of NitroMed’s common stock that it owns for a period ending 90 days after the effective time of the merger and not to transfer or otherwise dispose of more than 50% of the shares of NitroMed common stock that it owns for a period ending 180 days after the effective time of the merger. |
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Q: | When do you expect the merger to be consummated? | |
A: | NitroMed anticipates that the consummation of the merger will occur sometime in the second quarter of 2009, but cannot predict the exact timing. For more information, please see the section entitled “The Merger Agreement — Conditions to the Completion of the Merger.” | |
Q: | What is the asset sale and is it a condition to the completion of the merger? | |
A: | On October 22, 2008, NitroMed and JHP Pharmaceuticals, LLC, a privately held specialty pharmaceuticals company, referred to as JHP, entered into a purchase and sale agreement, which we refer to as the asset purchase agreement, pursuant to which NitroMed agreed to sell substantially all of its assets relating to its BiDil® (isosorbide dinitrate/hydralazine hydrochloride) and BiDil XRtm drug business to JHP. Under the asset purchase agreement, NitroMed will sell to JHP NitroMed’s BiDil and BiDil XR drug business, including intellectual property rights, trade names, certain assumed contracts, inventory, receivables and tangible personal property, and JHP will assume from NitroMed specified liabilities relating to the BiDil and BiDil XR drug business. The sale of the BiDil and BiDil XR assets is referred to in this joint proxy statement/prospectus as the asset sale. | |
The merger of NitroMed and Archemix as currently proposed is conditioned upon completion of the asset sale. If the asset sale is not approved by NitroMed’s stockholders or is not consummated for other reasons, the merger of NitroMed and Archemix will likely not be completed. If this occurs, NitroMed will review all strategic alternatives, including seeking to identify and effect an alternative business combination or other strategic transaction. However, NitroMed may not be able to consummate an alternative transaction on favorable terms, or at all. If NitroMed is not able to successfully consummate an alternative strategic transaction, NitroMed’s board of directors may take steps to liquidate or dissolve NitroMed’s business and remaining assets. | ||
Q: | What will happen if the asset sale is completed but the proposals relating to the merger of NitroMed and Archemix are not approved? | |
A: | After the sale of assets to JHP, NitroMed will have very few assets other than cash, none of which generate revenue. If the proposals relating to the merger of NitroMed and Archemix are not approved, NitroMed will complete the asset sale to JHP, and NitroMed will use the cash received from the asset sale to pay ongoing operating expenses. NitroMed will have no significant business or operations after the transfer of its assets to JHP, and will retain only those employees required to maintain its corporate existence. If the asset sale is completed and subsequently the proposals relating to the merger of NitroMed and Archemix are not approved, or the merger is not consummated for other reasons, after the asset sale is completed NitroMed will continue to consider and explore strategic alternatives that may include, without limitation, seeking to identify and effect a different business combination, a divestiture of any remaining assets or another similar strategic transaction or transactions, or the possible liquidation or dissolution of the company. | |
Q: | Why am I receiving this joint proxy statement/prospectus? | |
A: | You are receiving this joint proxy statement/prospectus because you have been identified as a stockholder of NitroMed as of the record date for the NitroMed special meeting, and thus you are entitled to vote at such special meeting. This document serves as both a joint proxy statement of NitroMed and Archemix, used to solicit proxies for their respective special meetings of stockholders, and as a prospectus of NitroMed, used to offer shares of NitroMed common stock in exchange for shares of Archemix common stock and preferred stock or shares of NitroMed common stock issuable upon exercise of options or warrants for Archemix capital stock, pursuant to the terms of the merger agreement. This document contains important information about the merger and the special meetings of NitroMed and Archemix, and you should read it carefully. |
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Q: | Who is soliciting my proxy? | |
A: | This proxy is being solicited by NitroMed’s board of directors. | |
Q: | What do I need to do now? | |
A: | NitroMed urges you to read this joint proxy statement/prospectus carefully, including its annexes, and to consider how the proposed merger affects you. | |
If you are a NitroMed stockholder, you may provide your proxy instructions in one of three different ways. First, you can mail your signed proxy card in the enclosed return envelope. Second, you can provide your proxy instructions via touch-tone telephone by dialing the toll-free telephone number on your proxy card or voting instruction form. Third, you may provide your proxy instructions via the Internet by following the instructions on your proxy card or voting instruction form. | ||
Please provide your proxy instructions only once and as soon as possible so that your shares can be voted at the special meeting of NitroMed stockholders. | ||
Q: | What happens if I do not return a proxy card or otherwise provide proxy instructions? | |
A: | The failure to return your proxy card or otherwise provide proxy instructions will have the same effect as voting against approval of NitroMed Proposal Nos. 2 and 3 relating to the charter amendments necessary to effect the merger of NitroMed and Archemix, and your shares will not be counted for purposes of determining whether a quorum is present at the NitroMed special meeting or for the other proposals. | |
Q: | May I vote in person? | |
A: | If your shares of NitroMed common stock are registered directly in your name with NitroMed’s transfer agent, you are considered the stockholder of record with respect to those shares, and the proxy materials and proxy card are being sent directly to you by NitroMed. If you are a NitroMed stockholder of record, you may attend the special meeting of NitroMed stockholders to be held on , 2009 and vote your shares in person, rather than signing and returning your proxy. | |
If your shares of NitroMed common stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited to attend the special meeting of NitroMed stockholders. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the NitroMed special meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting. | ||
Q: | If my NitroMed shares are held in “street name” by my broker, will my broker vote my shares for me? | |
A: | Your broker will not be able to vote your shares of NitroMed common stock without instructions from you. You should instruct your broker to vote your shares, following the procedure provided by your broker. | |
Q: | May I change my vote after I have submitted a proxy or provided proxy instructions? | |
A: | NitroMed stockholders of record, other than those NitroMed stockholders who have executed a voting agreement and irrevocable proxy, may change their vote at any time before their proxy is voted at the NitroMed special meeting. NitroMed stockholders of record, other than NitroMed stockholders who have executed a voting agreement and irrevocable proxy, can do this in one of three ways. First, a stockholder of record of NitroMed can send a written notice stating that the stockholder would like to revoke its proxy. Second, a stockholder of record of NitroMed can submit new proxy instructions either on a new proxy card, by telephone or via the Internet. Third, a stockholder of record of NitroMed can attend the NitroMed special meeting and vote in person. Attendance alone will not revoke a proxy. If a stockholder of record of |
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NitroMed has instructed a broker to vote its shares of NitroMed common stock, the stockholder must follow directions received from its broker to change those instructions. | ||
Q: | Who is paying for this proxy solicitation? | |
A: | NitroMed and Archemix will share equally the cost of soliciting proxies, including the printing, mailing and filing of this joint proxy statement/prospectus, the proxy card and any additional information furnished to stockholders. NitroMed has engaged The Altman Group, a proxy solicitation firm, to solicit proxies from NitroMed’s stockholders. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of NitroMed common stock for the forwarding of solicitation materials to the beneficial owners of NitroMed common stock. NitroMed will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. | |
Q: | Who can help answer my questions? | |
A: | If you would like additional copies, without charge, of this joint proxy statement/prospectus or if you have questions about the merger, including the procedures for voting your shares, you should contact either: |
The Altman Group 1200 Wall St. West, 3rd Floor Lyndhurst, New Jersey 07071 (201) 806-7300 (800) 249-7170 (toll-free) | NitroMed, Inc. 45 Hayden Avenue Suite 3000 Lexington, Massachusetts 02421 (781) 266-4000 Attn: Corporate Secretary |
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Q: | What proposals will be voted on at the Archemix special meeting? | |
A: | The following proposals will be voted on at the Archemix special meeting: | |
• The first proposal to be voted on is whether to adopt the merger agreement attached asAnnex A. See “The Merger” for a more detailed description of the transaction. | ||
• The second proposal to be voted on is whether to adjourn the meeting, if necessary to solicit additional proxies if there are not sufficient votes in favor of the first proposal. | ||
• The third proposal to be voted on is in connection with such other business as may properly be brought before the Archemix special meeting and any adjournment or postponement thereof. | ||
Q: | What is the merger? | |
A: | NitroMed and Archemix have entered into an Agreement and Plan of Merger, dated as of November 18, 2008, which is referred to in this joint proxy statement/prospectus as the merger agreement, that contains the terms and conditions of the proposed business combination of NitroMed and Archemix. Under the merger agreement, Archemix and Newport Acquisition Corp., a wholly owned subsidiary of NitroMed, which is referred to herein as merger sub, will merge, with Archemix surviving as a wholly owned subsidiary of NitroMed, which transaction is referred to as the merger. | |
At the effective time of the merger, all outstanding shares of Archemix’s capital stock will be converted into and exchanged for shares of NitroMed common stock, and all outstanding options, whether vested or unvested, and all outstanding warrants to purchase Archemix’s capital stock will be assumed by NitroMed and become options and warrants to purchase NitroMed common stock. In addition, NitroMed will grant options to specified employees of Archemix who remain employees or serve on the board of directors of the combined company after the merger, which are referred to herein as the retention options. As a result, an aggregate of approximately 110.9 million shares of NitroMed common stock will be issued or issuable by NitroMed pursuant to the merger, subject to adjustment as a result of a reverse stock split of NitroMed common stock to occur in connection with the merger. Immediately following the effective time of the merger, Archemix’s securityholders will own approximately 70%, and NitroMed’s current securityholders will own approximately 30%, of NitroMed’s common stock, after giving effect to shares issuable pursuant to Archemix’s outstanding options, warrants and the retention options, and to any shares issuable pursuant to NitroMed’s outstanding options. The number of shares to be issued or issuable in connection with the merger and these percentages assume that NitroMed’s net cash balance at closing is $45 million and that Archemix’s cash and cash equivalent balance at closing will be at least $30 million. The exact percentages will be determined in accordance with a formula that takes into account both NitroMed’s actual net cash balance and Archemix’s cash and cash equivalents at closing and will not be calculated until that time. | ||
Q: | Why am I receiving this joint proxy statement/prospectus? | |
A: | You are receiving this joint proxy statement/prospectus because you have been identified as a stockholder of Archemix as of the record date for the Archemix special meeting of stockholders, and thus you are entitled to vote at such special meeting. This document serves as both a joint proxy statement of NitroMed and Archemix, used to solicit proxies for their respective special meetings of stockholders, and as a prospectus of NitroMed, used to offer shares of NitroMed common stock in exchange for shares of Archemix common stock and preferred stock or shares of NitroMed common stock issuable upon the exercise of options or warrants for Archemix capital stock pursuant to the terms of the merger agreement. This |
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document contains important information about the merger and the special meetings of NitroMed and Archemix, and you should read it carefully. | ||
Q: | What will happen to Archemix if, for any reason, the merger with NitroMed does not close? | |
A: | Archemix has invested significant time and incurred, and expects to continue to incur, significant expenses related to the proposed merger with NitroMed. In the event the merger does not close, Archemix will need to obtain additional financing to continue its current operations beyond 2009. Although Archemix’s board of directors may elect to, among other things, attempt to complete a private financing or another strategic transaction if the merger with NitroMed does not close, Archemix’s board of directors may instead take steps necessary to liquidate or dissolve Archemix’s business and assets if a viable financing or alternative strategic transaction is not available. | |
Q: | How does Archemix’s board of directors recommend that Archemix’s stockholders vote? | |
A: | After careful consideration, Archemix’s board of directors has unanimously approved the merger agreement and each of the proposals described in this joint proxy statement/prospectus that the stockholders of Archemix are being asked to consider, and has determined that they are advisable, fair to and in the best interests of Archemix’s stockholders. The members of Archemix’s board of directors who are not members of management, preferred stockholders or designated by preferred stockholders, John Maraganore and Robert Stein, reviewed the proposed exchange ratios for the shares of Archemix common stock and preferred stock to be exchanged in the merger, including the allocation of merger consideration between the different classes and series of capital stock, and recommended that the Archemix board of directors vote in favor of the merger, including the exchange ratios, and recommend its approval to the Archemix stockholders. Accordingly, Archemix’s board of directors unanimously recommends that Archemix’s stockholders vote FOR each such proposal. | |
Q: | How did NitroMed’s board of directors recommend that NitroMed’s stockholders vote? | |
A: | After careful consideration and based upon a recommendation of a committee of disinterested directors, NitroMed’s board of directors has unanimously recommended that NitroMed’s stockholders vote to adopt each of the proposals described in this joint proxy statement/prospectus that the stockholders of NitroMed are being asked to consider. | |
Q: | What Archemix stockholder approvals are required to consummate the merger? | |
A: | To consummate the merger, Archemix’s stockholders must approve the adoption of the merger agreement, which requires the affirmative vote of the holders of (a) a majority of the shares of Archemix common stock and Archemix preferred stock outstanding on the record date and entitled to vote at the Archemix special meeting, voting together as a single class and on an as-converted basis, (b) two-thirds of the shares of Archemix Series A preferred stock and Series B preferred stock outstanding on the record date and entitled to vote at the Archemix special meeting, voting together as a single class and on an as-converted basis, and (c) two-thirds of the shares of Archemix Series A preferred stock, Series B preferred stock, and Series C preferred stock outstanding on the record date and entitled to vote at the Archemix special meeting, each voting as a separate series. | |
In connection with the execution of the merger agreement, holders of approximately 85% of the shares of Archemix’s outstanding capital stock have entered into agreements with NitroMed that provide, among other things, that the stockholders will vote in favor of adoption of the merger agreement and grant to NitroMed an irrevocable proxy to vote all of such stockholders’ shares of Archemix capital stock in favor of adoption of the merger agreement and against any proposal made in opposition to, or in competition with, the proposal to adopt the merger agreement. This constitutes a sufficient vote of Archemix stockholders to approve the merger. In addition, Archemix stockholders have agreed not to transfer or otherwise dispose of any of the shares of NitroMed’s common stock that they receive in the merger for a period ending 90 days after the effective time of the merger, and not to transfer or otherwise dispose of more than 50% of the shares of NitroMed common stock that they receive in the merger for a period ending 180 days after the effective time of the merger. |
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Q: | When do you expect the merger to be consummated? | |
A: | NitroMed and Archemix anticipate that the consummation of the merger will occur sometime in the second quarter of 2009, but cannot predict the exact timing. For more information, please see the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” of this joint proxy statement/prospectus. | |
Q: | What do I need to do now? | |
A: | Archemix urges you to read this joint proxy statement/prospectus carefully, including its annexes, and to consider how the merger affects you. | |
If you are an Archemix stockholder, you may only provide your proxy instructions by mailing your signed proxy card in the enclosed return envelope. Please provide your proxy instructions only once and as soon as possible so that your shares can be voted at the special meeting of Archemix stockholders. | ||
Q: | What happens if I do not return a proxy card or otherwise provide proxy instructions? | |
A: | The failure to return your proxy card will have the same effect as voting against the adoption of the merger agreement and your shares will not be counted for purposes of determining whether a quorum is present at the Archemix special meeting or for the other proposals. | |
Q: | Who is soliciting my proxy? | |
A: | This proxy is being solicited by Archemix’s board of directors. | |
Q: | May I vote in person? | |
A: | If your shares of Archemix capital stock are registered directly in your name, you are considered, with respect to those shares, the stockholder of record, and the proxy materials and proxy card are being sent directly to you by Archemix. If you are an Archemix stockholder of record, you may attend the special meeting of Archemix stockholders to be held on , 2009 and vote your shares in person, rather than signing and returning your proxy card. | |
Q: | May I change my vote after I have submitted a proxy or provided proxy instructions? | |
A: | Archemix stockholders of record, other than those Archemix stockholders who have executed a voting agreement and irrevocable proxy, may change their vote at any time before their proxy is voted at the Archemix special meeting. Archemix stockholders of record, other than those who have executed a voting agreement and irrevocable proxy, may revoke their proxies at any time prior to use by delivering to the Secretary of Archemix a signed notice of revocation or a later-dated signed proxy, or by attending the Archemix special meeting and voting in person. Attendance at the Archemix special meeting does not in itself constitute the revocation of a proxy. | |
Q: | Should I send in my stock certificates now? | |
A: | No. After the merger is consummated, you will receive written instructions from the exchange agent for exchanging your certificates representing shares of Archemix capital stock for certificates representing shares of NitroMed common stock. You will also receive a cash payment for any fractional share. | |
Q: | Who is paying for this proxy solicitation? | |
A: | NitroMed and Archemix will share equally the cost of soliciting proxies, including the printing, mailing and filing of this joint proxy statement/prospectus, the proxy card and any additional information furnished to stockholders. |
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Q: | Who can help answer my questions? | |
A: | If you would like additional copies, without charge, of this joint proxy statement/prospectus or if you have questions about the merger, including the procedures for voting your shares, you should contact: |
300 Third Street
Cambridge, Massachusetts 02142
(617) 621-7700
Attn: Chief Financial Officer
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45 Hayden Avenue
Suite 3000
Lexington, Massachusetts 02421
(781) 266-4000
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300 Third Street
Cambridge, Massachusetts 02142
(617) 621-7700
• | NitroMed’s limited prospects if it were to remain an independent, standalone company as a result of factors such as the discontinuation of active promotional activities for BiDil and the agreement to sell its BiDil and BiDil XR drug business to JHP, and NitroMed’s expected very limited operations and assets following the BiDil asset sale; | |
• | the opportunity for NitroMed’s stockholders to participate in the potential future value of the combined company; and | |
• | the NitroMed board of directors’ consideration of strategic alternatives to the merger, including the identification and evaluation of several potential private company candidates for a merger transaction and the consideration of undertaking the dissolution and liquidation of NitroMed, and the board of directors’ belief that the merger was more favorable to NitroMed’s stockholders than any other alternative reasonably available to NitroMed and its stockholders. |
• | that the cash resources of the combined company expected to be available at the closing of the merger and the ability to access capital markets as a public company are anticipated to provide sufficient capital to maintain Archemix’s projected business operations through and after 2009, including continued Phase 2 clinical development of Archemix’s product candidate ARC1779, and continued research and preclinical development of other product candidates; |
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• | the view that the range of options available to the combined company to access private and public equity markets should additional capital be needed in the future will likely be greater than the range of options Archemix would have as a private company; and | |
• | the opportunity for Archemix’s stockholders to participate in the long-term value of the product candidate development programs of Archemix through the ownership of stock in a public company. |
• | each share of Archemix common stock will entitle the holder to receive 0.5120 shares of NitroMed common stock; |
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• | each share of Archemix Series A preferred stock will entitle the holder to receive 0.8001 shares of NitroMed common stock; | |
• | each share of Archemix Series B preferred stock will entitle the holder to receive 0.8001 shares of NitroMed common stock; and | |
• | each share of Archemix Series C preferred stock will entitle the holder to receive 0.5120 shares of NitroMed common stock. |
• | the registration statement onForm S-4 must have been declared effective by the SEC; | |
• | no injunction or order must have been issued preventing the consummation of the merger, and no law shall be in effect which has the effect of making the consummation of the merger illegal; | |
• | stockholders of Archemix must adopt the merger agreement, and stockholders of NitroMed must approve the asset sale (if not previously approved at a separate meeting of NitroMed stockholders), approve the issuance of NitroMed common stock pursuant to the merger and the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split; | |
• | any governmental authorization or other consent required to be obtained by any of the parties to the merger agreement shall have been obtained; | |
• | the existing shares of NitroMed common stock shall have been continually listed on The NASDAQ Global Market, and NitroMed shall have caused the shares of NitroMed common stock Archemix securityholders will be entitled to receive pursuant to the merger to be approved for listing on The NASDAQ Global Market following the closing of the merger; | |
• | all representations and warranties of the other party in the merger agreement must be true and correct on the date of the merger agreement and on the closing date of the merger, except where the failure of the representations and warranties to be true and correct would not reasonably be expected to have a material adverse effect on the party making the representations and warranties; | |
• | the other party to the merger agreement must have performed or complied with all covenants and obligations required to be performed or complied, or obtained any consents required, by such party on or before the closing of the merger; | |
• | the other party having delivered the documents required under the merger agreement for the closing of the merger; | |
• | NitroMed and Archemix shall have received a tax opinion from legal counsel; | |
• | NitroMed shall have at least $34.5 million in net cash at closing, as calculated pursuant to the merger agreement; | |
• | the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split shall have become effective under the Delaware General Corporation Law; and | |
• | NitroMed shall have completed the asset sale. |
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• | solicit, initiate, encourage, induce or knowingly facilitate any inquiry with respect to the making, submission or announcement of, any acquisition proposal or inquiry; | |
• | furnish to any person any information with respect to it in connection with or in response to an acquisition proposal or inquiry, indication of interest or request for information that could reasonably be expected to lead to an acquisition proposal or inquiry; | |
• | engage in discussions or negotiations with respect to any acquisition proposal or inquiry, indication of interest or request for information that could reasonably be expected to lead to an acquisition proposal; | |
• | approve, endorse or recommend an acquisition proposal; or | |
• | execute or enter into any letter of intent or similar document or any contract contemplating or otherwise relating to an acquisition proposal or inquiry. |
• | by mutual written consent of Archemix and NitroMed; | |
• | by Archemix or NitroMed, if the merger has not been completed by April 30, 2009; | |
• | by Archemix or NitroMed, if a governmental entity has permanently restrained, enjoined or otherwise prohibits the merger; | |
• | by Archemix or NitroMed, if the stockholders of NitroMed have not approved the asset sale, the issuance of NitroMed common stock pursuant to the merger and the amendment of NitroMed’s certificate of incorporation effecting the reverse stock split at a NitroMed special meeting or any adjournment or postponement thereof; | |
• | by Archemix or NitroMed, if the stockholders of Archemix have not adopted the merger agreement at the Archemix special meeting or any adjournment or postponement thereof; | |
• | by Archemix or NitroMed, if the other party has breached any of its representations, warranties, covenants or other agreements contained in the merger agreement or if any representation or warranty has become inaccurate, in either case such that the conditions to the closing of the merger would not be satisfied, subject to a 30 day cure period; or | |
• | by Archemix or NitroMed, if prior to the consummation of the merger, the board of directors of the terminating party determines that a non-foreseeable material development or change (other than an acquisition proposal) has occurred. |
• | NitroMed’s board of directors fails to recommend that NitroMed’s stockholders vote to approve the asset sale, the issuance of the shares of NitroMed common stock pursuant to the merger or the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split or withdraws or modifies its recommendation in a manner adverse to Archemix; |
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• | NitroMed fails to include in this joint proxy statement/prospectus a recommendation to approve the issuance of the shares of NitroMed common stock pursuant to the merger or the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split; | |
• | NitroMed fails to hold the NitroMed special meeting within 45 days after the Registration Statement onForm S-4 of which this joint proxy statement/prospectus is a part is declared effective; | |
• | NitroMed’s board of directors approves, endorses or recommends any acquisition proposal, as defined under “The Merger Agreement — No Solicitation”; or | |
• | NitroMed enters into any letter of intent or similar document or any contract relating to any acquisition proposal. |
• | Archemix’s board of directors fails to recommend that Archemix’s stockholders vote to adopt the merger agreement or withdraws or modifies its recommendation in a manner adverse to NitroMed; | |
• | Archemix fails to include in this joint proxy statement/prospectus such recommendation; | |
• | Archemix fails to hold the Archemix special meeting within 45 days after the registration statement onForm S-4 of which this joint proxy statement/prospectus is a part is declared effective; | |
• | Archemix’s board of directors approves, endorses or recommends any acquisition proposal, as defined under “The Merger Agreement — No Solicitation”; or | |
• | Archemix enters into any letter of intent or similar document or any contract relating to any acquisition proposal. |
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• | Kenneth Bate — President and Chief Executive Officer | |
• | Gregg Beloff — Vice President, Chief Financial Officer, Treasurer and Secretary | |
• | Duncan Higgons — Executive Vice President, Business Operations | |
• | Page Bouchard, D.V.M. — Senior Vice President, Research and Preclinical Development | |
• | James Gilbert, M.D. — Senior Vice President, Chief Medical Officer |
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• | The consummation of the merger is subject to a number of closing conditions, including consummation of the asset sale, the continued listing of NitroMed’s shares on The NASDAQ Global Market, the merger shares having been approved for listing on The NASDAQ Global Market and NitroMed having net cash of at least $34.5 million at closing. If the closing conditions are not satisfied, then the merger agreement can be terminated. If NitroMed is not able to consummate the merger, it will review strategic alternatives, including another reverse merger. If it is not successful, NitroMed’s board may elect or be required to liquidate all of NitroMed’s business and assets. | |
• | The 70%/30% ownership ratio of common stock held by current Archemix and NitroMed securityholders after closing assumes NitroMed has $45 million of net cash at closing and that Archemix’s cash and cash equivalent balance at closing is at least $30 million. The exchange ratios are subject to adjustment based upon NitroMed’s net cash and Archemix’s cash and cash equivalents at closing. For example, if the net cash balance of NitroMed at the closing of the merger is below $45 million, the exchange ratios will be adjusted upward to increase the number of shares that Archemix securityholders will be entitled to receive pursuant to the merger, which would further dilute current NitroMed securityholders’ ownership in the combined company; if the net cash balance of NitroMed at the closing of the merger is below $34.5 million, Archemix may elect not to consummate the merger; and, if the net cash balance of NitroMed at the closing of the merger is greater than $45 million, the exchange ratios will be adjusted downward to decrease the number of shares that Archemix securityholders will be entitled to receive pursuant to the merger, which would further dilute current Archemix securityholders’ ownership in the combined company. Additionally, the exchange ratio for the merger will be adjusted to further increase, or to decrease, the number of shares that Archemix securityholders will be entitled to receive in the merger depending on whether Archemix’s cash and cash equivalent balance at closing is above or below $30 million. Specifically, if the Archemix cash and cash equivalent balance is below $30 million, then the percentage ownership of the combined company held by NitroMed securityholders will increase by approximately 2%. | |
• | The exchange ratio for the merger is not adjustable based on the market price of NitroMed common stock, and if the market price of NitroMed common stock declines, the value of the shares of NitroMed common stock that Archemix securityholders will be entitled to receive pursuant to the merger could be significantly lower. | |
• | Some of NitroMed’s and Archemix’s officers and directors have interests in the merger that may be different from yours and may influence them to support the merger without regard to your interests. | |
• | Failure to complete the merger may result in NitroMed or Archemix paying a termination fee to the other and could harm NitroMed’s or Archemix’s common stock price or NitroMed’s or Archemix’s future business and operations. | |
• | The merger may be completed even though material adverse changes may result from the announcement of the transaction, industry-wide changes and other causes, which could result in a decline in the combined company’s stock price and reduce the value of the merger to NitroMed’s or Archemix’s securityholders. | |
• | If the combined company resulting from the merger does not realize the anticipated benefits from the merger, the market price of the combined company’s common stock may decline as a result of the merger. | |
• | If the perceived benefits of the merger, including the benefits to the combined company’s business and prospects, are not realized after the merger, NitroMed and Archemix securityholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger. |
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CONDENSED COMBINED FINANCIAL INFORMATION AND DATA
Nine Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||||||||||
2007(1) | 2006(1) | 2005 | 2004 | 2003 | 2008 | 2007 | ||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||
Revenue | $ | 16,019 | $ | 12,086 | $ | 6,047 | $ | 16,458 | $ | 12,775 | $ | 11,767 | $ | 11,042 | ||||||||||||||
Cost and operating expenses: | ||||||||||||||||||||||||||||
Cost of product sales | 4,236 | 3,560 | 8,009 | — | — | 2,943 | 2,151 | |||||||||||||||||||||
Research and development | 12,185 | 17,029 | 31,340 | 27,401 | 18,447 | 2,622 | 9,745 | |||||||||||||||||||||
Sales, general and administrative | 31,358 | 59,403 | 74,596 | 20,185 | 3,574 | 8,438 | 23,709 | |||||||||||||||||||||
Restructuring charges | 1,004 | 5,283 | — | — | — | 2,708 | 1,004 | |||||||||||||||||||||
Total costs and operating expenses | 48,783 | 85,275 | 113,945 | 47,586 | 22,021 | 16,711 | 36,609 | |||||||||||||||||||||
Loss from operations | (32,764 | ) | (73,189 | ) | (107,898 | ) | (31,128 | ) | (9,246 | ) | (4,944 | ) | (25,567 | ) | ||||||||||||||
Other income, net | 1,190 | 1,852 | 2,046 | 1,355 | 477 | 352 | 863 | |||||||||||||||||||||
Net loss | (31,574 | ) | (71,337 | ) | (105,852 | ) | (29,773 | ) | (8,769 | ) | (4,592 | ) | (24,704 | ) | ||||||||||||||
Deemed dividends related to beneficial conversion features of redeemable convertible preferred stock | — | — | — | — | (19,357 | ) | — | — | ||||||||||||||||||||
Accretion of dividends and redemption value | — | — | — | — | (2,794 | ) | — | — | ||||||||||||||||||||
Net loss attributable to common stockholders | $ | (31,574 | ) | $ | (71,337 | ) | $ | (105,852 | ) | $ | (29,773 | ) | $ | (30,920 | ) | $ | (4,592 | ) | $ | (24,704 | ) | |||||||
Net loss per common share: | ||||||||||||||||||||||||||||
Basic and diluted | $ | (0.75 | ) | $ | (1.96 | ) | $ | (3.49 | ) | $ | (1.14 | ) | $ | (6.95 | ) | $ | (0.10 | ) | $ | (0.60 | ) | |||||||
Weighted average basic and diluted common shares outstanding | 41,997 | 36,399 | 30,355 | 26,152 | 4,447 | 45,954 | 40,877 |
(1) | NitroMed includes the expense associated with employee stock options in the Statement of Operations effective in 2006 upon the adoption of Statement of Financial Accounting Standards No. 123R, which |
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resulted in an aggregate of $5.0 million and $8.0 million recorded in the line items of research and development and sales, general and administrative expenses for the years ended December 31, 2007 and 2006, respectively. |
As of | ||||||||||||||||||||||||
As of December 31, | September 30, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | $ | 31,400 | $ | 42,153 | $ | 61,541 | $ | 142,367 | $ | 97,088 | $ | 17,823 | ||||||||||||
Working capital | 21,722 | 31,041 | 39,924 | 133,238 | 87,938 | 17,334 | ||||||||||||||||||
Total assets | 35,567 | 48,705 | 76,521 | 149,357 | 99,170 | 22,892 | ||||||||||||||||||
Long-term debt | — | 3,728 | 10,653 | — | — | — | ||||||||||||||||||
Accumulated deficit | (345,382 | ) | (313,808 | ) | (242,471 | ) | (136,619 | ) | (106,846 | ) | (349,973 | ) | ||||||||||||
Total stockholders’ equity | $ | 22,225 | $ | 29,079 | $ | 33,066 | $ | 137,012 | $ | 81,799 | $ | 19,024 |
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Nine Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | ||||||||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||
Revenue | $ | 17,368 | $ | 6,408 | $ | 2,398 | $ | 1,911 | $ | 152 | $ | 20,741 | $ | 11,774 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Research and development | 29,171 | 16,965 | 17,061 | 9,531 | 9,226 | 24,715 | 20,799 | |||||||||||||||||||||
General and administrative | 11,123 | 7,634 | 6,213 | 5,133 | 3,158 | 7,642 | 6,902 | |||||||||||||||||||||
Loss from operations | (22,926 | ) | (18,191 | ) | (20,876 | ) | (12,753 | ) | (12,232 | ) | (11,616 | ) | (15,927 | ) | ||||||||||||||
Interest income (expense), net | 2,551 | 1,807 | 909 | 403 | (36 | ) | 1,163 | 1,815 | ||||||||||||||||||||
Net loss | (20,375 | ) | (16,384 | ) | (19,967 | ) | (12,350 | ) | (12,268 | ) | (10,453 | ) | (14,112 | ) | ||||||||||||||
Accretion to redemption value of redeemable convertible preferred stock | (8,534 | ) | (8,534 | ) | (6,896 | ) | (5,566 | ) | (3,324 | ) | (6,400 | ) | (6,400 | ) | ||||||||||||||
Net loss attributable to common stockholders | $ | (28,909 | ) | $ | (24,918 | ) | $ | (26,863 | ) | $ | (17,916 | ) | $ | (15,592 | ) | $ | (16,853 | ) | $ | (20,512 | ) | |||||||
As of | ||||||||||||||||||||||||
As of December 31, | September 30, | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | |||||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | $ | 55,778 | $ | 36,024 | $ | 41,864 | $ | 41,992 | $ | 17,419 | $ | 37,694 | ||||||||||||
Working capital | 43,653 | 33,742 | 40,367 | 39,335 | 15,317 | 28,731 | ||||||||||||||||||
Total assets | 61,203 | 44,104 | 46,099 | 44,285 | 20,334 | 43,145 | ||||||||||||||||||
Redeemable convertible preferred stock | 169,904 | 131,552 | 123,022 | 95,630 | 56,898 | 176,304 | ||||||||||||||||||
Long-term debt | — | — | — | — | 591 | — | ||||||||||||||||||
Total stockholders’ deficit | $ | (136,957 | ) | $ | (109,422 | ) | $ | (84,881 | ) | $ | (58,026 | ) | $ | (40,171 | ) | $ | (153,021 | ) |
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For the | ||||||||
For The | Nine Months | |||||||
Year Ended | Ended | |||||||
December 31, | September 30, | |||||||
2007 | 2008 | |||||||
(In thousands) | ||||||||
Unaudited Pro Forma Condensed Combined Statement of Operations Data: | ||||||||
Revenues | $ | 17,368 | $ | 20,741 | ||||
Operating expenses: | ||||||||
Research and development | 29,171 | 24,715 | ||||||
General and administrative | 11,123 | 7,642 | ||||||
Total operating expenses | 40,294 | 32,357 | ||||||
Interest income, net | 3,728 | 1,628 | ||||||
Net loss | $ | (19,198 | ) | $ | (9,988 | ) | ||
As of | ||||
September 30, | ||||
2008 | ||||
(In thousands) | ||||
Unaudited Pro Forma Condensed Combined Balance Sheet Data: | ||||
Cash, cash equivalents and short term and long term marketable securities | $ | 82,951 | ||
Working capital | 62,346 | |||
Total assets | 88,612 | |||
Stockholders’ equity | 58,502 |
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Nine Months | ||||||||
Year Ended | Ended | |||||||
December 31, | September 30, | |||||||
2007 | 2008 | |||||||
Historical Per Common Share Data: | ||||||||
Net loss per common share — basic and diluted | $ | (0.75 | ) | $ | (0.10 | ) | ||
Book value per share | $ | 0.53 | $ | 0.41 |
Nine Months | ||||||||
Year Ended | Ended | |||||||
December 31, | September 30, | |||||||
2007 | 2008 | |||||||
Historical Per Common Share Data: | ||||||||
Net loss per common share — basic and diluted | $ | (5.43 | ) | $ | (2.46 | ) | ||
Book value per share | $ | (25.74 | ) | $ | (22.33 | ) |
Nine Months | ||||||||
Year Ended | Ended | |||||||
December 31, | September 30, | |||||||
2007 | 2008 | |||||||
Combined Unaudited Pro Forma Per Share Data: | ||||||||
Net loss per combined share from continuing operations — basic and diluted | $ | (0.14 | ) | $ | (0.07 | ) | ||
Book value per combined share | NA | $ | 0.40 |
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High | Low | |||||||
Year Ended December 31, 2006 | ||||||||
First Quarter | $ | 14.90 | $ | 7.51 | ||||
Second Quarter | $ | 8.86 | $ | 3.59 | ||||
Third Quarter | $ | 4.90 | $ | 2.38 | ||||
Fourth Quarter | $ | 3.20 | $ | 2.04 | ||||
Year Ended December 31, 2007 | ||||||||
First Quarter | $ | 4.44 | $ | 2.25 | ||||
Second Quarter | $ | 3.98 | $ | 2.11 | ||||
Third Quarter | $ | 2.52 | $ | 1.75 | ||||
Fourth Quarter | $ | 1.80 | $ | 1.00 | ||||
Year Ending December 31, 2008 | ||||||||
First Quarter | $ | 1.25 | $ | 0.80 | ||||
Second Quarter | $ | 1.52 | $ | 0.81 | ||||
Third Quarter | $ | 1.12 | $ | 0.37 | ||||
Fourth Quarter (through December 18, 2008) | $ | 0.50 | $ | 0.15 |
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• | If the net cash balance of NitroMed at the closing of the merger is below $45 million, the merger agreement provides for adjusting the exchange ratios to increase the number of shares of NitroMed common stock that Archemix securityholders will be entitled to receive pursuant to the merger, which would further dilute current NitroMed securityholders’ ownership in the combined company. | |
• | If the net cash balance of NitroMed at the closing of the merger is greater than $45 million, the merger agreement provides for adjusting the exchange ratios to decrease the number of shares of NitroMed common stock that Archemix securityholders will be entitled to receive pursuant to the merger, which would further dilute current Archemix securityholders’ ownership in the combined company. | |
• | If Archemix’s cash and cash equivalent balance is below $30 million at the closing of the merger, then the percentage ownership of the combined company held by NitroMed securityholders will increase by approximately 2%. |
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• | Gregg Beloff —Vice President, Chief Financial Officer, Treasurer and Secretary, annual base salary of $255,500; | |
• | Duncan Higgons —Executive Vice President, Business Operations, annual base salary of $315,000; | |
• | Page Bouchard, D.V.M. —Senior Vice President, Research and Preclinical Development, annual base salary of $278,000; and | |
• | James Gilbert, M.D. —Senior Vice President, Chief Medical Officer, annual base salary of $315,000. |
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• | any change in the business, financial condition, assets, operations or financial performance or prospects of NitroMed or Archemix caused by, related to or resulting from, directly or indirectly, the merger and the other transactions and actions contemplated by the merger; | |
• | any failure by NitroMed or Archemix to meet internal projections or forecasts for any period; | |
• | any adverse change, effect or occurrence attributable to the United States economy as a whole or the industries in which NitroMed or Archemix competes; | |
• | any act or threat of terrorism or war anywhere in the world, any armed hostilities or terrorist activities anywhere in the world, any threat or escalation of armed hostilities or terrorist activities anywhere in the world or any governmental or other response or reaction to any of the foregoing; | |
• | any change in accounting requirements or principles or any change in applicable laws, rules or regulations or the interpretation thereof; | |
• | any effect, change, event, circumstance or development resulting from the announcement or pendency of the merger; or | |
• | in the case of NitroMed, completion of the asset sale. |
• | Suppliers, distributors and other business partners may seek to change or terminate their relationships with either NitroMed or Archemix as a result of the proposed merger. | |
• | As a result of the proposed merger, current and prospective employees could experience uncertainty about their future roles within the combined company. This uncertainty may adversely affect the ability of either NitroMed or Archemix to retain its key employees, who may seek other employment opportunities. |
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• | the combined company does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts; | |
• | the effect of the merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or | |
• | investors react negatively to the effect on the combined company’s business and prospects as a result of the merger. |
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• | NitroMed’s ability to successfully consummate one or more strategic arrangements relating to its business and assets, including the asset sale and the proposed merger and the expenses related to any such transactions; | |
• | the amount of future product sales of BiDil; | |
• | the cost of manufacturing and selling BiDil; | |
• | the timing of collections related to sales of BiDil; | |
• | the time and costs involved in completing the clinical trials and further development of, and obtaining regulatory approvals for, BiDil XR, if at all; | |
• | the effect of competing technological and market developments; | |
• | the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; | |
• | the cost of maintaining licenses to use patented technologies; | |
• | unfavorable conditions in the capital markets, which may adversely affect the value and liquidity of its investments; and | |
• | general global and domestic economic conditions, including inflation, recessionary risks and volatile energy costs. |
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• | the discontinuation of NitroMed’s active promotional efforts related to BiDil as a result of its January 2008 restructuring plan; | |
• | the unavailability of favorable government and third-party payor reimbursement; | |
• | NitroMed’s inability to manufacture and sell BiDil at a competitive price; |
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• | the availability in generic form and at substantially lower prices of the individual components that constitute BiDil (isosorbide dinitrate, which is separately marketed for angina, and hydralazine hydrochloride, which is separately marketed for hypertension) and the misperception by physicians, patients and payors that these generic components are equivalent to BiDil; | |
• | the requirement by potential large purchasers of BiDil, such as hospitals or health maintenance organizations, or by state formularies, other government agencies or private payors that approve reimbursement for drugs, that the generic components of BiDil be substituted for BiDil; | |
• | the failure of physicians, third-party payors and patients to accept a product intended to improve therapeutic results based on ethnicity or to accept BiDil as being safe, effective, easy to administer and medically necessary; and | |
• | NitroMed’s inability to maintain the necessary patent protection, licenses and regulatory approvals required to manufacture and sell BiDil. |
• | difficulties with production costs and yields; | |
• | quality control and assurance; | |
• | difficulties obtaining ingredients for NitroMed’s products; | |
• | shortages of qualified personnel; | |
• | compliance with strictly enforced federal, state and foreign regulations; and | |
• | lack of capital funding. |
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• | conditions imposed on NitroMed by the FDA regarding the scope or design of its clinical trials; | |
• | difficulty obtaining or maintaining internal review board approval of studies; | |
• | problems in finalizing the formulation of BiDil XR through NitroMed’s planned clinical studies; | |
• | NitroMed’s clinical trials may produce negative or inconclusive results, and it may decide, or regulators may require it, to conduct additional clinical trials, including testing alternative formulations of BiDil XR; | |
• | the number of patients required for NitroMed’s clinical trials may be larger than it anticipates, enrollment in its clinical trials may be slower than it currently anticipates, or participants may drop out of its clinical trials at a higher rate than it anticipates, any of which would result in significant delays and increased costs; | |
• | NitroMed’s third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to NitroMed in a timely manner; | |
• | NitroMed might have to suspend or terminate one or more of its clinical trials if the participants are being exposed to unacceptable health risks; | |
• | regulators may require that NitroMed hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; | |
• | the cost of NitroMed’s clinical trials may be greater than it anticipates; | |
• | the supply or quality of BiDil XR or other materials necessary to conduct NitroMed’s clinical trials may be insufficient or inadequate; and | |
• | the effects of BiDil XR may not be the desired effects or may include undesirable side effects or may have other unexpected characteristics. |
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• | be delayed in obtaining marketing approval for BiDil XR; | |
• | not be able to obtain marketing approval; | |
• | obtain approval for an indication that is not as broad as intended; or | |
• | have the product removed from the market after obtaining marketing approval. |
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• | NitroMed may not be able to initiate or continue clinical trials of BiDil XR; | |
• | NitroMed may be delayed in submitting applications for regulatory approvals for BiDil XR; and | |
• | even if NitroMed successfully commercializes BiDil XR, it may be required to cease distributionand/or recall some or all batches of the product and it may not be able to meet commercial demands for its products or achieve profitability. |
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• | develop and commercialize products that render BiDiland/or BiDil XR, if successfully developed and commercialized, obsolete or non-competitive or that cause BiDil to be less desirable as a result of patent or non-patent exclusivity; | |
• | develop product candidates and market products that are less expensive or more effective than BiDil; | |
• | initiate or withstand substantial price competition more successfully than NitroMed can; | |
• | have greater success in recruiting skilled scientific workers from the limited pool of available talent; | |
• | more effectively negotiate third-party licenses and strategic relationships; and | |
• | take advantage of product acquisition or other opportunities more readily than NitroMed can. |
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• | fluctuations in NitroMed’s financial results, including with respect to sales of BiDil; | |
• | announcements concerning fundamental or material corporate transactions, restructuring or the like, or NitroMed’s failure to successfully consummate any such transaction; | |
• | general market conditions, both domestic and international; | |
• | announcements of technological innovations or new commercial products by NitroMed’s competitors; | |
• | announcements of actual or potential results relating to NitroMed’s BiDil XR development program; | |
• | governmental regulations and regulatory developments in both the U.S. and foreign countries affecting NitroMed or its competitors; | |
• | disputes relating to patents or other proprietary rights affecting NitroMed or its competitors; | |
• | public concern as to the safety of products developed by NitroMed or other biotechnology and pharmaceutical companies; | |
• | fluctuations in price and volume in the stock market in general, or in the trading of the stock of biopharmaceutical and biotechnology companies in particular, that are unrelated to NitroMed’s operating performance; | |
• | sales of common stock by existing stockholders; and | |
• | the perception that such issuances or sales could occur. |
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• | delaying, deferring or preventing a change in control of NitroMed; | |
• | impeding a merger, consolidation, takeover or other business combination involving NitroMed; or | |
• | discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of NitroMed. |
• | a prohibition on stockholder action through written consent; | |
• | a requirement that special meetings of stockholders be called only by a majority of the board of directors, the chairman of the board or the chief executive officer; | |
• | advance notice requirements for stockholder proposals and nominations; | |
• | limitations on the ability of stockholders to amend, alter or repeal NitroMed’s certificate of incorporation or bylaws; and | |
• | the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine. |
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• | the number and characteristics of the aptamer product candidates Archemix pursues; | |
• | the scope, progress, results and costs of researching and developing and conducting preclinical and clinical trials of Archemix’s aptamer product candidates; | |
• | the timing of, and the costs involved in, obtaining regulatory approvals for Archemix’s aptamer product candidates; | |
• | the cost of commercialization activities, including marketing, sales and distribution; | |
• | the cost of manufacturing Archemix’s aptamer product candidates; | |
• | the number and financial terms of the collaboration and license agreements that Archemix may enter into with third parties with respect to its aptamer technology; | |
• | Archemix’s ability to establish and maintain strategic collaborations, licensing or other arrangements; | |
• | the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other patent-related costs, including litigation costs and the results of such litigation; and | |
• | the timing, receipt and amount of sales of or royalties on Archemix’s future products, if any. |
• | delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of its aptamer product candidates; | |
• | delay, limit, reduce or terminate its research and development activities; or | |
• | delay, limit, reduce or terminate its establishment of sales and marketing capabilities or other activities that may be necessary to commercialize its aptamer product candidates. |
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• | discovery of harmful unexpected toxicities or side effects caused by the aptamer product candidate; | |
• | failure to demonstrate the efficacy or safety of the aptamer product candidate; | |
• | development of disease resistance or other physiological factors; | |
• | delays or failure in reaching agreement on acceptable clinical trial contracts or clinical trial protocols with prospective sites; | |
• | lower than anticipated recruitment and retention rates of subjects and patients in clinical trials; | |
• | delays in obtaining, or Archemix’s inability to obtain, required approvals from IRBs or other reviewing entities at clinical sites selected for participation in Archemix’s clinical trials; | |
• | insufficient supply or deficient quality of Archemix’s aptamer product candidates or other materials necessary to conduct Archemix’s clinical trials; | |
• | governmental or regulatory delays and changes in regulatory requirements and guidelines; or | |
• | failure of Archemix’s third-party contractors to comply with regulatory requirements or otherwise meet their contractual obligations to Archemix in a timely manner. |
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• | restrictions on the use or distribution of such aptamer product candidates, manufacturers or manufacturing processes; | |
• | warning letters; | |
• | withdrawal of the aptamer product candidates from the market; |
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• | refusal of the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications that Archemix submits; | |
• | recalls; | |
• | fines; | |
• | suspension or withdrawal of regulatory approvals; | |
• | refusal to permit the import or export of Archemix’s aptamer product candidates; | |
• | product seizure or detention of Archemix’s aptamer product candidates; or | |
• | injunctions or the imposition of civil or criminal penalties. |
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• | Archemix’s collaborators may have the first right to maintain or defend certain of Archemix’s intellectual property rights and, although it would have the right to assume the maintenance and defense of these intellectual property rights if its collaborators do not, Archemix’s ability to do so may be compromised by its collaborators’ acts or omissions; | |
• | Archemix’s collaborators may utilize certain of Archemix’s intellectual property rights in such a way as to invite litigation that could jeopardize or invalidate these intellectual property rights or expose Archemix to potential liability; | |
• | Archemix’s collaborators may not comply with all applicable regulatory requirements; and | |
• | If Archemix is unsuccessful in forming or maintaining these collaborations on favorable terms, its business may not succeed. |
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• | pursue alternative technologies or develop alternative products, either on its own or jointly with others, that may be competitive with the aptamer product candidates on which it is collaborating with Archemix or which could affect its commitment to the collaboration with Archemix; | |
• | pursue higher-priority programs or change the focus of its development programs, which could affect the collaborator’s commitment to Archemix; or | |
• | if it has marketing rights, choose to devote fewer resources to the marketing of Archemix’s aptamer product candidates, if any are approved for marketing, than it does for product candidates of its own development. |
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• | Archemix may not be able to initiate or it may need to discontinue human clinical trials of its aptamer product candidates; | |
• | the submission of applications for regulatory approvals for Archemix’s aptamer product candidates may be delayed; | |
• | Archemix may have to cease distribution of or recall some or all batches of its aptamer product candidates; or | |
• | Archemix may fail to meet clinical trial requirements or commercial demand for its aptamer product candidates. |
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• | develop products that are safer or more effective than Archemix’s aptamer product candidates; | |
• | obtain FDA and other regulatory approvals or reach the market with their products more rapidly than Archemix can, reducing the potential sales of Archemix’s aptamer product candidates; | |
• | develop new or improved technologies and scientific advances; | |
• | obtain patent protectionand/or receive regulatory approval for commercializing products before Archemix; | |
• | devote greater resources to market or sell their products; | |
• | initiate or withstand substantial price competition more successfully than Archemix can; | |
• | recruit skilled scientific workers from the limited pool of available talent; and | |
• | take advantage of acquisition or other opportunities more readily than Archemix can. |
• | decreased demand for Archemix’s aptamer product candidates; | |
• | injury to Archemix’s reputation and significant negative media attention; | |
• | withdrawal of clinical trial volunteers; | |
• | significant litigation costs; | |
• | distraction of management; and | |
• | substantial monetary awards to plaintiffs. |
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• | the results of the combined company’s current and any future clinical trials of its aptamer product candidates; | |
• | the results of preclinical studies and planned clinical trials of the combined company’s discovery stage and preclinical programs; | |
• | the entry into, or termination of, key agreements, including key strategic alliance agreements; | |
• | the results and timing of regulatory reviews relating to the approval of the combined company’s aptamer product candidates; | |
• | the initiation of, material developments in, or conclusion of litigation to enforce or defend any of the combined company’s intellectual property rights; | |
• | failure of any of the combined company’s aptamer product candidates, if approved, to achieve commercial success; | |
• | general and industry-specific economic conditions that may affect the combined company’s research and development expenditures; | |
• | the results of clinical trials conducted by others on drugs that would compete with the combined company’s aptamer product candidates; | |
• | issues in manufacturing the combined company’s aptamer product candidates or any approved products; | |
• | the loss of key employees; | |
• | the introduction of technological innovations or new commercial products by competitors of the combined company; | |
• | changes in estimates or recommendations by securities analysts, if any, who cover the combined company’s common stock; | |
• | future sales of the combined company’s securities; | |
• | changes in the structure of health care payment systems; and | |
• | period-to-period fluctuations in the combined company’s financial results. |
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• | a failure to successfully complete preclinical studies and clinical trials in a timely manner or at all, resulting in a delay in receiving, or a failure to receive, the required regulatory approvals to commercialize the combined company’s aptamer product candidates; | |
• | the timing of regulatory approvals or other regulatory actions; and | |
• | general and industry-specific economic conditions that may affect Archemix’s and its collaborators’ operations and financial results. |
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• | delaying, deferring or preventing a change in control; | |
• | entrenching management and the board of directors; | |
• | impeding a merger, consolidation, takeover or other business combination involving the combined company; or | |
• | discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the combined company. |
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• | a prohibition on stockholder action through written consent; | |
• | a requirement that special meetings of stockholders be called only by a majority of the board of directors, the chairman of the board or the chief executive officer; | |
• | advance notice requirements for stockholder proposals and nominations; | |
• | limitations on the ability of stockholders to amend, alter or repeal the certificate of incorporation or bylaws; and | |
• | the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine. |
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• | the potential value created by the proposed merger for the stockholders of NitroMed and Archemix; | |
• | the efficacy, safety and intended utilization of Archemix’s drug candidates; | |
• | the conduct and results of Archemix’s research, discovery and preclinical efforts and clinical trials; | |
• | Archemix’s plans regarding future research, discovery and preclinical efforts and clinical activities and collaborative, intellectual property and regulatory activities; | |
• | the amount of cash and cash equivalents that NitroMed anticipates it will hold on the closing date of the merger, after giving effect to the asset sale; | |
• | the period in which Archemix expects cash will be available to fund its current operating plan, both before and after giving effect to the merger; | |
• | the amount of shares NitroMed expects to issue in the merger; and | |
• | each of NitroMed’s and Archemix’s results of operations, financial condition and businesses, and products and drug candidates under development and the expected impact of the proposed merger on the combined company’s financial and operating performance. |
• | the ability of NitroMed to complete the proposed asset sale; | |
• | the ability of NitroMed and Archemix to complete the proposed merger; | |
• | fluctuations in NitroMed’s net cash balance prior to and at closing; | |
• | the ability of both NitroMed and Archemix to obtain the substantial additional funds required to fund their respective operating plans; | |
• | the significant increased costs and allocation of management resources associated with Archemix operating as a public company; | |
• | the discovery, development, clinical testing, regulatory approval and commercialization of Archemix’s products under development; | |
• | NitroMed’s ability to continue to generate revenue from sales of BiDil without active promotional efforts; | |
• | NitroMed’s ability to continue the manufacturing and distribution of its sole product, BiDil; | |
• | patient, physician and payor acceptance of products and products under development; | |
• | regulatory risks; | |
• | competitive pressures; | |
• | the ability to maintain and enforce necessary intellectual property protection; |
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• | Archemix’s ability to enter into and maintain successful alliances for its product development and commercialization programs; | |
• | NitroMed’s ability to maintain compliance with NASDAQ Global Market listing standards; and | |
• | general industry and market conditions. |
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• | Over the Internet. Go to the web site of NitroMed’s tabulator, American Stock Transfer and Trust Company, LLC, athttp://www.voteproxy.com and follow the instructions you will find there. You |
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must specify how you want your shares voted or your Internet vote cannot be completed and you will receive an error message. Your shares will be voted according to your instructions. |
• | By Telephone. Call800-776-9437 toll-free from the United States or718-921-8500 from foreign countries and follow the instructions. You must specify how you want your shares voted and confirm your vote at the end of the call or your telephone vote cannot be completed. Your shares will be voted according to your instructions. | |
• | By Mail. Complete, date and sign the enclosed proxy card and mail it in the enclosed postage-paid envelope to American Stock Transfer and Trust Company, LLC. Your proxy will be voted according to your instructions. | |
• | In Person at the Meeting. If you attend the meeting, you may deliver your completed proxy card in person or you may vote by completing a ballot, which will be available at the meeting. |
• | Over the Internet or By Telephone. You will receive instructions from your broker or other nominee if you are permitted to vote over the Internet or by telephone. | |
• | By Mail. You will receive instructions from your broker or other nominee explaining how to vote your shares. | |
• | In Person at the Meeting. Contact the broker or other nominee that holds your shares to obtain a broker’s proxy card and bring it with you to the meeting.A broker’s proxy is not the form of proxy enclosed with this proxy statement. You will not be able to vote shares you hold in “street name” at the meeting unless you have a proxy from your broker issued in your name giving you the right to vote the shares. |
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• | historical and current information concerning NitroMed’s business, including the discontinuation of active promotional activities for BiDil and the proposed asset sale to JHP, and negative trends in its financial condition, operations and competitive position; | |
• | current financial market conditions, and historical market prices, volatility and trading information with respect to NitroMed’s common stock; | |
• | NitroMed’s limited prospects if it were to remain an independent, standalone company as a result of factors such as the discontinuation of active promotional activities for BiDil and the agreement to sell its BiDil and BiDil XR drug business to JHP, and NitroMed’s expected very limited operations and assets following the BiDil asset sale; | |
• | Archemix’s prospects, and the belief that the merger would result in a combined company with the potential for enhanced future growth and value; | |
• | the opportunity for NitroMed’s stockholders to participate in the potential future value of the combined company; | |
• | historical and current information concerning Archemix’s business, financial performance, financial condition, operations and management, including the results of a due diligence investigation of Archemix conducted by NitroMed’s management and advisors; | |
• | the active evaluation of strategic alternatives in which NitroMed had contact with over 80 parties to assess potential interest and received preliminary indications of interest for the sale of the entire company or for the sale of all or substantially all of NitroMed’s assets from several parties; | |
• | the NitroMed board of directors’ consideration of strategic alternatives to the merger, including the identification and evaluation of several potential private company candidates for a merger transaction and the consideration of undertaking the dissolution and liquidation of NitroMed, and the board of directors’ belief that the merger was more favorable to NitroMed’s stockholders than any other alternative reasonably available to NitroMed and its stockholders; | |
• | the recommendation of a special committee of disinterested directors that had been actively involved in the negotiation of the merger and the sale of the BiDil and BiDil XR drug business that the board of directors approve the merger with Archemix; |
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• | the financial analyses of Cowen (including the assumptions and methodologies underlying the analyses) and the opinion of Cowen which is attached to this joint proxy statement/prospectus asAnnex C, which you should read carefully in its entirety, that as of November 17, 2008, the consideration to be paid by NitroMed in the merger was fair, from a financial point of view, to NitroMed; and | |
• | the terms and conditions of the merger agreement, including: |
• | the determination that the relative percentage ownership of the combined company by NitroMed’s securityholders and Archemix’s securityholders is consistent with NitroMed’s perceived valuations of each company at the time NitroMed’s board of directors approved the merger; | |
• | that the terms of the merger agreement are reasonable, including the parties’ representations, warranties and covenants and the conditions to the parties’ respective obligations; | |
• | the non-solicitation provisions limiting Archemix’s ability to engage in discussions or negotiations regarding, or furnish to any person any information with respect to, or solicit, encourage or knowingly facilitate any inquiry with respect to an alternative acquisition proposal; | |
• | NitroMed’s rights under the merger agreement to pursue alternative acquisition proposals received independently under specified circumstances and to terminate the merger agreement under specified circumstances; | |
• | the voting agreements entered into with holders of approximately 85% of the shares of Archemix’s outstanding capital stock, constituting a sufficient vote of Archemix’s stockholders to approve the merger, pursuant to which those stockholders agreed to vote in favor of adoption of the merger agreement and against any proposal made in opposition to, or in competition with, the merger; | |
• | NitroMed’s board of directors’ belief that the $1.5 million termination fee and obligation to reimburse Archemix’s documented expenses up to $1.5 million if NitroMed has less than $34.5 million in net cash at closing or $500,000 in certain other circumstances set forth in the merger agreement was reasonable in the context of termination fees that were payable in other comparable transactions and would not be likely to preclude another party from making a superior acquisition proposal; and | |
• | the qualification of the merger as a reorganization for U.S. federal income tax purposes, with the result that in the merger neither NitroMed’s nor Archemix’s stockholders will recognize gain or loss for U.S. federal income tax purposes. |
• | the risk that the merger might not be completed in a timely manner or at all due to failure to satisfy the closing conditions, some of which are outside of NitroMed’s control; | |
• | if the merger is not completed, the potential adverse effect of the public announcement of any termination of the merger or the merger agreement on NitroMed’s reputation; | |
• | the immediate and substantial dilution of the equity interests and voting power of NitroMed’s stockholders upon completion of the merger; | |
• | the ability of Archemix’s current stockholders, officers and directors to significantly influence the combined company’s business after the completion of the merger; | |
• | the risk that the combined company will be unable to raise additional capital and that such additional capital, even if available, will be further dilutive to NitroMed’s stockholders and may be at a lower valuation than reflected in the merger; | |
• | the restrictions that the merger agreement imposes on soliciting competing acquisition proposals; | |
• | the fact that if the merger agreement is terminated under certain circumstances, NitroMed would be obligated to pay a $1.5 million termination fee to Archemix and NitroMed may be required to |
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reimburse Archemix’s documented expenses up to $1.5 million if NitroMed has less than $34.5 million in net cash at closing or $500,000 in certain other circumstances; |
• | the restrictions on the conduct of NitroMed’s business prior to the completion of the merger, which require NitroMed, except for the sale of the BiDil and BiDil XR drug business which is expressly permitted, to carry on its business in the usual and ordinary course in substantially the same manner as previously conducted, subject to specific additional restrictions, which may delay or prevent NitroMed from pursuing business opportunities that would otherwise be in its best interests as a standalone company; | |
• | the requirement that NitroMed receive approval from NASDAQ for the re-listing of NitroMed’s common stock in connection with the merger based on NASDAQ’s initial listing requirements; | |
• | the challenges and costs of combining certain limited administrative operations and the substantial expenses to be incurred in connection with the merger, including the risks that delays or difficulties in completing the limited administrative integration and such other expenses, as well as the additional public company expenses and obligations that Archemix will be subject to in connection with the merger that it has not previously been subject to, could adversely affect the combined company’s operating results and preclude the achievement of some benefits anticipated from the merger; | |
• | the possible volatility of the trading price of NitroMed’s common stock resulting from the announcement and pendency of the merger; | |
• | the possible limitations on the liquidity of the combined company’s common stock following the consummation of the merger resulting from restrictions on transfer that will affect approximately 69% of the outstanding shares of the combined company, based on an assumed net cash balance of NitroMed of $45 million at closing and a cash and cash equivalent balance of Archemix at closing of at least $30 million, for a period of 90 to 180 days following the consummation of the merger; | |
• | the possible volatility of the trading price of the combined company’s common stock resulting from the possible sale of a substantial number of shares upon the lapsing oflock-up restrictions 90 and 180 days following the consummation of the merger; | |
• | the interests of NitroMed’s executive officer and directors in the transactions contemplated by the merger agreement, as described in the section of this joint proxy statement/prospectus entitled “Interests of NitroMed’s Directors and Executive Officers in the Merger;” and | |
• | various other applicable risks associated with the business of Archemix and the combined company and the merger, including those described in the section of this joint proxy statement/prospectus entitled “Risk Factors.” |
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• | historical and current information concerning Archemix’s business, financial performance, financial condition, operations and management, including financial projections of Archemix under various scenarios and its short and long-term strategic objectives and the risks associated therewith; | |
• | that the cash resources of the combined company expected to be available at the closing of the merger and the ability to access capital markets as a public company are anticipated to provide sufficient capital to maintain Archemix’s projected business operations through and after 2009, including continued Phase 2 clinical development of ARC1779 and continued research and preclinical development of other product candidates; and that without NitroMed’s net cash that is expected to be available to the combined company at the closing of the merger, Archemix would need to raise additional funds through private or public equity offerings, partnerships with pharmaceutical companies, debt financing or other arrangements during 2009; | |
• | the expectation that the merger with NitroMed would be a more time- and cost-effective means, including less dilutive to current Archemix stockholders, to access sufficient capital than other options considered, including an initial public offering or an additional round of private equity financing, given the stage of development of Archemix and the condition of capital markets for initial public offerings and follow-on rounds of venture financings; | |
• | the view that the range of options available to the combined company to access private and public equity markets should additional capital be needed in the future will likely be greater than the range of options Archemix would have as a private company; | |
• | the fact that shares of NitroMed common stock to be issued to Archemix’s stockholders will be registered on a FormS-4 registration statement by NitroMed and will become freely tradable for Archemix’s stockholders who are not affiliates of NitroMed and who are not parties tolock-up agreements; | |
• | the opportunity for Archemix’s stockholders to participate in the long-term value of the product candidate development programs of Archemix through the ownership of stock in a public company; and | |
• | the terms and conditions of the merger agreement, including: |
• | the determination that expected relative percentage ownership of the combined company by Archemix’s securityholders and NitroMed’s securityholders is consistent with Archemix’s perceived valuations of each company at the time Archemix’s board of directors approved the merger; | |
• | that the terms of the merger agreement are reasonable, including the parties’ representations, warranties and covenants and the conditions to the parties’ respective obligations; |
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• | the non-solicitation provisions limiting NitroMed’s ability to engage in discussions or negotiations regarding, or furnish to any person any information with respect to, or solicit, encourage or knowingly facilitate any inquiry with respect to an alternative acquisition proposal; | |
• | the qualification of the merger as a reorganization for U.S. federal income tax purposes, with the result that in the merger neither NitroMed’s nor Archemix’s stockholders will recognize gain or loss for U.S. federal income tax purposes; | |
• | Archemix’s rights under the merger agreement to pursue alternative acquisition proposals received independently under specified circumstances and to terminate the merger agreement under specified circumstances; | |
• | that appraisal rights would be available to non-consenting Archemix stockholders under Delaware law; and | |
• | the fact that NitroMed would be obligated to pay a termination fee to Archemix of $1.5 million and NitroMed may be required to reimburse Archemix’s documented expenses up to $1.5 million if NitroMed has less than $34.5 million in net cash at closing or $500,000 in certain other circumstances. |
• | the risk that the merger might not be completed in a timely manner, or at all, due to failure to satisfy the closing conditions, some of which are outside of Archemix’s control; | |
• | if the merger is not completed, the potential adverse effect of the public announcement of any termination of the merger or the merger agreement on Archemix’s business, including its ability to attract new sources of capital, retain key personnel and maintain its overall competitive position; | |
• | the indemnification obligations and other potential liabilities retained by NitroMed following the BiDil asset sale, which would be borne by the combined company following the merger; | |
• | the substantial expenses to be incurred in connection with the merger and the fact that Archemix would be obligated to pay a $1.5 million termination fee to NitroMed and reimburse a portion of NitroMed’s expenses if the merger agreement is terminated under specified circumstances; | |
• | expenses and obligations that the combined company would be subject to as a result of being a public company could adversely affect the combined company’s operating results and preclude the achievement of some benefits anticipated from the merger; | |
• | the interests of Archemix’s executive officers and directors in the transactions contemplated by the merger agreement, as described in the section of this joint proxy statement/prospectus entitled “Interests of Archemix’s Directors and Executive Officers in the Merger;” and | |
• | various other applicable risks associated with the business of Archemix, NitroMed and the combined company and the merger, including those described in the section of this joint proxy statement/prospectus entitled “Risk Factors.” |
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• | a draft of the merger agreement received on November 13, 2008, which was the most recent draft made available to Cowen; | |
• | certain publicly available financial and other information for NitroMed and Archemix, respectively, including equity research, and certain other relevant financial and operating data furnished to Cowen by the managements of NitroMed and Archemix, respectively; | |
• | certain internal financial analyses, financial projections, reports and other information concerning Archemix (the “Archemix Forecasts”) prepared by the management of Archemix; | |
• | discussions Cowen had with certain members of the management of Archemix concerning the historical and current business operations, financial condition and prospects of Archemix and such other matters Cowen deemed relevant; | |
• | discussions Cowen had with certain members of the management of NitroMed concerning the historical and current business operations, financial condition and prospects of NitroMed, including, more specifically, that following the asset sale NitroMed does not, and does not intend to, engage in any activity that may result in the generation of any revenue, and such other matters Cowen deemed relevant; | |
• | certain operating results of Archemix as compared to the operating results, reported price and trading histories of certain publicly traded companies Cowen deemed relevant; | |
• | certain financial terms of certain companies that completed their initial public offerings that Cowen deemed relevant; | |
• | certain financial terms of the merger as compared to the financial terms of certain selected business combinations Cowen deemed relevant; | |
• | certain pro forma financial effects of the merger; and |
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• | such other information, financial studies, analyses and investigations and such other factors that Cowen deemed relevant for the purposes of its opinion. |
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• | Affymax Inc. | |
• | Alnylam Pharmaceuticals Inc. | |
• | Altus Pharmaceuticals Inc. | |
• | Amicus Therapeutics Inc. | |
• | Exelixis Inc. | |
• | Incyte Corp. | |
• | Isis Pharmaceuticals Inc. | |
• | Lexicon Pharmaceuticals Inc. | |
• | Maxygen Inc. | |
• | Rigel Pharmaceuticals Inc. | |
• | Seattle Genetics Inc. | |
• | Trubion Pharmaceuticals Inc. | |
• | XenoPort Inc. | |
• | XOMA Ltd. | |
• | ZymoGenetics Inc. |
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Archemix Implied | ||||||||
Equity Value Range | ||||||||
Low | High | |||||||
Methodology | ||||||||
Equity Value Analysis | $ | 150.0 | $ | 250.0 | ||||
Enterprise Value Analysis | $ | 137.7 | $ | 187.7 |
• | Roche Holdings AG/ARIUS Research Inc. | |
• | Roche Holdings AG/Mirus Bio Corporation | |
• | Shire plc./Jerini AG | |
• | Daiichi Sankyo Co Ltd./U3 Pharma AG | |
• | GlaxoSmithKline plc./Sirtris Pharmaceuticals Inc. | |
• | Astellas Pharma Inc./Agensys Inc. | |
• | VaxGen Inc./Raven Biotechnologies Inc. | |
• | Bristol-Myers Squibb Co./Adnexus Therapeutics Inc. | |
• | PepTech Ltd./EvoGenix Ltd. | |
• | Roche Holdings AG/Therapeutic Human polyclonals Inc. | |
• | Eisai Co./Morphotek Inc. | |
• | GlaxoSmithKline plc./Domantis Ltd. | |
• | Merck & Co., Inc./Sirna Therapeutics | |
• | Amgen Inc./Avida Inc. | |
• | AstraZeneca plc./Cambridge Antibody Technology Group plc. | |
• | Merck & Co., Inc./GlycoFi Inc. | |
• | Merck & Co., Inc./Abmaxis Inc. | |
• | Amgen Inc./Abgenix Inc. | |
• | Roche/GlycArt Biotechnology AG |
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Archemix Implied | ||||||||
Equity Value Range | ||||||||
Low | High | |||||||
Methodology | ||||||||
Equity Value Analysis | $ | 200.0 | $ | 300.0 | ||||
Enterprise Value Analysis | $ | 237.7 | $ | 337.7 |
• | Amicus Therapeutics Inc. | |
• | Affymax Inc. | |
• | Trubion Pharmaceuticals Inc. | |
• | Altus Pharmaceuticals Inc. | |
• | CombinatoRx Inc. | |
• | XenoPort Inc. |
Archemix Implied | ||||||||
Equity Value Range | ||||||||
Low | High | |||||||
Methodology | ||||||||
Equity Value Analysis | $ | 200.0 | $ | 250.0 |
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• | 100% of Mr. Bate’s outstanding and unexercisable stock options become immediately exercisable in full; | |
• | a lump sum payment of (1) Mr. Bate’s base salary until through the date of termination plus any deferred pay and any vacation time; (2) an amount equal to Mr. Bate’s highest annual base salary during the two year period prior to the change in control; and (3) an amount equal to Mr. Bate’s then current annual bonus target percentage multiplied by highest base salary over the last two years; and | |
• | for a minimum of 12 months following termination, continued benefits coverage for Mr. Bate and his family at least equal to benefits NitroMed provided prior to Mr. Bate’s termination. The obligation to provide benefits will cease if Mr. Bate becomes employed by another employer and is eligible to receive benefits through that other employer. |
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Number of | ||||
Stock | ||||
Name | Options(1) | |||
Gregg Beloff | 305,441 | |||
Page Bouchard, D.V.M. | 328,177 | |||
James Gilbert, M.D. | 260,803 | |||
Duncan Higgons | 652,007 | |||
Total | 1,546,428 |
(1) | The Number of Stock Options does not reflect application of the exchange ratio applicable to options to purchase Archemix common stock in connection with the merger described elsewhere in this joint proxy statement/prospectus and will be adjusted in the same manner as outstanding options to purchase Archemix common stock. |
Payments and Benefits to Dr. De Souza Upon Resignation as | ||||
President and Chief Executive Officer of Archemix Pursuant to | ||||
Employment Agreement | ||||
Salary Continuation(1) | $ | 687,975 | ||
Bonus(2) | 573,313 | |||
Benefit Continuation(3) | 18,130 | |||
Total | $ | 1,279,418 |
(1) | Represents 18 months of salary continuation based on Dr. De Souza’s current annual base salary of $458,650, which is the maximum amount of potential salary continuation payments under Dr. De Souza’s employment agreement. Dr. De Souza’s employment agreement provides for continued payment of his base salary for a minimum of 12 months with a continuance for each month or partial month that he has not obtained full-time employment, up to an aggregate of 18 months, provided that if Dr. De Souza obtains full-time employment prior to the end of the 18 months with a salary that is less than his base salary at the time of termination with Archemix, then for each month or partial month through the 18th month, Archemix will pay him the difference between his base salary and new salary. | |
(2) | Consists of $229,325, representing Dr. De Souza’s target annual bonus for 2008, which is payable within 30 days following Dr. De Souza’s termination, and $229,325, representing Dr. De Souza’s target annual bonus for 2008, which is payable within 30 days after the 12 month anniversary of his termination. This amount also includes $114,663, representing 50% of Dr. De Souza’s target annual bonus for 2008, which is payable only to the extent Dr. De Souza receives salary continuation payments following the minimum 12 months of payments discussed above and assumes such payments continue for the maximum 18 month |
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period, and is subject to adjustment based on the actual number of months salary continuation payments are made after the first 12 months. | ||
(3) | Represents 18 months of continuation of group health insurance and payment of the premium in effect on the date of termination, which is the maximum amount of time for which this benefit will be provided, the actual duration of which will coincide with the number of months of salary continuation payments discussed above. |
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Post- | ||||||||||||||||||||||||||||||||
Closing | ||||||||||||||||||||||||||||||||
Retention | ||||||||||||||||||||||||||||||||
Weighted | Options to | |||||||||||||||||||||||||||||||
Average | Total | Purchase | ||||||||||||||||||||||||||||||
Total | Exercise | Shares of | Shares | NitroMed | ||||||||||||||||||||||||||||
Options | Vested | Unvested | Price per | Restricted | Vested | Subject to | Common | |||||||||||||||||||||||||
Name | Held | Options | Options | Share | Stock Held | Shares | Repurchase | Stock | ||||||||||||||||||||||||
Executive Officers | ||||||||||||||||||||||||||||||||
Errol De Souza, Ph.D. | 5,749,959 | 4,387,459 | 1,362,500 | $ | 0.14 | — | — | — | 1,789,797 | |||||||||||||||||||||||
Gregg Beloff | 702,693 | 540,193 | 162,500 | $ | 0.14 | — | — | — | 305,441 | |||||||||||||||||||||||
Page Bouchard, D.V.M. | 755,000 | 553,750 | 201,250 | $ | 0.13 | — | — | — | 328,177 | |||||||||||||||||||||||
James Gilbert, M.D. | 600,000 | 262,500 | 337,500 | $ | 0.17 | — | — | — | 260,803 | |||||||||||||||||||||||
Duncan Higgons | 300,000 | 93,750 | 206,250 | $ | 0.14 | 1,200,000 | 750,000 | 750,000 | 652,007 | |||||||||||||||||||||||
Directors(1)(2) | ||||||||||||||||||||||||||||||||
Lawrence Best | 182,000 | 154,000 | 28,000 | $ | 0.15 | — | — | — | — | |||||||||||||||||||||||
John Maraganore, Ph.D. | 130,000 | 80,000 | 50,000 | $ | 0.16 | — | — | — | — | |||||||||||||||||||||||
Robert Stein, M.D., Ph.D. | 110,000 | 30,000 | 80,000 | $ | 0.24 | — | — | — | — |
(1) | Dr. De Souza, President and Chief Executive Officer of Archemix, is also a director of Archemix. | |
(2) | The following members of the Archemix board of directors do not hold any options to purchase Archemix common stock: Peter Barrett, Ph.D., Alex Barkas, Ph.D., Corey Mulloy, and Michael Ross, Ph.D. |
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• | The exchange ratio for Archemix common stock will be 0.5120; | |
• | The exchange ratio for Archemix Series A preferred stock will be 0.8001; | |
• | The exchange ratio for Archemix Series B preferred stock will be 0.8001; and | |
• | The exchange ratio for Archemix Series C preferred stock will be 0.5120. |
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• | a certificate representing the number of whole shares of NitroMed common stock that such holder has the right to receive pursuant to the provisions of the merger agreement; | |
• | cash in lieu of any fractional share of NitroMed common stock; and | |
• | dividends or other distributions, if any, to which they are entitled under the terms of the merger agreement. |
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• | a citizen or resident of the United States; | |
• | a corporation created or organized in or under the laws of the United States, or any political subdivision thereof (including the District of Columbia); | |
• | an estate the income of which is subject to United States federal income taxation regardless of its source; | |
• | a trust if either: |
• | a court within the United States is able to exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of such trust, or | |
• | the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes. |
• | who are subject to special treatment under United States federal income tax rules such as dealers in securities, financial institutions,non-U.S. persons, mutual funds, regulated investment companies, real estate investment trusts, insurance companies, employees of Archemix who will become employees of NitroMed, or tax-exempt entities; | |
• | who are subject to the alternative minimum tax provisions of the Code; | |
• | who acquired their shares in connection with stock option or stock purchase plans or in other compensatory transactions; | |
• | who hold their shares as part of an integrated investment such as a hedge or as part of a hedging, straddle or other risk reduction strategy; or | |
• | who do not hold their shares as capital assets. |
• | tax consequences of transactions effectuated before, after or at the same time as the merger, whether or not they are in connection with the merger, including, without limitation, transactions in which Archemix shares are acquired or NitroMed shares are disposed of; | |
• | tax consequences of the receipt of NitroMed shares other than in exchange for Archemix shares; or | |
• | tax implications of a failure of the merger to qualify as a reorganization. |
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• | NitroMed, merger sub and Archemix will not recognize any gain or loss solely as a result of the merger; | |
• | stockholders of Archemix will not recognize any gain or loss upon the receipt of solely NitroMed common stock for their Archemix common or preferred stock, other than with respect to cash received in lieu of fractional shares of NitroMed common stock; | |
• | the aggregate tax basis of the shares of NitroMed common stock received by an Archemix stockholder in the merger (including any fractional share deemed received) will be equal to the aggregate tax basis of the shares of Archemix common and preferred stock surrendered in exchange therefor; | |
• | the holding period of the shares of NitroMed common stock received by an Archemix stockholder in the merger will include the holding period of the shares of Archemix common and preferred stock surrendered in exchange therefor; | |
• | generally, cash payments received by Archemix stockholders in lieu of fractional shares will be treated as if such fractional shares of NitroMed common stock were issued in the merger and then sold. A stockholder of Archemix who receives such cash will recognize gain or loss equal to the difference, if any, between such stockholder’s basis in the fractional share and the amount of cash received; and | |
• | such gain or loss will be capital gain or loss, and generally will constitute long-term capital gain or loss if the stockholder’s holding period in the shares surrendered is more than one year as of the effective time of the merger. Net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) will be subject to tax at reduced rates for non-corporate stockholders who receive cash. The deductibility of capital losses is subject to various limitations for corporate and non-corporate holders. |
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• | Stockholders electing to exercise appraisal rights must not vote “for” the adoption of the merger agreement. Voting “for” the adoption of the merger agreement will result in the waiver of appraisal rights. Also, because a submitted proxy not marked “against” or “abstain” will be voted “for” the proposal to adopt the merger agreement, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. | |
• | A written demand for appraisal of shares must be filed with Archemix before the taking of the vote on the merger agreement at the special meeting. The written demand for appraisal should specify the stockholder’s name and mailing address, and that the stockholder is thereby demanding appraisal of his or her Archemix capital stock. The written demand for appraisal of shares is in addition to and separate from a vote against the merger agreement or an abstention from such vote. That is, failure to return your proxy, voting against, or abstaining from voting on, the merger will not satisfy your obligation to make a written demand for appraisal. | |
• | A demand for appraisal must be executed by or for the stockholder of record, fully and correctly, as such stockholder’s name appears on the stock certificate. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, this demand must be executed by or for the fiduciary. If the shares are owned by or for more than one person, as in a joint tenancy or tenancy in common, such demand must be executed by or for all joint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record. However, the agent must identify the record owner and expressly disclose the fact that, in exercising the demand, he is acting as agent for the record owner. A person having a beneficial interest in Archemix capital stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below in a timely manner to perfect whatever appraisal rights the beneficial owners may have. | |
• | A stockholder who elects to exercise appraisal rights should mail or deliver his, her or its written demand to Archemix at 300 Third Street, Cambridge, Massachusetts 02142, Attention: Chief Financial Officer. |
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• | each share of Archemix common stock will entitle the holder to receive 0.5120 shares of NitroMed common stock; | |
• | each share of Archemix Series A preferred stock will entitle the holder to receive 0.8001 shares of NitroMed common stock; | |
• | each share of Archemix Series B preferred stock will entitle the holder to receive 0.8001 shares of NitroMed common stock; and | |
• | each share of Archemix Series C preferred stock will entitle the holder to receive 0.5120 shares of NitroMed common stock. |
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If Archemix Cash and Cash Equivalents | If Archemix Cash and Cash Equivalents | |||||||||||||||||||||
NitroMed’s Net | is at Least $30 Million | is Below $30 Million | ||||||||||||||||||||
Cash At | Exchange | Exchange | ||||||||||||||||||||
Closing As | Ratio for | Exchange | Ratio for | |||||||||||||||||||
Calculated | Exchange | Series C | Pro Forma | Ratio for | Series C | Pro Forma | ||||||||||||||||
Pursuant to the | Ratio for | Preferred | Ownership of | Series A | Preferred | Ownership of | ||||||||||||||||
Merger | Series A and B | Stock and | Combined | and B | Stock and | Combined | ||||||||||||||||
Agreement | Preferred | Common | Company | Preferred | Common | Company | ||||||||||||||||
(In millions)(1) | Stock | Stock | Archemix/NitroMed | Stock | Stock | Archemix/NitroMed | ||||||||||||||||
$ | 34.5 | 0.95631 | 0.61201 | 73.6%/26.4% | 0.87497 | 0.55996 | 71.8%/28.2% | |||||||||||||||
$ | 36.0 | 0.93036 | 0.59541 | 73.1%/26.9% | 0.85320 | 0.54602 | 71.3%/28.7% | |||||||||||||||
$ | 37.5 | 0.90579 | 0.57968 | 72.5%/27.5% | 0.83249 | 0.53277 | 70.8%/29.2% | |||||||||||||||
$ | 39.0 | 0.88248 | 0.56476 | 72.0%/28.0% | 0.81276 | 0.52014 | 70.3%/29.7% | |||||||||||||||
$ | 40.5 | 0.86034 | 0.55059 | 71.5%/28.5% | 0.79394 | 0.50810 | 69.8%/30.2% | |||||||||||||||
$ | 42.0 | 0.83928 | 0.53711 | 71.0%/29.0% | 0.77597 | 0.49660 | 69.4%/30.6% | |||||||||||||||
$ | 43.5 | 0.81923 | 0.52428 | 70.5%/29.5% | 0.75880 | 0.48561 | 68.9%/31.1% | |||||||||||||||
$ | 45.0 | 0.80011 | 0.51205 | 70.0%/30.0% | 0.74237 | 0.47510 | 68.4%/31.6% |
(1) | For purposes of determining the applicable exchange ratios above, net cash will be calculated in accordance with the merger agreement. |
• | the registration statement onForm S-4, of which this joint proxy statement/prospectus is a part, must have been declared effective by the SEC in accordance with the Securities Act and must not be subject to any stop order or proceeding, or any proceeding threatened by the SEC, seeking a stop order; | |
• | there must not have been issued any temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the merger, and no law, statute, rule, regulation, ruling or decree shall be in effect which has the effect of making the consummation of the merger illegal; |
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• | stockholders of Archemix must adopt the merger agreement, and stockholders of NitroMed must approve the asset sale (if not previously approved at a separate meeting of NitroMed stockholders), approve the issuance of NitroMed common stock pursuant to the merger and the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split; | |
• | any governmental authorization or other consent required to be obtained by any of the parties to the merger agreement under any applicable antitrust or competition law or regulation or other legal requirement shall have been obtained and shall remain in full force and effect; and | |
• | the existing shares of NitroMed common stock shall have been continually listed on The NASDAQ Global Market, and NitroMed shall have caused the shares of NitroMed common stock that Archemix securityholders will be entitled to receive pursuant to the merger to be approved for listing on The NASDAQ Global Stock Market following the closing of the merger. |
• | all representations and warranties of the other party in the merger agreement being true and correct on the date of the merger agreement and on the closing date of the merger with the same force and effect as if made on the date on which the merger is to be completed or, if such representations and warranties address matters as of a particular date, then as of that particular date, except where the failure of these representations and warranties to be true and correct, disregarding any materiality qualifications, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the party making the representations and warranties; | |
• | the other party to the merger agreement having performed or complied with in all material respects all covenants and obligations required to be performed or complied with by it on or before the closing of the merger; and | |
• | the other party having delivered the documents required under the merger agreement for the closing of the merger, including third party consents, good standing certificates, and certificates from certain of its officers. |
• | NitroMed shall have received the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. or Wilmer Cutler Pickering Hale and Dorr LLP to the effect that the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which is referred to herein as the Code. |
• | NitroMed shall have at least $34.5 million in net cash at closing, as calculated pursuant to the merger agreement; | |
• | the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split shall have become effective under the Delaware General Corporation Law; | |
• | Archemix shall have received the opinion of Wilmer Cutler Pickering Hale and Dorr LLP or Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. to the effect that the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of Code; and | |
• | NitroMed shall have completed the asset sale. |
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• | solicit, initiate, encourage, induce or knowingly facilitate the communication, making, submission or announcement of, any “acquisition proposal,” as defined below, or inquiry, indication of interest or request for information that could reasonably be expected to lead to an acquisition proposal; | |
• | furnish to any person any information with respect to it in connection with or in response to an acquisition proposal or inquiry, indication of interest or request for information that could reasonably be expected to lead to an acquisition proposal; | |
• | engage in discussions or negotiations with respect to any acquisition proposal or inquiry, indication of interest or request for information that could reasonably be expected to lead to an acquisition proposal; | |
• | approve, endorse or recommend an acquisition proposal; or | |
• | execute or enter into any letter of intent or similar document or any contract contemplating or otherwise relating to an acquisition proposal. |
• | any merger, consolidation, amalgamation, share exchange, business combination, issuance or acquisition of securities, reorganization, recapitalization, tender offer, exchange offer or similar transaction (1) in which Archemix, NitroMed or merger sub is a constituent corporation, (2) in which any individual, entity, governmental entity, or “group,” as defined under applicable securities laws, directly or indirectly acquires beneficial or record ownership of securities representing more than 15% of the outstanding securities of any class of voting securities of Archemix, NitroMed or merger sub or any of their subsidiaries or (3) in which Archemix, NitroMed or merger sub or any of their subsidiaries issues securities representing more than 15% of the outstanding voting securities of any class of voting securities of such party or any of its subsidiaries; | |
• | any sale, lease, exchange, transfer, license, acquisition or disposition of any business or assets that constitute 15% or more of the consolidated net revenues, net income or book value of the assets of or fair market value of the assets of Archemix, NitroMed or merger sub and their subsidiaries, taken as a whole; and | |
• | any liquidation or dissolution of Archemix, NitroMed or merger sub. |
• | neither such party nor any representative of such party has breached the no solicitation provisions of the merger agreement described above; | |
• | that party’s board of directors concludes in good faith, based on the advice of outside legal counsel, that the failure to take such action is reasonably likely to result in a breach of the fiduciary duties of such board of directors under applicable legal requirements; |
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• | that party gives the other party at least three business days’ prior notice of the identity of the third party and of that party’s intention to furnish information to, or enter into discussions or negotiations with, such third party before furnishing any information or entering into discussions or negotiations with such person; | |
• | that party receives from the third party an executed confidentiality agreement containing provisions at least as favorable to such party as those contained in the confidentiality agreement between Archemix and NitroMed; and | |
• | at least three business days prior to the furnishing of any information to a third party, that party furnishes the same information to the other party to the extent not previously furnished. |
• | is more favorable, from a financial point of view, to that party’s stockholders than the terms of the merger; and | |
• | is reasonably capable of being consummated. |
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• | declare, accrue, set aside or pay any dividends or make any other distributions in respect of any shares of its capital stock or repurchase any securities; | |
• | sell, issue or grant any securities, including options and warrants; | |
• | amend or waive any rights under, or permit the acceleration of vesting under, any stock option plan, stock option or warrant agreement, restricted stock purchase agreement, or other contract relating to any equity award; | |
• | modify its certificate of incorporation or bylaws or effect or become a party to any merger, consolidation, recapitalization, reclassification, stock split or similar transaction; | |
• | form any subsidiary or acquire equity or other interests in another entity; | |
• | make aggregate capital expenditures in excess of $500,000; | |
• | enter into any contract having a value in excess of $500,000, or amend or terminate any contract, or waive any right or remedy under any contract other than in the ordinary course of business consistent with past practices; | |
• | acquire, lease or license any right or asset or sell, dispose of, lease or license any right or asset or waive or relinquish any right except immaterial rights or assets in the ordinary course of business consistent with past practices; | |
• | write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other indebtedness; | |
• | pledge or encumber any assets, except for pledges of immaterial assets made in the ordinary course of business consistent with past practices; | |
• | lend money to any person, incur or guarantee indebtedness in the aggregate in excess of $100,000, or issue or sell any debt securities or options, warrants, calls or other similar rights to acquire any debt securities; | |
• | establish or adopt any employee benefit plan, pay any bonus or make any profit sharing, incentive compensation or similar payment to or increase the wages, salary or fringe benefits or other compensation of any of its directors, officers or employees with an annual salary in excess of $200,000, or hire a new employee having an annual salary in excess of $200,000; | |
�� | ||
• | change any of its personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect; | |
• | make any material tax election; | |
• | threaten, commence or settle any legal proceeding; | |
• | enter into any transaction or take any other action outside the ordinary course of business consistent with past practices, other than the transactions contemplated by the merger agreement; | |
• | pay, discharge or satisfy any claim, liability or obligation, other than non-material amounts in the ordinary course of business consistent with past practices, or as required by any contract or legal requirement; or | |
• | agree or commit to take any of these restricted actions. |
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• | declare, accrue, set aside or pay any dividends or make any other distributions in respect of any shares of its capital stock or repurchase any securities; | |
• | sell, issue or grant any securities, including options and warrants; | |
• | amend or waive any rights under, or permit the acceleration of vesting under, any stock option plan, stock option or warrant agreement, restricted stock purchase agreement, or other contract relating to any equity award; | |
• | modify its certificate of incorporation or bylaws or effect or become a party to any merger, consolidation, recapitalization, reclassification, stock split or similar transaction; | |
• | form any subsidiary or acquire equity or other interests in another entity; | |
• | make aggregate capital expenditures in excess of $100,000; | |
• | enter into any contract having a value in excess of $100,000, or amend or terminate any contract, or waive any right or remedy under any contract other than in the ordinary course of business consistent with past practices; | |
• | acquire, lease or license any right or asset or sell, dispose of, lease or license any right or asset or waive or relinquish any right, except immaterial rights or assets in the ordinary course of business consistent with past practices; | |
• | write off as uncollectible, or establish any extraordinary reserve with respect to, any account receivable or other indebtedness; | |
• | pledge or encumber its assets except for pledges of immaterial assets made in the ordinary course of business consistent with past practices; | |
• | lend money to any person, incur or guarantee any indebtedness in the aggregate in excess of $50,000, or issue or sell any debt securities or options, warrants, calls or other similar rights to acquire any debt securities; | |
• | establish or adopt any employee benefit plan, pay any bonus or make any profit sharing, incentive compensation or similar payment to or increase the wages, salary or fringe benefits or other compensation of any of its directors, officers or employees with an annual salary in excess of $175,000, or hire a new employee having an aggregate salary in excess of $100,000; | |
• | change any of its personnel policies or other business policies, or any of its methods of accounting or accounting practices in any respect; | |
• | make any material tax election; | |
• | threaten, commence or settle any legal proceeding; | |
• | enter into any transaction or take any other action outside the ordinary course of business consistent with past practices other than the transactions contemplated by the merger agreement; | |
• | pay, discharge or satisfy any claim, liability or obligation, other than non-material amounts in the ordinary course of business consistent with past practices, or as required by any contract or legal requirements; or | |
• | agree or commit to take any of these restricted actions. |
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• | file or otherwise submit all applications, notices, reports and other documents reasonably required to be filed with a governmental entity with respect to the merger; | |
• | take all actions necessary to complete the merger; | |
• | coordinate with the other in preparing and exchanging information and promptly provide the other with copies of all filings or submissions made in connection with the merger; | |
• | obtain all consents, approvals or waivers reasonably required in connection with the transactions contemplated by the merger agreement; | |
• | lift any injunction prohibiting the merger or other transactions contemplated by the merger agreement; and | |
• | consult and agree with each other about any public statement either will make concerning the merger, subject to certain exceptions. |
• | NitroMed will use commercially reasonable efforts to maintain the listing of its common stock on The NASDAQ Global Market and to obtain approval for listing on The NASDAQ Global Market of its common stock that Archemix securityholders will be entitled to receive pursuant to the merger; | |
• | for a period of six years after the merger, the combined company will indemnify each of the directors and officers of Archemix and NitroMed to the fullest extent permitted under the Delaware General Corporation Law and will maintain directors’ and officers’ liability insurance for Archemix’s and NitroMed’s directors and officers; and | |
• | Archemix and NitroMed will prepare and deliver to each other certain financial statements. |
• | by mutual written consent duly authorized by the board of directors of Archemix and NitroMed; | |
• | by Archemix or NitroMed, if the merger has not been completed by April 30, 2009, but this right to terminate the merger agreement will not be available to any party whose action or failure to act has been a principal cause of the failure of the merger to be completed by such date and such action or failure to act constitutes a breach of the merger agreement; | |
• | by Archemix or NitroMed, if a governmental entity has issued a final and nonappealable order, decree or ruling or taken any other action that permanently restrains, enjoins or otherwise prohibits the merger; | |
• | by Archemix or NitroMed, if the stockholders of NitroMed have not approved the asset sale, the issuance of NitroMed common stock pursuant to the merger and the amendment of NitroMed’s certificate of incorporation effecting the reverse stock split at a NitroMed special meeting or any adjournment or postponement thereof, provided that NitroMed may not terminate the merger agreement pursuant to this provision if such failure to obtain the approval of NitroMed’s stockholders was caused by the action or failure to act of NitroMed and such action or failure to act constitutes a material breach by NitroMed of the merger agreement; |
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• | by Archemix or NitroMed, if the stockholders of Archemix have not adopted the merger agreement at the Archemix special meeting or any adjournment or postponement thereof, provided that Archemix may not terminate the merger agreement pursuant to this provision if such failure to obtain the approval of Archemix’s stockholders was caused by the action or failure to act of Archemix and such action or failure to act is a material breach of the merger agreement; | |
• | by Archemix or NitroMed, if prior to the consummation of the merger, the board of directors of the terminating party determines that a non-foreseeable material development or change (other than an acquisition proposal) has occurred and such board of directors determines in good faith that the failure to withhold, amend, withdraw or modify its recommendation is reasonably likely to result in a breach of its fiduciary duties; provided that the non-terminating party must receive three business days prior written notice before the terminating party changes its recommendation; and the terminating party pays the non-terminating party a termination fee of $1.5 million; | |
• | by Archemix, at any time prior to the approval of the asset sale, the issuance of the shares of NitroMed common stock pursuant to the merger and the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split by the stockholders of NitroMed, if any of the following occur, each a “NitroMed Triggering Event”: |
• | NitroMed’s board of directors fails to recommend that NitroMed’s stockholders vote to approve the asset sale, the issuance of the shares of NitroMed common stock pursuant to the merger or the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split or withdraws or modifies its recommendation in a manner adverse to Archemix provided that the NitroMed board may approve another asset sale or modify the existing agreement, or approve the sale of NitroMed’s other assets, without triggering a termination right so long as it does not materially increase the liability of NitroMed under the agreement or delay the consummation of the merger beyond April 30, 2009 or impose material limitations on the conduct of NitroMed’s business, | |
• | NitroMed fails to include in this joint proxy statement/prospectus a recommendation to approve the issuance of the shares of NitroMed common stock pursuant to the merger or the amendment to NitroMed’s certificate of incorporation effecting the reverse stock split, | |
• | NitroMed fails to hold the NitroMed special meeting within 45 days after the Registration Statement onForm S-4 of which this joint proxy statement/prospectus is a part is declared effective under the Securities Act, other than to the extent that such registration statement is subject to a stop order or proceeding, or threatened proceeding by the SEC, seeking a stop order with respect to such registration statement, in which case such45-day period shall be tolled for so long as such stop order remains in effect or proceeding or threatened proceeding remains pending, | |
• | the NitroMed’s board of directors approves, endorses or recommends any acquisition proposal, as defined under “The Merger Agreement — No Solicitation,” or | |
• | NitroMed enters into any letter of intent or similar document or any contract relating to any acquisition proposal, as defined under “The Merger Agreement — No Solicitation,” other than a confidentiality agreement permitted pursuant to the merger agreement (each of the above clauses is referred to herein as a NitroMed Triggering Event); |
• | by NitroMed, at any time prior to the adoption of the merger agreement by the stockholders of Archemix, if any of the following occur, each an “Archemix Triggering Event”: |
• | the Archemix board of directors fails to recommend that Archemix’s stockholders vote to adopt the merger agreement or withdraws or modifies its recommendation in a manner adverse to NitroMed, | |
• | Archemix fails to include in this joint proxy statement/prospectus such recommendation, |
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• | Archemix fails to hold the Archemix special meeting within 45 days after the Registration Statement onForm S-4 of which this joint proxy statement/prospectus is a part is declared effective under the Securities Act, other than to the extent that such registration statement is subject to a stop order or proceeding, or threatened proceeding by the SEC, seeking a stop order with respect to such registration statement, in which case such45-day period shall be tolled for so long as such stop order remains in effect or proceeding or threatened proceeding remains pending, | |
• | the Archemix board of directors approves, endorses or recommends any acquisition proposal, as defined under “The Merger Agreement — No Solicitation,” or | |
• | Archemix enters into any letter of intent or similar document or any contract relating to any acquisition proposal, as defined under “The Merger Agreement — No Solicitation,” other than a confidentiality agreement permitted pursuant to the merger agreement (each of the above clauses is referred to herein as an “Archemix Triggering Event”). |
• | by Archemix or NitroMed, if the other party has breached any of its representations, warranties, covenants or other agreements contained in the merger agreement or if any representation or warranty has become inaccurate, in either case such that the conditions to the closing of the merger would not be satisfied as of time of such breach or inaccuracy, provided that if such breach or inaccuracy is curable, then the merger agreement will not terminate pursuant to this provision as a result of a particular breach or inaccuracy until the earlier of the expiration of a30-day period after delivery of written notice of such breach or inaccuracy and the breaching party ceasing to exercise commercially reasonable efforts to cure such breach, if such breach has not been cured, | |
• | by Archemix, if NitroMed does not have $34.5 million in net cash at closing or if NitroMed’s board has recommended or NitroMed has entered into a divestiture of assets other than the asset sale which would be reasonably likely to cause a delay in the completion of the merger beyond April 30, 2009 or impose increased liability or indemnification obligations on NitroMed. |
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• | corporate organization and power and similar corporate matters; | |
• | subsidiaries; | |
• | capital structure; | |
• | any conflicts or violations of each party’s agreements as a result of the merger or the merger agreement; | |
• | financial statements and, with respect to NitroMed, documents filed with the SEC and the accuracy of information contained in those documents; | |
• | any undisclosed liabilities; | |
• | any material changes or events; | |
• | with respect to Archemix, title to assets; | |
• | bank accounts and receivables; | |
• | equipment and leaseholds; | |
• | filing of tax returns and payment of taxes; | |
• | intellectual property; | |
• | compliance with legal requirements; | |
• | litigation matters; | |
• | any brokerage or finder’s fee or other fee or commission in connection with the merger; | |
• | employee benefits and related matters; | |
• | any liens and encumbrances; | |
• | environmental matters; | |
• | regulatory compliance; | |
• | insurance matters; |
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• | the validity of material contracts to which the parties or their subsidiaries are a party and any violation, default or breach to such contracts; | |
• | authority to enter into the merger agreement and the related agreements; | |
• | approval by the board of directors; | |
• | votes required for completion of the merger and approval of the proposals that will come before each of the NitroMed special meeting and the Archemix special meeting; | |
• | transactions with affiliates; | |
• | with respect to NitroMed, the valid issuance of the shares of NitroMed common stock in the merger; | |
• | with respect to NitroMed, controls and procedures and related matters; and | |
• | with respect to NitroMed, the inapplicability of the provisions of Section 203 of the Delaware General Corporation Law to the merger. |
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• | to use reasonable commercial efforts to conduct the operations of the BiDil drug business in the ordinary course during the period between the execution of the asset purchase agreement and the completion of the asset sale; | |
• | not to engage in specified types of transactions during such period; and | |
• | not to solicit proposals relating to alternative transactions or, subject to specified exceptions, enter into discussions or provide confidential information in connection with proposals for alternative transactions. |
• | the representations and warranties of the other party in the asset purchase agreement are true and correct as of the closing date of the asset sale except for specified exceptions; | |
• | the other party to the asset purchase agreement having performed or complied in all material respects with the agreements and covenants required to be performed or complied with by it as of or prior to the closing of the asset sale; | |
• | no action, suit or proceeding brought by a governmental entity seeking to prevent the completion of the asset sale and no judgment, order, decree or injunction enjoining or preventing the completion of the asset sale being in effect; | |
• | approval of the asset sale by NitroMed stockholders; and | |
• | the filing of a proxy statement with the SEC relating to the special meeting of NitroMed stockholders at which the asset sale will be submitted for approval. |
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• | because the initial listing standards of The NASDAQ Global Market will require NitroMed to have, among other things, a $5.00 per share minimum bid price upon the closing of the merger, the reverse stock split is necessary in order to consummate the merger; | |
• | the board of directors believes effecting the reverse stock split may be an effective means of avoiding a delisting of NitroMed’s common stock from The NASDAQ Global Market in the future; and | |
• | the board of directors believes a higher stock price may help generate investor interest in NitroMed and help NitroMed attract and retain employees. |
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• | the market price per share of NitroMed common stock after the reverse stock split will rise in proportion to the reduction in the number of shares of NitroMed common stock outstanding before the reverse stock split; | |
• | the reverse stock split will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks; | |
• | the reverse stock split will result in a per share price that will increase NitroMed’s ability to attract and retain employees; or | |
• | the market price per share will either exceed or remain in excess of the $1.00 minimum bid price as required by NASDAQ for continued listing, or that NitroMed will otherwise meet the requirements of NASDAQ for inclusion for trading on The NASDAQ Global Market. |
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Number of Shares | ||||||||||||||||
Authorized but | ||||||||||||||||
Number of Shares of | Number of Shares | Number of Shares | Neither Issued nor | |||||||||||||
Common Stock | Issued and | Reserved For | Reserved for | |||||||||||||
Authorized | Outstanding(1) | Issuance(1) | Issuance(1) | |||||||||||||
Prior to the Reverse Stock Split and Closing of the Merger: | 65,000,000 | 46,076,551 | 7,619,679 | 11,303,770 | ||||||||||||
After Assumed 10:1 Reverse Stock Split but Before Closing of the Merger: | 65,000,000 | 4,607,655 | 761,968 | 59,630,377 | ||||||||||||
After Assumed 20:1 Reverse Stock Split but Before Closing of the Merger: | 65,000,000 | 2,303,828 | 380,984 | 62,315,188 | ||||||||||||
After Assumed 30:1 Reverse Stock Split but Before Closing of the Merger: | 65,000,000 | 1,535,885 | 253,989 | 63,210,126 | ||||||||||||
After Assumed 10:1 Reverse Stock Split and Issuance of Shares Following Closing of the Merger: | 65,000,000 | 15,702,597 | (2) | 1,983,493 | (3) | 47,313,910 | ||||||||||
After Assumed 20:1 Reverse Stock Split and Issuance of Shares Following Closing of the Merger: | 65,000,000 | 7,851,299 | (2) | 991,747 | (3) | 56,156,954 | ||||||||||
After Assumed 30:1 Reverse Stock Split and Issuance of Shares Following Closing of the Merger: | 65,000,000 | 5,234,199 | (2) | 661,164 | (3) | 59,104,637 |
(1) | These estimates assume 46,076,551 shares of NitroMed common stock issued and outstanding immediately prior to the closing of the merger which was the number of shares issued and outstanding as of December 1, 2008. These estimates also assume that NitroMed’s net cash at closing, as calculated pursuant to the merger agreement, will be $45 million and that Archemix’s cash and cash equivalents, as calculated pursuant to the merger agreement will be at least $30 million. | |
(2) | This assumes 46,076,551 shares of NitroMed common stock issued and outstanding immediately prior to the closing of the merger and 110,949,419 shares of NitroMed common stock that Archemix stockholders will be entitled to receive in connection with the merger. | |
(3) | This assumes (A) 7,619,679 shares of NitroMed common stock reserved for issuance for the exercise of options to purchase shares of NitroMed common stock outstanding immediately prior to the closing of the merger and (B) 12,215,254 shares of NitroMed common stock reserved for issuance for the exercise of options and warrants to purchase shares of NitroMed common stock (i) that the holders of options and warrants to purchase shares of Archemix capital stock will be entitled to receive in connection with the merger and (ii) that employees of Archemix who remain employees or serve on the board of directors of the combined company in the merger will receive in connection with the merger. |
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• | BiDil; | |
• | NitroMed; | |
• | NitroMed Cares; | |
• | More Life to Live; and | |
• | NitroMed “N” logo. |
• | improved patient outcomes; |
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• | cost-effectiveness; | |
• | acceptance by patients, physicians, other health care providers and third-party public and private payors; | |
• | the quality and breadth of an organization’s technology; | |
• | the skill of an organization’s employees and its ability to recruit and retain skilled employees; | |
• | an organization’s intellectual property protection; | |
• | development, sales and marketing capabilities; and | |
• | the availability of substantial capital resources to fund development and commercialization activities. |
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Nine Months Ended | Year Ended | |||||||||||||||
September 30, | December 31, | |||||||||||||||
Customer | 2008 | 2007 | 2006 | 2005 | ||||||||||||
McKesson Corporation | 38 | % | 38 | % | 34 | % | 44 | % | ||||||||
Cardinal Health | 35 | % | 36 | % | 36 | % | 21 | % | ||||||||
Amerisource Bergen Corporation | 18 | % | 17 | % | 18 | % | 14 | % |
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• | Attractive drug-like properties. |
• | Ability to disrupt interactions between proteins. The large surface area of interaction between an aptamer and its protein target make an aptamer well-suited to block interactions between proteins. Because abnormal interactions between proteins are involved in many disease processes, the use of aptamers to inhibit these interactions may have meaningful clinical significance. Furthermore, since aptamers can interact with proteins found on the surface of and outside cells, aptamers do not have to cross the cell membrane, which may make it easier to deliver an effective quantity of aptamer to the target. | |
• | High affinity binding and specificity. Aptamers have well-defined, three-dimensional shapes, which allow them to interact with a folded, three-dimensional protein target, like a key in a lock. The complementary structure of an aptamer and its protein target allows aptamers to bind to their protein targets with high affinity and specificity. | |
• | Rationally designed duration of action. Aptamers can be rationally designed with an optimized duration of action necessary to achieve a desired effect. Archemix uses proprietary chemical stabilization and conjugation techniques to prevent or reduce the metabolism of the aptamer and its elimination from the body, which Archemix believes may permit aptamers to be used in treating both acute and chronic diseases. |
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• | No observed immunogenicity. Because nucleic acids are not typically recognized by the human immune system as foreign agents, aptamers do not generally trigger an antibody response. To date, Archemix has not observed an antibody response to any of its aptamer product candidates in its preclinical or clinical trials. | |
• | Rapid in vitro discovery and chemical synthesis. Discovering aptamers is an entirely in vitro process that does not rely on biological organisms. This allows for rapid and reproducible discovery compared to biologic drug products. Using Archemix’s proprietary process called Systematic Evolution of Ligands by EXponential expression, or SELEX, Archemix can select aptamers that bind to a selected target in vitro with high affinity and specificity in approximately one month. Then, using its proprietary post-SELEX modification processes, Archemix engineers desired characteristics and functionality into each aptamer such that it is ready for preclinical animal testing in approximately 12 to 15 months. | |
• | Ease of manufacturing. Because aptamers are chemically synthesized, they can be manufactured in a rapid, scalable and reproducible manner. |
• | Intellectual property. |
• | Broad patent portfolio. As of December 1, 2008, Archemix owns or has licensed exclusive rights for aptamer therapeutic applications to over 200 issued patents, including 162 issued United States patents and ten European patents and approximately 300 pending patent applications worldwide, including 64 pending United States patent applications, pertaining to the discovery and development of aptamers and their role in treating disease. All of Archemix’s issued patents and approximately 100 of its pending patent applications are exclusively licensed from Gilead pursuant to an agreement Archemix entered into with Gilead in October 2001. Archemix is obligated to pay a nominal royalty to the University of Colorado at Boulder, from which Gilead obtained the underlying technology, based on any net sales of and sublicense income from aptamer products. Archemix is also obligated to use commercially reasonable efforts to develop the licensed technology. In addition, Archemix has sublicensed the rights to patents and know-how from both Isis Pharmaceuticals, Inc. and SomaLogic, Inc. Archemix believes its access to these patents and know-how further strengthens its broad patent portfolio. | |
• | Rights to develop aptamer therapeutics. Archemix believes that its broad patent portfolio provides it with the exclusive right to discover and develop aptamer therapeutics, other than aptamer therapeutics targeting vascular endothelial growth factor and aptamers conjugated to radio therapeutics. In addition, because aptamers have only recently been recognized as potential therapeutic agents, the use of aptamers for the treatment of disease is often not blocked by existing intellectual property covering other classes of drugs. |
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• | Pool generation. Archemix begins by randomly generating libraries, or pools, of unique oligonucleotides. Archemix estimates that there are 1014 oligonucleotides in each pool. Archemix uses different types of nucleotides in its pools depending on what properties it wants the resulting aptamer to have. For example, if Archemix is seeking to design an aptamer for an acute indication for which it wants a short duration of action, it may use natural nucleotides, which are the basic building blocks of RNA or DNA molecules, which are rapidly degraded in the body. Conversely, if Archemix wants an aptamer with a longer duration of action, it may introduce mixtures of chemically modified nucleotides that resist degradation. | |
• | Selection. After Archemix generates a pool of oligonucleotides, it screens the pool to find those oligonucleotides with the greatest affinity for the target of interest. Archemix screens a pool against the target protein by allowing the pool and target to incubate together for a period of time. The oligonucleotides in each pool with weak or no affinity for the target have a tendency to remain free in solution, while those with some capacity to bind will tend to associate with the target. Archemix then isolates the target-bound oligonucleotides from each pool, which are the oligonucleotides with the highest affinity for the target, and uses them in subsequent rounds of the SELEX process. | |
• | Amplification. After Archemix isolates the oligonucleotides that demonstrate high affinity for the target, Archemix copies, or amplifies, them to generate libraries of oligonucleotides with enhanced affinity for the target, or enriched pools. Archemix screens these enriched pools against the target in an iterative fashion until it identifies those aptamers from each pool with the highest binding affinity. | |
• | Aptamer isolation. After five to 15 cycles of selection and amplification, Archemix can reduce its starting pool of an estimated 1014 oligonucleotides to approximately 100 or fewer sequences that bind tightly to the target of interest. Archemix then determines the nucleotide sequences of the individual aptamers and measures and compares the target binding affinity and functional activity of these |
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aptamers. Archemix advances the aptamers with the highest affinity and functional activity against the target to Archemix’s post-SELEX modification processes. |
• | Minimization. The initial aptamer sequences isolated by SELEX are typically 70 to 80 nucleotides long. Commercializing aptamers of this length would be difficult and expensive using current manufacturing techniques, and production yields would be low. Accordingly, Archemix applies its proprietary methods to identify the active portion or core of the aptamer and remove unnecessary nucleotides from the molecule. Archemix is typically able to reduce the aptamer to between 20 and 40 nucleotides in length without compromising the affinity, specificity or functional activity of the aptamer for the target of interest. | |
• | Optimization. Once Archemix has an aptamer of appropriate size, it optimizes its affinity, functional activity and metabolic stability. |
• | Affinity and functional activity improvements. Archemix uses sequence and chemical modifications to improve an aptamer’s affinity for its target and functional activity using a technique in which sets of variant aptamers are chemically synthesized. These sets of variants typically differ from the starting aptamer as a result of the introduction of a single nucleotide modification and differ from each other by the location of this modification. Archemix then compares these variant aptamers to each other and to the starting aptamer in order to determine which modifications improve affinityand/or functional activity. | |
• | Nuclease resistance. If not chemically altered, aptamers composed of unmodified nucleotides may be rapidly degraded, or metabolized, by enzymes which are naturally present in the blood and tissues. These enzymes, known as nucleases, bind to and metabolize the aptamer. While rapid drug metabolism and a short duration of action are desirable for some clinical applications, a prolonged duration of action is necessary for other disease categories. Accordingly, Archemix uses proprietary methods to identify the specific sites within an aptamer that are most susceptible to nuclease metabolism. With this information, Archemix introduces site-specific stabilizing substitutions into the aptamer to achieve nuclease resistance. |
• | PEGylation. Duration of action is often correlated to how long the aptamer remains in the body. Because aptamers are small in size, they may be naturally excreted before they have achieved their intended therapeutic effect. To slow the rate of excretion from the body, Archemix increases the size of the aptamer by attaching it to another molecule known as polyethylene glycol, or PEG, to create a larger molecule. This process is known as PEGylation. Archemix can achieve the desired duration of action by using different sizes, structures and attachment locations of PEG molecules. Once Archemix PEGylates the aptamer, it tests it to determine whether it has achieved the desired duration of action. Through this combination of SELEX and post-SELEX modification processes, Archemix is able to design and confirm the desired properties of an aptamer that it believes will address the proposed therapeutic indication. |
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• | Advance ARC1779 through clinical development. Archemix believes that the preclinical, Phase 1 and initial Phase 2a clinical data for ARC1779 demonstrate its ability to selectively inhibit vWF, which could play a key role in TMA, an area of unmet medical need. There is no drug treatment specifically approved for patients with the forms of TMA, and ARC1779 has received orphan drug designation for the treatment of TTP from both the FDA and the European Commission. Archemix has filed IND’s with the FDA and corresponding regulatory documents with foreign regulatory authorities to evaluate ARC1779 in a Phase 2b trial in patients with TMA and a Phase 2a in patients undergoing carotid endarterectomy. Archemix is currently recruiting patients in the Phase 2b trial in patients with TMA and expects to dose the first patient in the Phase 2a in patients undergoing carotid endarterectomy as early as the first quarter of 2009. If Archemix’s clinical trials of ARC1779 are successful, it intends to advance this aptamer product candidate into additional trials, including pivotal clinical trials, as rapidly as possible either on its own or through strategic alliances. | |
• | Generate additional aptamer product candidates for rare hematological diseases. Archemix plans to use its proprietary discovery platform, including SELEX and its post-SELEX modification processes, and expertise to discover and develop aptamer product candidates for rare hematological diseases. Archemix’s aptamer product candidate known as ARC5692 is in pre-clinical development and is designed to inhibit the function of a protein called P-selectin for use in patients with sickle cell disease, or SCD. Archemix is also conducting research activities with aptamers for use in treating patients with hemophilia. Archemix may advance these aptamer product candidates either on its own or through strategic alliances. | |
• | Enter alliances to build capabilities in therapeutic areas of strategic interest. In some disease areas, such as cancer, Archemix intends to continue to enter into strategic alliances in which its collaborators will share the costs and risks of developing and commercializing aptamer therapeutics. Under some of its collaborations, Archemix has the option to co-develop and co-promote aptamer product candidates in order to expand its development and marketing expertise. Archemix expects that these strategic alliances will also enable it to develop its own capabilities in these areas by working closely with its collaborators in developing and commercializing aptamer product candidates. Consistent with this strategy, Archemix plans to discover aptamers to treat cancer as part of its research and development collaborations with Merck Serono. As part of one of these collaborations, Archemix retains the right to co-develop and co-promote some or all of the aptamer product candidates in the United States subject to the collaboration. | |
• | Identify strategic opportunities to license Archemix’s technologies to others. Archemix intends to continue to license its intellectual property to third parties to develop their own aptamer therapeutics, primarily for chronic indications. Archemix expects to continue to use such agreements as part of its strategy to expand the commercial potential for aptamer therapeutics and to fund the development of its product pipeline. To date, Archemix has entered into aptamer product development agreements with more than 10 biotechnology and pharmaceutical companies, including Pfizer, Merck Serono and Takeda Pharmaceuticals. These agreements provide Archemix with a source of cash flow in the form of upfront payments, research fundingand/or payments if Archemix achieves specified milestones. In addition, Archemix has the right to receive royalties from future product sales, if any, although it has not received any royalties to date. Some of the agreements also provide Archemix with equity investments, co-development rights, co-promotion rights, rights of first refusal or profit sharing rights. | |
• | Maintain and expand Archemix’s proprietary technology and intellectual property position. Archemix owns or exclusively licenses an extensive estate of issued patents and pending patent applications for the discovery and development of aptamers and their role in treating disease. Archemix believes that its |
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intellectual property position is and will continue to be a key factor in its discovery and development efforts and its ability to form strategic relationships with others. Archemix intends to expand its intellectual property position by filing additional patent applications covering fundamental aspects of aptamers and through in-licensing agreements that provide Archemix with access to technologies useful in the development of aptamer therapeutics. |
Aptamer Product | ||||||||
Development | Candidate | Stage of | Collaborator/ | |||||
Rights | (Molecular Target) | Target Indication | Development | Licensee | ||||
Being developed by Archemix: | ARC1779 (von Willebrand Factor) | Thrombotic Microangiopathies | Phase 2b currently enrolling patients | None | ||||
ARC1779 (von Willebrand Factor) | Carotid endarterectomy | Phase 2a expected to commence in 1Q09 | None | |||||
ARC5692 | Sickle Cell Disease (Acute Chest Syndrome) | Pre-clinical development | None | |||||
Hemophilia | Research | None | ||||||
Being developed by others with specifiedco-development rights: | Anti-Cancer Aptamers | Multiple Cancers | Research | Merck Serono | ||||
Being developed by others under license: | AS1411 (Nucleolin) | Acute Myeloid Leukemia | Phase 2 commenced in 3Q07 | Antisoma | ||||
AS1411 (Nucleolin) | Renal Cell Carcinoma | Phase 2 commenced in 3Q08 | Antisoma | |||||
REG1 (Factor IXa) | Percutaneous Coronary Intervention, PCI | Phase 2 completed enrollment in 4Q08 | Regado Biosciences | |||||
REG1 (Factor IXa) | Coronary Artery Bypass Graft Surgery, CABG | Phase 2b expected to commence in 3Q09 | Regado Biosciences | |||||
NU172 (Thrombin) | CABG, PCI, Kidney Dialysis | Phase 2 expected to commence in 4Q08/1Q09 | Nuvelo | |||||
E10030 (PDGF) | Age Related Macular Degeneration (AMD) | Phase 1 commenced in 1Q08 | Ophthotech | |||||
ARC1905 (C5) | AMD | Phase 1 commenced in 4Q08 | Ophthotech |
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Potential | ||||||||||||||||
Payments | Future | Archemix’s | ||||||||||||||
Scope/ | Disease | Stage of | Received(1) | Payments(2) | Product | |||||||||||
Party | Product(s) | Category | Development | (Millions) | (Millions) | Rights | ||||||||||
Ribomic (June 2008) | Aptamers to 6 targets | Various therapeutic areas | Research | $ | 3.0 | $ | 237.0 | None | ||||||||
Ribomic (December 2007) | Aptamers to 1 target | Various therapeutic areas | Research | $ | 1.0 | $ | 38.0 | None | ||||||||
Merck Serono (June 2007 Agreement) | Aptamers to 12 targets | Cancer, Inflammation, Autoimmune | Research | $ | 32.1 | $ | 580.9 | Co-development/ co-promotion option in the US | ||||||||
Merck KGaA (January 2007 Agreement) | Aptamers to 2 targets | Cancer | Research | $ | 7.1 | $ | 122.0 | Co-promotion option in the US | ||||||||
Pfizer | Aptamers to 3 targets | Various therapeutic areas | Research | $ | 6.0 | $ | 104.6 | None | ||||||||
Takeda Pharmaceuticals | Aptamers to 3 targets | Various therapeutic areas | Research | $ | 8.1 | $ | 253.5 | None | ||||||||
Nuvelo | NU172 and short-acting aptamers to specified targets | Anti-coagulation/ acute cardiovascular | Phase 2 expected to commence 4Q08/1Q09 | $ | 12.4 | $ | 68.0 | Worldwide profit share option | ||||||||
Antisoma | AS1411 | Acute myeloid leukemia | Phase 2 commenced 2Q07 | N/A | N/A | Right of first refusal to market in US | ||||||||||
Renal Cell Carcinoma | Phase 2 commenced 3Q08 | N/A | N/A | Right of first refusal to market in US | ||||||||||||
Regado Biosciences | REG1 | Anti- coagulation/ acute cardiovascular | One Phase 2 trial completed enrollment in 4Q08, and one Phase 2 trial commenced 1Q08 | N/A | $ | 5.5 | None | |||||||||
Ophthotech(3) | E10030 | Age-related macular degeneration (AMD) | Phase 1 commenced in 1Q08 | $ | 4.6 | $ | 11.0 | None | ||||||||
Ophthotech | ARC1905/ Aptamers to C5 | AMD | Phase 1 commenced in 4Q08 | $ | 1.0 | $ | 86.5 | (4) | None |
(1) | Amounts are as of September 30, 2008. Includes upfront payments, equity investments, research funding and milestone payments. | |
(2) | Includes potential milestone payments but excludes research funding and potential royalties on any approved products. | |
(3) | OSI Pharmaceuticals assigned its rights under Archemix’s collaboration agreement to Ophthotech Corporation in July 2007. | |
(4) | Represents potential milestone payments per aptamer product candidate, as there is no specific number of aptamer product candidates contemplated by the agreement. |
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• | fundamental aspects of the identification, optimization, and structure of aptamers and their uses as therapeutics; | |
• | chemical modifications to aptamers that improve their suitability for therapeutic uses; and | |
• | aptamers directed to specific targets and as treatments for particular diseases. |
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• | design and develop products that are superior to other products in the market; | |
• | attract and retain qualified scientific, product development and commercial personnel; | |
• | obtain required regulatory approvals; and | |
• | successfully collaborate with pharmaceutical companies in the design, development and commercialization of new products. |
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• | completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s Good Laboratory Practices or other applicable regulations; | |
• | submission to the FDA of an IND, which must become effective before human clinical trials may begin; | |
• | approval by an institutional review board, or IRB, at each institution participating in a clinical trial, which must review and approve the plan for any clinical trial before it commences at that institution; | |
• | performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices, or GCPs, to establish the safety and efficacy of the proposed drug for its intended use; | |
• | submission to the FDA of an NDA; | |
• | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and | |
• | FDA review and approval of the NDA. |
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• | Phase 1: The drug is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. | |
• | Phase 2: Involves studies in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. | |
• | Phase 3: Involves studies undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These studies are intended to establish the overall risk-benefit ratio of the product and provide an adequate basis for product labeling. |
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• | restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, or voluntary or mandatory product recalls; |
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• | fines, warning letters or holds on clinical trials; | |
• | refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; | |
• | product seizure or detention, or refusal to permit the import or export of products; or | |
• | injunctions or the imposition of civil or criminal penalties. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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• | BiDil. From May 2001 to July 2004, NitroMed enrolled 1,050 patients at 169 clinical sites in the United States in its phase III clinical trial for BiDil. NitroMed halted the trial in July 2004 due to a significant survival benefit in the preliminary data for patients taking BiDil. The FDA approved BiDil on June 23, 2005, and NitroMed launched BiDil in July 2005. The total cost for the BiDil A-HeFT trial was approximately $43.0 million. | |
• | BiDil XR. The current formulation of BiDil is an immediate-release tablet that must be taken three times daily. NitroMed has pursued the development of BiDil XR, an extended release formulation of BiDil that could be taken once a day. To date, NitroMed has incurred expenses of approximately $11.0 million in connection with the development of BiDil XR. Preliminary clinical studies of BiDil XR demonstrated proof of principle, and NitroMed commenced clinical development of BiDil XR in October 2006. Additional formulation studies and trials will be required in order to finalize the formulation prior to the commencement of bioequivalence trials. Because of its stage of development, and the uncertainties inherent in pharmaceutical development generally, NitroMed may not be able to |
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successfully develop and commercialize BiDil XR in the event that the BiDil drug business asset sale is not completed. |
• | Other Discovery Research. NitroMed has used its know-how and expertise in nitric oxide to develop preclinical stage drug candidates that are nitric oxide-enhancing versions of existing medicines in the areas of cardiovascular, gastrointestinal/anti-inflammatory and pulmonary medicine. These studies have not progressed beyond a discovery stage of testing, and it remains speculative whether the addition of nitric oxide will result in an improved clinical profile of these medicines. NitroMed continues to seek divestiture opportunities for the intellectual property rights associated with these technologies, and is not presently engaging in any internal research and development activities with respect to these programs. NitroMed cannot be certain if it will be able to secure divestiture arrangements for its nitric oxide-based intellectual property on favorable terms, if at all. |
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Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2007 | |||||||
Research and Development Program (in millions) | ||||||||
BiDil | $ | 1.1 | $ | 4.0 | ||||
BiDil XR | 1.5 | 5.6 | ||||||
Other discovery research | — | 0.1 | ||||||
Total research and development expense | $ | 2.6 | $ | 9.7 | ||||
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December 31, | ||||||||||||
Research and Development Program | 2007 | 2006 | 2005 | |||||||||
BiDil | $ | 5,339,000 | $ | 9,603,000 | $ | 19,052,000 | ||||||
BiDil XR | 6,581,000 | 2,774,000 | — | |||||||||
Nitric oxide-enhancing cardiovascular compounds | — | 2,568,000 | 6,073,000 | |||||||||
Nitric oxide stents | — | 206,000 | 2,279,000 | |||||||||
Other discovery research | 265,000 | 1,878,000 | 3,936,000 | |||||||||
Total research and development expense | $ | 12,185,000 | $ | 17,029,000 | $ | 31,340,000 | ||||||
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Less Than | More Than | |||||||||||||||||||
Contractual Obligations | Total | One Year | 1-3 Years | 3-5 Years | Five Years | |||||||||||||||
Operating lease(1) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Purchase obligations(2) | 324,000 | 324,000 | — | — | — | |||||||||||||||
License milestones(3) | — | — | — | — | — | |||||||||||||||
Total | $ | 324,000 | $ | 324,000 | $ | — | $ | — | $ | — | ||||||||||
(1) | In May 2008, NitroMed entered into a sublease with Cubist, pursuant to which NitroMed agreed to sublease approximately 4,000 square feet of office space at a rate of approximately $9,200 per month in advance. The initial term of this sublease was for three months beginning on June 1, 2008. Upon the expiration of the initial term, NitroMed has the right to extend the sublease, without notice, on a month-to-month basis. | |
(2) | In April and July 2008, NitroMed placed binding purchase orders totaling $324,000 with Schwarz Pharma for production of BiDil finished goods during the fourth quarter of 2008. | |
(3) | In February 2007, NitroMed entered into a License Agreement with Elan, pursuant to which NitroMed may be obligated to pay certain milestone payments in the aggregate amount of $2.5 million, of which |
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$250,000 was paid in the first quarter of 2007. NitroMed is uncertain as to the timing of future payments, if any, pursuant to the terms of the License Agreement. |
• | its ability to successfully consummate one or more strategic arrangements relating to its business and assets, including the planned asset sale and merger, and the expenses related to any such transactions; | |
• | the amount of future product sales of BiDil; | |
• | the cost of manufacturing and selling BiDil; | |
• | the timing of collections related to sales of BiDil; | |
• | the time and costs involved in completing the clinical trials and further development of, and obtaining regulatory approvals for, BiDil XR, if at all; | |
• | the effect of competing technological and market developments; | |
• | the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; | |
• | the cost of maintaining licenses to use patented technologies; | |
• | unfavorable conditions in the capital markets, which may adversely affect the liquidity and value of NitroMed’s investments; and | |
• | general global and domestic economic conditions, including inflation, recessionary risks and volatile energy costs. |
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ABOUT NITROMED’S MARKET RISK
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• | proceeds of $136.0 million from private placements of redeemable convertible preferred stock and other equity issuances; and | |
• | cash receipts of $60.7 million from license fees, research and development funding and milestone payments from its collaborators and licensees. |
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Nine Months Ended | ||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ARC1779 | $ | 13,945 | $ | 5,061 | $ | 1,586 | $ | 10,706 | $ | 10,097 | ||||||||||
ARC1905 | 185 | 690 | 5,129 | — | 193 | |||||||||||||||
ARC183 and NU172 | — | 1,009 | 2,289 | — | — | |||||||||||||||
Other preclinical and platform programs | 15,041 | 10,205 | 8,057 | 14,009 | 10,509 | |||||||||||||||
Total research and development expenses | $ | 29,171 | $ | 16,965 | $ | 17,061 | $ | 24,715 | $ | 20,799 | ||||||||||
• | the scope, rate of progress and expense of Archemix’s clinical trials and other research and development activities; | |
• | the safety and effectiveness of Archemix’s aptamer product candidates; | |
• | patient enrollment in clinical trials; | |
• | future clinical trial results for Archemix’s aptamer product candidates and those of Archemix’s collaborators and licensees; | |
• | the terms and timing of regulatory approvals; | |
• | ability to market, commercialize and achieve market acceptance for any of Archemix’s aptamer product candidates that Archemix is developing or may develop in the future; | |
• | the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and | |
• | the terms and timing of any collaborative, licensing and other arrangements that Archemix may establish. |
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• | persuasive evidence of an arrangement exists; | |
• | delivery has occurred and risk of loss has passed; | |
• | the seller’s price to the buyer is fixed or determinable; and | |
• | collectibility is reasonably assured. |
• | the milestone payment is nonrefundable; | |
• | substantive effort is involved in achieving the milestone and both parties are at risk that the milestone will not be achieved; and | |
• | the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with achievement of the milestone. |
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• | its knowledge and experience in valuing early-stage life sciences companies; | |
• | comparative values of public companies, discounted for the risk and limited liquidity provided for in the shares subject to the options it has issued; | |
• | pricing of private sales of its preferred stock; | |
• | any perspective provided by any investment banks, including the likelihood of a merger, acquisition or initial public offering; | |
• | rights and preferences of the security being granted compared to the rights and preferences of its other outstanding equity securities; | |
• | the effect of events that have occurred between the times of the determination of the fair value of its common stock; and | |
• | economic trends in the biotechnology and pharmaceutical industries specifically, and general economic trends. |
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Date of Valuation | Type of Valuation | Fair Value | ||||||
December 31, 2005 | Contemporaneous | $ | 0.10 | |||||
December 31, 2006 | Contemporaneous | $ | 0.22 | |||||
July 2006 | Retrospective | $ | 0.25 | |||||
November 2006 | Retrospective | $ | 0.39 | |||||
March 2007 | Retrospective | $ | 0.53 | |||||
June 30, 2007 | Contemporaneous | $ | 0.64 | |||||
July 2007 | Retrospective | $ | 0.93 | |||||
September 2007 | Retrospective | $ | 1.30 |
Date of Valuation | Type of Valuation | Fair Value | ||||||
December 31, 2007 | Contemporaneous | $ | 0.49 | |||||
February 6, 2008 | Contemporaneous | $ | 0.31 |
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• | In the third quarter of 2005, Archemix stopped Phase 1 clinical trials of ARC183, which at that time was its only proprietary aptamer product candidate in clinical trials, after it determined that the amount of drug substance needed to achieve the desired anticoagulation effect resulted in a sub-optimal dosing profile. |
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• | In the fourth quarter of 2005, Archemix elected not to file an IND for a second aptamer product candidate after a third party that was developing a product candidate for the same indication reported that its Phase 3 clinical trial failed to meet its stated endpoints. | |
• | In the fourth quarter of 2005, Archemix issued additional shares of its redeemable convertible preferred stock to new investors who valued the shares at $1.00 per share, on an as-converted basis, which was the same price as the shares Archemix issued in the initial round of its Series B financing in March 2004. |
• | On January 17, 2007, Archemix signed a corporate research and development collaboration agreement with Merck KGaA. Archemix estimated that Merck KGaA would not generate any validating clinical data within three to five years of signing the agreement and, consequently, Archemix determined that this collaboration did not, at the time, increase the fair value of its equity. Furthermore, the $3.0 million upfront payment Archemix received under this agreement was considered but was determined not to change the fair value of its equity. | |
• | In January 2007, Archemix incurred a delay in the clinical trial of ARC1779, as discussed above. |
• | In June 2007, Archemix received the full data set from its Phase 1 clinical trial, which it concluded warranted the advancement of ARC1779 into Phase 2 clinical trials. | |
• | In June 2007, Archemix signed an expanded corporate research and development agreement with Merck Serono and, as part of this expanded agreement, Merck Serono invested $29.8 million in shares of its Series C redeemable convertible preferred stock. |
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• | In June 2007, Archemix initiated the process of an initial public offering and held an organizational meeting with its investment bankers and others, although there were still significant risks that Archemix would not complete its initial public offering. |
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• | On February 6, 2008, Archemix voluntarily withdrew its Registration Statement onForm S-1 with the Securities and Exchange Commission due to continuing unfavorable market conditions. This voluntary withdrawal, as well as the current market environment for IPOs, resulted in Archemix decreasing the probability weighting of the IPO scenario from 50% to 20%. | |
• | Archemix was investigating ARC1779 for the treatment of patients with acute coronary syndrome undergoing percutaneous coronary intervention, or PCI. Archemix commenced a Phase 2a clinical trial of ARC1779 in this patient population in December 2007. The planned enrollment for this clinical trial was 300 patients, but Archemix prematurely terminated the trial after only 20 patients were enrolled. The premature termination was necessitated by the occurrence of the serious adverse reaction in the simultaneously conducted Phase 2a clinical trial in patients with thrombotic thrombocytopenic purpora, or TTP. In response to this reaction and in order to lower the risk of such reactions in the future, Archemix slowed the rate of administration of ARC1779 in a manner that made it impractical to use ARC1779 in the emergent care setting of PCI for acute coronary syndrome. Patients with TTP, however, are already in the hospital and thus, a slower rate of administration is not problematic for this patient population. This event limited Archemix’s clinical development of ARC1779 to one indication and increased its risks associated with development. |
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Grant Date | Options Granted | Exercise Price | Fair Value | Intrinsic Value | ||||||||||||
March 2007 | 1,169,000 | $ | 0.22 | $ | 0.53 | (1) | $ | 0.31 | ||||||||
July 2007 | 1,948,500 | $ | 0.64 | (2) | $ | 0.93 | (1) | $ | 0.29 | |||||||
September 2007 | 306,900 | $ | 0.64 | (2) | $ | 1.30 | (1) | $ | 0.66 | |||||||
May 2008 | �� | 1,465,050 | $ | 0.31 | $ | 0.31 | — | |||||||||
July 2008 | 830,300 | $ | 0.31 | $ | 0.31 | — |
(1) | Retrospectively determined fair value. | |
(2) | In May 2008, Archemix amended stock options granted in July 2007 and September 2007 with an exercise price of $0.64 to reduce the exercise price of the stock options to $0.31. |
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• | Archemix executed new collaboration agreements with Merck Serono, Takeda and Ribomic, resulting in additional revenue of $7.5 million, or approximately 83% of the increase in total revenues for the nine months ended September 30, 2008. | |
• | As a result of the termination of the Elan collaboration agreement in April 2008, Archemix recognized the remaining deferred revenue related to the upfront payment of $2.3 million. In addition, Archemix is no longer eligible to receive payments for future research funding or development milestone payments under this collaboration. | |
• | In February 2008, Archemix received a $1.0 million milestone payment from Nuvelo. The milestone payment was triggered by Nuvelo’s enrollment of the first volunteer in a Phase 1 study of NU172, a thrombin-inhibiting aptamer. Archemix is recognizing revenue from this milestone payment based on the proportionate amount that correlates to services that have already been rendered, with the remaining balance of the milestone payment being deferred and recognized on a straight-line basis over the remaining estimated period of performance. During the nine months ended September 30, 2008, Archemix recognized $0.7 million of revenue related to the milestone payment. |
Increase/ | ||||||||||||||||
Nine Months Ended September 30, | (Decrease) | |||||||||||||||
2008 | 2007 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Collaborator: | ||||||||||||||||
Elan | $ | 5,300 | $ | 4,450 | $ | 850 | 19 | % | ||||||||
Merck Serono | 4,484 | 2,014 | 2,470 | 123 | % | |||||||||||
Nuvelo | 3,552 | 2,830 | 722 | 26 | % | |||||||||||
Ribomic | 3,000 | — | 3,000 | — | ||||||||||||
Takeda | 2,711 | 730 | 1,981 | 271 | % | |||||||||||
Ophthotech | 900 | 1,000 | (100 | ) | (10 | )% | ||||||||||
Pfizer | 750 | 750 | — | — | ||||||||||||
Other | 44 | — | 44 | — | ||||||||||||
Total | $ | 20,741 | $ | 11,774 | $ | 8,967 | 76 | % | ||||||||
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Increase/ | ||||||||||||||||
Nine Months Ended September 30, | (Decrease) | |||||||||||||||
2008 | 2007 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Compensation and related expenses | $ | 6,454 | $ | 5,124 | $ | 1,330 | 26 | % | ||||||||
External services | 8,783 | 7,809 | 974 | 12 | % | |||||||||||
Research materials and related expenses | 4,534 | 2,873 | 1,661 | 58 | % | |||||||||||
Facilities related expenses | 3,677 | 3,715 | (38 | ) | (1 | )% | ||||||||||
Other | 1,267 | 1,278 | (11 | ) | (1 | )% | ||||||||||
Total | $ | 24,715 | $ | 20,799 | $ | 3,916 | 19 | % | ||||||||
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Increase/ | ||||||||||||||||
Year Ended December 31, | (Decrease) | |||||||||||||||
2007 | 2006 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Collaborator: | ||||||||||||||||
Elan | $ | 5,933 | $ | 2,967 | $ | 2,966 | 100 | % | ||||||||
Nuvelo | 3,923 | 1,846 | 2,077 | 113 | % | |||||||||||
Pfizer | 1,000 | — | 1,000 | — | ||||||||||||
Merck Serono | 2,740 | — | 2,740 | — | ||||||||||||
Takeda | 1,522 | — | 1,522 | — | ||||||||||||
Ophthotech | 1,000 | — | 1,000 | — | ||||||||||||
Ribomic | 1,250 | 150 | 1,100 | 733 | % | |||||||||||
Eyetech | — | 1,445 | (1,445 | ) | (100 | )% | ||||||||||
Total | $ | 17,368 | $ | 6,408 | $ | 10,960 | 171 | % | ||||||||
• | additional personnel costs related to additional hiring and annual compensation increases; | |
• | increased research materials related to Archemix’s expanding research efforts; and | |
• | additional facility costs related to the leasing of an additional 34,000 square feet of operating space within Archemix’s current location. |
Increase/ | ||||||||||||||||
Year Ended December 31, | (Decrease) | |||||||||||||||
2007 | 2006 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Compensation and related expenses | $ | 7,272 | $ | 5,895 | $ | 1,377 | 23 | % | ||||||||
External services | 10,851 | 4,059 | 6,792 | 167 | % | |||||||||||
Research materials and related expenses | 4,315 | 2,419 | 1,896 | 78 | % | |||||||||||
Facilities related expenses | 5,118 | 3,543 | 1,575 | 44 | % | |||||||||||
Other | 1,615 | 1,049 | 566 | 54 | % | |||||||||||
Total | $ | 29,171 | $ | 16,965 | $ | 12,206 | 72 | % | ||||||||
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Increase/ | ||||||||||||||||
Year Ended December 31, | (Decrease) | |||||||||||||||
2006 | 2005 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Collaborator: | ||||||||||||||||
Elan | $ | 2,967 | $ | — | $ | 2,967 | — | |||||||||
Nuvelo | 1,846 | 656 | 1,190 | 181 | % | |||||||||||
Eyetech | 1,445 | 1,742 | (297 | ) | (17 | )% | ||||||||||
Ribomic | 150 | — | 150 | — | ||||||||||||
Total | $ | 6,408 | $ | 2,398 | $ | 4,010 | 167 | % | ||||||||
• | During 2005, Archemix incurred approximately $3.6 million of external IND-enabling preclinical studies and manufacturing activities for its ARC1905 program. ARC1905 was initially being developed for an acute cardiovascular indication, but Archemix ceased pursuing that indication. As a result, costs for external services related to ARC1905 development decreased approximately $3.4 million for the year ended December 31, 2006. | |
• | During 2005, Archemix incurred approximately $1.5 million of net external expenses related to preclinical toxicology and safety studies, Phase 1 clinical trial costs and manufacturing activities for its ARC183 co-development program with Nuvelo. After the completion of the Phase 1 clinical trials, Archemix and Nuvelo decided not to pursue the development of ARC183 and agreed to develop an optimized second generation molecule, resulting in a $1.1 million reduction in external services for the year ended December 31, 2006. |
• | relocating to Archemix’s new expanded facility in January 2006, which provided an additional 37% of operating space; | |
• | increased costs for research materials related to Archemix’s expanded research efforts; and | |
• | personnel costs related to additional hires and annual compensation increases. |
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Increase/ | ||||||||||||||||
Year Ended December 31, | (Decrease) | |||||||||||||||
2006 | 2005 | $ | % | |||||||||||||
(In thousands) | ||||||||||||||||
Compensation and related expenses | $ | 5,895 | $ | 5,375 | $ | 520 | 10 | % | ||||||||
External services | 4,059 | 6,530 | (2,471 | ) | (38 | )% | ||||||||||
Research materials and related expenses | 2,419 | 1,815 | 604 | 33 | % | |||||||||||
Facilities related expenses | 3,543 | 2,604 | 939 | 36 | % | |||||||||||
Other | 1,049 | 737 | 312 | 42 | % | |||||||||||
Total | $ | 16,965 | $ | 17,061 | $ | (96 | ) | (1 | )% | |||||||
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Nine Months | ||||||||||||||||
Ended | ||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||
2007 | 2006 | 2005 | 2008 | |||||||||||||
(In thousands) | ||||||||||||||||
Cash provided by (used in): | ||||||||||||||||
Operating activities | $ | (7,962 | ) | $ | (5,833 | ) | $ | (18,893 | ) | $ | (17,203 | ) | ||||
Investing activities | (17,613 | ) | (11,043 | ) | (13,211 | ) | 10,588 | |||||||||
Financing activities | 29,967 | 611 | 19,608 | 366 | ||||||||||||
Capital expenditures (included in investing activities above) | (2,326 | ) | (891 | ) | (579 | ) | (1,015 | ) |
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Payments Due by Period | ||||||||||||||||||||
2009 | 2011 | |||||||||||||||||||
through | through | After | ||||||||||||||||||
Total | 2008 | 2010 | 2012 | 2012 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating lease obligations(1) | $ | 24,415 | $ | 2,900 | $ | 6,070 | $ | 6,138 | $ | 9,307 | ||||||||||
Total contractual cash obligations | $ | 24,415 | $ | 2,900 | $ | 6,070 | $ | 6,138 | $ | 9,307 | ||||||||||
(1) | The operating lease obligations will be offset by sublease income of an aggregate of approximately $4.0 million that Archemix expects to receive in equal monthly installments through 2011. |
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ARCHEMIX’S MARKET RISK
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Name | Age | Title | ||||
Kenneth Bate | 58 | President, Chief Executive Officer and Director | ||||
Gregg Beloff | 40 | Vice President, Chief Financial Officer | ||||
Page Bouchard, D.V.M. | 46 | Senior Vice President, Discovery and Preclinical Development | ||||
James Gilbert, M.D. | 55 | Senior Vice President, Chief Medical Officer | ||||
Duncan Higgons | 53 | Executive Vice President, Business Operations | ||||
Alex Barkas, Ph.D. | 61 | Director | ||||
Peter Barrett, Ph.D. | 56 | Director | ||||
Errol De Souza, Ph.D. | 55 | Director | ||||
Mark Leschly | 40 | Director | ||||
John Maraganore, Ph.D. | 46 | Director | ||||
Michael Ross, Ph.D. | 59 | Director | ||||
Davey Scoon, C.P.A. | 62 | Director |
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• | appointing, approving the compensation of, and assessing the independence of the combined company’s independent registered public accounting firm; | |
• | overseeing the work of the independent registered public accounting firm, including through the receipt and consideration of certain reports from the independent registered public accounting firm; | |
• | reviewing and discussing with management and the independent registered public accounting firm the combined company’s annual and quarterly financial statements and related disclosures; | |
• | coordinating the board of directors’ oversight of the combined company’s internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics; | |
• | establishing policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and retention of accounting-related complaints and concerns; | |
• | meeting independently with the independent registered public accounting firm and management; | |
• | reviewing and approving or ratifying any related person transactions; and | |
• | preparing the audit committee report required by the rules of the Securities and Exchange Commission to be included in the combined company’s annual meeting proxy statement. |
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• | annually reviewing and approving corporate goals and objectives relevant to the compensation of the combined company’s chief executive officer; | |
• | determining the compensation of the combined company’s chief executive officer; | |
• | reviewing and approving, or making recommendations to the board of directors with respect to, the compensation of the combined company’s other executive officers; | |
• | reviewing and making recommendations to the board of directors regarding the combined company’s incentive compensation plans and equity-based plans; | |
• | reviewing and making recommendations to the board of directors with respect to director compensation; | |
• | reviewing and discussing annually with management the combined company’s “Compensation Discussion and Analysis”; and | |
• | preparing the compensation committee report required by the rules of the Securities and Exchange Commission to be included in the combined company’s annual meeting proxy statement. |
• | identifying individuals qualified to become members of the board of directors; | |
• | recommending to the board of directors the persons to be nominated for election as directors and to each committee of the board of directors; | |
• | reviewing and making recommendations to the board of directors with respect to management succession planning; | |
• | developing and recommending to the board of directors corporate governance principles; and | |
• | overseeing an annual evaluation of the board of directors. |
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• | the related person’s interest in the related person transaction; | |
• | the approximate dollar value of the amount involved in the related person transaction; | |
• | the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss; | |
• | whether the transaction was undertaken in the ordinary course of NitroMed’s business; | |
• | whether the terms of the transaction are no less favorable to NitroMed than terms that could have been reached with an unrelated third party; | |
• | the purpose of, and the potential benefits to NitroMed of, the transaction; and | |
• | any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. |
• | interests arising solely from the related person’s position as an executive officer of another entity (whether or not the person is also a director of such entity), that is a participant in the transaction, where (a) the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, (b) the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction; and | |
• | a transaction that is specifically contemplated by provisions of NitroMed’s charter or bylaws. |
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Number of | Aggregate | |||||||
Series B | Purchase | |||||||
Name | Shares | Price | ||||||
Funds affiliated with Atlas Venture(1) | 5,050,000 | $ | 5,050,000 | |||||
Funds affiliated with International Life Sciences Fund III (GP), L.P.(2) | 5,311,444 | $ | 5,311,444 | |||||
Funds affiliated with Prospect Venture Partners II, L.P.(3) | 5,500,000 | $ | 5,500,000 |
(1) | Includes 4,983,554 shares of Series B preferred stock held by Atlas Venture Fund V, L.P. and 66,446 shares of Series B preferred stock held by Atlas Venture Entrepreneurs’ Fund V, L.P. Peter Barrett, Ph.D., a member of the Archemix board of directors, is a partner at Atlas Venture. | |
(2) | Includes 4,999,740 shares of Series B preferred stock held by International Life Sciences Fund III (LP1), L.P., 200,325 shares of Series B preferred stock held by International Life Sciences Fund III (LP2), L.P., 61,704 shares of Series B preferred stock held by International Life Sciences Fund III Co-Investment, L.P., and 49,675 shares of Series B preferred stock held by International Life Sciences Fund III Strategic Partners, L.P. Michael Ross, Ph.D. a member of the Archemix board of directors, is a Managing Partner of SV Life Sciences Advisers. Dr. Ross serves as a member of the investment committee of ILSF III, LLC, the general partner of International Life Sciences Fund III (GP), L.P. | |
(3) | Includes 5,500,000 shares of Series B preferred stock held by Prospect Venture Partners II, L.P. (PVP II). Alex Barkas, Ph.D., a member of the Archemix board of directors, is a managing member of the general partner of PVP II and shares voting and investment power over the shares held by PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP II, except to the extent of his pecuniary interest therein. |
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• | approved by a majority of the members of the Archemix board of directors and by a majority of the disinterested members of the Archemix board of directors; and | |
• | on terms no less favorable to Archemix than those which Archemix believes could be obtained from unaffiliated third parties. |
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Non-Equity | ||||||||||||||||||||||||||||
Option | Incentive Plan | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Awards | Compensation | Compensation | ||||||||||||||||||||||||
Name and Current Principal Position | Year | ($) | ($) | ($)(1) | ($) | ($) | Total ($) | |||||||||||||||||||||
Kenneth Bate | 2007 | 381,958 | — | 893,308 | 144,375 | (2) | 23,683 | (3) | 1,444,324 | |||||||||||||||||||
NitroMed President, Chief | 2006 | 236,539 | 50,000 | (4) | 747,518 | 90,000 | (5) | 1,021 | (6) | 1,125,078 | ||||||||||||||||||
Executive Officer and Interim | ||||||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||||
Gregg Beloff | 2007 | 246,029 | 64,250 | (7) | 27,851 | — | — | 338,130 | ||||||||||||||||||||
Archemix Vice President, Chief | 2006 | 235,237 | 60,274 | (8) | 7,963 | — | — | 303,474 | ||||||||||||||||||||
Financial Officer, Secretary and | ||||||||||||||||||||||||||||
Treasurer | ||||||||||||||||||||||||||||
Page Bouchard, D.V.M. | 2007 | 269,339 | 80,000 | (7) | 25,899 | — | — | 375,238 | ||||||||||||||||||||
Archemix Senior Vice President, | 2006 | 255,641 | 79,038 | (8) | 9,991 | — | — | 344,670 | ||||||||||||||||||||
Discovery and Preclinical | ||||||||||||||||||||||||||||
Development | ||||||||||||||||||||||||||||
James Gilbert, M.D.(9) | 2007 | 301,418 | 93,000 | (7) | 54,463 | — | — | 448,881 | ||||||||||||||||||||
Archemix Senior Vice President, | 2006 | 80,535 | 85,065 | (10) | 566 | — | — | 166,166 | ||||||||||||||||||||
Chief Medical Officer | ||||||||||||||||||||||||||||
Duncan Higgons(11) | 2007 | 301,418 | 93,000 | (7) | 47,749 | — | — | 442,167 | ||||||||||||||||||||
Archemix Executive Vice | 2006 | 251,363 | 83,265 | (8) | 17,739 | — | — | 352,367 | ||||||||||||||||||||
President, Business Operations |
(1) | Represents compensation expense in 2007 and 2006, respectively, calculated in accordance with SFAS 123(R). See Note 7 to NitroMed’s audited financial statements for the fiscal year ended |
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December 31, 2007, included elsewhere in the joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by Mr. Bate. See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by the Archemix executive officers. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” The executive officers will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. | ||
(2) | Represents a cash incentive award paid in fiscal year 2008 with respect to NitroMed performance measures achieved in fiscal year 2007. | |
(3) | Includes $15,706 related to health and dental benefits, $2,191 related to premiums on group life insurance and $5,786 related to NitroMed 401(k) plan matching contributions. | |
(4) | Represents a sign-on bonus paid to Mr. Bate pursuant to his March 2006 employment offer letter with NitroMed. | |
(5) | Represents a cash incentive award paid in fiscal year 2007 with respect to NitroMed performance measures achieved in fiscal year 2006. | |
(6) | Represents the payment of premiums with respect to group life insurance. | |
(7) | Represents a cash bonus for performance during the fiscal year ended December 31, 2007, which was paid in 2008. | |
(8) | Represents a cash bonus for performance during the fiscal year ended December 31, 2006, which was paid in 2007. | |
(9) | Dr. Gilbert commenced employment with Archemix in September 2006. | |
(10) | Consists of a $25,065 pro-rated cash bonus for performance during the fiscal year ended December 31, 2006, which was paid in 2007, and a $60,000 sign-on bonus. | |
(11) | Mr. Higgons commenced employment with Archemix in February 2006. |
All Other | ||||||||||||||||||||||||||||||||
Option | ||||||||||||||||||||||||||||||||
Awards: | ||||||||||||||||||||||||||||||||
Estimated Future Payouts | Number of | Exercise or | Grant Date | |||||||||||||||||||||||||||||
Under Non-Equity Incentive Plan | Securities | Base Price of | Fair Value of | |||||||||||||||||||||||||||||
Awards | Underlying | Option | Option | |||||||||||||||||||||||||||||
Grant | Approval | Threshold | Target | Maximum | Options | Awards | Awards | |||||||||||||||||||||||||
Name | Date | Date | ($) | ($) | ($) | (#) | ($/Sh) | ($)(1) | ||||||||||||||||||||||||
Kenneth Bate | — | — | — | 192,500 | (2) | — | — | — | — | |||||||||||||||||||||||
1/19/07 | 1/19/07 | — | — | — | 500,000 | 2.65 | (3) | 785,000 | ||||||||||||||||||||||||
Gregg Beloff | 3/8/07 | 3/8/07 | — | — | — | 250,000 | 0.22 | 105,193 | ||||||||||||||||||||||||
Page Bouchard, D.V.M. | 3/8/07 | 3/8/07 | — | — | — | 200,000 | 0.22 | 84,154 | ||||||||||||||||||||||||
James Gilbert, M.D. | 7/23/07 | 6/7/07 | — | — | — | 200,000 | 0.64 | (4) | 133,097 | |||||||||||||||||||||||
Duncan Higgons | 7/23/07 | 6/7/07 | — | — | — | 300,000 | 0.64 | (4) | 199,645 |
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(1) | See Note 7 to NitroMed’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in the joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by Mr. Bate. See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by the Archemix executive officers. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Estimates.” The executive officers will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. | |
(2) | Represents the incentive award that would have been paid to Mr. Bate by NitroMed for 2007 performance if such award had been made at Mr. Bate’s target percentage of annual base salary. In 2007, the target percentage for Mr. Bate was 50% of his annual base salary. | |
(3) | The exercise price of Mr. Bate’s stock option equals the closing price of NitroMed’s common stock on The NASDAQ Global Market on the date of grant. | |
(4) | These options to purchase shares of Archemix common stock were repriced effective May 5, 2008 to an exercise price of $0.31 per share. |
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Option Awards | Stock Awards | |||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Value of | ||||||||||||||||||||||||
Number | Number of | Shares | ||||||||||||||||||||||
of | Number of | Shares or | or Units | |||||||||||||||||||||
Securities | Securities | Units of | of Stock | |||||||||||||||||||||
Underlying | Underlying | Stock | That | |||||||||||||||||||||
Unexercised | Unexercised | Option | That Have | Have | ||||||||||||||||||||
Options | Options | Exercise | Option | Not | Not | |||||||||||||||||||
(#) | (#) | Price | Expiration | Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable(1) | ($) | Date | (#) | ($)(2) | ||||||||||||||||||
Kenneth Bate | 260,001 | 239,999 | (3) | 7.83 | 3/20/16 | — | — | |||||||||||||||||
— | 500,000 | (4) | 2.65 | 1/19/17 | — | — | ||||||||||||||||||
Gregg Beloff | 350,000 | (5) | — | 0.10 | 12/15/13 | — | — | |||||||||||||||||
31,443 | (6) | — | 0.10 | 1/20/15 | — | — | ||||||||||||||||||
34,375 | 15,625 | (7) | 0.10 | 1/20/15 | — | — | ||||||||||||||||||
21,250 | (8) | — | 0.10 | 1/23/16 | — | — | ||||||||||||||||||
— | 250,000 | (9) | 0.22 | 3/8/17 | — | — | ||||||||||||||||||
Page Bouchard, D.V.M. | 300,000 | 100,000 | (10) | 0.10 | 11/1/14 | — | — | |||||||||||||||||
35,000 | (8) | — | 0.10 | 1/23/16 | — | — | ||||||||||||||||||
8,750 | 11,250 | (11) | 0.10 | 1/23/16 | — | — | ||||||||||||||||||
37,500 | 62,500 | (12) | 0.10 | 6/2/16 | — | — | ||||||||||||||||||
— | 200,000 | (9) | 0.22 | 3/8/17 | — | — | ||||||||||||||||||
James Gilbert, M.D. | 125,000 | 275,000 | (13) | 0.10 | 11/29/16 | — | — | |||||||||||||||||
— | 200,000 | (14) | 0.64 | (15) | 7/23/17 | — | — | |||||||||||||||||
Duncan Higgons | — | — | — | — | 675,000(16 | ) | 330,750 | |||||||||||||||||
— | 300,000 | (14) | 0.64 | (15) | 7/23/17 | — | — |
(1) | All stock options held by Mr. Beloff, Dr. Bouchard, Dr. Gilbert, and Mr. Higgons are immediately exercisable for shares of restricted common stock, which are subject to Archemix’s repurchase right that lapses on the same schedule as the vesting schedule of the applicable stock option. | |
(2) | The market value of the stock awards is determined by multiplying the number of shares times $0.49, the fair value of Archemix’s common stock on December 31, 2007. | |
(3) | 180,000 shares of NitroMed common stock underlying this option vest and become exercisable in 12 equal monthly installments beginning on the date that is one month following the date of grant and 320,000 shares of NitroMed common stock underlying this option vest and become exercisable in 36 monthly installments beginning on the first anniversary of the date of grant. | |
(4) | The option vests in equal annual installments on the first, second, third and fourth anniversaries of the date of grant. | |
(5) | The option vested as to 25% of the shares on December 15, 2004 and as to an additional 6.25% quarterly thereafter, and is currently fully vested. | |
(6) | The option vested in full on January 20, 2006. | |
(7) | Represents the unvested portion of an option to purchase 50,000 shares of common stock, which vested as to 25% of the shares on January 20, 2006 and vests as to an additional 6.25% quarterly thereafter. | |
(8) | The option vested in full on January 23, 2007. |
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(9) | The option vested as to 25% of the shares on March 8, 2008 and vests as to an additional 6.25% quarterly thereafter. | |
(10) | Represents the unvested portion of an option to purchase 400,000 shares of common stock, which vested as to 25% of the shares on November 1, 2005 and vests as to an additional 6.25% quarterly thereafter. | |
(11) | Represents the unvested portion of an option to purchase 20,000 shares of common stock, which vested as to 25% of the shares on January 23, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(12) | Represents the unvested portion of an option to purchase 100,000 shares of common stock, which vested as to 25% of the shares on June 2, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(13) | Represents the unvested portion of an option to purchase 400,000 shares of common stock, which vested as to 25% of the shares on September 25, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(14) | The option vested as to 25% of the shares on June 7, 2008 and vests as to an additional 6.25% quarterly thereafter. | |
(15) | The option was repriced effective May 5, 2008 to $0.31 per share. | |
(16) | Represents the unvested portion of 1,200,000 shares of restricted stock subject to Archemix’s repurchase right that lapsed as to 25% of the 1,200,000 shares on February 1, 2007 and lapses as to an additional 6.25% quarterly thereafter. |
Stock Awards | ||||||||
Number | ||||||||
of Shares | ||||||||
Acquired | Value Realized | |||||||
on Vesting | on Vesting | |||||||
Name | (#) | ($) | ||||||
Kenneth Bate | — | — | ||||||
Gregg Beloff | — | — | ||||||
Page Bouchard, D.V.M. | — | — | ||||||
James Gilbert, M.D. | — | — | ||||||
Duncan Higgons | 525,000 | 157,500 | (1) |
(1) | All shares were acquired at a purchase price of $0.10 per share. The value realized upon vesting consists of $36,000 upon the vesting of 300,000 shares on February 1, 2007 at a fair value of $0.22 per share, $40,500 upon the vesting of 75,000 shares on May 1, 2007 at a fair value of $0.64 per share, $40,500 upon the vesting of 75,000 shares on August 1, 2007 at a fair value of $0.64 per share, and $40,500 upon the vesting of 75,000 shares on November 1, 2007 at a fair value of $0.64 per share. |
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• | Severance: Salary continuation for a period of one year at his base rate of pay. | |
• | Benefit Continuation: Contributions to the cost of COBRA health and dental insurance coverage on the same basis as NitroMed’s contributions to its health and dental insurance coverage immediately before the executive’s termination for a period of one year, provided that if the executive secures new employment, the continued contributions shall end when the new employment begins. |
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• | the expiration of the term of the agreement, if the change in control date has not occurred during the term; | |
• | the termination of Mr. Bate’s employment with NitroMed prior to the change in control date; | |
• | the date that is 12 months after the change in control date, if Mr. Bate is still employed by NitroMed on that date; or | |
• | the fulfillment by NitroMed of certain of its obligations under the agreement if Mr. Bate’s employment with NitroMed terminates within 12 months following the change in control date. |
a. | Mr. Bate’s continued failure to substantially perform his reasonable assigned duties (other than any such failure resulting from incapacity due to physical or mental illness or any failure after Mr. Bate gives written notice of termination for good reason), which failure is not cured within 30 days after a written demand for substantial performance is received by Mr. Bate from the board of directors of NitroMed which specifically identifies the manner in which the board of directors believes Mr. Bate has not substantially performed his duties; or | |
b. | Mr. Bate’s willful engagement in illegal conduct or gross misconduct which is materially injurious to NitroMed. |
a. | the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of NitroMed if, after such acquisition, such Person beneficially owns (within the meaning ofRule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of NitroMed (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of NitroMed entitled to vote generally in the election of directors |
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(the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from NitroMed (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of NitroMed, unless the Person exercising, converting or exchanging such security acquired such security directly from NitroMed or an underwriter or agent of NitroMed), (ii) any acquisition by NitroMed, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by NitroMed or any corporation controlled by NitroMed, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of section (c) below; or |
b. | such time as the Continuing Directors (as defined below) do not constitute a majority of the board of the directors (or, if applicable, the board of directors of a successor corporation to NitroMed), where the term “Continuing Director” means at any date a member of the board of directors (i) who was a member of the board of directors on the date of the execution of the change in control agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the board of directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the board of directors; or | |
c. | the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving NitroMed or a sale or other disposition of all or substantially all of the assets of NitroMed in one or a series of transactions (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns NitroMed or substantially all of NitroMed’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by NitroMed or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or |
d. | approval by the stockholders of NitroMed of a complete liquidation or dissolution of NitroMed. |
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a. | the assignment to Mr. Bate of duties which result in a material diminution of his position (including status, offices, titles and reporting requirements), authority or responsibilities in effect immediately prior to the earliest to occur of (i) the Change in Control date, (ii) the date of the execution by NitroMed of the initial written agreement or instrument providing for the Change in Control or (iii) the date of the adoption by the board of directors of a resolution providing for the Change in Control (with the earliest to occur of such dates referred to herein as the “Measurement Date”); | |
b. | a material reduction in Mr. Bate’s annual base salary as in effect on the Measurement Date or as the same was or may be increased thereafter from time to time; | |
c. | the failure by NitroMed to (i) continue in effect any material compensation or benefit plan or program (including without limitation any life insurance, medical, health and accident or disability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in which he participates or which is applicable to Mr. Bate immediately prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan or program or (ii) continue Mr. Bate’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of Mr. Bate’s participation relative to other participants, than the basis existing immediately prior to the Measurement Date; |
d. | a change by NitroMed in the location at which Mr. Bate performs his principal duties for NitroMed to a new location that is more than 50 miles from the location at which he performed his principal duties for NitroMed immediately prior to the Measurement Date; or a requirement by NitroMed that Mr. Bate travel on company business to a substantially greater extent than required immediately prior to the Measurement Date; |
e. | the failure of NitroMed to obtain the agreement from any successor to NitroMed to assume and agree to perform the change in control agreement; or |
f. | any material breach by NitroMed of the change in control agreement. |
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Circumstances of Termination | Cash Payments ($) | Benefit Continuation ($) | Total ($) | |||||||||
Termination by NitroMed without Cause, not following a Change in Control | 577,500 | 15,919 | 593,419 | |||||||||
Termination by NitroMed without Cause or by Mr. Bate with Good Reason within 12 months following a Change in Control | 577,500 | 15,919 | 593,419 |
a. | a continuing failure by Mr. Higgons to render services to Archemix in accordance with his assigned duties, other than failures resulting from Mr. Higgons’ disability; | |
b. | any act or omission by Mr. Higgons involving misconduct or negligence which results in material harm to Archemix; | |
c. | Mr. Higgons’ commission of any felony or any fraud, financial wrongdoing, disloyalty, dishonesty or breach of fiduciary duty in connection with the performance of Mr. Higgons’ obligations to Archemix and which adversely affects Archemix’s business activities, reputation, or goodwill; |
d. | Mr. Higgons’ deliberate disregard of one of Archemix’s rules or policies which materially and adversely affects Archemix’s business activities, reputation, or goodwill; or |
e. | Mr. Higgons’ material breach of his employment agreement. |
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Termination | ||||
Benefits Upon Termination | Without Cause | |||
Base salary | $ | 225,000 | ||
Bonus | 81,000 | |||
Value of accelerated options(1) | 87,750 | |||
Total | $ | 393,750 | ||
(1) | The value of the accelerated options is calculated by multiplying the number of shares subject to the acceleration, 225,000 shares, by the spread between $0.49, the fair value of Archemix common stock on December 31, 2007, and $0.10, the exercise price of the option. In 2006, Mr. Higgons exercised this stock option and received shares of restricted common stock, which shares are subject to Archemix’s repurchase right that lapses based on the same vesting schedule of the option. If Mr. Higgons had been terminated on December 31, 2007, Archemix’s repurchase right with respect to the 225,000 shares subject to acceleration would have lapsed. |
• | Salary and Bonus: A lump sum cash payment within 30 days after the later of the date of the termination or change in control of the sum of (a) the executive’s base salary then in effect for a period of nine months, and (b) the amount of the executive’s current annual bonus target, or if not yet determined, 75% of the executive’s prior year bonus. | |
• | Benefit Continuation: For nine months following the later of the date of termination or the change in control or such longer term as the applicable plan or program may provide, Archemix shall pay for continued health benefits, provided, however, that if the executive becomes eligible to receive health insurance benefits from a new employer on terms at least as favorable as those being provided by Archemix, then Archemix’s obligations to continue payment will cease. |
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• | Accrued Obligations: A lump sum cash payment within 30 days after the later of the date of the termination or change in control of the sum of (a) any unpaid portion of the executive’s base salary through the date of termination, (b) a pro rated current fiscal year bonus, and (c) the amount of any accrued vacation pay. |
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Number of | ||||
Stock | ||||
Name | Options(1) | |||
Gregg Beloff | 305,441 | |||
Page Bouchard, D.V.M. | 328,177 | |||
James Gilbert, M.D. | 260,803 | |||
Duncan Higgons | 652,007 | |||
Total | 1,546,428 |
(1) | The Number of Stock Options does not reflect application of the exchange ratio applicable to options to purchase Archemix common stock in connection with the merger described elsewhere in this joint proxy statement/prospectus and will be adjusted in the same manner as outstanding options to purchase Archemix common stock. |
a. | continuing failure by the executive to render services to Archemix in accordance with the executive’s assigned duties (other than such a failure as a result of disability); |
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b. | any act or omission by the executive involving willful misconduct or gross negligence which results in material harm to Archemix; | |
c. | the executive’s commission of any felony or any fraud, financial wrongdoing, willful disloyalty, deliberate dishonesty or breach of fiduciary duty in connection with the performance of the executive’s obligations to Archemix and which materially and adversely affects the business activities, reputation, or goodwill of Archemix; |
d. | the executive’s deliberate disregard of an Archemix rule or policy which materially and adversely affects the business activities, reputation, or goodwill of Archemix; or |
e. | the executive’s material breach of the change in control agreement. |
a. | the acquisition by an individual, entity or group (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), (a “Person”) of beneficial ownership of any capital stock of Archemix if, after such acquisition, such Person beneficially owns (within the meaning ofRule 13d-3 promulgated under the Exchange Act) more than 50% of the combined voting power of the then-outstanding securities of Archemix entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from Archemix (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of Archemix, unless the Person exercising, converting or exchanging such security acquired such security directly from Archemix), (ii) any acquisition by Archemix, or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Archemix or any corporation controlled by Archemix; or | |
b. | the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving Archemix, or a sale or other disposition of assets of Archemix having a total gross fair market value equal to or more than 40% of the total gross fair market value of the assets of Archemix immediately before such sale or disposition (a “Business Combination”), unless, immediately following such Business Combination, the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Archemix or substantially all of Archemix’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to as the “Acquiring Corporation”). In no event shall any of the foregoing events or occurrences constitute a Change in Control under the change in control agreement if it results from the acquisition by any one person, or more than one person acting as a group, owning more than 50% of the total fair market value or total voting power of Archemix’s stock, of additional stock of Archemix. In all cases, the determination of whether a Change in Control has occurred shall be interpreted in a manner consistent with the definition of a change in control under Section 409A of the Internal Revenue Code of 1986, as amended. |
a. | any material diminution in the executive’s duties, authority or responsibilities as in effect immediately prior to the earliest to occur of (i) the date of the Change in Control or Reverse Merger, (ii) the date of the execution by Archemix of the initial written agreement or instrument providing for the Change in Control or Reverse Merger or (iii) the date of the adoption by the board of directors of a resolution providing for the Change in Control or Reverse Merger (with the earliest to occur of such dates referred to herein as the “Measurement |
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Date”); provided that a change in title or role reflecting the difference in size or structure of an Acquiring Corporation shall not be Good Reason if the executive’s duties, authority or responsibilities within the portion of the business of the Acquiring Corporation represented by the business of Archemix are not materially diminished; |
b. | any material diminution in the executive’s duties, authority or responsibilities prior to the date set forth in clause (a) that the executive can reasonably demonstrate (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or Reverse Merger or (ii) otherwise arose in connection with or in anticipation of a Change in Control or Reverse Merger; | |
c. | a material reduction in the executive’s compensation as in effect on the Measurement Date, except such a reduction (i) with the executive’s consent, or (ii) in connection with a reduction in compensation of other Archemix executives at the level of senior management (a “Broad Executive Reduction”), other than a Broad Executive Reduction that the executive can reasonably demonstrate (x) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or Reverse Merger or (y) otherwise arose in connection with or in anticipation of a Change in Control or Reverse Merger; |
d. | a material breach of the change in control agreement by Archemix or any successor to Archemix; |
e. | any material reduction in the aggregate in the executive’s pension, retirement or benefit plans or programs (including without limitation any 401(k), life insurance, medical, health and accident or disability plan and any vacation program or policy) (a “Benefit Plan”) in which the executive participates or which is applicable to the executive immediately prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan or program; except for any across the board reduction imposed on substantially all other members of Archemix’s senior management (a “Broad Executive Benefit Reduction”) other than a Broad Executive Benefit Reduction that the executive can reasonably demonstrate (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or Reverse Merger or (ii) otherwise arose in connection with or in anticipation of a Change in Control or Reverse Merger; or |
f. | any relocation of the executive’s principal office location to a location more than 35 miles from the Boston, Massachusetts metropolitan area. |
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• | the number of shares of common stock covered by options and the dates upon which such options become exercisable; | |
• | the exercise price of options; | |
• | the duration of options; | |
• | the conditions and limitations applicable to the exercise of each option; and | |
• | the number of shares of common stock subject to any restricted stock award or other stock-based awards, and the terms and conditions of such awards. |
• | make appropriate provision for the continuation of such options by substituting on an equitable basis for the shares then subject to such options either the consideration payable with respect to the outstanding shares of common stock in connection with the acquisition or securities of any successor or acquiring entity; | |
• | upon written notice to the participants, provide that all options must be exercised (either to the extent then exercisable or, at the discretion of the administrator, all options being made fully exercisable) at the end of which period the options shall terminate; or |
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• | terminate all options in exchange for a cash payment equal to the excess of the fair market value of the shares subject to such options (either to the extent then exercisable or, at the discretion of the administrator, all options being made fully exercisable) over the exercise price thereof. |
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• | the number of shares of common stock covered by options and the dates upon which such options become exercisable; | |
• | the exercise price of options; | |
• | the duration of options; | |
• | the conditions and limitations applicable to the exercise of each option; and | |
• | the number of shares of common stock subject to any restricted stock award or, in the case of the 2003 Plan, other stock based awards, and the terms and conditions of such awards. |
• | under the 1993 Plan, if the approval of NitroMed’s stockholders is required for any such modification or amendment under Section 422 of the Internal Revenue Code with respect to incentive stock options or underRule 16b-3 under the Securities Exchange Act of 1934, such modification or amendment will not become effective until the modification or amendment is approved by the stockholders; and | |
• | under the 2003 Plan, no award granted under the 2003 Plan intended to comply with Section 162(m) shall, after the date of such amendment, become exercisable, realizable or vested, as applicable to such award, unless such amendment is approved by the stockholders as required by Section 162(m). |
• | provide for outstanding options to be assumed or substituted for by the acquiring or succeeding entity; | |
• | provide that all unexercised options will terminate immediately prior to the consummation of such transaction unless previously exercised; | |
• | in the event of a transaction where the holders of common stock receive a cash payment for their shares, provide for per share cash payment to the optionees equal the cash per share received by the holders of common stock less the exercise price per share of such option; or | |
• | provide that, immediately prior to such transaction, all unexercised options will become exercisable in full. |
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• | such person is employed for more than 20 hours per week and for more than five months in a calendar year; | |
• | such person is employed for at least six months prior to enrolling in the ESPP; and | |
• | such person is employed on the first day of the applicable offering period under the ESPP. |
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Fees Earned or | Option | All Other | ||||||||||||||
Paid in Cash | Awards | Compensation | Total | |||||||||||||
Name | ($) | ($)(1) | ($) | ($) | ||||||||||||
Peter Barrett, Ph.D.(2) | — | — | — | |||||||||||||
Alex Barkas, Ph.D.(2) | — | — | — | |||||||||||||
Errol De Souza, Ph.D.(3) | — | 169,356 | 457,415 | (4) | 626,771 | |||||||||||
Mark Leschly(5) | 38,000 | (6) | 42,946 | 80,946 | ||||||||||||
John Maraganore, Ph.D.(7) | — | 9,704 | 9,704 | |||||||||||||
Michael Ross, Ph.D.(2) | — | — | — | |||||||||||||
Davey Scoon, C.P.A.(8) | 47,500 | (9) | 66,774 | 114,274 |
(1) | Represents compensation expense in 2007, calculated in accordance with SFAS 123(R). See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by Drs. De Souza and Maraganore. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” See Note 7 to NitroMed’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in the joint proxy |
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statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards held by Mr. Leschly and Mr. Scoon. The directors will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. | ||
(2) | To date, Archemix has not compensated the members of its board of directors who are appointed by its preferred stockholders. | |
(3) | Dr. De Souza is currently Archemix’s President and Chief Executive Officer and member of the Archemix board of directors. Dr. De Souza will resign as President and Chief Executive Officer upon completion of the merger but will serve as a member of the board of directors of the combined company following the merger. All of the compensation disclosed in this table for Dr. De Souza was earned or paid in connection with his services as President and Chief Executive Officer. Dr. De Souza receives no additional compensation for his service as a director of Archemix. As of December 31, 2007, the last day of Archemix’s fiscal year, Dr. De Souza held options to purchase 5,281,209 shares of common stock, of which 3,849,959 were vested and 1,431,250 were unvested but immediately exercisable for shares of restricted stock which are subject to Archemix’s repurchase right that lapses in accordance with the vesting schedule of the applicable option grant. On July 23, 2007, Dr. De Souza was granted an option to purchase 1,000,000 shares of common stock for his services as President and Chief Executive Officer, the grant date fair value of which was $665,483, calculated in accordance with SFAS 123(R). On May 5, 2008, the exercise price of this option was repriced from $0.64 per share to $0.31 per share, as discussed below in Archemix’s Compensation Discussion and Analysis. | |
(4) | Consists of $442,418 in salary paid to Dr. De Souza for his services as President and Chief Executive Officer, $10,000 reimbursed to Dr. De Souza for his procurement of financial planning services, and $4,997 reimbursed to Dr. De Souza as a taxgross-up associated with the reimbursement for the financial planning services. A detailed discussion of the terms of Dr. De Souza’s compensation arrangements with Archemix is set forth below. | |
(5) | As of December 31, 2007, the last day of NitroMed’s fiscal year, Mr. Leschly held options to purchase 77,500 shares of NitroMed common stock, of which 62,500 were vested. On May 25, 2007, Mr. Leschly was granted an option to purchase 15,000 shares of NitroMed common stock at an exercise price of $2.67 per share in accordance with NitroMed’s director compensation policy, the grant date fair value of which was $25,800, calculated in accordance with SFAS 123(R). | |
(6) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Leschly includes $2,000 earned in 2007 but paid in 2008. | |
(7) | As of December 31, 2007, the last day of Archemix’s fiscal year, Dr. Maraganore held options to purchase 110,000 shares of common stock, of which 30,000 were vested and 80,000 were unvested but immediately exercisable for shares of restricted stock which are subject to Archemix’s repurchase right that lapses in accordance with the vesting schedule of the applicable option grant. On July 23, 2007, Dr. Maraganore was granted an option to purchase 20,000 shares of common stock in accordance with Archemix’s director compensation policy, the grant date fair value of which was $13,310, calculated in accordance with SFAS 123(R). On May 5, 2008, the exercise price of this option was repriced from $0.64 per share to $0.31 per share, as discussed below in Archemix’s Compensation Discussion and Analysis. | |
(8) | As of December 31, 2007, the last day of NitroMed’s fiscal year, Mr. Scoon held options to purchase 90,000 shares of NitroMed common stock, of which 75,000 were vested. On May 25, 2007, Mr. Scoon was granted an option to purchase 15,000 shares of NitroMed common stock at an exercise price of $2.67 per share in accordance with NitroMed’s director compensation policy, the grant date fair value of which was $25,800, calculated in accordance with SFAS 123(R). | |
(9) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Scoon includes $8,000 earned in 2007 but paid in 2008. |
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• | Salary Continuation: Continued payment of his base salary for a minimum of 12 months with a continuance for each month or partial month that he has not obtained full-time employment, up to an aggregate of 18 months, provided that if Dr. De Souza obtains full-time employment prior to the end of the 18 months with a salary that is less than his base salary at the time of termination with Archemix, then for each month or partial month through the 18th month, Archemix will pay him the difference between his base salary and new salary. | |
• | Bonus: (i) Payment of the full amount of Dr. De Souza’s target annual bonus for the calendar year in which the termination occurs, payable within 30 days after termination, (ii) payment of the full amount of Dr. De Souza’s target annual bonus for the calendar year in which the termination occurs, payable within 30 days after the 12 month anniversary of his termination, and (iii) if there is any salary continuation payments made after the first 12 months following termination, then Archemix will pay Dr. De Souza a prorated portion of this annual target bonus for the calendar year in which his termination occurs. | |
• | Benefit Continuation: Continuation of group health insurance and payment of the premium in effect on the date of termination for the same period of time as the salary continuation payments are made. | |
• | Accelerated Vesting. Any unvested portion of any stock options issued to Dr. De Souza will immediately vest with respect to such additional number of shares that would have vested over the 36 month period following his termination. | |
• | Accrued Obligations: (i) Payment of any portion of base salary that has accrued but has not been paid prior to his termination, (ii) payment of the value of any accrued and unused vacation days, and (iii) payment for any reimbursable expenses incurred but not yet paid prior to his termination. |
• | Salary: Payment of an amount equal to 18 months of his base salary. | |
• | Bonus: (i) Payment of the full amount of Dr. De Souza’s target annual bonus for the calendar year in which the termination occurs, payable within 30 days after termination, and (ii) payment of 150% of the full amount of Dr. De Souza’s target annual bonus for the calendar year in which the termination occurs, payable within 30 days after the 18 month anniversary of his termination. | |
• | Benefit Continuation: Continuation of group health insurance and payment of the premium in effect on the date of termination for 18 months. | |
• | Accelerated Vesting: Any unvested portion of any stock option issued to Dr. De Souza will immediately vest. | |
• | Accrued Obligations: (i) Payment of any portion of base salary that has accrued but has not been paid prior to his termination, (ii) payment of the value of any accrued and unused vacation days, and (iii) payment for any reimbursable expenses incurred but not yet paid prior to his termination. |
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a. | a continuing failure by Dr. De Souza to render services to Archemix in accordance with his assigned duties, other than failures resulting from Dr. De Souza’s disability; | |
b. | any act or omission by Dr. De Souza involving willful misconduct or gross negligence which results in material harm to Archemix; | |
c. | Dr. De Souza’s commission of any felony or any fraud, financial wrongdoing, willful disloyalty, deliberate dishonesty or breach of fiduciary duty in connection with the performance of Dr. De Souza’s obligations to Archemix and which materially and adversely affects Archemix’s business activities, reputation, or goodwill; |
d. | Dr. De Souza’s deliberate disregard of one of Archemix’s rules or policies which materially and adversely affects Archemix’s business activities, reputation, or goodwill; or |
e. | Dr. De Souza’s material breach of his employment agreement. |
a. | the appointment of a president or chief executive officer other than Dr. De Souza to serve in such position(s) during the term of the employment agreement without Dr. De Souza’s consent; | |
b. | any material reduction in Dr. De Souza’s responsibilities or authority, including, without limitation, a change in the lines of reporting such that Dr. De Souza no longer reports to the board of directors; | |
c. | a reduction in Dr. De Souza’s compensation except a reduction in connection with a reduction in compensation of Archemix’s other executives at the level of senior management or with Dr. De Souza’s consent; |
d. | a material breach by Archemix of the employment agreement; |
e. | any failure by Archemix to have the employment agreement explicitly assumed by a successor; |
f. | any material reduction in Dr. De Souza’s welfare benefits in the aggregate, other than any across the board reduction imposed on substantially all other members of Archemix’s senior management; or |
g. | any relocation of Dr. De Souza’s principal office location to a location more than 35 miles from the Boston metropolitan areas. |
a. | the acquisition by an individual, entity or group (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of Archemix if, after such acquisition, such Person beneficially owns (within the meaning ofRule 13d-3 promulgated under the Exchange Act) more than 50% of the combined voting power of the then-outstanding securities of Archemix |
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entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from Archemix (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of Archemix, unless the Person exercising, converting or exchanging such security acquired such security directly from Archemix), (B) any acquisition by Archemix, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Archemix or any corporation controlled by Archemix, or (D) any acquisition of more than 50% but less than 80% of the capital stock of Archemix by one or more financial investors, such as venture capital or private equity firms; or |
b. | the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving Archemix, or a sale or other disposition of assets of Archemix having a total gross fair market value equal to or more than 40% of the total gross fair market value of the assets of Archemix immediately before such sale or disposition (a “Business Combination”), unless, immediately following such Business Combination, the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Archemix or substantially all of Archemix’s assets either directly or through one or more subsidiaries). |
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• | Affymax, Inc. | |
• | Amicus Therapeutics, Inc. | |
• | Infinity Pharmaceuticals, Inc. | |
• | Jazz Pharmaceuticals, Inc. | |
• | Novacea, Inc. | |
• | Pharmasset, Inc. | |
• | Replidyne, Inc. | |
• | Sirtris Pharmaceuticals, Inc. | |
• | Synta Pharmaceuticals Corp. | |
• | Targacept, Inc. | |
• | TorreyPines Therapeutics, Inc. | |
• | Trubion Pharmaceuticals, Inc. |
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• | the individual’s particular background and circumstances, including training and prior relevant work experience; | |
• | the individual’s role with Archemix and the compensation paid to similar persons in the companies represented in the compensation data that Archemix reviews; | |
• | the demand for people with the individual’s specific expertise and experience at the time of hire; | |
• | performance goals and other expectations for the position; | |
• | comparison to other executives within Archemix having similar levels of expertise and experience; and | |
• | uniqueness of industry skills. |
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• | initiate a Phase 2a clinical study with ARC1779 (30%); | |
• | continue development of early aptamer product candidates (25%); | |
• | sign new and strengthen existing collaborations (25%); | |
• | sign in-license deals to access scientific capabilities (10%); and | |
• | improve financial stability by increasing corporate cash balance (10%). |
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2007 Base | 2006 Base | |||||||||||
Salary | Salary | Increase | ||||||||||
Name | ($) | ($) | (%) | |||||||||
Errol De Souza, Ph.D. | 441,000 | 420,000 | 5.0 | |||||||||
President and Chief Executive Officer | ||||||||||||
Gregg Beloff | 245,000 | 234,400 | 4.5 | |||||||||
Vice President, Chief Financial Officer, Secretary and Treasurer | ||||||||||||
Page Bouchard, D.V.M. | 267,000 | 254,000 | 5.1 | |||||||||
Senior Vice President, Discovery and Preclinical Development | ||||||||||||
James Gilbert, M.D. | 300,000 | 300,000 | — | (1) | ||||||||
Senior Vice President, Chief Medical Officer | ||||||||||||
Duncan Higgons | 300,000 | 285,000 | 5.3 | |||||||||
Executive Vice President, Business Operations |
(1) | Dr. Gilbert was not eligible for a base salary increase in 2007 because he joined Archemix in September 2006. |
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• | Archemix’s financial and operating performance during the relevant period; | |
• | achievement of non-financial goals; | |
• | the executive officer’s contribution to Archemix’s success and anticipated future contributions; | |
• | the level of competition for executives with comparable skills and experience; | |
• | a review of compensation for comparable positions with the peer companies included in the Radford survey data; | |
• | the total number of stock options granted to an executive over the course of his career, together with the retentive effect of additional stock option grants; | |
• | the executive officer’s total cash compensation; and | |
• | periodic reviews of the equity holdings of each of Archemix’s current executive officers. |
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Name and Principal | Salary | Bonus | Option Awards | All Other | ||||||||||||||||||||
Position | Year | ($) | ($) | ($)(1) | Compensation ($) | Total ($) | ||||||||||||||||||
Errol De Souza, Ph.D. | 2007 | 442,418 | 169,356 | 14,997 | (3) | 626,771 | ||||||||||||||||||
President and Chief Executive Officer | 2006 | 421,173 | 196,560 | (2)(4) | 79,732 | 17,200 | (3) | 714,665 | ||||||||||||||||
Gregg Beloff | 2007 | 246,029 | 64,250 | (5) | 27,851 | — | 338,130 | |||||||||||||||||
Vice President, Chief Financial Officer, Secretary and Treasurer | 2006 | 235,237 | 60,274 | (4) | 7,963 | — | 303,474 | |||||||||||||||||
Page Bouchard, D.V.M | 2007 | 269,339 | 80,000 | (5) | 25,899 | — | 375,238 | |||||||||||||||||
Senior Vice President, Discovery and Preclinical Development | 2006 | 255,641 | 79,038 | (4) | 9,991 | — | 344,670 | |||||||||||||||||
James Gilbert, M.D.(6) | 2007 | 301,418 | 93,000 | (5) | 54,463 | — | 448,881 | |||||||||||||||||
Senior Vice President, Chief Medical Officer | 2006 | 80,535 | 85,065 | (7) | 566 | — | 166,166 | |||||||||||||||||
Duncan Higgons(8) | 2007 | 301,418 | 93,000 | (5) | 47,749 | — | 442,167 | |||||||||||||||||
Executive Vice President, Business Operations | 2006 | 251,363 | 83,265 | (4) | 17,739 | — | 352,367 |
(1) | Represents compensation expense in 2007 and 2006, respectively, calculated in accordance with SFAS 123(R). See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards. Archemix’s executive officers will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Estimates.” | |
(2) | In lieu of a cash bonus, on May 5, 2008, Dr. De Souza was granted a bonus for performance during fiscal year 2007 in the form of a stock option to purchase 468,750 shares of common stock at an exercise price of $0.31 per share, which commenced vesting on January 1, 2008 and will vest in full on January 1, 2009. | |
(3) | Consists of $10,000 reimbursed to Dr. De Souza in each of fiscal year 2007 and 2006 for his procurement of financial planning services and $4,997 in fiscal year 2007, and $7,200 in fiscal year 2006 reimbursed to Dr. De Souza as a taxgross-up associated with the reimbursement for the financial planning services. Archemix has agreed to pay or reimburse Dr. De Souza for up to $10,000, on an after-tax basis, for financial planning services each year that he is employed with Archemix. | |
(4) | Represents a cash bonus for performance during the fiscal year ended December 31, 2006, which was paid in 2007. | |
(5) | Represents a cash bonus for performance during the fiscal year ended December 31, 2007, which was paid in 2008. | |
(6) | Dr. Gilbert commenced employment with Archemix in September 2006. | |
(7) | Consists of a $25,065 pro-rated cash bonus for performance during the fiscal year ended December 31, 2006, which was paid in 2007, and a $60,000 sign-on bonus. | |
(8) | Mr. Higgons commenced employment with Archemix in February 2006. |
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All Other Option | ||||||||||||||||||||
Awards: Number of | ||||||||||||||||||||
Securities | Grant Date Fair | |||||||||||||||||||
Underlying | Exercise or Base | Value of Option | ||||||||||||||||||
Grant | Approval | Options | Price of Option | Awards | ||||||||||||||||
Name | Date | Date | (#) | Awards ($/Sh) | ($)(1) | |||||||||||||||
Errol De Souza, Ph.D. | 7/23/07 | 6/7/07 | 1,000,000 | 0.64 | (2) | 665,483 | ||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||
Gregg Beloff | 3/8/07 | 3/8/07 | 250,000 | 0.22 | 105,193 | |||||||||||||||
Vice President, Chief Financial Officer, Secretary and Treasurer | ||||||||||||||||||||
Page Bouchard, D.V.M. | 3/8/07 | 3/8/07 | 200,000 | 0.22 | 84,154 | |||||||||||||||
Senior Vice President, Discovery and Preclinical Development | ||||||||||||||||||||
James Gilbert, M.D. | 7/23/07 | 6/7/07 | 200,000 | 0.64 | (2) | 133,097 | ||||||||||||||
Senior Vice President, Chief Medical Officer | ||||||||||||||||||||
Duncan Higgons | 7/23/07 | 6/7/07 | 300,000 | 0.64 | (2) | 199,645 | ||||||||||||||
Executive Vice President, Business Operations |
(1) | See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards. Archemix’s executive officers will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” | |
(2) | These options were repriced effective May 5, 2008 to an exercise price of $0.31 per share. |
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Stock Awards | ||||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Option Awards | Value of | |||||||||||||||||||||||
Number | Number of | Shares | ||||||||||||||||||||||
of | Number of | Shares or | or Units | |||||||||||||||||||||
Securities | Securities | Units of | of Stock | |||||||||||||||||||||
Underlying | Underlying | Stock | That | |||||||||||||||||||||
Unexercised | Unexercised | Option | That Have | Have | ||||||||||||||||||||
Options | Options | Exercise | Option | Not | Not | |||||||||||||||||||
(#) | (#) | Price | Expiration | Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable(1) | ($) | Date | (#) | ($)(2) | ||||||||||||||||||
Errol De Souza, Ph.D. | 3,265,625 | (3) | — | 0.10 | 4/1/13 | — | — | |||||||||||||||||
President and Chief Executive Officer | 192,000 | (4) | — | 0.10 | 1/20/15 | — | — | |||||||||||||||||
206,250 | 93,750 | (5) | 0.10 | 1/20/15 | — | — | ||||||||||||||||||
112,500 | 337,500 | (6) | 0.10 | 8/2/15 | — | — | ||||||||||||||||||
73,584 | (7) | — | 0.10 | 1/23/16 | — | — | ||||||||||||||||||
— | 1,000,000 | (8) | 0.64 | (9) | 7/23/17 | — | — | |||||||||||||||||
Gregg Beloff | 350,000 | (10) | — | 0.10 | 12/15/13 | — | — | |||||||||||||||||
Vice President, Chief Financial | 31,443 | (4) | — | 0.10 | 1/20/15 | — | — | |||||||||||||||||
Officer, Secretary and Treasurer | 34,375 | 15,625 | (11) | 0.10 | 1/20/15 | — | — | |||||||||||||||||
21,250 | (7) | — | 0.10 | 1/23/16 | — | — | ||||||||||||||||||
— | 250,000 | (12) | 0.22 | 3/8/17 | — | — | ||||||||||||||||||
Page Bouchard, D.V.M. | 300,000 | 100,000 | (13) | 0.10 | 11/1/14 | — | — | |||||||||||||||||
Senior Vice President, Discovery | 35,000 | (7) | — | 0.10 | 1/23/16 | — | — | |||||||||||||||||
and Preclinical Development | 8,750 | 11,250 | (14) | 0.10 | 1/23/16 | — | — | |||||||||||||||||
37,500 | 62,500 | (15) | 0.10 | 6/2/16 | — | — | ||||||||||||||||||
— | 200,000 | (11) | 0.22 | 3/8/17 | — | — | ||||||||||||||||||
James Gilbert, M.D. | 125,000 | 275,000 | (16) | 0.10 | 11/29/16 | — | — | |||||||||||||||||
Senior Vice President, Chief Medical Officer | — | 200,000 | (8) | 0.64 | (9) | 7/23/17 | — | — | ||||||||||||||||
Duncan Higgons | — | — | — | — | 675,000 | (17) | 330,750 | |||||||||||||||||
Executive Vice President, Business Operations | — | 300,000 | (8) | 0.64 | (9) | 7/23/17 | — | — |
(1) | All stock options granted to Archemix’s executive officers are immediately exercisable for shares of restricted common stock, which are subject to Archemix’s repurchase right that lapses on the same schedule as the vesting schedule of the applicable stock option. | |
(2) | The market value of the stock awards is determined by multiplying the number of shares times $0.49, the fair value of Archemix common stock on December 31, 2007. | |
(3) | Represents the unexercised portion of an option to purchase 4,250,000 shares of common stock, which vested as to 25% of the shares on April 1, 2004 and as to an additional 6.25% of the shares quarterly thereafter, and is currently fully vested. | |
(4) | The option vested in full on January 20, 2006. | |
(5) | Represents the unvested portion of an option to purchase 300,000 shares of common stock, which vested as to 25% of the shares on January 20, 2006 and vests as to an additional 6.25% of the shares quarterly thereafter. | |
(6) | Represents an option to purchase 450,000 shares of common stock, the vesting of which, as of December 31, 2006, commenced upon the completion of Archemix’s initial public offering and was scheduled to vest quarterly thereafter over 18 months from the completion of the initial public offering. In June 2007, the Archemix board of directors approved an amendment to the vesting schedule of this option that removed the contingency of an initial public offering and provides that the option will vest quarterly as to 12.5% of the shares, with the first tranche having vested on September 7, 2007. | |
(7) | The option vested in full on January 23, 2007. |
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(8) | The option vests as to 25% of the shares on June 7, 2008 and vests as to an additional 6.25% quarterly thereafter. | |
(9) | The option was repriced effective May 5, 2008 to $0.31 per share. |
(10) | The option vested as to 25% of the shares on December 15, 2004 and as to an additional 6.25% quarterly thereafter, and is currently fully vested. | |
(11) | Represents the unvested portion of an option to purchase 50,000 shares of common stock, which vested as to 25% of the shares on January 20, 2006 and vests as to an additional 6.25% quarterly thereafter. | |
(12) | The option vests as to 25% of the shares on March 8, 2008 and vests as to an additional 6.25% quarterly thereafter. | |
(13) | Represents the unvested portion of an option to purchase 400,000 shares of common stock, which vested as to 25% of the shares on November 1, 2005 and vests as to an additional 6.25% quarterly thereafter. | |
(14) | Represents the unvested portion of an option to purchase 20,000 shares of common stock, which vested as to 25% of the shares on January 23, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(15) | Represents the unvested portion of an option to purchase 100,000 shares of common stock, which vested as to 25% of the shares on June 2, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(16) | Represents the unvested portion of an option to purchase 400,000 shares of common stock, which vested as to 25% of the shares on September 25, 2007 and vests as to an additional 6.25% quarterly thereafter. | |
(17) | Represents the unvested portion of 1,200,000 shares of restricted stock subject to Archemix’s repurchase right that lapsed as to 25% of the 1,200,000 shares on February 1, 2007 and lapses as to an additional 6.25% quarterly thereafter. |
Stock Awards | ||||||||
Number | ||||||||
of Shares | ||||||||
Acquired | Value Realized | |||||||
on Vesting | on Vesting | |||||||
Name | (#) | ($) | ||||||
Errol De Souza, Ph.D. | — | — | ||||||
President and Chief Executive Officer | ||||||||
Gregg Beloff | — | — | ||||||
Vice President, Chief Financial Officer, Secretary and Treasurer | ||||||||
Page Bouchard, D.V.M. | — | — | ||||||
Senior Vice President, Discovery and Preclinical Development | ||||||||
James Gilbert, M.D. | — | — | ||||||
Senior Vice President, Chief Medical Officer | ||||||||
Duncan Higgons | 525,000 | 157,500 | (1) | |||||
Executive Vice President, Business Operations |
(1) | All shares were acquired at a purchase price of $0.10 per share. The value realized upon vesting consists of $36,000 upon the vesting of 300,000 shares on February 1, 2007 at a fair value of $0.22 per share, $40,500 upon the vesting of 75,000 shares on May 1, 2007 at a fair value of $0.64 per share, $40,500 upon the vesting of 75,000 shares on August 1, 2007 at a fair value of $0.64 per share, and $40,500 upon the vesting of 75,000 shares on November 1, 2007 at a fair value of $0.64 per share. |
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Termination Without | ||||||||||||||||
Termination Without | Cause or With Good | |||||||||||||||
Cause or With Good | Reason Upon or | Termination in the | ||||||||||||||
Benefits Upon | Reason Prior to a | Subsequent to a | Event of Death or | |||||||||||||
Termination | Change in Control | Change in Control | Disability | |||||||||||||
Base salary | $ | 441,000 | $ | 441,000 | $ | — | ||||||||||
Bonus | 176,400 | 176,400 | 176,400 | |||||||||||||
Continuation of health insurance | 11,506 | 11,506 | — | |||||||||||||
Total | $ | 628,906 | $ | 628,906 | $ | 176,400 | ||||||||||
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Option | ||||||||
Awards | Total | |||||||
Name | ($)(1) | ($) | ||||||
Peter Barrett, Ph.D.(2) | — | — | ||||||
Alex Barkas, Ph.D.(2) | — | — | ||||||
Lawrence Best(3) | 12,116 | (4) | 12,116 | |||||
John Maraganore, Ph.D.(5) | 9,704 | (4) | 9,704 | |||||
Corey Mulloy(2) | — | — | ||||||
Michael Ross, Ph.D.(2) | — | — | ||||||
Robert Stein, M.D., Ph.D.(6) | 10,306 | 10,306 |
(1) | See Note 8 to Archemix’s audited financial statements for the fiscal year ended December 31, 2007, included elsewhere in this joint proxy statement/prospectus for details as to the assumptions used to calculate the fair value of the option awards. Archemix’s directors will not realize the value of these awards in cash until these awards are exercised and the underlying shares are subsequently sold. See also Archemix’s discussion of stock-based compensation under “Archemix’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” | |
(2) | To date, Archemix has not compensated the members of its board of directors who are appointed by its preferred stockholders. | |
(3) | As of December 31, 2007, the last day of Archemix’s fiscal year, Mr. Best held options to purchase 154,000 shares of common stock, of which 96,000 were vested and 58,000 were unvested but immediately exercisable for shares of restricted stock which are subject to Archemix’s repurchase right that lapses in accordance with the vesting schedule of the applicable option grant. On March 2, 2007, Mr. Best was granted options to purchase 20,000 shares and 8,000 shares of common stock in accordance with Archemix’s director compensation policy, the grant date fair values of which were $8,415 and $3,366, respectively, calculated in accordance with SFAS 123(R). | |
(4) | Represents compensation expense in 2007, calculated in accordance with SFAS 123(R). | |
(5) | As of December 31, 2007, the last day of Archemix’s fiscal year, Dr. Maraganore held options to purchase 110,000 shares of common stock, of which 30,000 were vested and 80,000 were unvested but immediately exercisable for shares of restricted stock which are subject to Archemix’s repurchase right that lapses in accordance with the vesting schedule of the applicable option grant. On July 23, 2007, Dr. Maraganore was granted an option to purchase 20,000 shares of common stock in accordance with Archemix’s director compensation policy, the grant date fair value of which was $13,310, calculated in accordance with SFAS 123(R). On May 5, 2008, the exercise price of this option was repriced from $0.64 per share to $0.31 per share, as discussed above in the Compensation Discussion and Analysis. | |
(6) | Dr. Stein was elected to the Archemix board of directors on March 8, 2007. As of December 31, 2007, the last day of Archemix’s fiscal year, Dr. Stein held an option to purchase 90,000 shares of common stock, none of which were vested but all of which are immediately exercisable for shares of restricted stock which are subject to Archemix’s repurchase right that lapses in accordance with the vesting schedule of the option grant. On March 8, 2007, Dr. Stein was granted an option to purchase 90,000 shares of common stock in accordance with Archemix’s director compensation policy, the grant date fair value of which was $37,869, calculated in accordance with SFAS 123(R). |
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• | Effective on the date of appointment, each director receives a non-qualified stock option to purchase 90,000 shares of common stock. These options are for a period of ten years, and are exercisable for up to 33% percent of the shares on the first anniversary of the vesting commencement date, which is the effective date of the director’s appointment to the board, and for an additional 33% percent of the shares each year thereafter, ending three years after the vesting commencement date. | |
• | Upon the first anniversary of election to the board, and each such anniversary thereafter, each director receives an option to purchase 20,000 shares of common stock; provided that such director attended a minimum of 75% of the board meetings held in the applicable calendar year. These options are for a period of ten years, and are exercisable for up to 100% of the shares on the first anniversary of the vesting commencement date. | |
• | The chairperson of the nominating and governance committee or the compensation committee upon election as chairperson receives an additional option to purchase 4,000 shares of common stock. In addition, upon each anniversary of the election as chairperson, such director will receive an option to purchase 4,000 shares of common stock; provided that the chairperson attended a minimum of 75% of the respective committee meetings held in the applicable calendar year. These options are for a period of ten years, and are exercisable for up to 100% of the shares on the first anniversary of the vesting commencement date, which is the date of appointment as chairperson, and each anniversary of such date thereafter. | |
• | The chairperson of the audit committee upon election as chairperson receives an additional option to purchase 8,000 shares of common stock. In addition, upon each anniversary of the election as chairperson, such director will receive an option to purchase 8,000 shares of common stock; provided that the chairperson attended a minimum of 75% of the audit committee meetings held in the applicable calendar year. These options are for a period of ten years, and are exercisable for up to 100% of the shares offered on the first anniversary of the vesting commencement date, which is the date of appointment as chairperson, and each anniversary of such date thereafter. |
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• | attract, motivate and retain the best possible executive talent; | |
• | ensure executive compensation is tied to NitroMed’s corporate strategies and the achievement of NitroMed’s business objectives; | |
• | promote the achievement of key strategic and financial performance measures by linking short- and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and | |
• | align executives’ incentives with the creation of stockholder value. |
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• | base salary; | |
• | annual cash incentive awards; | |
• | equity awards; | |
• | employee benefits, including retirement plans and health, dental and life insurance; and | |
• | severance and change in control benefits. |
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Cash Incentives | ||||||||
Award as a | ||||||||
Target | Cash Incentive Award | |||||||
Percentage of | Amount Paid for 2007 | |||||||
Name | Base Salary | Service | ||||||
Kenneth Bate | 50 | % | $ | 144,375 | ||||
James Ham, III | 35 | % | 63,656 | |||||
Gerald Bruce | 50 | % | 90,000 | |||||
Jane Kramer | 35 | % | 58,094 |
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Non-Equity | ||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||||||
Bonus | Awards | Awards | Compensation | Compensation | ||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | ($) | ($)(1) | ($)(2) | ($)(3) | ($) | Total ($) | ||||||||||||||||||||||||
Kenneth Bate(4) | 2007 | 381,958 | — | — | 898,308 | 144,375 | 23,683 | 1,448,324 | ||||||||||||||||||||||||
President and Chief Executive Officer and Interim Chief Financial Officer | 2006 | 236,539 | 50,000 | — | 747,518 | 90,000 | 1,021 | 1,125,078 | ||||||||||||||||||||||||
Argeris Karabelas, Ph.D.(5) | 2007 | — | — | — | 539,976 | — | 34,000 | 573,976 | ||||||||||||||||||||||||
Former Interim President and Chief Executive Officer | 2006 | — | — | — | 1,528,124 | — | 81,000 | 1,609,124 | ||||||||||||||||||||||||
James Ham, III(6) | 2007 | 241,713 | — | 69,611 | 316,295 | 63,656 | 19,415 | 710,690 | ||||||||||||||||||||||||
Former Vice President, Chief Financial Officer, Treasurer and Secretary | 2006 | 206,816 | — | — | 378,253 | 32,250 | 16,481 | 633,800 | ||||||||||||||||||||||||
Gerald Bruce(7) | 2007 | 239,533 | — | 78,999 | 184,043 | 90,000 | 127,488 | 720,063 | ||||||||||||||||||||||||
Former Senior Vice President, Commercial Operations | 2006 | 199,269 | 45,000 | — | 275,028 | 90,000 | 83,220 | 692,517 | ||||||||||||||||||||||||
Jane Kramer(8) | 2007 | 221,312 | — | 63,529 | 248,653 | 58,094 | 22,884 | 614,472 | ||||||||||||||||||||||||
Former Vice President, Corporate Affairs | 2006 | 212,800 | — | — | 331,060 | 44,688 | 93,961 | 682,509 | ||||||||||||||||||||||||
L. Gordon Letts, Ph.D.(9) | 2007 | 292,754 | 11,250 | — | 823,938 | — | 23,970 | 1,151,912 | ||||||||||||||||||||||||
Former Senior Vice President, Research and Development and Chief Scientific Officer | 2006 | 270,217 | 25,000 | — | 826,318 | 56,746 | 23,998 | 1,202,279 | ||||||||||||||||||||||||
Manuel Worcel, M.D.(10) | 2007 | 277,401 | — | — | 491,230 | — | 17,386 | 786,017 | ||||||||||||||||||||||||
Former Chief Medical Officer | 2006 | 206,744 | — | — | 624,039 | — | 16,720 | 847,503 |
(1) | The fair value amount for grants of restricted common stock has been determined applying the principles outlined in SFAS 123R. | |
(2) | The fair value amount for options has been determined using the Black-Scholes option pricing model and applying the principles outlined in SFAS 123R. | |
(3) | The amounts listed in 2007 reflect cash incentive awards paid in fiscal year 2008 with respect to performance measures achieved in fiscal year 2007. The amounts listed in 2006 reflect cash incentive awards paid in fiscal year 2007 with respect to performance measures achieved in fiscal year 2006. | |
(4) | The amount listed under “All Other Compensation” in 2007 includes $15,706 related to health and dental benefits, $2,191 related to premiums on group life insurance and $5,786 related to 401(k) plan matching contributions. The amount listed under “Bonus” in 2006 reflects a sign-on bonus paid to Mr. Bate pursuant to his March 2006 employment offer letter. The amount listed under “All Other Compensation” in 2006 represents the payment of premiums with respect to group life insurance. | |
(5) | Dr. Karabelas was appointed NitroMed’s interim president and chief executive officer in March 2006 and relinquished his responsibilities in January 2007. The amount listed under “All Other Compensation” in |
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2007 includes $34,000 paid with respect to service on NitroMed’s board of directors. The amount listed under “All Other Compensation” in 2006 includes $40,000 paid with respect to cost of living expenses and $41,000 paid with respect to service on NitroMed’s board of directors. Additional information regarding compensation earned by Dr. Karabelas for his service on NitroMed’s board is included under the headings “Compensation of Directors” and “Director Compensation Table” below. | ||
(6) | Mr. Ham relinquished his responsibilities as NitroMed’s vice president, chief financial officer, treasurer and secretary in April 2008. Mr. Ham was appointed NitroMed’s vice president, chief financial officer, treasurer and secretary in January 2007, having previously served as NitroMed’s vice president, finance since September 2004. The amount listed under “All Other Compensation” in 2007 includes $15,429 related to health and dental benefits, $2,167 related to premiums on group life insurance and $1,819 related to 401(k) plan matching contributions. The amount listed under “All Other Compensation” in 2006 includes $14,566 related to health and dental benefits and $1,915 related to premiums on group life insurance. | |
(7) | Mr. Bruce relinquished his responsibilities as NitroMed’s senior vice president, commercial operations in March 2008. The amount listed under “All Other Compensation” in 2007 includes $15,429 related to health and dental benefits, $2,158 related to premiums on group life insurance, $5,410 related to 401(k) plan matching contributions, $30,000 paid as a cost of living adjustment benefit and $74,491 related to housing reimbursement, including payment for state and federal taxes. The amount listed under “Bonus” in 2006 reflects a sign-on bonus paid to Mr. Bruce pursuant to his January 2006 employment offer letter. The amount listed under “All Other Compensation” in 2006 includes $15,175 related to health and dental benefits, $27,500 paid as a cost of living adjustment benefit and $40,545 related to temporary housing reimbursement, including payment for state and federal taxes. | |
(8) | Ms. Kramer relinquished her responsibilities as NitroMed’s vice president, corporate affairs in April 2008. The amount listed under “All Other Compensation” in 2007 includes $14,135 related to health and dental benefits, $2,098 related to premiums on group life insurance and $6,651 related to 401(k) plan matching contributions. The amount listed under “All Other Compensation” in 2006 includes $14,566 related to health and dental benefits, $449 related to premiums on group life insurance, $8,854 related to 401(k) plan matching contributions and $70,092 paid with respect to reimbursement of relocation expenses, including payment for state and federal taxes. | |
(9) | NitroMed entered into a transition agreement with Dr. Letts in May 2007, pursuant to which Dr. Letts relinquished his responsibilities as NitroMed’s senior vice president, research and development and chief scientific officer in May 2007 and became NitroMed’s scientific and technology advisor. The amount listed under “Bonus” in 2007 reflects an achievement bonus paid to Dr. Letts in connection with the licensing of certain non-strategic intellectual property rights, pursuant to the terms of his May 2007 transition agreement. The amount listed under “All Other Compensation” in 2007 includes $15,429 related to health and dental benefits, $2,191 related to premiums on group life insurance and $6,350 related to 401(k) plan matching contributions. The amount listed under “Bonus” in 2006 reflects a retention bonus paid to Dr. Letts in March 2006. The amount listed under “All Other Compensation” in 2006 includes $14,566 related to health and dental benefits, $1,132 related to premiums on group life insurance and $8,300 related to 401(k) plan matching contributions. |
(10) | Dr. Worcel served as NitroMed’s chief medical officer from March 2007 to January 2008 and as NitroMed’s medical and scientific advisor from January 2006 to March 2007. Dr. Worcel previously served as NitroMed’s chief medical officer from August 2003 to January 2006. The amount listed under “All Other Compensation” in 2007 includes $15,429 related to health and dental benefits and $1,957 related to premiums on group life insurance. The amount listed under “All Other Compensation” in 2006 includes $14,566 related to health and dental benefits and $2,154 related to premiums on group life insurance. |
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All Other | ||||||||||||||||||||||||||||||||
Stock | ||||||||||||||||||||||||||||||||
All Other | Awards: | Exercise | Grant Date | |||||||||||||||||||||||||||||
Stock Awards: | Number of | or Base | Fair Value of | |||||||||||||||||||||||||||||
Estimated Future Payouts Under Non-Equity | Number of | Securities | Price of | Stock and | ||||||||||||||||||||||||||||
Incentive Plan Awards (2) | Shares of | Underlying | Option | Option | ||||||||||||||||||||||||||||
Grant | Threshold | Maximum | Stock or Units | Options | Awards | Awards | ||||||||||||||||||||||||||
Name | Date(1) | ($) | Target ($) | ($) | (#) | (#) | ($)(3) | ($)(4) | ||||||||||||||||||||||||
Kenneth Bate | — | — | 192,500 | — | — | — | — | — | ||||||||||||||||||||||||
01/19/2007 | — | — | — | — | 500,000 | 2.65 | 785,000 | |||||||||||||||||||||||||
Argeris Karabelas, Ph.D. | 05/25/2007 | (5) | — | — | — | — | 15,000 | 2.67 | 25,800 | |||||||||||||||||||||||
James Ham, III | — | — | 84,875 | — | — | — | — | — | ||||||||||||||||||||||||
03/16/2007 | — | — | — | — | 25,000 | 3.22 | 47,500 | |||||||||||||||||||||||||
03/16/2007 | (6) | — | — | — | 54,129 | — | — | 174,295 | ||||||||||||||||||||||||
Gerald Bruce | — | — | 120,000 | — | — | — | — | — | ||||||||||||||||||||||||
03/16/2007 | (6) | — | — | — | 61,429 | — | — | 197,801 | ||||||||||||||||||||||||
Jane Kramer | — | — | 77,459 | — | — | — | — | — | ||||||||||||||||||||||||
03/16/2007 | (6) | — | — | — | 49,400 | — | — | 159,068 | ||||||||||||||||||||||||
L. Gordon Letts, Ph.D. | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Manuel Worcel, M.D. | — | — | — | — | — | — | — | — |
(1) | Unless otherwise noted in this table, all outstanding option grants were granted under NitroMed’s 2003 stock incentive plan, have a 10 year term and vest and become exercisable in equal annual installments on the first, second, third and fourth anniversaries of the date of grant, subject to such named executive officer’s continued service. | |
(2) | These amounts reflect the incentive awards that would have been paid for 2007 performance if such awards had been made at each named executive’s target percentage of annual base salary. In 2007, the target percentage for each of Mr. Bate and Mr. Bruce was 50% of annual base salary, and the target percentage for each of Mr. Ham and Ms. Kramer was 35% of annual base salary. | |
(3) | The exercise prices of the option grants listed in this column reflect the closing price of NitroMed’s common stock on The NASDAQ Global Market on the date of grant. | |
(4) | The grant date fair value amount for option awards has been determined using the Black-Scholes option pricing model and applying the principles outlined in SFAS 123R. The grant date fair value amount for restricted stock awards has been determined applying the principles outlined in SFAS 123R. | |
(5) | In accordance with the terms of a director compensation program previously established by NitroMed’s board of directors, this option was awarded to Dr. Karabelas upon his re-election to NitroMed’s board at NitroMed’s 2007 annual meeting and vests and becomes exercisable on the first anniversary of the date of grant. |
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(6) | These restricted stock awards were granted under NitroMed’s 2003 stock incentive plan and the restrictions on these shares lapse, or vest, as follows: 25% of the restricted shares vested on the date that was six months after the grant date; 25% of the restricted shares vest on the first anniversary of the grant date; and 50% of the restricted shares vest on the second anniversary of the grant date. |
Option Awards(1) | Stock Awards | |||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Value of | ||||||||||||||||||||||||
Shares or | ||||||||||||||||||||||||
Number of | Number of | Units of | ||||||||||||||||||||||
Number of | Securities | Shares or | Stock | |||||||||||||||||||||
Securities | Underlying | Units of | That Have | |||||||||||||||||||||
Underlying | Unexercised | Option | Stock That | Not | ||||||||||||||||||||
Unexercised Options | Options (#) | Exercise | Option Expiration | Have Not | Vested | |||||||||||||||||||
Name | (#) Exercisable | Unexercisable | Price ($) | Date | Vested (#) | ($)(2) | ||||||||||||||||||
Kenneth Bate | 260,001 | 239,999 | 7.83 | 03/20/2016 | (3) | — | — | |||||||||||||||||
0 | 500,000 | 2.65 | 01/19/2017 | — | — | |||||||||||||||||||
Argeris Karabelas, Ph.D. | 12,500 | 0 | 2.00 | 01/15/2012 | — | — | ||||||||||||||||||
5,000 | 0 | 2.00 | 11/19/2012 | — | — | |||||||||||||||||||
7,500 | 2,500 | 6.95 | 06/14/2014 | — | — | |||||||||||||||||||
15,000 | 0 | 14.99 | 05/16/2015 | (4) | — | — | ||||||||||||||||||
168,750 | 0 | 7.83 | 03/20/2016 | (5) | — | — | ||||||||||||||||||
200,000 | 0 | 4.12 | 05/17/2016 | (6) | — | — | ||||||||||||||||||
0 | 15,000 | 2.67 | 05/25/2017 | (4) | — | — | ||||||||||||||||||
James Ham, III | 30,000 | 10,000 | 18.98 | 09/13/2014 | — | — | ||||||||||||||||||
5,000 | 5,000 | 14.99 | 05/16/2015 | — | — | |||||||||||||||||||
6,625 | 19,875 | 11.46 | 01/30/2016 | — | — | |||||||||||||||||||
32,000 | 0 | 8.06 | 03/30/2016 | (7) | — | — | ||||||||||||||||||
10,000 | 30,000 | 2.84 | 08/16/2016 | — | — | |||||||||||||||||||
8,750 | 26,250 | 2.17 | 10/12/2016 | — | — | |||||||||||||||||||
0 | 25,000 | 3.22 | 03/16/2017 | — | — | |||||||||||||||||||
— | — | — | — | 40,596 | 41,002 | |||||||||||||||||||
Gerald Bruce | 10,000 | 30,000 | 12.03 | 02/27/2016 | — | — | ||||||||||||||||||
43,000 | 0 | 8.06 | 03/30/2016 | (7) | — | — | ||||||||||||||||||
10,000 | 30,000 | 2.84 | 08/16/2016 | — | — | |||||||||||||||||||
12,500 | 37,500 | 2.17 | 10/12/2016 | — | — | |||||||||||||||||||
— | — | — | — | 46,071 | 46,532 | |||||||||||||||||||
Jane Kramer | 21,000 | 21,000 | 19.30 | 09/01/2015 | — | — | ||||||||||||||||||
956 | 2,866 | 12.02 | 01/19/2016 | — | — | |||||||||||||||||||
43,000 | 0 | 8.06 | 03/30/2016 | (7) | — | — | ||||||||||||||||||
10,000 | 30,000 | 2.84 | 08/16/2016 | — | — | |||||||||||||||||||
8,750 | 26,250 | 2.17 | 10/12/2016 | — | — | |||||||||||||||||||
— | — | — | — | 37,050 | 37,421 | |||||||||||||||||||
L. Gordon Letts, Ph.D. | 3,465 | 0 | 1.30 | 06/16/2009 | — | — | ||||||||||||||||||
24,660 | 0 | 2.00 | 01/30/2011 | — | — | |||||||||||||||||||
65,000 | 0 | 2.00 | 03/12/2012 | — | — | |||||||||||||||||||
55,000 | 0 | 2.00 | 06/17/2013 | — | — | |||||||||||||||||||
75,000 | 0 | 7.98 | 12/01/2013 | — | — | |||||||||||||||||||
18,750 | 6,250 | 7.55 | 05/18/2014 | — | — | |||||||||||||||||||
46,875 | 15,625 | 10.21 | 07/19/2014 | — | — | |||||||||||||||||||
42,500 | 42,500 | 14.99 | 05/16/2015 | — | — | |||||||||||||||||||
8,600 | 25,800 | 12.02 | 01/19/2016 | — | — | |||||||||||||||||||
43,000 | 0 | 8.06 | 03/30/2016 | (7) | — | — | ||||||||||||||||||
10,000 | 30,000 | 2.84 | 08/16/2016 | — | — | |||||||||||||||||||
8,750 | 26,250 | 2.17 | 10/12/2016 | — | — | |||||||||||||||||||
Manuel Worcel, M.D. | 102,000 | 0 | 0.72 | 01/26/2008 | — | — | ||||||||||||||||||
19,250 | 0 | 1.30 | 06/16/2009 | — | — | |||||||||||||||||||
30,000 | 0 | 2.00 | 01/30/2011 | — | — | |||||||||||||||||||
55,000 | 0 | 2.00 | 06/17/2013 | — | — | |||||||||||||||||||
68,359 | 0 | 7.98 | 12/01/2013 | — | — | |||||||||||||||||||
18,750 | 6,250 | 7.55 | 05/18/2014 | — | — | |||||||||||||||||||
46,875 | 15,625 | 10.21 | 07/19/2014 | — | — | |||||||||||||||||||
42,500 | 42,500 | 14.99 | 05/16/2015 | — | — |
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(1) | Unless otherwise noted in this table, all outstanding option grants have a 10 year term and vest and become exercisable in equal annual installments on the first, second, third and fourth anniversaries of the date of grant, subject to such named executive officer’s continued service. | |
(2) | Market value represents the number of shares of restricted stock that have not vested as of December 31, 2007, multiplied by the closing price of NitroMed’s common stock on that date ($1.01). | |
(3) | 180,000 shares of this option vest and become exercisable in twelve equal monthly installments beginning on the date that is one month following the date of grant and 320,000 shares of this option vest and become exercisable in 36 monthly installments beginning on the first anniversary of the date of grant. | |
(4) | This option vests and becomes exercisable on the first anniversary of the date of grant. | |
(5) | This option vested and became exercisable in twelve equal monthly installments beginning on the date that was one month following the date of grant. | |
(6) | This option vested and became immediately exercisable upon grant. | |
(7) | This option vested and became exercisable in two equal installments, the first on the date that is six months following the date of grant and the second on the first anniversary of the date of grant. |
Option Awards | Stock Awards | |||||||||||||||
Number of | Value | Number of | Stock Awards | |||||||||||||
Shares | Realized on | Shares | Value | |||||||||||||
Acquired on | Exercise | Acquired on | Realized on | |||||||||||||
Name | Exercise (#) | ($)(1) | Vesting (#)(2) | Vesting ($)(3) | ||||||||||||
Kenneth Bate | — | — | — | — | ||||||||||||
Argeris Karabelas, Ph.D. | — | — | — | — | ||||||||||||
James Ham, III | — | — | 13,533 | 27,743 | ||||||||||||
Gerald Bruce | — | — | 15,358 | 31,484 | ||||||||||||
Jane Kramer | — | — | 12,350 | 35,318 | ||||||||||||
L. Gordon Letts, Ph.D. | — | — | — | — | ||||||||||||
Manuel Worcel, M.D. | 109,275 | 276,466 | — | — |
(1) | Value represents the difference between the exercise price per share and the fair market value per share of NitroMed’s common stock on the date of exercise, multiplied by the number of shares acquired on exercise. | |
(2) | These shares represent the September 2007 lapse of restrictions, or vesting, with respect to 25% of the shares of restricted stock awarded pursuant to the terms of restricted stock agreements entered into in March 2007. The shares listed in this column include a portion of shares that were surrendered by the executive to NitroMed in satisfaction of tax withholding obligations incurred upon the lapse of restrictions, in accordance with the terms of the restricted stock agreements. | |
(3) | Value represents the fair market value per share of NitroMed’s common stock on the date of the lapse of restrictions, or vesting, multiplied by the number of shares acquired on vesting. |
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Key Plan Elements | Senior Vice President and Above | Vice President | ||
Severance | Salary continuation for a period of one year at base rate of pay. | Salary continuation for a period of six months at base rate of pay; if the executive remains unemployed throughout and at the conclusion of the initial six month period, the executive shall receive an additional six month period of salary continuation. However, if at any time during such additional six month period the executive secures new employment, the benefits terminate immediately. | ||
Benefit Continuation | Contributions to the cost of COBRA health and dental insurance coverage on the same basis as NitroMed’s contribution to NitroMed’s health and dental insurance coverage immediately before the executive’s termination for a period of one year, provided that if the executive secures new employment, the continued contributions shall end when the new employment begins | Contributions to the cost of COBRA health and dental insurance coverage on the same basis as NitroMed’s contribution to health and dental insurance coverage immediately before the executive’s termination for a period of six months, provided that if the executive secures new employment, the contributions end when the new employment begins. If the executive remains unemployed throughout and at the conclusion of the initial six month period, the executive shall receive an additional six month period of benefits continuation. However, if at any time during such additional six month period the executive secures new employment, the benefits terminate immediately. |
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Cash | Benefits | |||||||||||
Circumstance of Termination | Payment ($) | Continuation ($) | Total ($) | |||||||||
Termination by the company without cause, not following a change in control | 416,393 | 22,552 | 438,945 | |||||||||
Termination by the company without cause or by the executive officer with good reason within 12 months following a change in control | 300,000 | 15,919 | 315,919 |
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Fees Earned or | Option Awards | |||||||||||
Name | Paid in Cash ($)(1) | ($)(2) | Total ($) | |||||||||
Argeris Karabelas, Ph.D.(3) | 34,000 | 539,976 | 573,976 | |||||||||
Kenneth Bate(4) | — | — | — | |||||||||
Robert Cohen(5) | 40,000 | 40,127 | 80,127 | |||||||||
Frank Douglas, M.D., Ph.D.(6) | 24,000 | 92,003 | 116,003 | |||||||||
Zola Horovitz, Ph.D.(7) | 37,000 | 42,946 | 79,946 | |||||||||
Mark Leschly(8) | 38,000 | 42,946 | 80,946 | |||||||||
John Littlechild(9) | 32,000 | 42,946 | 74,946 | |||||||||
Joseph Loscalzo, M.D., Ph.D.(10) | 24,000 | 4,908 | 28,908 | |||||||||
Davey Scoon(11) | 47,500 | 66,774 | 114,274 | |||||||||
Christopher Sobecki | 24,000 | 23,785 | 47,785 |
(1) | Unless otherwise specified, the amount listed under “Fees Earned or Paid in Cash” represents cash compensation earned and paid in fiscal year 2007. | |
(2) | These values reflect grant date fair value using the Black-Scholes option pricing model and applying the principles outlined in SFAS 123R. For stock options granted to non-employees, NitroMed recognizes compensation expense in accordance with the requirements of Emerging Issues Task Force No.96-18, or EITF96-18. Pursuant to EITF96-18, non-employee stock options are remeasured at each reporting date utilizing the Black-Scholes option pricing model. Two of NitroMed’s directors, Dr. Douglas and Dr. Loscalzo, have previously received options in connection with their service on NitroMed’sthen-current scientific advisory board, for which NitroMed applies the provisions of EITF96-18. | |
(3) | The amount listed under “Option Awards” includes the grant fair value date of options Dr. Karabelas received pursuant to his appointment as NitroMed’s interim chief executive officer in March 2006 and his May 2006 agreement to forego any salary or bonus payments to which he would otherwise have been entitled pursuant to the terms of his employment offer letter. Dr. Karabelas relinquished his responsibilities as NitroMed’s interim president and chief executive officer in January 2007. Additional information regarding compensation earned by Dr. Karabelas in his capacity as NitroMed’s interim president and chief executive officer from March 2006 to January 2007 is included under the heading “— Summary Compensation Table” above. | |
(4) | In January 2007, Mr. Bate was named NitroMed’s president and chief executive officer and was also elected a director. Additional information regarding compensation earned by Mr. Bate in his capacity as NitroMed’s president and chief executive officer, as well as in his previous capacity as NitroMed’s chief financial officer, chief operating officer, treasurer and secretary, is included under the heading “Summary Compensation Table” above. | |
(5) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Cohen includes $5,000 earned in 2007 but paid in 2008. | |
(6) | The amount listed under “Option Awards” with respect to Dr. Douglas includes a reversal of stock-based compensation expense for the year ended December 31, 2007 that NitroMed recognized with respect to options Dr. Douglas previously received in connection with his service on NitroMed’s then-current scientific advisory board. |
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(7) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Dr. Horovitz includes $5,000 earned in 2007 but paid in 2008. | |
(8) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Leschly includes $2,000 earned in 2007 but paid in 2008. | |
(9) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Littlechild includes $1,000 earned in 2007 but paid in 2008. Mr. Littlechild has returned to NitroMed the entire amount listed under “Fees Earned or Paid in Cash” that was earned in fiscal year 2007. | |
(10) | The amount listed under “Option Awards” with respect to Dr. Loscalzo includes a reversal of stock-based compensation expense for the year ended December 31, 2007 that NitroMed recognized with respect to options Dr. Loscalzo previously received in connection with his service on NitroMed’s then-current scientific advisory board. | |
(11) | In addition to cash compensation earned and paid in fiscal year 2007, the amount listed under “Fees Earned or Paid in Cash” with respect to Mr. Scoon includes $8,000 earned in 2007 but paid in 2008. |
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September 30, 2008
Purchase | ||||||||||||||||||||
Archemix | NitroMed | Divestiture | Accounting | Pro Forma | ||||||||||||||||
Historical | Historical | Adjustments | Adjustments | Combined | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 11,374 | $ | 13,631 | $ | 25,881 | (a) | $ | 50,886 | |||||||||||
Marketable securities | 26,320 | 4,192 | — | 30,512 | ||||||||||||||||
Receivables | 851 | 1,979 | (1,979 | )(a) | 851 | |||||||||||||||
Inventories | — | 1,230 | (1,230 | )(a) | — | |||||||||||||||
Prepaid expenses and other current assets | 1,213 | 170 | — | 1,383 | ||||||||||||||||
Total current assets | 39,758 | 21,202 | 22,672 | 83,632 | ||||||||||||||||
Property and equipment, net | 3,387 | 137 | (97 | )(a) | 3,427 | |||||||||||||||
Long-term marketable securities | — | 1,553 | — | 1,553 | ||||||||||||||||
Total assets | $ | 43,145 | $ | 22,892 | $ | 22,575 | $ | 88,612 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 702 | $ | 690 | $ | — | $ | — | $ | 1,392 | ||||||||||
Accrued expenses | 3,969 | 3,107 | (1,828 | )(a) | 1,280 | (f) | 6,528 | |||||||||||||
Estimated taxes on asset sale | — | — | 291 | (b) | 291 | |||||||||||||||
Transaction cost liabilities | 805 | (c) | 3,380 | (e) | 6,648 | |||||||||||||||
2,463 | (f) | |||||||||||||||||||
Accrued restructuring | — | 71 | — | 71 | ||||||||||||||||
Deferred revenue | 6,356 | — | — | 6,356 | ||||||||||||||||
Total current liabilities | 11,027 | 3,868 | (732 | ) | 7,123 | 21,286 | ||||||||||||||
Deferred revenue, long-term | 6,227 | — | — | 6,227 | ||||||||||||||||
Deferred rent, long-term | 2,597 | — | — | 2,597 | ||||||||||||||||
Preferred stock warrant liability | 11 | — | — | (11 | )(g) | — | ||||||||||||||
Total liabilities | 19,862 | 3,868 | (732 | ) | 7,112 | 30,110 | ||||||||||||||
Redeemable convertible preferred stock: | ||||||||||||||||||||
Series A redeemable convertible preferred stock | 76,689 | — | — | (76,689 | )(h) | — | ||||||||||||||
Series B redeemable convertible preferred stock | 69,797 | — | — | (69,797 | )(h) | — | ||||||||||||||
Series C redeemable convertible preferred stock | 29,818 | — | — | (29,818 | )(h) | — | ||||||||||||||
Stockholders’ (deficit) equity: | ||||||||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 16 | 460 | — | (16 | )(h) | 1,462 | ||||||||||||||
1,002 | (h) | |||||||||||||||||||
Additional paid-in capital | 3,425 | 368,526 | — | 175,318 | (h) | 213,502 | ||||||||||||||
11 | (g) | |||||||||||||||||||
(3,380 | )(e) | |||||||||||||||||||
(368,526 | )(j) | |||||||||||||||||||
38,128 | (i) | |||||||||||||||||||
Accumulated other comprehensive income (loss) | (147 | ) | 11 | — | (11 | )(j) | (147 | ) | ||||||||||||
Accumulated deficit | (156,315 | ) | (349,973 | ) | 23,307 | (d) | 330,409 | (j) | (156,315 | ) | ||||||||||
(3,743 | )(f) | |||||||||||||||||||
Total stockholders’ (deficit) equity | (153,021 | ) | 19,024 | 23,307 | 169,192 | 58,502 | ||||||||||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ (deficit) equity | $ | 43,145 | $ | 22,892 | $ | 22,575 | $ | — | $ | 88,612 | ||||||||||
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Nine Months Ended September 30, 2008 | ||||||||||||||||||||
Archemix | NitroMed | Divestiture | Pro Forma | Pro Forma | ||||||||||||||||
Historical | Historical | Adjustments | Adjustments | Combined | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Product sales | $ | — | $ | 11,767 | $ | (11,767 | )(k) | $ | — | $ | — | |||||||||
Revenue earned under collaboration agreements | 12,743 | — | 12,743 | |||||||||||||||||
Research and development support | 7,998 | — | 7,998 | |||||||||||||||||
Total revenues | 20,741 | 11,767 | (11,767 | ) | 20,741 | |||||||||||||||
Cost and operating expenses: | ||||||||||||||||||||
Cost of product sales | — | 2,943 | (2,943 | )(k) | — | |||||||||||||||
Research and development | 24,715 | 2,622 | (2,622 | )(k) | 24,715 | |||||||||||||||
General and administrative | 7,642 | 8,438 | (8,438 | )(k) | 7,642 | |||||||||||||||
Restructuring charge | — | 2,708 | (2,708 | )(k) | — | |||||||||||||||
Total cost and operating expenses | 32,357 | 16,711 | (2,943 | ) | (13,768 | ) | 32,357 | |||||||||||||
Loss from operations | (11,616 | ) | (4,944 | ) | (8,824 | ) | 13,768 | (11,616 | ) | |||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income, net | 1,139 | 489 | — | 1,628 | ||||||||||||||||
Other income (expense), net | 24 | (137 | ) | 113 | (g) | — | ||||||||||||||
Net loss | (10,453 | ) | (4,592 | ) | (8,824 | ) | 13,881 | (9,988 | ) | |||||||||||
Accretion of redeemable convertible preferred stock | (6,400 | ) | — | 6,400 | (m) | — | ||||||||||||||
Net loss attributable to common stockholders | $ | (16,853 | ) | $ | (4,592 | ) | $ | (8,824 | ) | $ | 20,281 | $ | (9,988 | ) | ||||||
Basic and diluted net loss per share attributable to common stockholders | $ | (0.10 | ) | $ | (0.07 | ) | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 45,954 | 98,980 | (l) | 144,934 | ||||||||||||||||
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Twelve Months Ended December 31, 2007 | ||||||||||||||||||||
Archemix | NitroMed | Divestiture | Pro Forma | Pro Forma | ||||||||||||||||
Historical | Historical | Adjustment | Adjustments | Combined | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Product sales | $ | — | $ | 15,269 | $ | (15,269 | )(k) | $ | — | $ | — | |||||||||
Revenue earned under collaboration agreements | 9,436 | 750 | (750 | )(k) | 9,436 | |||||||||||||||
Research and development support | 7,932 | — | — | 7,932 | ||||||||||||||||
Total revenues | 17,368 | 16,019 | (15,269 | ) | (750 | ) | 17,368 | |||||||||||||
Cost and operating expenses: | ||||||||||||||||||||
Cost of product sales | — | 4,236 | (4,236 | )(k) | — | |||||||||||||||
Research and development | 29,171 | 12,185 | (12,185 | )(k) | 29,171 | |||||||||||||||
General and administrative | 11,123 | 31,358 | (31,358 | )(k) | 11,123 | |||||||||||||||
Restructuring charge | — | 1,004 | (1,004 | )(k) | — | |||||||||||||||
Total operating expenses | 40,294 | 48,783 | (4,236 | ) | (44,547 | ) | 40,294 | |||||||||||||
Loss from operations | (22,926 | ) | (32,764 | ) | (11,033 | ) | 43,797 | (22,926 | ) | |||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income, net | 2,538 | 1,190 | — | 3,728 | ||||||||||||||||
Other income (expense), net | 13 | — | (13 | )(g) | — | |||||||||||||||
Net loss | (20,375 | ) | (31,574 | ) | (11,033 | ) | 43,784 | (19,198 | ) | |||||||||||
Accretion of redeemable convertible preferred stock | (8,534 | ) | — | 8,534 | (m) | — | ||||||||||||||
Net loss attributable to common stockholders | $ | (28,909 | ) | $ | (31,574 | ) | $ | (11,033 | ) | $ | 52,318 | $ | (19,198 | ) | ||||||
Basic and diluted net loss per share attributable to common stockholders | $ | (0.75 | ) | $ | (0.14 | ) | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 41,997 | 93,892 | (l) | 135,889 | ||||||||||||||||
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COMBINED FINANCIAL INFORMATION
1. | Basis of Presentation and Accounting for the Merger |
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FINANCIAL INFORMATION — (Continued)
• | cash cost of operations between the signing of the merger agreement and the closing of the merger, | |
• | NitroMed’s final net cash balance as calculated pursuant to the merger agreement, which partially determines the actual number of shares of NitroMed common stock issued pursuant to the merger, | |
• | the timing of completion of the merger, and | |
• | other changes in NitroMed’s cash balances that occur prior to completion of the merger, which could cause material differences in the information presented below. |
2. | Divestiture, Purchase Accounting and Pro Forma Adjustments |
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• | restricting dividends on the common stock; | |
• | diluting the voting power of the common stock; | |
• | impairing the liquidation rights of the common stock; or | |
• | delaying or preventing changes in control or management of NitroMed. |
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Authorized Capital Stock | NitroMed’s restated certificate of incorporation authorizes the issuance of up to 65,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. | Archemix’s amended and restated certificate of incorporation, as amended, authorizes the issuance of up to 164,215,873 shares of common stock, par value $0.001 per share, and 130,657,202 shares of preferred stock, par value $0.01 per share, of which 51,884,995 shares are designated as “Series A Convertible Preferred Stock,” 53,850,000 shares are designated as “Series B Convertible Preferred Stock,” 14,922,207 shares are designated as “Series C Convertible Preferred Stock,” and 10,000,000 are undesignated. | ||
Number of Directors | NitroMed’s amended and restated bylaws provide that the number of directors be established by resolution of the board of directors, and shall at no time be less than three. NitroMed’s board currently consists of ten directors. | Archemix’s amended and restated bylaws provide that the number of directors be established by resolution of the board of directors, and shall at no time be less than one. The number of directors may be increased or decreased by action of the board of directors, provided, however, that, pursuant to Archemix’s amended and restated certificate of incorporation, as amended, Archemix shall not, |
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without the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A preferred stock and Series B preferred stock, increase the maximum number of directors to a number in excess of 11. The Archemix board of directors currently consists of eight directors. | ||||
Stockholder Nominations and Proposals | NitroMed’s amended and restated bylaws provide that except for any directors entitled to be elected by the holders of preferred stock and any directors elected by the board of directors to fill a vacancy or newly created directorships, a nomination for election to the board of directors of NitroMed at a meeting of the stockholders may be made (i) by or at the direction of the board of directors or (ii) by any stockholder of the corporation who complies with the notice procedures provided in the bylaws and is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting. | Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated bylaws are silent as to stockholder nominations and proposals, provided, however, that the holders of a majority of the Series A and Series B preferred stock, voting together as a separate class, are entitled to elect four directors, and holders of a majority of the preferred stock and common stock, voting together as a class and on an as- converted basis, are entitled to elect the remaining number of directors,one of whom shall be Archemix’s chief executive officer, and at least two of whom shall be unaffiliated non-employee industry outsiders. In addition, if Archemix fails or refuses to redeem all of the shares of preferred stock pursuant to the terms of the amended and restated certificate of incorporation, as amended, then the holders of the preferred stock shall be entitled to elect a majority of the board of directors, as discussed below under “Redemption”. | ||
Classification of Directors | NitroMed’s restated certificate of incorporation and amended and restated bylaws do not provide for the division of the directors into classes. | Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated bylaws do not provide for the division of the board of directors into classes. | ||
Removal of Directors | Under NitroMed’s amended and restated bylaws, a director or the entire board of directors may be removed only for cause by affirmative vote of at least seventy-five percent (75)% of the votes which all the stockholders would be entitled to cast in any annual election of directors. | Under Archemix’s amended and restated bylaws, a director or the entire board of directors may be removed, with or without cause, at an annual or special meeting called for that purpose, by the holders of a majority of the shares then entitled to vote at an election of directors. | ||
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Filling Vacancies on the Board of Directors | Under NitroMed’s restated certificate of incorporation and amended and restated bylaws, subject to the rights of holders of any series of preferred stock, any vacancy or newly created directorships in the board of directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and the term of each director so elected shall continue until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation, or removal. | Under Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated bylaws, unless and until filled by the stockholders, any vacancy or newly created directorships in the board of directors may be filled by vote of a majority of the directors in office, although less than a quorum, or by a sole remaining director, and the term of each director so elected shall continue until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation, or removal; provided, however, that with respect to a vacancy in the office of a director occurring among the directors elected by the holders of a class or series of stock, such vacancy shall be filled only by the affirmative vote or written consent of the holders of a majority of the applicable class or series of stock entitled to elect such member. If at any time there are no directors in office, an election of directors may be held in accordance with the Delaware General Corporation Law. | ||
Stockholder Action by Written Consent | NitroMed’s restated certificate of incorporation and amended and restated bylaws provide that the stockholders of the corporation may not take any action by written consent in lieu of a meeting. | Archemix’s amended and restated bylaws provide that any action to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. | ||
Notice of Annual Meeting | Under NitroMed’s amended and restated bylaws, notice of the annual meeting must include the date, time, place and the means of | Under Archemix’s amended and restated bylaws, written notice of the annual meeting must include the date, time, place, and purpose of |
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remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. Notice shall be given not less than 10 nor more than 60 days prior to the annual meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the Delaware General Corporation Law) by the stockholder to whom the notice is given. | such meeting. Notice shall be given not less than 10 nor more than 60 days prior to the annual meeting to each stockholder entitled to vote at such meeting. | |||
Special Meeting of Stockholders | NitroMed’s amended and restated bylaws provide that a special meeting of stockholders may be called at any time by the chief executive officer, the chairman of the board of directors, or the board of directors, but such special meetings may not be called by any other person or persons. Notice of special meetings must include the date, time, place, purpose and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. Notice must be given not less than 10 nor more than 60 days prior to the special meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the Delaware General Corporation Law) by the stockholder to whom the notice is given. | Archemix’s amended and restated bylaws provide that a special meeting of stockholders may be called by the president, the chairman of the board of directors, the board of directors, or by the secretary or any other officer upon the written request of one or more stockholders holding of record at least a majority of the outstanding shares of Archemix stock entitled to vote at such meeting and stating the purpose of the proposed meeting. Written notice of special meetings must include the date, time, place and purpose and must be given not less than 10 nor more than 60 days prior to the special meeting to each stockholder entitled to vote at such meeting. | ||
Amendment of Certificate of Incorporation | NitroMed’s restated certificate of incorporation provides that NitroMed reserves the right to amend, alter, change or repeal any provision contained in its certificate of incorporation. | Archemix’s amended and restated certificate of incorporation, as amended, provides that Archemix reserves the right to amend, alter, change or repeal any provision contained in its certificate of incorporation. | ||
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Amendment of Bylaws | NitroMed’s restated certificate of incorporation and amended and restated bylaws provide the board of directors with the power to alter, amend, repeal, or adopt new bylaws by the affirmative vote of a majority of the directors present at any regular or special meeting of the board of directors at which a quorum is present, and the stockholders with the power to alter, amend, repeal or adopt new bylaws by the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors. | Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated bylaws provide the board of directors with the power to alter, amend, repeal, or adopt new bylaws by the affirmative vote of a majority of the directors present at any regular or special meeting of the board of directors at which a quorum is present, and the stockholders with the power to alter, amend, repeal or adopt new bylaws by the affirmative vote of the holders of a majority of the shares of the capital stock of Archemix issued and outstanding and entitled to vote at any regular meeting of stockholders, or at any special meeting of stockholders provided notice of such action shall have been stated in the notice of such special meeting. | ||
Voting Stock | Under NitroMed’s amended and restated bylaws, the holders of common stock are entitled to one vote for each share of stock (and a proportionate vote for each fractional share) held by them. | Under Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated bylaws, the holders of common stock are entitled to one vote for each share of stock (and a proportionate vote for each fractional share) held by them and holders of preferred stock are entitled to such number of votes per share as equals the number of shares of common stock (including fractions of a share) into which such share of preferred stock held by them is convertible. Each share of preferred stock is currently convertible into one share of common stock. | ||
Conversion Rights and Protective Provisions | Under NitroMed’s restated certificate of incorporation, authority is expressly granted to the board of directors from time to time to issue the preferred stock in one or more series, and in connection with the creation of any such series, by resolution or resolutions providing for the issuance of the share thereof, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and | Under Archemix’s amended and restated certificate of incorporation, as amended, so long as at least 25% of the shares of the Series A and Series B preferred stock remain outstanding, Archemix may not, without the affirmative vote or written consent of the holders of at least two-thirds of the then outstanding shares of Series A and Series B preferred stock, voting together as a single class on an as- converted basis: consent to or effect any liquidation, dissolution or |
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relative participating, option or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the full extent permitted by the Delaware General Corporation Law. | winding-up of Archemix; merge or consolidate with any other entity; sell, abandon, transfer, lease or otherwise dispose of all or a substantial portion of its properties or assets; amend, alter or repeal any provision of the certificate of incorporation or bylaws; create or authorize another series of stock or increase the number of authorized shares of any series of stock; create or authorize any obligation or security convertible into shares of any class or series of stock; enter into any agreement, including financing agreements, which in the aggregate would result in Archemix borrowing more than $250,000, unless approved by the board of directors, including a majority of the directors designated by the holders of Archemix preferred stock; or purchase, redeem or pay dividends on any series of stock other than the Series A and Series B preferred stock, subject to certain exceptions. In addition, Archemix may not amend, alter or repeal any provision of the certificate of incorporation or bylaws or amend, alter or change the powers, preferences, rights, or privileges of each of the Series A preferred stock, Series B preferred stock or Series C preferred stock, in a manner adverse to such series, without the affirmative vote or written consent of the holders of at least two-thirds of the shares of such series. Further, the affirmative vote or written consent of the holders of at least two-thirds of the shares of Series B preferred stock is required in order for Archemix to declare or pay any dividend (excluding a common stock dividend) on, make a distribution on, or repurchase or redeem (in each case, subject to certain exceptions) any Archemix capital stock junior to, or of equal seniority with, the Series B preferred stock in liquidation or junior to, or of equal seniority with, the Series B preferred stock with regard to the payment of dividends. Also, the |
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affirmative vote or written consent of the holders of at least two-thirds of the shares of Series C preferred stock is required in order for Archemix to authorize any additional series of preferred stock which is not pari passu or junior to the Series C preferred stock with respect to dividends, liquidation, redemption and/or other matters, subject to certain exceptions. | ||||
Each share of Archemix preferred stock is convertible at any time at the election of the holder into that number of shares of common stock determined by dividing the purchase price of such share by the conversion price, which is initially equal to the purchase price, adjustable for certain dilutive events such as stock splits. Each share of Archemix preferred stock automatically converts, at the conversion rate described above, upon an initial public offering resulting in gross proceeds to Archemix of at least $30.0 million at a per share price to the public of at least $2.00, or an equity financing meeting certain criteria that has been approved by the holders of at least two-thirds of the outstanding shares of Series A and Series B preferred stock, voting together as a single class on an as-converted basis, and the affirmative election by such holders of Series A and Series B preferred stock to convert the shares of preferred stock into common stock. Notwithstanding the foregoing, upon the affirmative vote or written consent of the holders of at least two-thirds of the shares of each series of preferred stock, each share of such series of preferred stock will automatically convert into shares of common stock. In addition, all shares of Archemix preferred stock will convert automatically upon the closing of a firm commitment underwritten public offering of Archemix’s common stock, without any minimum proceeds or per share price, upon the affirmative vote or |
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written consent of the holders of at least two-thirds of the Series A and Series B preferred stock voting together as a single class on an as-converted basis. | ||||
In the event of a liquidation, dissolution or winding up of Archemix, the holders of the Series B preferred stock receive preferential treatment over the holders of the Series A preferred stock, Series C preferred stock, and common stock; the holders of the Series A preferred stock receive preferential treatment over the holders of Series C preferred stock and common stock; and the holders of Series C preferred stock receive preferential treatment over the holders of common stock. | ||||
Dividends | NitroMed’s restated certificate of incorporation and amended and restated bylaws provide that dividends may be declared and paid on the common stock from funds lawfully available as determined by the board of directors and subject to any preferential dividend or other rights of any then outstanding preferred stock. The board of directors may fix an advanced record date for determination of the stockholders entitled to receive payment of any dividend. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates. | Archemix’s amended and restated bylaws provide that, subject to the provisions of Archemix’s certificate of incorporation, the board of directors may declare dividends upon the common stock at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of capital stock. The holders of Series A preferred stock and Series B preferred stock are entitled to receive dividends equal to any dividend paid on the common stock. In addition, the holders of the Series A preferred stock and Series B preferred stock are entitled to receive dividends at a rate of $0.08 per share on an annual basis, payable in preference to any dividend payment on the Series C preferred stock or other class or series of junior preferred stock or common stock, and the holders of Series B preferred stock are entitled to receive dividends in preference to the Series A preferred stock. The dividends on the Series A and Series B preferred stock accrue, whether or not earned or declared, and are cumulative. All accrued dividends are forfeited upon conversion of the Series A preferred stock and Series B preferred stock, including in connection with the |
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conversion of the preferred stock upon the closing of Archemix’s initial public offering. After payment of dividends on the Series A and Series B preferred stock, the holders of the Series C preferred stock and common stock may receive dividends when and if declared by the board of directors out of legally available funds. | ||||
Redemption | Pursuant to NitroMed’s restated certificate of incorporation and amended and restated bylaws, the stockholders of NitroMed do not have any redemption rights. | Pursuant to Archemix’s amended and restated certificate of incorporation, as amended, the holders of two-thirds of the then outstanding shares of preferred stock, voting together as a class on an as-converted basis, may require Archemix to redeem all of the outstanding preferred stock in three equal installments, with one-third of the shares of preferred stock redeemed on the first redemption date, one-third of the shares of preferred stock redeemed on the first anniversary of the first redemption date and the remainder redeemed on the second anniversary of the first redemption date. The first redemption date may not be earlier than March 31, 2009. If funds are available, the redemption price is equal to the liquidation preference payment on the first redemption date. If sufficient funds are not available, the shares of the Series B preferred stock will be redeemed in preference to the shares of Series A preferred stock and the shares of Series A preferred stock will be redeemed in preference to the shares of Series C preferred stock. All shares not redeemed shall be entitled to receive interest accruing daily at the rate of 8% per year, and if Archemix fails or refuses to redeem all of the shares of preferred stock subject to redemption within 90 days of the redemption date, then the holders of the preferred stock shall be entitled to elect a majority of the board of directors. | ||
Indemnification and Limitation of Liability | NitroMed’s restated certificate of incorporation provides that NitroMed shall, to the fullest extent | Archemix’s amended and restated certificate of incorporation, as amended, and amended and restated |
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permissible under the Delaware General Corporation Law, indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative or each person who was or is a party to or threatened to be made a party to any threatened, pending or completed action or suit by or in the right of NitroMed by reason of the fact that he or she is or was, or has agreed to become, a director or officer of NitroMed, or is or was serving , or has agreed to serve, at the request of NitroMed, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorney’s fees). For any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of NitroMed), NitroMed shall also indemnify each indemnitee against judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if indemnitee acted in good faith and in a manner which the indemnified party to be in, or not opposed to, the best interests of NitroMed, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. | bylaws provide that Archemix shall, to the fullest extent permissible under the Delaware General Corporation Law, indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of Archemix against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of such person in connection with such action, suit or proceeding and any appeal therefrom, and advance expenses to such person in connection with any such proceeding. The right to indemnification and advancement of expenses is not exclusive of any other rights to which such persons may be entitled. Archemix’s amended and restated certificate of incorporation, as amended, provides that, to the fullest extent permissible under applicable law, members of the board of directors shall not be personally liable to Archemix or its stockholders for monetary damages for breach of fiduciary duty. | |||
For any threatened, pending or completed action or suit by or in the right of NitroMed, NitroMed shall also indemnify each indemnitee, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by or on behalf of indemnitee in |
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connection with such action, suit or proceeding and any appeal therefrom, if indemnitee acted in good faith and in a manner which indemnitee reasonably believed to be in, or not opposed to the best interests of NitroMed, except that no indemnification shall be made under this circumstance unless the Court of Chancery of Delaware determines that an award of such expenses (including attorneys’ fees) to the indemnitee is proper. | ||||
The right to indemnification and advancement of expenses is not exclusive of any other rights to which such persons may be entitled. |
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• | each person, entity or group of affiliated persons or entities known to NitroMed to be the beneficial owner of more than 5% of the outstanding shares of NitroMed common stock; | |
• | each member of NitroMed’s board of directors; | |
• | all individuals serving as NitroMed’s principal executive officer during fiscal year 2007, (ii) all individuals serving as NitroMed’s principal financial officer during fiscal year 2007, (iii) each of NitroMed’s three most highly compensated other executive officers who were serving as executive officers on December 31, 2007 and (iv) one additional person for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer on December 31, 2007; and | |
• | all of NitroMed’s directors and executive officers as a group. |
Number of | ||||||||||||||||
Outstanding | Common Stock | |||||||||||||||
Shares of | Underlying | Total Number | Percentage of | |||||||||||||
Common Stock | Options | of Shares | Common Stock | |||||||||||||
Name and Address of | Beneficially | Exercisable | Beneficially | Beneficially | ||||||||||||
Beneficial Owner(1) | Owned | Within 60 Days | Owned | Owned | ||||||||||||
5% Stockholders | ||||||||||||||||
Funds affiliated with HealthCare Ventures, L.L.C. | 3,239,598 | — | 3,239,598 | 7.0 | % | |||||||||||
Nassau Street, Second Floor Princeton, New Jersey 08837(2) | ||||||||||||||||
Rho Ventures | 5,397,711 | — | 5,397,711 | 11.7 | % | |||||||||||
152 West 57th Street, 23rd Floor New York, New York 10019(3) | ||||||||||||||||
Invus Public Equities, L.P. | 4,989,024 | — | 4,989,024 | 10.8 | % | |||||||||||
750 Lexington Avenue, 30th Floor New York, New York 10022(4) | ||||||||||||||||
Deerfield Capital, L.P. | 5,525,345 | — | 5,525,345 | 12.0 | % | |||||||||||
780 Third Avenue, 37th Floor New York, New York 10017(5) |
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Number of | ||||||||||||||||
Outstanding | Common Stock | |||||||||||||||
Shares of | Underlying | Total Number | Percentage of | |||||||||||||
Common Stock | Options | of Shares | Common Stock | |||||||||||||
Name and Address of | Beneficially | Exercisable | Beneficially | Beneficially | ||||||||||||
Beneficial Owner(1) | Owned | Within 60 Days | Owned | Owned | ||||||||||||
Named Executive Officers | ||||||||||||||||
Kenneth Bate | — | 625,558 | 625,558 | 1.3 | % | |||||||||||
James Ham, III(6) | 299 | — | 299 | * | ||||||||||||
Gerald Bruce(7) | 46,072 | — | 46,072 | * | ||||||||||||
Jane Kramer(8) | 37,051 | — | 37,051 | * | ||||||||||||
L. Gordon Letts, Ph.D.(9) | 128,367 | 437,700 | 566,067 | 1.2 | % | |||||||||||
Manuel Worcel, M.D.(10) | 110,717 | — | 110,717 | * | ||||||||||||
Directors | ||||||||||||||||
Robert Cohen | 12,500 | 75,000 | 87,500 | * | ||||||||||||
Frank Douglas, M.D., Ph.D. | — | 60,000 | 60,000 | * | ||||||||||||
Zola Horovitz, Ph.D. | 12,500 | 75,000 | 87,500 | * | ||||||||||||
Argeris Karabelas, Ph.D.(11) | 1,403,460 | 426,249 | 1,829,709 | 3.9 | % | |||||||||||
Mark Leschly(12) | 5,421,455 | 62,500 | 5,483,955 | 11.9 | % | |||||||||||
John Littlechild(13) | 3,306,360 | 64,375 | 3,370,735 | 7.3 | % | |||||||||||
Joseph Loscalzo, M.D., Ph.D. | 3,449 | 154,375 | 157,824 | * | ||||||||||||
Davey Scoon | — | 75,000 | 75,000 | * | ||||||||||||
Christopher Sobecki(14) | 4,989,024 | 25,000 | 5,014,024 | 10.9 | % | |||||||||||
All current directors and executive officers as a group (10 persons) | 15,148,748 | 1,643,057 | 16,791,805 | 35.2 | % |
* | Less than 1% of NitroMed’s outstanding common stock. | |
(1) | Unless otherwise indicated, the address of each stockholder isc/o NitroMed, Inc., 45 Hayden Avenue, Suite 3000, Lexington, Massachusetts 02421. | |
(2) | Consists of 1,240,788 shares of common stock held by HealthCare Ventures V, L.P. and 1,998,810 shares of common stock held by HealthCare Ventures VI, L.P. Mr. Littlechild, a director of NitroMed, is a general partner of HealthCare Partners V, L.P. (which is the general partner of HealthCare Ventures V, L.P.) and HealthCare Partners VI, L.P. (which is the general partner of HealthCare Ventures VI, L.P.). Mr. Littlechild disclaims beneficial ownership of the shares held by each of the funds affiliated with HealthCare Ventures, L.L.C., except to the extent of his pecuniary interest therein. | |
(3) | Consists of 2,647,802 shares of common stock held by Rho Management Trust II, 450,376 shares of common stock held by Rho Management Trust III, 77,932 shares of common stock held by Rho Investment Partners “H” L.P., 21,145 shares of common stock held by Rho Management Partners L.P., 378,884 shares of common stock held by Rho Ventures IV L.P., 891,990 shares of common stock held by Rho Ventures IV (QP) L.P. and 929,582 shares of common stock held by Rho Ventures IV GmbH & Co., Beteiligungs KG. Mr. Leschly, a director of NitroMed, is a managing member of the general partner of Rho Ventures IV, L.P. and Rho Ventures IV (QP), L.P., a managing director of the general partner of Rho Ventures IV GmbH & Co. Beteiligungs KG and a managing partner of the investment advisor to Rho Management Trust II. Mr. Leschly disclaims beneficial ownership of the shares held by each of the funds affiliated with Rho Capital Partners, Inc. except to the extent of his pecuniary interest therein. | |
(4) | Consists of 4,989,024 shares of common stock held by Invus Public Equities, L.P. Mr. Sobecki, a director of NitroMed, is managing director of The Invus Group, LLC, which is an affiliate of Invus Public Equities, L.P. Mr. Sobecki disclaims beneficial ownership of the shares held by Invus Public Equities, L.P., except to the extent of his pecuniary interest therein. | |
(5) | Based upon a Schedule 13D filed with the SEC on September 23, 2008. Consists of 1,945,255 shares of common stock held by Deerfield Special Situations Fund, L.P., whose general partner is Deerfield Capital, L.P., and 3,580,090 shares of common stock held by Deerfield Special Situations |
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Fund International Limited, whose investment manager is Deerfield Management Company, L.P. Mr. Flynn is the managing member of general partner of Deerfield Capital, L.P. and the managing member of the general partner of Deerfield Management Company, L.P. | ||
(6) | Mr. Ham ceased to serve as NitroMed’s vice president, chief financial officer, treasurer and secretary on April 11, 2008. | |
(7) | Mr. Bruce ceased to serve as NitroMed’s senior vice president, commercial operations on March 15, 2008. | |
(8) | Ms. Kramer ceased to serve as NitroMed’s vice president, corporate affairs on April 15, 2008. | |
(9) | Dr. Letts ceased to serve as NitroMed’s senior vice president, research and development and chief scientific officer on May 21, 2007. Pursuant to the terms of a transition agreement, Dr. Letts served as NitroMed’s scientific and technology advisor from May 21, 2007 to May 21, 2008. | |
(10) | Dr. Worcel ceased to serve as NitroMed’s chief medical officer on January 17, 2008. | |
(11) | Includes 1,332,856 shares of common stock held by funds affiliated with Care Capital LLC, 36,885 shares held by Jan and Lotte Leshly and 22,540 shares held by David Ramsay. Mr. Ramsay and Mr. Leschly are partners of Care Capital LLC. Dr. Karabelas, a director of NitroMed, is also a partner of Care Capital LLC. Dr. Karabelas disclaims beneficial ownership of the shares held by each of the funds of NitroMed affiliated with Care Capital LLC, except to the extent of his pecuniary interest therein. Dr. Karabelas served as NitroMed’s interim president and chief executive officer from March 20, 2006 to January 19, 2007. | |
(12) | Includes 5,397,711 shares of common stock held by funds affiliated with Rho Ventures. See Note 3 above. | |
(13) | Includes 3,239,598 shares of common stock held by funds affiliated with HealthCare Ventures, L.L.C. See Note 2 above. | |
(14) | Includes 4,989,024 shares of common stock held by Invus Public Equities, L.P. See Note 4 above. |
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• | each director and named executive officer of Archemix, | |
• | each person or group who is known to the management of Archemix to be the beneficial owner of more than 5% of any class of Archemix voting securities outstanding as of December 1, 2008, and | |
• | all current directors and current executive officers of Archemix as a group. |
Number of | Common | |||||||||||||||
Outstanding | Stock | |||||||||||||||
Shares of | Underlying | Total | Percentage of | |||||||||||||
Common | Options | Number of | Common | |||||||||||||
Stock | Exercisable | Shares | Stock | |||||||||||||
Name and Address of | Beneficially | Within | Beneficially | Beneficially | ||||||||||||
Beneficial Owner | Owned | 60 Days | Owned | Owned | ||||||||||||
5% Stockholders | ||||||||||||||||
Funds affiliated with Atlas Venture(1) | 18,425,000 | — | 18,425,000 | 13.5 | % | |||||||||||
890 Winter Street, Suite 320 Waltham, Massachusetts 02451 | ||||||||||||||||
Funds affiliated with Care Capital II, LLC(2) | 7,000,000 | — | 7,000,000 | 5.1 | % | |||||||||||
Princeton Overlook One 47 Hulfish Street, Suite 310 Princeton, New Jersey 08540 | ||||||||||||||||
Funds affiliated with Highland Capital Partners(3) | 17,500,000 | — | 17,500,000 | 12.8 | % | |||||||||||
92 Hayden Avenue Lexington, Massachusetts 02421 | ||||||||||||||||
Funds affiliated with International Life Sciences Fund III (GP), L.P.(4) | 15,311,443 | — | 15,311,443 | 11.2 | % | |||||||||||
c/o SV Life Science Advisers 60 State Street, Suite 3650 Boston, Massachusetts 02109 |
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Number of | Common | |||||||||||||||
Outstanding | Stock | |||||||||||||||
Shares of | Underlying | Total | Percentage of | |||||||||||||
Common | Options | Number of | Common | |||||||||||||
Stock | Exercisable | Shares | Stock | |||||||||||||
Name and Address of | Beneficially | Within | Beneficially | Beneficially | ||||||||||||
Beneficial Owner | Owned | 60 Days | Owned | Owned | ||||||||||||
Merck KGaA(5) | 14,922,207 | — | 14,922,207 | 10.9 | % | |||||||||||
Frankfurter Street 250 D 64293 Darmstadt, Germany | ||||||||||||||||
Funds affiliated with Prospect Venture Partners II, L.P.(6) | 18,400,000 | — | 18,400,000 | 13.5 | % | |||||||||||
435 Tasso Street, Suite 200 Palo Alto, California 94301 | ||||||||||||||||
Funds affiliated with Rho Ventures(7) | 12,709,306 | — | 12,709,306 | 9.3 | % | |||||||||||
Carnegie Hall Tower 152 57th Street, 23rd Floor New York, New York 10019 | ||||||||||||||||
Named Executive Officers and Directors | ||||||||||||||||
Errol De Souza, Ph.D.(8) | 1,134,375 | 5,749,959 | 6,884,334 | 4.8 | % | |||||||||||
Gregg Beloff(9) | — | 702,693 | 702,693 | * | ||||||||||||
Page Bouchard, D.V.M.(10) | — | 755,000 | 755,000 | * | ||||||||||||
James Gilbert, M.D.(11) | — | 600,000 | 600,000 | * | ||||||||||||
Duncan Higgons(12) | 1,200,000 | 300,000 | 1,500,000 | 1.1 | % | |||||||||||
Peter Barrett, Ph.D.(13) | 18,425,000 | — | 18,425,000 | 13.5 | % | |||||||||||
Corey Mulloy(14) | 17,500,000 | — | 17,500,000 | 12.8 | % | |||||||||||
Michael Ross, Ph.D.(15) | 15,311,443 | — | 15,311,443 | 11.2 | % | |||||||||||
Alex Barkas, Ph.D.(16) | 18,400,000 | — | 18,400,000 | 13.5 | % | |||||||||||
John Maraganore, Ph.D.(17) | — | 130,000 | 130,000 | * | ||||||||||||
Lawrence Best(18) | 600,000 | 182,000 | 782,000 | * | ||||||||||||
Robert Stein, M.D., Ph.D.(19) | — | 110,000 | 110,000 | * | ||||||||||||
All current directors and executive officers as a group (12 persons) | 72,570,818 | 8,529,652 | 81,100,470 | 55.9 | % |
* | Indicates beneficial ownership of less than 1%. | |
(1) | Consists of 18,182,567 shares of Archemix preferred stock held by Atlas Venture Fund V, L.P., and 242,433 shares of Archemix preferred stock held by Atlas Venture Entrepreneurs’ Fund V, L.P. As general partner of these funds, and by virtue of these funds’ relationships as affiliated limited partnerships, Atlas Venture Associates V, L.P., or AVA V LP, may also be deemed to beneficially own these shares. As the general partner of AVA V LP, Atlas Venture Associates V, Inc., or AVA V Inc., may also be deemed to beneficially own these shares. In their capacities as directors of AVA V Inc., each of Messrs. Axel Bichara, Jean-Francois Formela and Christopher Spray may be deemed to beneficially own these shares. Each of Messrs. Bichara, Formela and Spray disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Each of the Atlas Venture funds disclaims beneficial ownership of the shares except to the extent of its pecuniary interest therein. Dr. Barrett, a member of Archemix’s board of directors, is a Partner at Atlas Venture. Dr. Barrett disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(2) | Consists of 6,550,600 shares of Archemix preferred stock held by Care Capital Investments II, L.P. and 449,400 shares of Archemix preferred stock held by Care Capital Offshore Investments II, L.P. The voting and disposition of the shares held by Care Capital Investments II, L.P. and Care Capital Offshore Investments II, L.P. is determined by the managers of Care Capital II, LLC, which is the manager of each of these funds. In their capacities as managers of Care Capital II, LLC, each of Jan Leschly, Argeris Karabelas, Ph.D. and David Ramsay may be deemed to beneficially own these shares. Each of Messrs. Leschly, Karabelas and Ramsay disclaim beneficial ownership of such shares except to the extent of his primary interest therein, the amount of which cannot be determined. |
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(3) | Consists of 10,955,000 shares of Archemix preferred stock held by Highland Capital Partners VI Limited Partnership, or HCP VI, 6,002,500 shares of Archemix preferred stock held by Highland Capital Partners VI-B Limited Partnership, or HCP VI-B, and 542,500 shares of Archemix preferred stock held by Highland Entrepreneurs’ Fund VI Limited Partnership, or HEF VI, collectively the Highland Investing Entities. Highland Management Partners VI Limited Partnership, or HMP, is the general partner of HCP VI and HCP VI-B. HEF VI Limited Partnership, or HEF, is the general partner of HEF VI. Highland Management Partners VI, Inc., or Highland Management, is the general partner of both HMP and HEF. Corey Mulloy, a member of Archemix’s board of directors, is one of eight managing directors of Highland Management. Highland Management, as the general partner of the general partners of the Highland Investing Entities, may be deemed to have beneficial ownership of the shares held by the Highland Investing Entities. The managing directors of Highland Management have shared voting and investment control over all the shares held by the Highland Investing Entities and therefore may be deemed to share beneficial ownership of the shares held by the Highland Investing Entities by virtue of this status as controlling persons of Highland Management. Each of the managing directors of Highland Management disclaims beneficial ownership of the shares held by the Highland Investing Entities except to the extent of his pecuniary interest therein. | |
(4) | Consists of 14,412,879 shares of Archemix preferred stock beneficially owned by International Life Sciences Fund III (LP1), L.P., or ILSF III LP1, 577,485 shares of Archemix preferred stock beneficially owned by International Life Sciences Fund III (LP2), L.P., or ILSF III LP2, 143,204 shares of Archemix preferred stock beneficially owned by International Life Sciences Fund III Strategic Partners, L.P., or ILSF III Strategic Partners, and 177,875 shares of Archemix preferred stock beneficially owned by International Life Sciences Fund III Co-investment, L.P., or ILSF III Co-Invest. International Life Sciences Fund III (GP), L.P., or GP, the general partner of each of ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners, and ILSF III, LLC, the general partner of the GP, may be deemed to share voting and dispositive power over the shares held by each of ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners. ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners (each a “Fund”, or collectively the “Funds”) may be deemed to beneficially own the shares held by each other Fund because of certain contractual relationships among the Funds and their affiliates. Michael Ross, a member of Archemix’s board of directors, is a member of the investment committee of ILSF III, L.L.C. and shares voting and dispositive power over these shares with others. Dr. Ross disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(5) | Represents 14,922,207 shares of Archemix preferred stock held by Merck KGaA. | |
(6) | Consists of 3,950,000 shares of Archemix preferred stock held by Prospect Venture Partners, L.P., or PVP I, and 14,450,000 shares of Archemix preferred stock held by Prospect Venture Partners II, L.P., or PVP II. Alex Barkas, Ph.D., is a managing member of each of the respective general partners of PVP I and PVP II and shares voting and investment power over the shares held by PVP I and PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP I and PVP II, except to the extent of his pecuniary interest therein. | |
(7) | Consists of 3,467,263 shares of Archemix preferred stock held by Rho Management Trust I, 3,904,300 shares of Archemix preferred stock held by Rho Ventures IV GmbH & Co. Beteiligungs KG, 1,591,338 shares of Archemix preferred stock held by Rho Ventures IV, L.P., and 3,746,405 shares of Archemix preferred stock held by Rho Ventures IV (QP), L.P. In their capacities as the managing members, managing directors and managing partners of the general partners and investment advisors of these entities, Habib Kairouz, Mark Leschly and Joshua Ruch may be deemed to have voting and investment control over the shares listed above. Each of Mr. Kairouz, Mr. Leschly and Mr. Ruch disclaim beneficial ownership of these shares except to the extent of their pecuniary interest therein. | |
(8) | Consists of 150,000 shares of Archemix common stock held by Dr. De Souza, 984,375 shares of Archemix common stock held by the De Souza Family Trust, the trustees and beneficiaries of which are Dr. De Souza and his spouse, and options to purchase 5,749,959 shares of Archemix common stock held by Dr. De Souza. Of the shares underlying options, 1,206,250 shares issuable upon exercise of such options will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. |
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(9) | 140,625 shares underlying the options issuable upon exercise to Mr. Beloff will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(10) | 155,000 shares underlying the options issuable upon exercise to Dr. Bouchard will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(11) | 300,000 shares underlying the options issuable upon exercise to Dr. Gilbert will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(12) | Consists of 1,200,000 shares of Archemix common stock held by Mr. Higgons, 375,000 of which were subject to a right of repurchase in favor of Archemix as of December 1, 2008. Of the 300,000 shares underlying options, 187,500 shares issuable upon exercise of such options will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(13) | Consists of 18,182,567 shares of Archemix preferred stock held by Atlas Venture Fund V, L.P., and 242,433 shares of Archemix preferred stock held by Atlas Venture Entrepreneurs’ Fund V, L.P. Peter Barrett, Ph.D., a member of Archemix’s board of directors, is a Partner at Atlas Venture. Dr. Barrett disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(14) | Represents 17,500,000 shares of Archemix preferred stock held by Highland Capital Partners VI Limited Partnership, or HCP VI, Highland Capital Partners VI-B Limited Partnership, or HCP VI-B, and Highland Entrepreneurs’ Fund VI Limited Partnership, or HEF VI, as noted in footnote 3. Mr. Mulloy disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(15) | Represents 15,311,443 shares of Archemix preferred stock held by funds affiliated with International Life Sciences Fund III (GP), L.P. as noted in footnote 4. Dr. Ross disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(16) | Consists of 3,950,000 shares of Archemix preferred stock held by Prospect Venture Partners, L.P., or PVP I, and 14,450,000 shares of Archemix preferred stock held by Prospect Venture Partners II, L.P., or PVP II, as noted in footnote 6. Alex Barkas, Ph.D., a member of Archemix’s board of directors, is a managing member of each of the respective general partners of PVP I and PVP II and shares voting and investment power over the shares held by PVP I and PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP I and PVP II, except to the extent of his pecuniary interest therein. | |
(17) | 50,000 shares underlying the options issuable upon exercise to Dr. Maraganore will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(18) | Consists of 600,000 shares of Archemix preferred stock and options to purchase 182,000 shares of Archemix common stock held by Mr. Best, of which 28,000 shares underlying such options issuable upon exercise will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(19) | 80,000 shares underlying the options issuable upon exercise to Dr. Stein will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. |
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Percent of | ||||||||||||
Number of | Common | |||||||||||
Shares of | Options and | Stock | ||||||||||
Common | Warrants | Beneficially | ||||||||||
Stock | Exercisable | Owned of the | ||||||||||
Beneficially | Within | Combined | ||||||||||
Name of Beneficial Owner | Owned | 60 Days | Company | |||||||||
5% Stockholders | ||||||||||||
Funds affiliated with Atlas Venture(1) | 14,742,091 | — | 10.1 | % | ||||||||
890 Winter Street, Suite 320 Waltham, Massachusetts 02451 | ||||||||||||
Funds affiliated with Highland Capital Partners(2) | 14,001,986 | — | 9.6 | % | ||||||||
92 Hayden Avenue Lexington, Massachusetts 02421 | ||||||||||||
Funds affiliated with International Life Sciences Fund III (GP), L.P.(3) | 12,250,888 | — | 8.4 | % | ||||||||
c/o SV Life Science Advisers 60 State Street, Suite 3650 Boston, Massachusetts 02109 | ||||||||||||
Merck KGaA | 7,640,899 | — | 5.2 | % | ||||||||
Frankfurter Street 250 D 64293 Darmstadt, Germany |
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Percent of | ||||||||||||
Number of | Common | |||||||||||
Shares of | Options and | Stock | ||||||||||
Common | Warrants | Beneficially | ||||||||||
Stock | Exercisable | Owned of the | ||||||||||
Beneficially | Within | Combined | ||||||||||
Name of Beneficial Owner | Owned | 60 Days | Company | |||||||||
Funds affiliated with Prospect Venture Partners II, L.P.(4) | 14,722,088 | — | 10.1 | % | ||||||||
435 Tasso Street, Suite 200 Palo Alto, California 94301 | ||||||||||||
Funds affiliated with Rho Ventures(5) | 15,566,595 | — | 10.6 | % | ||||||||
Carnegie Hall Tower 152 57th Street, 23rd Floor New York, New York 10019 | ||||||||||||
Directors and Executive Officers | ||||||||||||
Kenneth Bate(6) | — | 150,000 | * | |||||||||
Gregg Beloff(7) | — | 359,813 | * | |||||||||
Page Bouchard, D.V.M.(8) | — | 386,596 | * | |||||||||
James Gilbert, M.D.(9) | — | 307,229 | * | |||||||||
Duncan Higgons(10) | 614,458 | 768,072 | * | |||||||||
Errol De Souza, Ph.D.(11) | 580,855 | 2,944,259 | 2.4 | % | ||||||||
Alex Barkas, Ph.D.(12) | 14,722,088 | — | 10.1 | % | ||||||||
Peter Barrett, Ph.D.(13) | 14,742,091 | — | 10.1 | % | ||||||||
John Maraganore, Ph.D.(14) | — | 66,566 | * | |||||||||
Mark Leschly(15) | 15,566,595 | — | 10.6 | % | ||||||||
Michael Ross(16) | 12,250,888 | — | 8.4 | % | ||||||||
Davey Scoon, C.P.A.(17) | — | 15,000 | * | |||||||||
All directors and executive officers as a group (12 persons) | 58,476,975 | 4,383,077 | 40.6 | % |
* | Less than 1% | |
(1) | Consists of 14,548,118 shares held by Atlas Venture Fund V, L.P., and 193,973 shares held by Atlas Venture Entrepreneurs’ Fund V, L.P. As general partner of these funds, and by virtue of these funds’ relationships as affiliated limited partnerships, Atlas Venture Associates V, L.P., or AVA V LP, may also be deemed to beneficially own these shares. As the general partner of AVA V LP, Atlas Venture Associates V, Inc., or AVA V Inc., may also be deemed to beneficially own these shares. In their capacities as directors of AVA V Inc., each of Messrs. Axel Bichara, Jean-Francois Formela and Christopher Spray may be deemed to beneficially own these shares. Each of Messrs. Bichara, Formela and Spray disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Each of the Atlas Venture funds disclaims beneficial ownership of the shares except to the extent of its pecuniary interest therein. Dr. Barrett, a member of Archemix’s board of directors, is a Partner at Atlas Venture. Dr. Barrett disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(2) | Consists of 8,765,244 shares held by Highland Capital Partners VI Limited Partnership, or HCP VI, 4,802,681 shares held by Highland Capital Partners VI-B Limited Partnership, or HCP VI-B, and 434,061 shares held by Highland Entrepreneurs’ Fund VI Limited Partnership, or HEF VI, collectively the Highland Investing Entities. Highland Management Partners VI Limited Partnership, or HMP, is the general partner of HCP VI and HCP VI-B. HEF VI Limited Partnership, or HEF, is the general partner of HEF VI. Highland Management Partners VI, Inc., or Highland Management, is the general partner of both HMP and HEF. There are eight managing directors of Highland Management. Highland Management, as the general partner of the general partners of the Highland Investing Entities, and may be deemed to have beneficial ownership of the shares held by the Highland Investing Entities. The managing directors of Highland Management have shared voting and investment control over all the shares held by the Highland Investing Entities and therefore may be deemed to share beneficial ownership of the shares |
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held by the Highland Investing Entities by virtue of this status as controlling persons of Highland Management. Each of the managing directors of Highland Management disclaims beneficial ownership of the shares held by the Highland Investing Entities except to the extent of his pecuniary interest therein. | ||
(3) | Consists of 11,531,939 shares beneficially owned by International Life Sciences Fund III (LP1), L.P., or ILSF III LP1, 462,052 shares beneficially owned by International Life Sciences Fund III (LP2), L.P., or ILSF III LP2, 114,578 shares beneficially owned by International Life Sciences Fund III Strategic Partners, L.P., or ILSF III Strategic Partners, and 142,319 shares beneficially owned by International Life Sciences Fund III Co-investment, L.P., or ILSF III Co-Invest. International Life Sciences Fund III (GP), L.P., or GP, the general partner of each of ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners, and ILSF III, LLC, the general partner of the GP, may be deemed to share voting and dispositive power over the shares held by each of ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners. ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners (each a “Fund”, or collectively the “Funds”) may be deemed to beneficially own the shares held by each other Fund because of certain contractual relationships among the Funds and their affiliates. Michael Ross, a member of Archemix’s board of directors, is a member of the investment committee of ILSF III, L.L.C. and shares voting and dispositive power over these shares with others. Dr. Ross disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(4) | Consists of 3,160,448 shares held by Prospect Venture Partners, L.P., or PVP I, and 11,561,640 shares held by Prospect Venture Partners II, L.P., or PVP II. Alex Barkas, Ph.D., is a managing member of each of the respective general partners of PVP I and PVP II and shares voting and investment power over the shares held by PVP I and PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP I and PVP II, except to the extent of his pecuniary interest therein. | |
(5) | Consists of 2,647,802 share held be Rho Management Trust II, 450,376 shares held by Rho Management Trust III, 77,932 shares held by Rho Investment Partners “H” L.P., 21,145 shares held by Rho Management Partners L.P., 3,153,087 shares held by Rho Management Trust I, 4,053,465 shares held by Rho Ventures IV GmbH & Co. Beteiligungs KG, 1,652,134 shares held by Rho Ventures IV, L.P., and 3,889,538 shares held by Rho Ventures IV (QP), L.P. Mr. Leschly, a director of Archemix, is a managing member of the general partner of Rho Ventures IV, L.P. and Rho Ventures IV (QP), L.P., a managing director of the general partner of Rho Ventures IV, GmbH & Co. Beteiligungs KG and a managing partner of the investment advisor to Rho Management Trust II. Mr. Leschly disclaims beneficial ownership of the shares held by each of the funds affiliated with Rho Capital Partners, Inc. except to the extent of his pecuniary interest therein. | |
(6) | Assumes the cancellation of options to purchase 500,000 shares of NitroMed common stock at the closing of the merger pursuant to option cancellation agreements entered into by NitroMed and Mr. Bate in connection with the merger. | |
(7) | 72,006 shares underlying the options issuable upon exercise to Mr. Beloff will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(8) | 79,367 shares underlying the options issuable upon exercise to Dr. Bouchard will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(9) | 153,614 shares underlying the options issuable upon exercise to Dr. Gilbert will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(10) | Consists of 614,458 shares of Archemix common stock held by Mr. Higgons, 192,018 of which were subject to a right of repurchase in favor of Archemix as of December 1, 2008. Of the 153,614 shares underlying options, 96,009 shares issuable upon exercise of such options will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(11) | Consists of 76,807 shares held by Dr. De Souza, 504,048 shares held by the De Souza Family Trust, the trustees and beneficiaries of which are Dr. De Souza and his spouse, and options to purchase 2,944,259 shares of Archemix common stock held by Dr. De Souza. Of the shares underlying options, 617,658 shares issuable upon exercise of such options will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. |
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(12) | Consists of 3,160,448 shares held by Prospect Venture Partners, L.P., or PVP I, and 11,561,640 shares held by Prospect Venture Partners II, L.P., or PVP II, as noted in footnote 4. Alex Barkas, Ph.D., a member of Archemix’s board of directors, is a managing member of each of the respective general partners of PVP I and PVP II and shares voting and investment power over the shares held by PVP I and PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP I and PVP II, except to the extent of his pecuniary interest therein. | |
(13) | Consists of 14,548,118 shares held by Atlas Venture Fund V, L.P., and 193,973 shares held by Atlas Venture Entrepreneurs’ Fund V, L.P., as noted in footnote 1. Peter Barrett, Ph.D., a member of Archemix’s board of directors, is a Partner at Atlas Venture. Dr. Barrett disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(14) | 35,843 shares underlying the options issuable upon exercise to Dr. Maraganore will be subject to a right of repurchase in favor of Archemix if such options are exercised within 60 days of December 1, 2008. | |
(15) | Includes 15,566,595 shares held by funds affiliated with Rho Ventures. See Note 5 above. | |
(16) | Represents 12,250,888 shares held by funds affiliated with International Life Sciences Fund III (GP), L.P. as noted in footnote 3. Dr. Ross disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(17) | Assumes the cancellation of options to purchase 60,000 shares of NitroMed common stock at the closing of the merger pursuant to option cancellation agreements entered into by NitroMed and Mr. Scoon in connection with the merger. |
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Number of | ||||||||||||||||||||
Shares of Common | Shares | Shares of Common | ||||||||||||||||||
Stock | of | Stock | ||||||||||||||||||
Beneficially Owned | Common | to be Beneficially | ||||||||||||||||||
Prior | Stock | Owned | ||||||||||||||||||
to the Offering | Being | After the Offering | ||||||||||||||||||
Name of Selling Stockholder(1) | Number | Percentage | Offered | Number | Percentage | |||||||||||||||
Directors and Officers: | ||||||||||||||||||||
Errol De Souza, Ph.D.(2) | 3,525,114 | 2.4 | % | 3,525,114 | 0 | 0% |
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Number of | ||||||||||||||||||||
Shares of Common | Shares | Shares of Common | ||||||||||||||||||
Stock | of | Stock | ||||||||||||||||||
Beneficially Owned | Common | to be Beneficially | ||||||||||||||||||
Prior | Stock | Owned | ||||||||||||||||||
to the Offering | Being | After the Offering | ||||||||||||||||||
Name of Selling Stockholder(1) | Number | Percentage | Offered | Number | Percentage | |||||||||||||||
Duncan Higgons(3) | 768,072 | * | 768,072 | 0 | 0% | |||||||||||||||
Gregg Beloff(4) | 359,813 | * | 359,813 | 0 | 0% | |||||||||||||||
Page Bouchard, D.V.M.(5) | 386,596 | * | 386,596 | 0 | 0% | |||||||||||||||
James Gilbert, M.D.(6) | 307,229 | * | 307,229 | 0 | 0% | |||||||||||||||
John Maraganore(7) | 66,566 | * | 66,566 | 0 | 0% | |||||||||||||||
Lawrence Best(8) | 573,260 | * | 573,260 | 0 | 0% | |||||||||||||||
Robert Stein, M.D., Ph.D.(9) | 56,325 | * | 56,325 | 0 | 0% | |||||||||||||||
10% Stockholders: | ||||||||||||||||||||
Atlas Venture Entrepreneurs’ Fund V, L.P.(10) | 193,973 | * | 193,973 | 0 | 0% | |||||||||||||||
890 Winter Street, Suite 320 Waltham, Massachusetts 02451 | ||||||||||||||||||||
Atlas Venture Fund V, L.P.(10) | 14,548,118 | 9.9 | % | 14,548,118 | 0 | 0% | ||||||||||||||
890 Winter Street, Suite 320 Waltham, Massachusetts 02451 | ||||||||||||||||||||
Highland Capital Partners VI Limited Partnership(11) | 8,765,244 | 6.0 | % | 8,765,244 | 0 | 0% | ||||||||||||||
92 Hayden Avenue Lexington, Massachusetts 02421 | ||||||||||||||||||||
Highland Capital Partners VI-B Limited Partnership(11) | 4,802,681 | 3.3 | % | 4,802,681 | 0 | 0% | ||||||||||||||
92 Hayden Avenue Lexington, Massachusetts 02421 | ||||||||||||||||||||
Highland Entrepreneurs’ Fund VI Limited Partnership(11) | 434,061 | * | 434,061 | 0 | 0% | |||||||||||||||
92 Hayden Avenue Lexington, Massachusetts 02421 | ||||||||||||||||||||
International Life Sciences Fund III (LP1), L.P.(12) | 11,531,939 | 7.9 | % | 11,531,939 | 0 | 0% | ||||||||||||||
c/o SV Life Sciences Advisers 60 State Street, Suite 36350 Boston, Massachusetts 02109 | ||||||||||||||||||||
International Life Sciences Fund III (LP2), L.P.(12) | 462,052 | * | 462,052 | 0 | 0% | |||||||||||||||
c/o SV Life Sciences Advisers 60 State Street, Suite 36350 Boston, Massachusetts 02109 | ||||||||||||||||||||
International Life Sciences Fund III Co-Investment, L.P.(12) | 142,319 | * | 142,319 | 0 | 0% | |||||||||||||||
c/o SV Life Sciences Advisers 60 State Street, Suite 36350 Boston, Massachusetts 02109 | ||||||||||||||||||||
International Life Sciences Fund III Strategic Partners, L.P.(12) | 114,578 | * | 114,578 | 0 | 0% | |||||||||||||||
c/o SV Life Sciences Advisers 60 State Street, Suite 36350 Boston, Massachusetts 02109 |
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Number of | ||||||||||||||||||||
Shares of Common | Shares | Shares of Common | ||||||||||||||||||
Stock | of | Stock | ||||||||||||||||||
Beneficially Owned | Common | to be Beneficially | ||||||||||||||||||
Prior | Stock | Owned | ||||||||||||||||||
to the Offering | Being | After the Offering | ||||||||||||||||||
Name of Selling Stockholder(1) | Number | Percentage | Offered | Number | Percentage | |||||||||||||||
Merck KGaA | 7,640,899 | 5.2 | % | 7,640,899 | 0 | 0% | ||||||||||||||
Frankfurter Street 250 D 64293 Darmstadt, Germany | ||||||||||||||||||||
Prospect Venture Partners II, L.P.(13) | 11,561,640 | 7.9 | % | 11,561,640 | 0 | 0% | ||||||||||||||
435 Tasso Street, Suite 200 Palo Alto, California 94301 | ||||||||||||||||||||
Prospect Venture Partners, L.P.(13) | 3,160,448 | 2.2 | % | 3,160,448 | 0 | 0% | ||||||||||||||
435 Tasso Street, Suite 200 Palo Alto, California 94301 | ||||||||||||||||||||
Total: | 69,400,927 | 46.0 | % | 69,400,927 | 0 | 0% |
* | Less than one percent. | |
(1) | Unless otherwise indicated, the address of each selling stockholder isc/o Archemix Corp., 300 Third Street, Cambridge, Massachusetts 02142. | |
(2) | Consists of 76,807 shares of common stock held by Dr. De Souza, 504,048 shares held by the De Souza Family Trust, the trustees and beneficiaries of which are Dr. De Souza and his spouse, and options to purchase 2,944,259 shares of common stock held by Dr. De Souza, of which, 688,065 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(3) | Consists of 614,458 shares of common stock held by Mr. Higgons, 153,614 shares of which were subject to a right of repurchase in favor of Archemix as of December 1, 2008, and options to purchase 153,614 shares of common stock, of which, 105,610 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(4) | Consists of options to purchase 359,813 shares of common stock, of which, 81,607 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(5) | Consists of options to purchase 386,596 shares of common stock, of which, 89,608 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(6) | Consists of options to purchase 307,229 shares of common stock, of which, 172,816 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(7) | Consists of options to purchase 66,566 shares of common stock, of which, 25,602 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(8) | Consists of 480,068 shares of common stock and options to purchase 93,192 shares of common stock, of which, 14,337 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(9) | Consists of options to purchase 56,325 shares of common stock, of which, 40,963 shares issuable upon exercise of such options were subject to a right of repurchase in favor of Archemix as of December 1, 2008. | |
(10) | As general partner of Atlas Venture Fund V, L.P., and Atlas Venture Entrepreneurs’ Fund V, L.P. and by virtue of these funds’ relationships as affiliated limited partnerships, Atlas Venture Associates V, L.P., or AVA V LP, may also be deemed to beneficially own these shares. As the general partner of AVA V LP, |
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Atlas Venture Associates V, Inc., or AVA V Inc., may also be deemed to beneficially own these shares. In their capacities as directors of AVA V Inc., each of Messrs. Axel Bichara, Jean-Francois Formela and Christopher Spray may be deemed to beneficially own these shares. Each of Messrs. Bichara, Formela and Spray disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Each of the Atlas Venture funds disclaims beneficial ownership of the shares except to the extent of its pecuniary interest therein. Dr. Barrett, a member of Archemix’s board of directors, is a Partner at Atlas Venture. Dr. Barrett disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | ||
(11) | Highland Management Partners VI Limited Partnership, or HMP, is the general partner of Highland Capital Partners VI Limited Partnership, or HCP VI, and Highland Capital Partners VI-B Limited Partnership, or HCP VI-B. HEF VI Limited Partnership, or HEF, is the general partner of Highland Entrepreneurs’ Fund VI Limited Partnership, or HEF VI, and collectively with HCP VI and HCPVI-B, the Highland Investing Entities. Highland Management Partners VI, Inc., or Highland Management, is the general partner of both HMP and HEF. There are eight managing directors of Highland Management. Highland Management, as the general partner of the general partners of the Highland Investing Entities, and may be deemed to have beneficial ownership of the shares held by the Highland Investing Entities. The managing directors of Highland Management have shared voting and investment control over all the shares held by the Highland Investing Entities and therefore may be deemed to share beneficial ownership of the shares held by the Highland Investing Entities by virtue of this status as controlling persons of Highland Management. Each of the managing directors of Highland Management disclaims beneficial ownership of the shares held by the Highland Investing Entities except to the extent of his pecuniary interest therein. | |
(12) | International Life Sciences Fund III (GP), L.P., or GP, the general partner of each of International Life Sciences Fund III (LP1), L.P., or ILSF III LP1, International Life Sciences Fund III (LP2), L.P., or ILSF III LP2, International Life Sciences Fund III Strategic Partners, L.P., or ILSF III Strategic Partners, International Life Sciences Fund III Co-investment, L.P., or ILSF III Co-Invest, and ILSF III, LLC, the general partner of the GP, may be deemed to share voting and dispositive power over the shares held by each of ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners. ILSF III LP1, ILSF III LP2, ILSF III Co-Invest and ILSF III Strategic Partners (each a “Fund”, or collectively the “Funds”) may be deemed to beneficially own the shares held by each other Fund because of certain contractual relationships among the Funds and their affiliates. Michael Ross, a member of Archemix’s board of directors, is a member of the investment committee of ILSF III, L.L.C. and shares voting and dispositive power over these shares with others. Dr. Ross disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. | |
(13) | Alex Barkas, Ph.D., is a managing member of each of the respective general partners of Prospect Venture Partners, L.P., or PVP I, and Prospect Venture Partners II, L.P., or PVP II, and shares voting and investment power over the shares held by PVP I and PVP II. Dr. Barkas disclaims beneficial ownership of the shares held by PVP I and PVP II, except to the extent of his pecuniary interest therein. |
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• | on any national securities exchange or quotation service on which the common stock may be listed or quoted at the time of sale; | |
• | in the over-the-counter market; | |
• | in transactions otherwise than on these exchanges or services or in the over-the-counter market; or | |
• | through the writing of options. |
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339
Page | ||||
NITROMED FINANCIAL STATEMENTS | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-8 | ||||
F-9 | ||||
NITROMED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) | ||||
F-29 | ||||
F-30 | ||||
F-31 | ||||
F-32 |
F-1
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F-2
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December 31, | ||||||||
2007 | 2006 | |||||||
(In thousands, except par value amounts) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 8,167 | $ | 21,074 | ||||
Marketable securities | 23,233 | 21,079 | ||||||
Accounts receivable | 1,929 | 1,370 | ||||||
Inventories | 1,401 | 2,846 | ||||||
Prepaid expenses and other current assets | 334 | 570 | ||||||
Total current assets | 35,064 | 46,939 | ||||||
Property and equipment, net | 312 | 963 | ||||||
Restricted cash | 191 | 803 | ||||||
Total assets | $ | 35,567 | $ | 48,705 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 3,235 | $ | 1,923 | ||||
Accrued expenses | 6,379 | 6,545 | ||||||
Accrued restructuring | — | 299 | ||||||
Deferred revenue | — | 206 | ||||||
Current portion of long-term debt | 3,728 | 6,925 | ||||||
Total current liabilities | 13,342 | 15,898 | ||||||
Long-term debt | — | 3,728 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders’ Equity: | ||||||||
Preferred stock, $0.01 par value; 5,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common stock, $0.01 par value; 65,000 shares authorized; 45,381 shares and 37,181 shares issued and outstanding as of December 31, 2007 and 2006, respectively | 454 | 372 | ||||||
Additional paid-in capital | 367,125 | 342,528 | ||||||
Accumulated deficit | (345,382 | ) | (313,808 | ) | ||||
Accumulated other comprehensive income (loss) | 28 | (13 | ) | |||||
Total stockholders’ equity | 22,225 | 29,079 | ||||||
Total liabilities and stockholders’ equity | $ | 35,567 | $ | 48,705 | ||||
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Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Revenues: | ||||||||||||
Product sales | $ | 15,269 | $ | 12,086 | $ | 4,455 | ||||||
License and collaboration | 750 | — | 1,592 | |||||||||
Total revenues | 16,019 | 12,086 | 6,047 | |||||||||
Cost and operating expenses: | ||||||||||||
Cost of product sales | 4,236 | 3,560 | 8,009 | |||||||||
Research and development(1) | 12,185 | 17,029 | 31,340 | |||||||||
Sales, general and administrative(1) | 31,358 | 59,403 | 74,596 | |||||||||
Restructuring charges | 1,004 | 5,283 | — | |||||||||
Total cost and operating expenses | 48,783 | 85,275 | 113,945 | |||||||||
Loss from operations | (32,764 | ) | (73,189 | ) | (107,898 | ) | ||||||
Non-operating income: | ||||||||||||
Interest income | 1,884 | 3,204 | 2,976 | |||||||||
Interest expense | (694 | ) | (1,352 | ) | (930 | ) | ||||||
1,190 | 1,852 | 2,046 | ||||||||||
Net loss | (31,574 | ) | (71,337 | ) | (105,852 | ) | ||||||
Basic and diluted net loss per share | $ | (0.75 | ) | $ | (1.96 | ) | $ | (3.49 | ) | |||
Shares used in computing basic and diluted net loss per share | 41,997 | 36,399 | 30,355 | |||||||||
(1) Includes stock-based compensation expense as follows: | ||||||||||||
Research and development | $ | 2,005 | $ | 2,795 | $ | 298 | ||||||
Sales, general and administrative | $ | 3,763 | $ | 5,119 | $ | 195 |
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Accumulated | ||||||||||||||||||||||||||||
Common Stock | Additional | Deferred | Other | Total | ||||||||||||||||||||||||
Par | Paid-in | Stock | Accumulated | Comprehensive | Stockholders’ | |||||||||||||||||||||||
Shares | Value | Capital | Compensation | Deficit | Income (Loss) | Equity | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance at December 31, 2004 | 30,124 | $ | 301 | $ | 275,727 | $ | (2,095 | ) | $ | (136,619 | ) | $ | (302 | ) | $ | 137,012 | ||||||||||||
Exercise of stock options | 339 | 3 | 653 | 656 | ||||||||||||||||||||||||
Exercise of stock purchase warrants | 12 | — | 1 | 1 | ||||||||||||||||||||||||
Amortization of deferred stock compensation | 887 | 887 | ||||||||||||||||||||||||||
Reversal of compensation expense associated with options issued to non-employees and performance options issued to employees | (394 | ) | (394 | ) | ||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | 37 | 1 | 523 | 524 | ||||||||||||||||||||||||
Unrealized gains on marketable securities | 232 | 232 | ||||||||||||||||||||||||||
Net loss | (105,852 | ) | (105,852 | ) | ||||||||||||||||||||||||
Comprehensive loss | (105,620 | ) | ||||||||||||||||||||||||||
Balance at December 31, 2005 | 30,512 | $ | 305 | $ | 276,510 | $ | (1,208 | ) | $ | (242,471 | ) | $ | (70 | ) | $ | 33,066 |
F-5
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Accumulated | ||||||||||||||||||||||||||||
Common Stock | Additional | Deferred | Other | Total | ||||||||||||||||||||||||
Par | Paid-in | Stock | Accumulated | Comprehensive | Stockholders’ | |||||||||||||||||||||||
Shares | Value | Capital | Compensation | Deficit | Income (Loss) | Equity | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance at December 31, 2005 | 30,512 | $ | 305 | $ | 276,510 | $ | (1,208 | ) | $ | (242,471 | ) | $ | (70 | ) | $ | 33,066 | ||||||||||||
Elimination of deferred stock compensation in accordance with the adoption of SFAS 123R | (1,208 | ) | 1,208 | — | ||||||||||||||||||||||||
Exercise of stock options | 461 | 5 | 688 | 693 | ||||||||||||||||||||||||
Compensation expense associated with options issued to employees | 8,042 | 8,042 | ||||||||||||||||||||||||||
Reversal of compensation expense associated with options issued to non-employees | (239 | ) | (239 | ) | ||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | 32 | — | 93 | 93 | ||||||||||||||||||||||||
Issuance of stock in connection with employee benefit plan | 78 | 1 | 198 | 199 | ||||||||||||||||||||||||
Sale of common stock in public offering (net of issuance costs of $4,056) | 6,098 | 61 | 58,444 | 58,505 | ||||||||||||||||||||||||
Unrealized gains on marketable securities | 57 | 57 | ||||||||||||||||||||||||||
Net loss | (71,337 | ) | (71,337 | ) | ||||||||||||||||||||||||
Comprehensive loss | (71,280 | ) | ||||||||||||||||||||||||||
Balance at December 31, 2006 | 37,181 | $ | 372 | $ | 342,528 | $ | — | $ | (313,808 | ) | $ | (13 | ) | $ | 29,079 |
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Table of Contents
Accumulated | ||||||||||||||||||||||||
Common Stock | Additional | Other | Total | |||||||||||||||||||||
Par | Paid-in | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||
Shares | Value | Capital | Deficit | Income (Loss) | Equity | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Balance at December 31, 2006 | 37,181 | $ | 372 | $ | 342,528 | $ | (313,808 | ) | $ | (13 | ) | $ | 29,079 | |||||||||||
Exercise of stock options | 273 | 3 | 309 | 312 | ||||||||||||||||||||
Compensation expense associated with options issued to employees | 4,993 | 4,993 | ||||||||||||||||||||||
Reversal of compensation expense associated with options issued to non-employees | (26 | ) | (26 | ) | ||||||||||||||||||||
Issuance of stock under employee stock purchase plan | 74 | 1 | 78 | 79 | ||||||||||||||||||||
Issuance of stock in connection with employee benefit plan | 87 | 1 | 279 | 280 | ||||||||||||||||||||
Issuance of common stock and related stock compensation expense in connection with restricted stock plan | 166 | 1 | 800 | 801 | ||||||||||||||||||||
Sale of common stock in public offering (net of issuance costs of $1,485) | 7,600 | 76 | 18,164 | 18,240 | ||||||||||||||||||||
Unrealized gains on marketable securities | 41 | 41 | ||||||||||||||||||||||
Net loss | (31,574 | ) | (31,574 | ) | ||||||||||||||||||||
Comprehensive loss | (30,533 | ) | ||||||||||||||||||||||
Balance at December 31, 2007 | 45,381 | $ | 454 | $ | 367,125 | $ | (345,382 | ) | $ | 28 | $ | 22,225 | ||||||||||||
F-7
Table of Contents
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (31,574 | ) | $ | (71,337 | ) | $ | (105,852 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 285 | 798 | 896 | |||||||||
Stock-based compensation expense | 5,768 | 7,914 | 493 | |||||||||
Non-cash restructuring charges | — | 1,342 | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (559 | ) | 1,236 | (4,078 | ) | |||||||
Inventories | 1,445 | 401 | (3,247 | ) | ||||||||
Prepaid expenses and other current assets | 236 | 3,290 | (644 | ) | ||||||||
Accounts payable | 1,312 | (9,887 | ) | 9,148 | ||||||||
Accrued expenses | 114 | (4,636 | ) | 3,178 | ||||||||
Accrued restructuring charge | (299 | ) | 299 | — | ||||||||
Deferred revenue | (206 | ) | (1,773 | ) | 1,859 | |||||||
Net cash used in operating activities | (23,478 | ) | (72,353 | ) | (98,247 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (162 | ) | (111 | ) | (925 | ) | ||||||
Proceeds from sale of equipment | 528 | — | — | |||||||||
Purchases of marketable securities | (69,020 | ) | (150,092 | ) | (126,159 | ) | ||||||
Sales of marketable securities | 66,907 | 179,520 | 182,426 | |||||||||
Restricted cash | 612 | — | 8 | |||||||||
Net cash (used in) provided by investing activities | (1,135 | ) | 29,317 | 55,350 | ||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from sale of common stock | 18,240 | 58,505 | — | |||||||||
Proceeds from long-term debt | — | — | 20,000 | |||||||||
Principal payments on long-term debt | (6,925 | ) | (6,272 | ) | (3,075 | ) | ||||||
Proceeds from employee stock plans | 391 | 786 | 1,181 | |||||||||
Net cash provided by financing activities | 11,706 | 53,019 | 18,106 | |||||||||
Net (decrease) increase in cash and cash equivalents | (12,907 | ) | 9,983 | (24,791 | ) | |||||||
Cash and cash equivalents, beginning balance | 21,074 | 11,091 | 35,882 | |||||||||
Cash and cash equivalents, ending balance | $ | 8,167 | $ | 21,074 | $ | 11,091 | ||||||
Supplemental disclosure: | ||||||||||||
Cash paid during the year for interest | $ | 751 | $ | 1,403 | $ | 790 | ||||||
F-8
Table of Contents
1. | The Company |
2. | Summary of Significant Accounting Policies |
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
December 31, | ||||||||
2007 | 2006 | |||||||
Laboratory furniture, fixtures and equipment | $ | 362 | $ | 2,343 | ||||
Office furniture, fixtures and equipment | 162 | 903 | ||||||
Leasehold improvements | — | 221 | ||||||
524 | 3,467 | |||||||
Less accumulated depreciation and amortization | (212 | ) | (2,504 | ) | ||||
Total | $ | 312 | $ | 963 | ||||
F-12
Table of Contents
December 31, | ||||||||
2007 | 2006 | |||||||
Raw materials | $ | 349 | $ | 2,123 | ||||
Finished goods | 1,052 | 723 | ||||||
Total | $ | 1,401 | $ | 2,846 | ||||
F-13
Table of Contents
Percentage of | ||||||||||||||||
Total Product | ||||||||||||||||
Number of | Revenues by | |||||||||||||||
Significant | Customer | |||||||||||||||
Customers | A | B | C | |||||||||||||
Year ended: | ||||||||||||||||
December 31, 2007 | 3 | 38 | % | 36 | % | 17 | % | |||||||||
December 31, 2006 | 3 | 34 | % | 36 | % | 18 | % | |||||||||
December 31, 2005 | 3 | 44 | % | 21 | % | 14 | % |
Number of | Percentage of Total Accounts | |||||||||||||||
Significant | Receivables by Customer | |||||||||||||||
Customers | A | B | C | |||||||||||||
As of: | ||||||||||||||||
December 31, 2007 | 3 | 38 | % | 34 | % | 17 | % | |||||||||
December 31, 2006 | 3 | 37 | % | 30 | % | 16 | % |
F-14
Table of Contents
F-15
Table of Contents
3. | Cash Equivalents and Marketable Securities |
Gross Unrealized | Gross Unrealized | Estimated Fair | ||||||||||||||
December 31, 2007 | Amortized Cost | Gains | Losses | Value | ||||||||||||
Cash and money market funds | $ | 8,167 | $ | — | $ | — | $ | 8,167 | ||||||||
U.S. Government agencies | ||||||||||||||||
Due in one year or less | 799 | — | (3 | ) | 796 | |||||||||||
Taxable auction securities | 9,575 | — | — | 9,575 | ||||||||||||
Tax-free auction securities | 700 | — | — | 700 | ||||||||||||
Corporate securities | ||||||||||||||||
Due in one year or less | 9,897 | 28 | (1 | ) | 9,924 | |||||||||||
Due in one to three years | 2,234 | 4 | — | 2,238 | ||||||||||||
Total marketable securities | $ | 23,205 | $ | 32 | $ | (4 | ) | $ | 23,233 | |||||||
Gross Unrealized | Gross Unrealized | Estimated Fair | ||||||||||||||
December 31, 2006 | Amortized Cost | Gains | Losses | Value | ||||||||||||
Cash and money market funds | $ | 21,074 | $ | — | $ | — | $ | 21,074 | ||||||||
U.S. Government agencies | ||||||||||||||||
Due in one year or less | $ | — | $ | — | $ | — | $ | — | ||||||||
Due in one to three years | 1,000 | — | (13 | ) | 987 | |||||||||||
Taxable auction securities | 18,400 | — | — | 18,400 | ||||||||||||
Corporate securities | ||||||||||||||||
Due in one to three years | 1,692 | — | — | 1,692 | ||||||||||||
Total marketable securities | $ | 21,092 | $ | — | $ | (13 | ) | $ | 21,079 | |||||||
F-16
Table of Contents
4. | Accrued Expenses |
December 31, | ||||||||
2007 | 2006 | |||||||
Sales and marketing | $ | 304 | $ | 817 | ||||
Compensation and related benefits | 1,955 | 1,425 | ||||||
Reimbursements and rebates related to managed care organizations | 1,800 | 448 | ||||||
Product returns reserve | 946 | 1,339 | ||||||
Other | 1,374 | 2,516 | ||||||
Total | $ | 6,379 | $ | 6,545 | ||||
5. | Long-Term Debt |
F-17
Table of Contents
6. | Restructuring Actions |
Cash | Accrued at | Accrued at | ||||||||||||||||||
Payments and | December 31, | December 31, | ||||||||||||||||||
Charge | Write-offs | 2006 | Cash Payments | 2007 | ||||||||||||||||
Workforce reduction | $ | 1,441 | $ | (1,371 | ) | $ | 70 | $ | (70 | ) | $ | — | ||||||||
Impairment | 597 | (597 | ) | — | — | — | ||||||||||||||
Total | $ | 2,038 | $ | (1,968 | ) | $ | 70 | $ | (70 | ) | $ | — | ||||||||
F-18
Table of Contents
Cash Payments and | Accrued at | Accrued at | ||||||||||||||||||
Charge | Write-offs | December 31, 2006 | Cash Payments | December 31, 2007 | ||||||||||||||||
Workforce reduction | $ | 2,500 | $ | (2,271 | ) | $ | 229 | $ | (229 | ) | $ | — | ||||||||
Impairment | 745 | (745 | ) | — | — | — | ||||||||||||||
Total | $ | 3,245 | $ | (3,016 | ) | $ | 229 | $ | (229 | ) | $ | — | ||||||||
7. | Stockholders’ Equity |
F-19
Table of Contents
F-20
Table of Contents
December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Options granted (in thousands) | 960 | 3,833 | 984 | |||||||||
Weighted-average exercise price of stock options | $ | 2.62 | $ | 6.65 | $ | 16.43 | ||||||
Weighted-average grant date fair-value of stock options | $ | 1.61 | $ | 4.14 | $ | 11.51 | ||||||
Assumptions: | ||||||||||||
Volatility | 76 | % | 74 | % | 73 | % | ||||||
Risk-free interest rate | 4.8 | % | 4.7 | % | 4.0 | % | ||||||
Expected lives | 4.4 years | 5.4 years | 6.0 years | |||||||||
Dividend | — | — | — |
F-21
Table of Contents
December 31, | ||||
2005 | ||||
Net loss as reported | $ | (105,852 | ) | |
Add: Stock-based employee compensation expense included in reported net loss | 626 | |||
Deduct: Stock-based employee compensation expense determined under fair value based method | (5,961 | ) | ||
Pro forma net loss | $ | (111,187 | ) | |
Basic and diluted net loss per share | ||||
As reported | $ | (3.49 | ) | |
Pro forma | $ | (3.66 | ) | |
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Average | Remaining | |||||||||||||||
Exercise | Contractual | Aggregate | ||||||||||||||
Number of | Price | Term | Intrinsic | |||||||||||||
Options | per Share | in Years | Value | |||||||||||||
Options outstanding at December 31, 2006 | 4,936 | $ | 6.90 | |||||||||||||
Options granted | 960 | $ | 2.62 | |||||||||||||
Options exercised | (273 | ) | $ | 1.14 | ||||||||||||
Options canceled | (875 | ) | $ | 7.37 | ||||||||||||
Options outstanding at December 31, 2007 | 4,748 | $ | 6.28 | $ | 33 | |||||||||||
Options vested or expected to vest at December 31, 2007(1) | 4,496 | $ | 6.36 | 7.4 | $ | 33 | ||||||||||
Options exercisable at December 31, 2007 | 2,493 | $ | 7.15 | 6.5 | $ | 33 |
(1) | Options expected to vest is calculated by applying an estimated forfeiture rate to unvested options. |
F-22
Table of Contents
F-23
Table of Contents
Weighted-Average | ||||||||
Restricted Shares | Grant Date Fair | |||||||
Outstanding | Value per Share | |||||||
Non-vested shares outstanding at December 31, 2006 | — | $ | — | |||||
Awards granted | 735 | $ | 3.22 | |||||
Restrictions lapsed | (166 | ) | $ | 3.22 | ||||
Awards forfeited | (117 | ) | $ | 3.22 | ||||
Non-vested shares outstanding at December 31, 2007 | 452 | $ | 3.22 |
8. | Operating Lease |
9. | License, Manufacturing and Commercialization Agreements |
F-24
Table of Contents
F-25
Table of Contents
10. | Income Taxes |
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Benefit at federal statutory tax rate | $ | (10,735 | ) | $ | (24,255 | ) | $ | (35,990 | ) | |||
State taxes, net of federal benefit | (1,980 | ) | (4,473 | ) | (6,637 | ) | ||||||
Non-deductible expenses | 37 | 910 | 254 | |||||||||
Unbenefited operating losses | 12,678 | 27,818 | 42,373 | |||||||||
Income tax provision | $ | — | $ | — | $ | — | ||||||
December 31, | ||||||||
2007 | 2006 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 93,535 | $ | 81,642 | ||||
Capitalized research costs, net of amortization | 27,049 | 27,386 | ||||||
Tax credit carryforwards | 7,509 | 6,663 | ||||||
Deferred revenue | — | 83 | ||||||
Depreciation | (30 | ) | 422 | |||||
Accrued expenses | 410 | 218 | ||||||
Other | 5,571 | 3,979 | ||||||
134,044 | 120,393 | |||||||
Valuation allowance | (134,044 | ) | (120,393 | ) | ||||
Net deferred tax assets | $ | — | $ | — | ||||
F-26
Table of Contents
11. | Commitments and Contingencies |
12. | Retirement Plan |
F-27
Table of Contents
13. | Quarterly Results of Operations (Unaudited) |
Year Ended December 31, 2007 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 3,568 | $ | 3,715 | $ | 3,759 | $ | 4,977 | ||||||||
Gross profit | 2,614 | 3,078 | 3,199 | 2,892 | ||||||||||||
Net loss | (10,114 | ) | (6,236 | ) | (8,354 | ) | (6,870 | ) | ||||||||
Basic and diluted net loss per share | $ | (0.27 | ) | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.15 | ) | ||||
Weighted average common shares used to compute net loss per share | 37,263 | 40,100 | 45,180 | 45,322 |
Year Ended December 31, 2006 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 2,316 | $ | 2,855 | $ | 3,427 | $ | 3,488 | ||||||||
Gross profit | 1,420 | 2,234 | $ | 2,117 | $ | 2,755 | ||||||||||
Net loss | (25,924 | ) | (18,280 | ) | (16,520 | ) | (10,613 | ) | ||||||||
Basic and diluted net loss per share | $ | (0.75 | ) | $ | (0.50 | ) | $ | (0.45 | ) | $ | (0.29 | ) | ||||
Weighted average common shares used to compute net loss per share | 34,597 | 36,724 | 37,090 | 37,147 |
F-28
Table of Contents
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
(In thousands, except | ||||||||
par value amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 13,631 | $ | 8,167 | ||||
Short-term marketable securities | 4,192 | 23,233 | ||||||
Accounts receivable | 1,979 | 1,929 | ||||||
Inventories | 1,230 | 1,401 | ||||||
Prepaid expenses and other current assets | 170 | 334 | ||||||
Total current assets | 21,202 | 35,064 | ||||||
Property and equipment, net | 137 | 312 | ||||||
Long-term marketable securities | 1,553 | — | ||||||
Restricted cash | — | 191 | ||||||
Total assets | $ | 22,892 | $ | 35,567 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 690 | $ | 3,235 | ||||
Accrued expenses | 3,107 | 6,379 | ||||||
Accrued restructuring | 71 | — | ||||||
Current portion of long-term debt | — | 3,728 | ||||||
Total current liabilities | 3,868 | 13,342 | ||||||
Commitments and contingencies (Note 10) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value; 5,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common stock, $0.01 par value; 65,000 shares authorized; 46,042 and 45,381 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively | 460 | 454 | ||||||
Additional paid-in capital | 368,526 | 367,125 | ||||||
Accumulated deficit | (349,973 | ) | (345,382 | ) | ||||
Accumulated other comprehensive income | 11 | 28 | ||||||
Total stockholders’ equity | 19,024 | 22,225 | ||||||
Total liabilities and stockholders’ equity | $ | 22,892 | $ | 35,567 | ||||
F-29
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Revenues: | ||||||||||||||||
Product sales | $ | 4,003 | $ | 3,759 | $ | 11,767 | $ | 11,042 | ||||||||
Cost and operating expenses: | ||||||||||||||||
Cost of product sales | 1,429 | 560 | 2,943 | 2,151 | ||||||||||||
Research and development(1) | 482 | 3,807 | 2,622 | 9,745 | ||||||||||||
Sales, general and administrative(1) | 2,534 | 8,127 | 8,438 | 23,709 | ||||||||||||
Restructuring charge | (17 | ) | — | 2,708 | 1,004 | |||||||||||
Total cost and operating expenses | 4,428 | 12,494 | 16,711 | 36,609 | ||||||||||||
Loss from operations | (425 | ) | (8,735 | ) | (4,944 | ) | (25,567 | ) | ||||||||
Non-operating income: | ||||||||||||||||
Interest expense | (4 | ) | (152 | ) | (90 | ) | (585 | ) | ||||||||
Interest income | 124 | 533 | 579 | 1,448 | ||||||||||||
Other expense | (85 | ) | — | (137 | ) | — | ||||||||||
Total non-operating income | 35 | 381 | 352 | 863 | ||||||||||||
Net loss | $ | (390 | ) | $ | (8,354 | ) | $ | (4,592 | ) | $ | (24,704 | ) | ||||
Basic and diluted net loss per common share | $ | (0.01 | ) | $ | (0.18 | ) | $ | (0.10 | ) | $ | (0.60 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 46,042 | 45,180 | 45,954 | 40,877 | ||||||||||||
(1) | Includes stock-based compensation expense as follows: |
Research and development | $ | (20 | ) | $ | 581 | $ | 74 | $ | 1,666 | |||||||
Sales, general and administrative | $ | 282 | $ | 762 | $ | 1,071 | $ | 3,078 |
F-30
Table of Contents
Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Operating activities | ||||||||
Net loss | $ | (4,592 | ) | $ | (24,704 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 89 | 247 | ||||||
Non-cash restructuring charge | 72 | — | ||||||
Stock-based compensation expense | 1,145 | 4,744 | ||||||
Impairment charge on auction rate securities | 97 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (50 | ) | (145 | ) | ||||
Inventories | 171 | 150 | ||||||
Prepaid expenses and other current assets | 164 | 39 | ||||||
Deferred revenue | — | (206 | ) | |||||
Accounts payable and accrued expenses | (5,817 | ) | 1,775 | |||||
Accrued restructuring charge | 71 | (299 | ) | |||||
Net cash used in operating activities | (8,650 | ) | (18,399 | ) | ||||
Investing activities | ||||||||
Purchase of property and equipment | — | (162 | ) | |||||
Proceeds from sale of equipment | 14 | 528 | ||||||
Sales of marketable securities | 27,452 | 46,903 | ||||||
Purchases of marketable securities | (10,078 | ) | (54,717 | ) | ||||
Other assets | 191 | 612 | ||||||
Net cash provided by (used in) investing activities | 17,579 | (6,836 | ) | |||||
Financing activities | ||||||||
Net proceeds from sale of common stock | — | 18,240 | ||||||
Principal payments on long-term debt | (3,728 | ) | (5,128 | ) | ||||
Proceeds from employee stock plans | 263 | 341 | ||||||
Net cash (used in) provided by financing activities | (3,465 | ) | 13,453 | |||||
Net change in cash and cash equivalents | 5,464 | (11,782 | ) | |||||
Cash and cash equivalents at beginning of period | 8,167 | 21,074 | ||||||
Cash and cash equivalents at end of period | $ | 13,631 | $ | 9,292 | ||||
F-31
Table of Contents
(1) | Operations and Basis of Presentation |
F-32
Table of Contents
(2) | Revenue Recognition |
F-33
Table of Contents
(3) | Fair Value Measurements |
• | Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
• | Level 2 — Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs. | |
• | Level 3 — Unobservable inputs used when little or no market data is available and require the Company to develop its own assumptions about how market participants would price the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
September 30, 2008 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Cash equivalentavailable-for-sale investments | $ | 12,191 | $ | — | $ | — | $ | 12,191 | ||||||||
Corporate securities | $ | — | $ | 4,192 | $ | — | $ | 4,192 | ||||||||
Total short-term marketable securities | $ | — | $ | 4,192 | $ | — | $ | 4,192 | ||||||||
Long-term marketable securities(1) | $ | — | $ | — | $ | 1,553 | $ | 1,553 | ||||||||
(1) | The Company recorded impairment charges of $97,000 for the nine months ended September 30, 2008 related to certain auction rate securities that are classified as Level 3 securities. |
F-34
Table of Contents
Auction Rate | ||||
Securities | ||||
Balance at January 1, 2008 | $ | — | ||
Transfers to Level 3 | 1,650 | |||
Unrealized loss reported in statement of operations | (97 | ) | ||
Balance at September 30, 2008 | $ | 1,553 | ||
F-35
Table of Contents
(4) | Inventories |
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
Raw materials | $ | 144 | $ | 349 | ||||
Finished goods | 1,086 | 1,052 | ||||||
Total | $ | 1,230 | $ | 1,401 | ||||
(5) | Stock-Based Compensation |
F-36
Table of Contents
Nine Months Ended | ||||||||
September 30, | ||||||||
2008 | 2007 | |||||||
Options granted (in thousands) | 385 | 951 | ||||||
Weighted-average exercise price of stock options | $ | 1.01 | $ | 2.63 | ||||
Weighted-average grant date fair-value of stock options | $ | 0.67 | $ | 1.61 | ||||
Assumptions: | ||||||||
Volatility | 76 | % | 76 | % | ||||
Risk-free interest rate | 3.1 | % | 4.8 | % | ||||
Expected life (years) | 5.5 | 5.0 | ||||||
Dividend | None | None |
F-37
Table of Contents
Weighted- | ||||||||||||||||
Average | ||||||||||||||||
Remaining | ||||||||||||||||
Weighted- | Contracted | Aggregate | ||||||||||||||
Options | Average | Term in | Intrinsic | |||||||||||||
Outstanding | Exercise Price | Years | Value | |||||||||||||
Outstanding at December 31, 2007 | 4,748 | $ | 6.28 | |||||||||||||
Granted | 385 | $ | 1.01 | |||||||||||||
Exercised | (102 | ) | $ | 0.72 | ||||||||||||
Forfeited/Cancelled | (2,117 | ) | $ | 6.74 | ||||||||||||
Outstanding at September 30, 2008 | 2,914 | $ | 5.44 | 6.31 | $ | — | ||||||||||
Vested or expected to vest at September 30, 2008 | 2,803 | $ | 5.55 | 6.22 | $ | — | ||||||||||
Exercisable at September 30, 2008 | 2,007 | $ | 6.43 | 5.33 | $ | — | ||||||||||
Weighted- | ||||||||
Average | ||||||||
Grant Date | ||||||||
Restricted Shares | Fair Value | |||||||
Outstanding | per Share | |||||||
(In thousands) | ||||||||
Non-vested shares outstanding at December 31, 2007 | 452 | $ | 3.22 | |||||
Awards granted | — | $ | — | |||||
Restrictions lapsed | (313 | ) | $ | 3.22 | ||||
Awards forfeited | (104 | ) | $ | 3.22 | ||||
Non-vested shares outstanding at September 30, 2008 | 35 | $ | 3.22 | |||||
(6) | Restructuring |
F-38
Table of Contents
Cash | Accrued at | |||||||||||
Payments and | September 30, | |||||||||||
Charge | Write-offs | 2008 | ||||||||||
Workforce reduction | $ | 2,636 | $ | (2,565 | ) | $ | 71 | |||||
Impairment | 72 | (72 | ) | — | ||||||||
Total | $ | 2,708 | $ | (2,637 | ) | $ | 71 | |||||
(7) | Accumulated Other Comprehensive Income/(Loss) |
(8) | Loss Per Share |
(9) | Concentration of Credit Risk |
F-39
Table of Contents
Percentage of | ||||||||||||||||
Number of | Total Revenues | |||||||||||||||
Significant | by Customer | |||||||||||||||
Customers | A | B | C | |||||||||||||
Three months ended September 30, 2008 | 3 | 36 | % | 37 | % | 18 | % | |||||||||
Three months ended September 30, 2007 | 3 | 34 | % | 40 | % | 16 | % | |||||||||
Nine months ended September 30, 2008 | 3 | 35 | % | 38 | % | 18 | % | |||||||||
Nine months ended September 30, 2007 | 3 | 35 | % | 37 | % | 17 | % |
Percentage of | ||||||||||||||||
Total Accounts | ||||||||||||||||
Number of | Receivable by | |||||||||||||||
Significant | Customer | |||||||||||||||
Customers | A | B | C | |||||||||||||
As of: | ||||||||||||||||
September 30, 2008 | 3 | 38 | % | 37 | % | 18 | % | |||||||||
December 31, 2007 | 3 | 34 | % | 38 | % | 17 | % |
(10) | Commitments and Contingencies |
(11) | Sublease |
(12) | Amendment to Cohn License Agreement |
F-40
Table of Contents
(13) | Subsequent Event — Agreement to Sell BiDil Drug Business |
F-41
Table of Contents
Table of Contents
May 19, 2008
F-43
Table of Contents
December 31, | September 30, | |||||||||||
2007 | 2006 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
(In thousands, except share and per share data) | ||||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 17,623 | $ | 13,231 | $ | 11,374 | ||||||
Marketable securities | 38,155 | 22,793 | 26,320 | |||||||||
Receivables | 1,651 | 6,149 | 851 | |||||||||
Prepaid expenses and other current assets | 623 | 250 | 1,213 | |||||||||
Total current assets | 58,052 | 42,423 | 39,758 | |||||||||
Property and equipment, net | 3,151 | 1,681 | 3,387 | |||||||||
Total assets | $ | 61,203 | $ | 44,104 | $ | 43,145 | ||||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 1,045 | $ | 728 | $ | 702 | ||||||
Accrued expenses | 4,589 | 2,450 | 3,969 | |||||||||
Deferred revenue | 8,765 | 5,503 | 6,356 | |||||||||
Total current liabilities | 14,399 | 8,681 | 11,027 | |||||||||
Deferred revenue, long-term | 11,239 | 11,704 | 6,227 | |||||||||
Deferred rent, long-term | 2,583 | 1,541 | 2,597 | |||||||||
Preferred stock warrant liability | 35 | 48 | 11 | |||||||||
Commitments and contingencies (Note 10) | ||||||||||||
Redeemable convertible preferred stock: | ||||||||||||
Series A redeemable convertible preferred stock, at liquidation value; 51,884,995 shares authorized; 51,774,995 shares issued and outstanding | 73,551 | 69,366 | 76,689 | |||||||||
Series B redeemable convertible preferred stock, at liquidation value; 53,850,000 shares authorized, issued, and outstanding | 66,535 | 62,186 | 69,797 | |||||||||
Series C redeemable convertible preferred stock, at liquidation value; 14,922,207 shares authorized, issued, and outstanding | 29,818 | — | 29,818 | |||||||||
Stockholders’ deficit: | ||||||||||||
Preferred stock, 10,000,000 shares authorized; no shares issued and outstanding | ||||||||||||
Common stock, $0.001 par value; 164,215,873, 155,615,005 and 164,215,873 shares authorized at December 31, 2007 and 2006 and September 30, 2008 (unaudited), respectively; 12,048,482, 10,579,400, and 15,653,186 shares issued and outstanding at December 31, 2007 and 2006, and September 30, 2008 (unaudited), respectively | 12 | 10 | 16 | |||||||||
Additional paid-in capital | 2,408 | 1,111 | 3,425 | |||||||||
Accumulated other comprehensive income (loss) | 85 | 10 | (147 | ) | ||||||||
Accumulated deficit | (139,462 | ) | (110,553 | ) | (156,315 | ) | ||||||
Total stockholders’ deficit | (136,957 | ) | (109,422 | ) | (153,021 | ) | ||||||
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit | $ | 61,203 | $ | 44,104 | $ | 43,145 | ||||||
F-44
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
License revenue | $ | 9,436 | $ | 3,558 | $ | 1,371 | $ | 12,743 | $ | 6,120 | ||||||||||
Research and development support | 7,932 | 2,850 | 1,027 | 7,998 | 5,654 | |||||||||||||||
Total revenues | 17,368 | 6,408 | 2,398 | 20,741 | 11,774 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 29,171 | 16,965 | 17,061 | 24,715 | 20,799 | |||||||||||||||
General and administrative | 11,123 | 7,634 | 6,213 | 7,642 | 6,902 | |||||||||||||||
Total operating expenses | 40,294 | 24,599 | 23,274 | 32,357 | 27,701 | |||||||||||||||
Loss from operations | (22,926 | ) | (18,191 | ) | (20,876 | ) | (11,616 | ) | (15,927 | ) | ||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 2,538 | 1,779 | 919 | 1,139 | 1,830 | |||||||||||||||
Interest expense | — | — | (10 | ) | — | — | ||||||||||||||
Other income, net | 13 | 28 | — | 24 | (15 | ) | ||||||||||||||
Net loss | $ | (20,375 | ) | $ | (16,384 | ) | $ | (19,967 | ) | $ | (10,453 | ) | $ | (14,112 | ) | |||||
F-45
Table of Contents
Series C | |||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable | |||||||||||||||||||||||||||||||||||||||||||||||||
Series A Redeemable | Series B Redeemable | Convertible | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||
Convertible | Convertible | Preferred | Other | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Stock | Common Stock | Additional | Comprehensive | ||||||||||||||||||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Par | Paid-in | Income | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Share | Value | Capital | (Loss) | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | 51,774,995 | $ | 60,996 | 33,333,326 | $ | 34,634 | 7,409,782 | $ | 7 | $ | 739 | $ | (58,772 | ) | $ | (58,026 | ) | ||||||||||||||||||||||||||||||||
Issuance of Series B redeemable convertible preferred stock in August 2005 (net of issuance costs of $3) | 300,000 | 297 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series B redeemable convertible preferred stock in December 2005 (net of issuance costs of $17) | 20,216,674 | 20,199 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | 81,132 | 8 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | 4,185 | 2,711 | (6,896 | ) | (6,896 | ) | |||||||||||||||||||||||||||||||||||||||||||
Compensation expense associated with options issued to nonemployees | 14 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on marketable securities | $ | (14 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | (19,967 | ) | (19,967 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (19,981 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 51,774,995 | 65,181 | 53,850,000 | 57,841 | 7,490,914 | 7 | 761 | (14 | ) | (85,635 | ) | (84,881 | ) | ||||||||||||||||||||||||||||||||||||
Issuance costs of Series B redeemable convertible preferred stock in December 2005 | (4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options and issuance of restricted stock | 3,088,486 | 3 | 187 | 190 | |||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | 4,185 | 4,349 | (8,534 | ) | (8,534 | ) | |||||||||||||||||||||||||||||||||||||||||||
Compensation expense associated with options issued to employees and nonemployees | 239 | 239 | |||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of Series A redeemable convertible preferred stock warrants | (76 | ) | (76 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | 24 | 24 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (16,384 | ) | (16,384 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (16,360 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 51,774,995 | 69,366 | 53,850,000 | 62,186 | 10,579,400 | 10 | 1,111 | 10 | (110,553 | ) | (109,422 | ) |
F-46
Table of Contents
Series C | |||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable | |||||||||||||||||||||||||||||||||||||||||||||||||
Series A Redeemable | Series B Redeemable | Convertible | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||
Convertible | Convertible | Preferred | Other | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Stock | Common Stock | Additional | Comprehensive | ||||||||||||||||||||||||||||||||||||||||||||
Carrying | Carrying | Carrying | Par | Paid-in | Income | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Capital | (Loss) | Deficit | Deficit | ||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 51,774,995 | $ | 69,366 | 53,850,000 | $ | 62,186 | 10,579,400 | $ | 10 | $ | 1,111 | $ | 10 | $ | (110,553 | ) | $ | (109,422 | ) | ||||||||||||||||||||||||||||||
Issuance costs of Series C redeemable convertible preferred stock in June 2007 (net of issuance costs of $26) | 14,922,207 | $ | 29,818 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | 1,469,082 | 2 | 147 | 149 | |||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | 4,185 | 4,349 | (8,534 | ) | (8,534 | ) | |||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | 52 | 52 | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense associated with options issued to employees and nonemployees | 605 | 605 | |||||||||||||||||||||||||||||||||||||||||||||||
Fair value of warrant issued in connection with license agreement | 493 | 493 | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | 75 | 75 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (20,375 | ) | (20,375 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss | (20,300 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2007 | 51,774,995 | 73,551 | 53,850,000 | 66,535 | 14,922,207 | 29,818 | 12,048,482 | 12 | 2,408 | 85 | (139,462 | ) | (136,957 | ) | |||||||||||||||||||||||||||||||||||
Exercise of common stock options (unaudited) | 3,604,704 | 4 | 362 | 366 | |||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value (unaudited) | 3,138 | 3,262 | (6,400 | ) | (6,400 | ) | |||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock (unaudited) | 22 | 22 | |||||||||||||||||||||||||||||||||||||||||||||||
Compensation expense associated with options issued to employees and nonemployees (unaudited) | 633 | 633 | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on marketable securities (unaudited) | (232 | ) | (232 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net loss (unaudited) | (10,453 | ) | (10,453 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive loss (unaudited) | (10,685 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2008 (unaudited) | 51,774,995 | $ | 76,689 | 53,850,000 | $ | 69,797 | 14,922,207 | $ | 29,818 | 15,653,186 | $ | 16 | $ | 3,425 | $ | (147 | ) | $ | (156,315 | ) | $ | (153,021 | ) | ||||||||||||||||||||||||||
F-47
Table of Contents
Nine Months Ended | ||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating activities | ||||||||||||||||||||
Net loss | $ | (20,375 | ) | $ | (16,384 | ) | $ | (19,967 | ) | $ | (10,453 | ) | $ | (14,112 | ) | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||||
Depreciation expense | 856 | 679 | 714 | 779 | 612 | |||||||||||||||
Stock-based compensation expense | 605 | 239 | 14 | 633 | 442 | |||||||||||||||
Change in fair value of preferred stock warrants | (13 | ) | (28 | ) | — | (24 | ) | 15 | ||||||||||||
Fair value of warrant issued in connection with license agreement | 493 | — | — | — | 493 | |||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Receivables | 4,498 | (4,008 | ) | (1,513 | ) | 800 | 5,127 | |||||||||||||
Prepaid expenses and other assets | (373 | ) | (180 | ) | (9 | ) | (590 | ) | (1,591 | ) | ||||||||||
Accounts payable and accrued expenses | 3,550 | 111 | 2,739 | (927 | ) | 1,910 | ||||||||||||||
Deferred revenue | 2,797 | 13,738 | (871 | ) | (7,421 | ) | 4,404 | |||||||||||||
Net cash used in operating activities | (7,962 | ) | (5,833 | ) | (18,893 | ) | (17,203 | ) | (2,700 | ) | ||||||||||
Investing activities | ||||||||||||||||||||
Purchase of marketable securities | (67,837 | ) | (48,686 | ) | (22,482 | ) | (37,920 | ) | (55,883 | ) | ||||||||||
Maturities of marketable securities | 52,550 | 38,284 | 10,100 | 49,523 | 34,814 | |||||||||||||||
Restricted cash | — | 250 | (250 | ) | — | — | ||||||||||||||
Purchases of equipment | (2,326 | ) | (891 | ) | (579 | ) | (1,015 | ) | (2,112 | ) | ||||||||||
Net cash (used in) provided by investing activities | (17,613 | ) | (11,043 | ) | (13,211 | ) | 10,588 | (23,181 | ) | |||||||||||
Financing activities | ||||||||||||||||||||
Proceeds from exercise of stock options | 149 | 190 | 8 | 366 | 119 | |||||||||||||||
Issuance of restricted stock | — | 120 | — | — | — | |||||||||||||||
Net proceeds from issuance of redeemable convertible preferred stock | 29,818 | 301 | 20,191 | — | 29,818 | |||||||||||||||
Payments of long-term debt | — | — | (591 | ) | — | — | ||||||||||||||
Net cash provided by financing activities | 29,967 | 611 | 19,608 | 366 | 29,937 | |||||||||||||||
Net (decrease) increase in cash and cash equivalents | 4,392 | (16,265 | ) | (12,496 | ) | (6,249 | ) | 4,056 | ||||||||||||
Cash and cash equivalents at beginning of period | 13,231 | 29,496 | 41,992 | 17,623 | 13,231 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 17,623 | $ | 13,231 | $ | 29,496 | $ | 11,374 | $ | 17,287 | ||||||||||
Noncash investing and financing activities | ||||||||||||||||||||
Accretion of preferred stock to redemption value | $ | 8,534 | $ | 8,534 | $ | 6,896 | $ | 6,400 | $ | 6,400 | ||||||||||
Subscription receivables | $ | — | $ | — | $ | 305 | $ | — | $ | — | ||||||||||
Supplemental disclosure of cash flow information | ||||||||||||||||||||
Cash paid during the year for interest | $ | — | $ | — | $ | 10 | $ | — | $ | — |
F-48
Table of Contents
1. | Nature of Business and Organization |
2. | Significant Accounting Policies |
F-49
Table of Contents
F-50
Table of Contents
Nine Months Ended | ||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||
2007 | 2006 | 2005 | 2008 | |||||||||||||
(Unaudited) | ||||||||||||||||
Collaborator: | ||||||||||||||||
Elan | $ | 5,933 | $ | 2,967 | $ | — | $ | 5,300 | ||||||||
Nuvelo | 3,923 | 1,846 | 656 | 3,552 | ||||||||||||
Pfizer | 1,000 | — | — | 750 | ||||||||||||
Merck Serono | 2,740 | — | — | 4,484 | ||||||||||||
Takeda | 1,522 | — | — | 2,711 | ||||||||||||
Ophthotech | 1,000 | — | — | 900 | ||||||||||||
Eyetech | — | 1,445 | 1,742 | — | ||||||||||||
Ribomic | 1,250 | 150 | — | 3,000 | ||||||||||||
Other | — | — | — | 44 | ||||||||||||
Total | $ | 17,368 | $ | 6,408 | $ | 2,398 | $ | 20,741 | ||||||||
F-51
Table of Contents
• | Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
• | Level 2 — Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs. | |
• | Level 3 — Unobservable inputs used when little or no market data is available and requires the Company to develop its own assumptions about how market participants would price the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
F-52
Table of Contents
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents | $ | 8,275 | $ | 2,096 | $ | — | $ | 10,371 | ||||||||
Marketable securities | 5,188 | 21,132 | $ | — | 26,320 | |||||||||||
$ | 13,463 | $ | 23,228 | $ | — | $ | 36,691 | |||||||||
F-53
Table of Contents
F-54
Table of Contents
3. | License and Collaboration Agreements |
F-55
Table of Contents
F-56
Table of Contents
F-57
Table of Contents
F-58
Table of Contents
F-59
Table of Contents
Fair value of common stock | $ | 0.93 | ||
Weighted-average risk-free interest rate | 4.68 | % | ||
Expected life (contractual term) | 7 years | |||
Volatility | 76 | % | ||
Dividend yield | 0 | % |
F-60
Table of Contents
4. | Marketable Securities |
F-61
Table of Contents
September 30, 2008 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(Unaudited) | ||||||||||||||||
Certificates of Deposit | $ | 500 | $ | — | $ | — | $ | 500 | ||||||||
Commercial paper | 9,953 | 20 | — | 9,973 | ||||||||||||
U.S. Government treasury notes | 2,779 | 19 | — | 2,798 | ||||||||||||
U.S. Government treasury securities | 2,387 | 2 | — | 2,389 | ||||||||||||
U.S. Government agencies | 5,377 | — | (6 | ) | 5,371 | |||||||||||
Corporate debt securities: | ||||||||||||||||
Due in one year or less | 4,958 | — | (182 | ) | 4,776 | |||||||||||
Due in one to three years | 519 | — | (6 | ) | 513 | |||||||||||
Total marketable securities | $ | 26,473 | $ | 41 | $ | (194 | ) | $ | 26,320 | |||||||
December 31, 2007 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Commercial paper | $ | 17,277 | $ | 65 | $ | — | $ | 17,342 | ||||||||
U.S. Government treasury notes | 4,974 | 12 | — | 4,986 | ||||||||||||
U.S. Government agencies | 2,014 | 2 | — | 2,016 | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Due in one year or less | 9,931 | 2 | (5 | ) | 9,928 | |||||||||||
Due in one to three years | 1,035 | 2 | — | 1,037 | ||||||||||||
Asset-backed securities | 2,842 | 4 | — | 2,846 | ||||||||||||
Total marketable securities | $ | 38,073 | $ | 87 | $ | (5 | ) | $ | 38,155 | |||||||
December 31, 2006 | ||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Certificates of deposit | $ | 300 | $ | — | $ | — | $ | 300 | ||||||||
Commercial paper | 5,707 | 3 | — | 5,710 | ||||||||||||
U.S. Government treasury notes | 5,075 | 2 | — | 5,077 | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Due in one year or less | 1,892 | — | — | 1,892 | ||||||||||||
Due in one to three years | 4,819 | 1 | (1 | ) | 4,819 | |||||||||||
Asset-backed securities | 4,994 | 1 | — | 4,995 | ||||||||||||
Total marketable securities | $ | 22,787 | $ | 7 | $ | (1 | ) | $ | 22,793 | |||||||
F-62
Table of Contents
5. | Property and Equipment |
Estimated | December 31, | |||||||||
Life in Years | 2007 | 2006 | ||||||||
Laboratory equipment | 5 | $ | 5,312 | $ | 3,310 | |||||
Computers and office equipment | 4 | 534 | 377 | |||||||
Purchased software | 3 | 312 | 261 | |||||||
Office furniture | 5 | 419 | 313 | |||||||
Leasehold improvements | Shorter of useful life or remainder of lease | 345 | 335 | |||||||
6,922 | 4,596 | |||||||||
Less accumulated depreciation and amortization | (3,771 | ) | (2,915 | ) | ||||||
Property and equipment, net | $ | 3,151 | $ | 1,681 | ||||||
6. | Debt |
F-63
Table of Contents
7. | Income Taxes |
�� | ||||||||||||
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Loss before income tax expense | $ | (20,375 | ) | $ | (16,384 | ) | $ | (19,967 | ) | |||
Benefit at federal statutory tax rates | (6,927 | ) | (5,580 | ) | (6,789 | ) | ||||||
Permanent differences | 1,976 | 110 | 19 | |||||||||
State taxes, net of deferral benefit | (1,324 | ) | (1,067 | ) | (1,298 | ) | ||||||
Tax credits | (264 | ) | (423 | ) | (523 | ) | ||||||
Change in valuation allowance | 6,539 | 6,960 | 8,591 | |||||||||
Income tax provision | $ | — | $ | — | $ | — | ||||||
F-64
Table of Contents
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
Net operating loss carryforwards | $ | 26,211 | $ | 22,936 | ||||
Research and development credits | 3,362 | 2,716 | ||||||
Accrual to cash adjustment | — | 6,247 | ||||||
Deferred Revenue | 8,048 | — | ||||||
Deferred Rent | 1,207 | — | ||||||
Intangible assets | 4,081 | 4,547 | ||||||
Other | 7 | (70 | ) | |||||
Net deferred tax assets | 42,916 | 36,376 | ||||||
Less — valuation allowance | (42,916 | ) | (36,376 | ) | ||||
Net deferred tax asset | $ | — | $ | — | ||||
8. | Stockholders’ Equity |
F-65
Table of Contents
Aggregate | Aggregate | |||||||||||||||||||
Liquidation | Liquidation | |||||||||||||||||||
Shares | Per Share | Preference as | Preference as | |||||||||||||||||
Shares | Issued and | Liquidation | of December 31, | of September 30, | ||||||||||||||||
Designated | Outstanding | Price | 2007 | 2008 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Series A | 51,884,995 | 51,774,995 | $ | 1.00 | $ | 73,551 | $ | 76,689 | ||||||||||||
Series B | 53,850,000 | 53,850,000 | $ | 1.00 | 66,535 | 69,797 | ||||||||||||||
Series C | 14,922,207 | 14,922,207 | $ | 2.00 | 29,818 | 29,818 | ||||||||||||||
Total | 120,657,202 | 120,547,202 | $ | 169,904 | $ | 176,304 | ||||||||||||||
F-66
Table of Contents
F-67
Table of Contents
December 31, | September 30, | |||||||
2007 | 2008 | |||||||
(Unaudited) | ||||||||
Conversion of Series A | 51,774,995 | 51,774,995 | ||||||
Conversion of Series B | 53,850,000 | 53,850,000 | ||||||
Conversion of Series C | 14,922,207 | 14,922,207 | ||||||
Authorized stock options | 16,490,771 | 16,886,067 | ||||||
Warrants to purchase common stock, including warrants related to convertible preferred stock | 729,419 | 710,000 | ||||||
137,767,392 | 138,143,269 | |||||||
F-68
Table of Contents
F-69
Table of Contents
December 31, | September 30, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Weighted-average risk-free interest rate | 4.64 | % | 4.64 | % | 3.88 | % | 3.12 | % | 4.64 | % | ||||||||||
Expected option life (in years) | 5 | 5 | 5 | 5 | 5 | |||||||||||||||
Volatility | 76 | % | 76 | % | 80 | % | 73 | % | 76 | % | ||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % |
• | Risk-free interest rate: The yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term of the awards. | |
• | Expected term: The expected term of the awards represents the period of time that the awards are expected to be outstanding. The expected term is based on historical data and expectations for the future to estimate employee exercise and post-vesting termination behavior. Management believes that all groups of employees exhibit similar exercise and post-vesting termination behavior, and therefore, does not stratify employees into multiple groups. | |
• | Expected stock price volatility: Expected volatility is determined by using the average historical volatility of comparable public companies with an expected term consistent with the Company’s expected term. | |
• | Expected annual dividend yield: The estimate for annual dividends is zero, because the Company has not historically paid a dividend on common stock and does not intend to do so in the foreseeable future. |
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• | the Company’s knowledge and experience in the valuation of early-stage life sciences companies; | |
• | comparative values of public companies, discounted for the risk and limited liquidity provided for in the shares subject to the options we have issued; | |
• | pricing of private sales of the Company’s preferred stock; | |
• | any perspective provided by any investment banks, including the likelihood of an initial public offering and the potential value of the Company in an initial public offering; | |
• | comparative rights and preferences of the security being granted compared to the rights and preferences of the Company’s other outstanding equity securities; | |
• | the effect of Company-specific events that have occurred between the times of the determination of the fair value of the Company’s common stock, such as the progress or lack thereof of the Company’s aptamer product candidates; and | |
• | economic trends in the biotechnology and pharmaceutical industries specifically, and general economic trends. |
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Year Ended December 31, | Nine Months Ended September 30, | |||||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Unaudited) | ||||||||||||||||
Research and development | $ | 205 | $ | 78 | $ | 218 | $ | 134 | ||||||||
General and administrative | 356 | 149 | 413 | 250 | ||||||||||||
Total stock-based compensation | $ | 561 | $ | 227 | $ | 631 | $ | 384 | ||||||||
2005 | ||||
Net loss, as reported | $ | (19,967 | ) | |
Less total stock-based compensation expense determined under fair value method for all employee awards | (253 | ) | ||
Pro forma net loss | $ | (20,220 | ) | |
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Weighted- | ||||||||||||||||
Average | ||||||||||||||||
Weighted- | Remaining | |||||||||||||||
Average | Contractual | Aggregate | ||||||||||||||
Exercise | Term | Intrinsic | ||||||||||||||
Options | Price | (in Years) | Value | |||||||||||||
Outstanding at December 31, 2006 | 13,909,769 | $ | 0.10 | |||||||||||||
Granted | 3,424,400 | $ | 0.50 | |||||||||||||
Exercised | (1,469,082 | ) | $ | 0.10 | ||||||||||||
Canceled | (186,597 | ) | $ | 0.30 | ||||||||||||
Outstanding at December 31, 2007 | 15,678,490 | $ | 0.18 | 6.62 | $ | 5,123 | ||||||||||
Granted (unaudited) | 2,295,350 | $ | 0.31 | |||||||||||||
Exercised (unaudited) | (3,604,704 | ) | $ | 0.10 | ||||||||||||
Canceled (unaudited) | (512,041 | ) | $ | 0.20 | ||||||||||||
Outstanding at September 30, 2008 (unaudited) | 13,857,095 | $ | 0.17 | 6.79 | $ | 1,883 | ||||||||||
Available for grant at December 31, 2007 | 812,281 | |||||||||||||||
Available for grant at September 30, 2008 (unaudited) | 3,028,888 | |||||||||||||||
Options expected to vest at December 31, 2007(1) | 4,836,511 | $ | 0.35 | 8.92 | $ | 978 | ||||||||||
Options expected to vest at September 30, 2008 (unaudited)(1) | 4,768,943 | $ | 0.26 | 8.92 | $ | 227 | ||||||||||
Options exercisable at December 31, 2007 | 10,421,413 | $ | 0.10 | 5.46 | $ | 4,060 | ||||||||||
Options exercisable at September 30, 2008 (unaudited) | 8,673,461 | $ | 0.12 | 5.52 | $ | 1,636 | ||||||||||
(1) | Options expected to vest is calculated by applying an estimated forfeiture rate to unvested options. |
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Grant Date | Options Granted | Exercise Price | Fair Value | Intrinsic Value | ||||||||||||
March 2007 | 1,169,000 | $ | 0.22 | $ | 0.53 | 0.31 | ||||||||||
July 2007(1) | 1,948,500 | $ | 0.64 | $ | 0.93 | 0.29 | ||||||||||
September 2007(1) | 306,900 | $ | 0.64 | $ | 1.30 | 0.66 | ||||||||||
May 2008 | 1,465,050 | $ | 0.31 | $ | 0.31 | — | ||||||||||
July 2008 | 830,300 | $ | 0.31 | $ | 0.31 | — | ||||||||||
Total | 5,719,750 | |||||||||||||||
(1) | In May 2008, the Company amended stock options granted in July 2007 and September 2007 with an exercise price of $0.64 to reduce the exercise price of the stock options to $0.31. |
9. | Accrued Expenses |
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
Accrued compensation and benefits | $ | 1,477 | $ | 1,384 | ||||
Accrued professional services | 420 | 405 | ||||||
Deferred rent | 418 | 33 | ||||||
ARC1779 development costs | 1,597 | 20 | ||||||
Other | 677 | 608 | ||||||
Total current accrued expenses | $ | 4,589 | $ | 2,450 | ||||
10. | Commitments and Contingencies |
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Third Street | Sublease | Total | ||||||||||
Operating | Income for | Operating | ||||||||||
Lease | Third Street | Leases | ||||||||||
Fiscal year ending December 31: | ||||||||||||
2008 | $ | 2,900 | $ | (1,073 | ) | $ | 1,827 | |||||
2009 | 3,035 | (1,073 | ) | 1,962 | ||||||||
2010 | 3,035 | (1,073 | ) | 1,962 | ||||||||
2011 | 3,035 | (805 | ) | 2,230 | ||||||||
2012 | 3,103 | — | 3,103 | |||||||||
Thereafter | 9,307 | — | 9,307 | |||||||||
$ | 24,415 | $ | (4,024 | ) | $ | 20,391 | ||||||
11. | Defined Contribution Benefit Plan |
12. | Subsequent Events (unaudited) |
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by and among
NITROMED, INC.,
a Delaware corporation;
NEWPORT ACQUISITION CORP.,
a Delaware corporation; and
ARCHEMIX CORP.,
a Delaware corporation
Dated as of November 18, 2008
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1. | DESCRIPTION OF TRANSACTION | A-6 | ||||
1.1 The Merger | A-6 | |||||
1.2 Effects of the Merger | A-6 | |||||
1.3 Closing; Effective Time | A-7 | |||||
1.4 Certificate of Incorporation and Bylaws | A-7 | |||||
1.5 Recapitalization of NitroMed Common Stock | A-7 | |||||
1.6 Conversion of Archemix Shares | A-8 | |||||
1.7 Calculation of Net Cash | A-9 | |||||
1.8 Closing of Archemix’s Transfer Books | A-9 | |||||
1.9 Surrender of Certificates | A-10 | |||||
1.10 Appraisal Rights | A-11 | |||||
1.11 Further Action | A-11 | |||||
1.12 Tax Consequences | A-11 | |||||
1.13 Withholding | A-11 | |||||
2. | REPRESENTATIONS AND WARRANTIES OF ARCHEMIX | A-12 | ||||
2.1 Due Organization; No Subsidiaries; Etc | A-12 | |||||
2.2 Certificate of Incorporation and Bylaws; Records | A-12 | |||||
2.3 Capitalization, Etc | A-13 | |||||
2.4 Financial Statements | A-13 | |||||
2.5 Absence of Changes | A-14 | |||||
2.6 Title to Assets | A-15 | |||||
2.7 Bank Accounts | A-15 | |||||
2.8 Equipment; Leasehold | A-15 | |||||
2.9 Intellectual Property | A-15 | |||||
2.10 Contracts | A-18 | |||||
2.11 Liabilities; Fees, Costs and Expenses | A-19 | |||||
2.12 Compliance with Legal Requirements | A-20 | |||||
2.13 Governmental Authorizations | A-20 | |||||
2.14 Tax Matters | A-20 | |||||
2.15 Employee and Labor Matters; Benefit Plans | A-22 | |||||
2.16 Environmental Matters | A-25 | |||||
2.17 Insurance | A-25 | |||||
2.18 Legal Proceedings; Orders | A-25 | |||||
2.19 Authority; Binding Nature of Agreement | A-26 | |||||
2.20 Non-Contravention; Consents | A-26 | |||||
2.21 Vote Required | A-26 | |||||
2.22 Regulatory Compliance | A-27 | |||||
2.23 Archemix Action | A-27 | |||||
2.24 Anti-Takeover Law | A-27 | |||||
2.25 No Financial Advisor | A-28 | |||||
2.26 Certain Payments | A-28 | |||||
2.27 Disclosure | A-28 |
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3. | REPRESENTATIONS AND WARRANTIES OF NITROMED AND MERGER SUB | A-28 | ||||
3.1 Due Organization; Subsidiaries; Etc | A-28 | |||||
3.2 Certificate of Incorporation and Bylaws; Records | A-29 | |||||
3.3 Capitalization, Etc | A-29 | |||||
3.4 SEC Filings; Financial Statements | A-30 | |||||
3.5 Absence of Changes | A-31 | |||||
3.6 Liabilities; Fees, Costs and Expenses | A-32 | |||||
3.7 Compliance with Legal Requirements | A-33 | |||||
3.8 Governmental Authorizations | A-33 | |||||
3.9 Equipment; Leasehold | A-33 | |||||
3.10 Intellectual Property | A-33 | |||||
3.11 Contracts | A-36 | |||||
3.12 Tax Matters | A-37 | |||||
3.13 Employee and Labor Matters; Benefit Plans | A-39 | |||||
3.14 Environmental Matters | A-42 | |||||
3.15 Insurance | A-43 | |||||
3.16 Title to Assets; Bank Accounts; Receivables | A-43 | |||||
3.17 Legal Proceedings; Orders | A-43 | |||||
3.18 Non-Contravention; Consents | A-44 | |||||
3.19 Vote Required | A-44 | |||||
3.20 Regulatory Compliance | A-44 | |||||
3.21 NitroMed Action | A-45 | |||||
3.22 No Financial Advisor | A-46 | |||||
3.23 Certain Payments | A-46 | |||||
3.24 Authority; Binding Nature of Agreement | A-46 | |||||
3.25 Anti-Takeover Law | A-46 | |||||
3.26 Valid Issuance | A-46 | |||||
3.27 Controls and Procedures, Certifications and Other Matters Relating to the Sarbanes-Oxley Act | A-47 | |||||
3.28 Disclosure | A-47 | |||||
4. | CERTAIN COVENANTS OF THE PARTIES | A-47 | ||||
4.1 Access and Investigation | A-47 | |||||
4.2 Operation of NitroMed’s Business | A-48 | |||||
4.3 Operation of Archemix’s Business | A-48 | |||||
4.4 Disclosure Schedule Updates | A-49 | |||||
4.5 No Solicitation | A-49 | |||||
4.6 Employee Benefit Plans | A-50 | |||||
5. | ADDITIONAL AGREEMENTS OF THE PARTIES | A-50 | ||||
5.1 Registration Statement; Joint Proxy Statement/Prospectus | A-50 | |||||
5.2 Archemix Stockholders’ Meeting | A-51 | |||||
5.3 NitroMed Stockholders’ Meeting | A-52 | |||||
5.4 Regulatory Approvals | A-53 | |||||
5.5 Archemix Stock Options; Archemix Warrants | A-53 | |||||
5.6 NitroMed Options | A-55 | |||||
5.7 Indemnification of Officers and Directors | A-55 | |||||
5.8 Additional Agreements | A-56 |
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5.9 Disclosure | A-57 | |||||
5.10 Listing | A-57 | |||||
5.11 Directors and Officers | A-57 | |||||
5.12 Tax Matters | A-57 | |||||
5.13 Equity Retention Plan | A-58 | |||||
5.14 Archemix Affiliates | A-58 | |||||
5.15 Resale Registration Statement | A-58 | |||||
5.16 Section 16(b) | A-59 | |||||
5.17 Current Report onForm 8-K | A-59 | |||||
6. | CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY | A-59 | ||||
6.1 Effectiveness of Registration Statement | A-59 | |||||
6.2 No Restraints | A-59 | |||||
6.3 Stockholder Approval | A-59 | |||||
6.4 Governmental Authorization | A-59 | |||||
6.5 Listing | A-59 | |||||
6.6 Regulatory Matters | A-59 | |||||
7. | ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF NITROMED AND MERGER SUB | A-60 | ||||
7.1 Accuracy of Representations | A-60 | |||||
7.2 Performance of Covenants | A-60 | |||||
7.3 Consents | A-60 | |||||
7.4 Agreements and Other Documents | A-60 | |||||
8. | ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF ARCHEMIX | A-60 | ||||
8.1 Accuracy of Representations | A-60 | |||||
8.2 Performance of Covenants | A-61 | |||||
8.3 Consents | A-61 | |||||
8.4 Documents | A-61 | |||||
8.5 Certificate of Amendment | A-61 | |||||
8.6 Net Cash at Closing | A-61 | |||||
8.7 BiDil Divestiture | A-61 | |||||
9. | TERMINATION | A-61 | ||||
9.1 Termination | A-61 | |||||
9.2 Effect of Termination | A-63 | |||||
9.3 Expenses; Termination Fees | A-63 | |||||
10. | MISCELLANEOUS PROVISIONS | A-64 | ||||
10.1 Non-Survival of Representations and Warranties | A-64 | |||||
10.2 Amendment | A-64 | |||||
10.3 Waiver | A-65 | |||||
10.4 Entire Agreement; Counterparts; Exchanges by Facsimile | A-65 | |||||
10.5 Applicable Law; Jurisdiction | A-65 | |||||
10.6 Attorneys’ Fees | A-65 |
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10.7 Assignability; No Third Party Beneficiaries | A-65 | |||||
10.8 Notices | A-66 | |||||
10.9 Cooperation | A-66 | |||||
10.10 Severability | A-66 | |||||
10.11 Other Remedies; Specific Performance | A-67 | |||||
10.12 Construction | A-67 |
Exhibits | ||||
Exhibit A | Capitalized Terms | |||
Exhibit B | Form of Archemix Stockholder Voting Agreement | |||
Exhibit C | Form of NitroMed Stockholder Voting Agreement |
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5. | ADDITIONAL AGREEMENTS OF THE PARTIES |
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7. | ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF NITROMED AND MERGER SUB |
8. | ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF ARCHEMIX |
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9. | TERMINATION |
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10. | MISCELLANEOUS PROVISIONS |
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45 Hayden Avenue
Suite 3000
Lexington MA 02421
Fax:(781) 274-8080
Attention: Kenneth Bate, President and CEO
60 State Street
Boston, MA 02109
Fax:(858) 550-6420
Attention: Steven D. Singer, Esq.
Jay E. Bothwick, Esq.
Cynthia T. Mazareas, Esq.
300 Third Street
Cambridge, MA 02142
Fax:(617) 621-9300
Attention: Errol B. DeSouza, President and CEO
One Financial Center
Boston, MA 02111
Fax:(617) 542-2241
Attention: Jeffrey M. Wiesen, Esq.
Scott A. Samuels, Esq.
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By: | /s/ Kenneth M. Bate |
Title: | President and Chief Executive Officer |
By: | /s/ Kenneth M. Bate |
Title: | President |
By: | /s/ Errol B. DeSouza |
Title: | President and Chief Executive Officer |
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Definition | Section | |
Archemix | Recitals | |
Archemix Affiliate | 5.14 | |
Archemix Audited Balance Sheet | 2.4(a)(i) | |
Archemix Board Recommendation | 5.2(b) | |
Archemix Certificate | 1.6 | |
Archemix Certificate of Incorporation | 2.2 | |
Archemix Constituent Documents | 2.2 | |
Archemix Disclosure Schedule | 2 | |
Archemix Financial Statements | 2.4(a) | |
Archemix Foreign Plan | 2.15(k) | |
Archemix Intervening Event | 5.2(c) | |
Archemix Plans | 2.15(s) | |
Archemix Returns | 2.14(a) | |
Archemix Stock Certificate | 1.8 | |
Archemix Stockholder Voting Agreements | Recitals | |
Archemix Stockholders’ Meeting | 5.2(a) | |
Archemix Unaudited Interim Balance Sheet | 2.4(a)(ii) | |
Agreement | Preamble | |
BiDil Asset Purchase Agreement | 4.2(a) | |
BiDil Divestiture | 4.2(a) | |
Closing | 1.3 | |
Closing Date | 1.3 | |
Continuing Plans | 4.6 | |
Conversion Factor | 1.6(a) | |
D&O Indemnified Parties | 5.7(a) | |
Dispute Net Cash Determination Date | 1.7(d) | |
Dispute Notice | 1.7(b) | |
Dissenting Shares | 1.9 | |
Effective Time | 1.3 | |
Equity Retention Plan | 5.13 | |
Equity Retention Plan Options | 5.13 | |
Exchange Agent | 1.8(a) | |
Exchange Fund | 1.8(a) | |
First Anticipated Closing Date | 1.7(a) | |
GAAP | 2.4(b) | |
Lapse Date | 1.7(b) | |
Merger | Recitals | |
Merger Sub | Preamble | |
Net Cash Estimation | 1.7(a) | |
Net Cash Schedule | 1.7(a) | |
NitroMed | Preamble | |
NitroMed Board Recommendation | 5.3(b) |
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Definition | Section | |
NitroMed Balance Sheet | 3.6(a) | |
NitroMed Balance Sheet Date | 3.5(h) | |
NitroMed Certificate of Amendment | 1.5(a) | |
NitroMed Constituent Documents | 3.2 | |
NitroMed Disclosure Schedule | 3 | |
NitroMed Foreign Plan | 3.13(k) | |
NitroMed Intervening Event | 5.3(c) | |
NitroMed Option Plans | 3.3(b) | |
NitroMed Plan | 3.13(s) | |
NitroMed Returns | 3.12(a) | |
NitroMed SEC Documents | 3.4(a) | |
NitroMed Stockholder Voting Agreements | Recitals | |
NitroMed Stockholders’ Meeting | 5.3(a) | |
Non-Dispute Net Cash Determination Date | 1.7(c) | |
NO Program Divestiture | 4.2(a) | |
Pension Plan | 2.15(k) | |
Pre-Closing Period | 4.1 | |
Registrable Merger Shares | 5.15 | |
Required Archemix Stockholder Vote | 2.22 | |
Required NitroMed Stockholder Vote | 3.19 | |
Reverse Stock Split | 1.5(a)(i) | |
Shelf Registration Statement | 5.15 | |
Subsequent Anticipated Closing Date | 1.7(e) | |
Surviving Corporation | 1.1 |
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to
Agreement and Plan of Merger and Reorganization
by and among
NitroMed, Inc., Newport Acquisition Corp.,
and
Archemix Corp.
Merger Shares = | Total number of shares of NitroMed Common Stock issued in the Merger, or issuable upon exercise of (i) outstanding Archemix Options or outstanding Archemix Warrants assumed in the Merger as set forth in Section 5.5 of the Merger Agreement, or (ii) Equity Retention Plan Options; provided, however, that any shares of NitroMed Common Stock issued in the Merger or issuable with respect to any shares of Archemix capital stock issued or issuable in connection with any Contract described on Part 4.3 of the Archemix Disclosure Schedule shall not be counted. | |
NitroMed Equivalents = | Total number of shares of NitroMed Common Stock outstanding at the Effective Time, or issuable upon outstanding NitroMed Options; provided, however, that any NitroMed Options described on Part 3.3(b) of the NitroMed Disclosure Schedule that are cancelled prior to the Effective Time shall not be counted. | |
Adjusted Net Cash = | Either (i) the sum of Net Cash and $19,285,714, if Archemix Target Cash is equal to or greater than the amount specified in Part 1.6(a) of the Archemix Disclosure Schedule, or (ii) the sum of Net Cash and $24,285,714, if Archemix Target Cash is less than the amount specified in Part 1.6(a) of the Archemix Disclosure Schedule. | |
Where: | NitroMed Equivalents x 150,000,000 = Merger Shares Adjusted Net Cash |
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GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
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NitroMed, Inc.
45 Hayden Avenue
Lexington, MA 02421
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• | a draft of the Agreement received on November 13, 2008, which is the most recent draft made available to Cowen; | |
• | certain publicly available financial and other information for the Company and Archemix, respectively, including equity research, and certain other relevant financial and operating data furnished to Cowen by the managements of the Company and Archemix, respectively; | |
• | certain internal financial analyses, financial projections, reports and other information concerning Archemix (the “Archemix Forecasts”) prepared by the management of Archemix; | |
• | discussions Cowen has had with certain members of the management of Archemix concerning the historical and current business operations, financial condition and prospects of Archemix and such other matters Cowen deemed relevant; | |
• | discussions Cowen has had with certain members of the management of the Company concerning the historical and current business operations, financial condition and prospects of the Company, including, more specifically, that the Company does not, and does not intend to, engage in any activity that may result in the generation of any revenue, and such other matters Cowen deemed relevant; | |
• | certain operating results of Archemix as compared to the operating results, reported price and trading histories of certain publicly traded companies Cowen deemed relevant; | |
• | certain financial terms of certain companies that completed their initial public offerings that Cowen deemed relevant; | |
• | certain financial terms of the Merger as compared to the financial terms of certain selected business combinations Cowen deemed relevant; | |
• | certain pro forma financial effects of the Merger; and | |
• | such other information, financial studies, analyses and investigations and such other factors that Cowen deemed relevant for the purposes of its opinion. |
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RESTATED
CERTIFICATE OF INCORPORATION
OF NITROMED, INC.
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
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By: |
Title: | President, Chief Executive Officer and |
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RESTATED
CERTIFICATE OF INCORPORATION
OF NITROMED, INC
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
By: |
Title: | President, Chief Executive Officer and |
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Item 20. | Indemnification of Directors and Officers |
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Item 21. | Exhibits and Financial Statement Schedules |
Exhibit | ||||
Number | Description | |||
2 | .1 | Agreement and Plan of Merger, dated as of November 18, 2008, among Archemix Corp., Newport Acquisition Corp. and NitroMed, Inc. (Included asAnnex Ato the joint proxy statement/prospectus forming a part of this Registration Statement) | ||
2 | .2 | Form of NitroMed Stockholder Agreement and a schedule of signatories thereto (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 18, 2008 (FileNo. 000-50439)) | ||
2 | .3 | Form of Archemix Stockholder Agreement and a schedule of signatories thereto (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 18, 2008 (FileNo. 000-50439)) | ||
3 | .1 | Restated Certificate of Incorporation of NitroMed (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
3 | .2 | Amended and Restated Bylaws of NitroMed (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
4 | .1** | Form of NitroMed common stock certificate to be effective upon completion of the merger | ||
4 | .2 | Warrant to Purchase Series A Convertible Preferred Stock issued to Comerica Bank-California by Archemix Corp., dated December 18, 2002 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
4 | .3 | Warrant to Purchase Common Stock issued to Isis Pharmaceuticals, Inc. by Archemix Corp., dated July 23, 2007 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
5 | .1** | Opinion of Wilmer Cutler Pickering Hale and Dorr LLP regarding the legality of securities | ||
8 | .1** | Opinion of Wilmer Cutler Pickering Hale and Dorr LLP regarding tax matters | ||
8 | .2** | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding tax matters | ||
10 | .1# | Restated 1993 Equity Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .2# | Amended and Restated 2003 Stock Incentive Plan, as amended (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .3# | Form of Incentive Stock Option Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .4# | Form of Nonstatutory Stock Option Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .5# | Form of Restricted Stock Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan entered into between NitroMed and certain of NitroMed’s executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on March 22, 2007 (FileNo. 000-50439)) | ||
10 | .6# | 2003 Employee Stock Purchase Plan, as amended (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .7† | Collaboration and License Agreement between NitroMed and Professor Jay N. Cohn dated January 22, 1999, as amended January 29, 2001 and March 15, 2002 (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .8† | Amendment No. 1 to Collaboration and License Agreement between NitroMed and Professor Jay N. Cohn dated August 10, 2000 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) |
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Exhibit | ||||
Number | Description | |||
10 | .9† | Letter Agreement, dated as of September 5, 2008, between NitroMed, Inc. and Jay N. Cohn, M.D. (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2008 (FileNo. 000-50439)) | ||
10 | .10† | Agreement between NitroMed and FoxKiser dated April 26, 2001 (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .11† | Supply Agreement between NitroMed and Schwarz Pharma Manufacturing, Inc. dated as of February 16, 2005 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .12# | Executive Severance Benefit Plan (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2006 (FileNo. 000-50439)) | ||
10 | .13# | Amendment No. 1 to Executive Severance Benefit Plan (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on August 22, 2006 (FileNo. 000-50439)) | ||
10 | .14# | Form of Agreement entered into by and between NitroMed and certain of its executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2006 (FileNo. 000-50439)) | ||
10 | .15# | Form of Amendment No. 1 to Agreement entered into by and between NitroMed and certain of its executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on August 22, 2006 (FileNo. 000-50439)) | ||
10 | .16# | Employment Offer Letter between NitroMed and Kenneth M. Bate, dated as of January 19, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .17# | Retention Agreement between NitroMed and Kenneth M. Bate, dated as of January 23, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .18# | Severance Agreement between NitroMed and Kenneth M. Bate, dated as of January 23, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .19# | Retention Agreement between NitroMed and Kenneth M. Bate, dated as of January 15, 2008 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 17, 2008 (FileNo. 000-50439)) | ||
10 | .20† | License Agreement between the Company and Elan Pharma International Limited, dated as of February 9, 2007 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .21# | Consulting Agreement, dated as of October 31, 2008, between NitroMed, Inc. and Jane A. Kramer (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2008 (FileNo. 000-50439)) | ||
10 | .22 | Purchase and Sale Agreement, dated as of October 22, 2008, by and between NitroMed, Inc. and JHP Pharmaceuticals, LLC (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on October 23, 2008 (FileNo. 000-50439)) | ||
10 | .23 | Voting Agreement, dated October 22, 2008, by and between NitroMed, Inc., JHP Pharmaceuticals, LLC and certain funds affiliated with HealthCare Ventures LLC, Rho Ventures and Invus Public Equities, L.P. (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on October 23, 2008 (FileNo. 000-50439)) | ||
10 | .24 | Voting Agreement, dated November 21, 2008, effective as of November 17, 2008, by and between NitroMed, Inc., JHP Pharmaceuticals, LLC and certain funds affiliated with Care Capital LLC. (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 26, 2008 (FileNo. 000-50439)) | ||
10 | .25# | Employment Agreement by and between Archemix Corp. and Errol De Souza, dated March 7, 2003 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) |
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Exhibit | ||||
Number | Description | |||
10 | .26#* | First Amendment to Employment Agreement by and between Archemix Corp. and Errol De Souza, dated June 30, 2008 | ||
10 | .27# | Employment Agreement by and between Archemix Corp. and Duncan Higgons, dated December 15, 2005 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .28# | Offer Letter from Archemix Corp. to James Gilbert, dated September 8, 2006 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .29# | Offer Letter from Archemix Corp. to Gregg Beloff, dated November 14, 2003 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .30# | Offer Letter from Archemix Corp. to Page Bouchard, dated August 24, 2004 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .31#* | Form of Change in Control Agreement by and between Archemix Corp. and each of the persons listed on Schedule I attached thereto dated September 30, 2008 | ||
10 | .32 | Lease by and between Archemix Corp. and Three Hundred Third Street, LLC, dated April 11, 2005, as amended by the First Amendment to Lease dated July 9, 2006 and the Second Amendment to Lease dated October 31, 2007 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .33††* | Amended and Restated Collaboration Agreement by and between Archemix Corp. and Nuvelo, Inc., dated July 31, 2006 | ||
10 | .34††* | Collaborative Research and License Agreement by and between Archemix Corp. and Merck KGaA, dated January 17, 2007, as amended June 6, 2007 | ||
10 | .35††* | Collaborative Research and License Agreement between Archemix Corp. and Merck KGaA, dated as of June 6, 2007 | ||
10 | .36††* | License Agreement between Gilead Sciences, Inc. and Archemix Corp., dated as of October 23, 2001 | ||
10 | .37††* | Settlement Agreement and Release by and among Archemix Corp., Gilead Sciences, Inc. and University License Equity Holdings, Inc., dated September 4, 2003 | ||
10 | .38††* | Amended and Restated License Agreement by and between Archemix Corp. and SomaLogic, Inc., dated as of June 14, 2007 | ||
10 | .39††* | License Agreement by and between Archemix Corp. and Regado Biosciences, Inc., dated as of October, 2003 | ||
10 | .40††* | Collaborative Research and License Agreement by and between Archemix Corp. and Takeda Pharmaceutical Company Limited, dated June 11, 2007 | ||
10 | .41††* | Collaborative Research and License Agreement by and between Archemix Corp. and Elan Pharma International Limited, dated June 30, 2006 | ||
10 | .42††* | Collaborative Research, Services and License Agreement by and between Archemix Corp. and Pfizer Inc., dated as of December 21, 2006 | ||
10 | .43††* | Technology Development and License Agreement by and between Archemix Corp. and Aptamera, Inc. (now known as Antisoma plc), dated as of August 6, 2003 | ||
10 | .44††* | Research and License Agreement by and between Archemix Corp. and Eyetech Pharmaceuticals, Inc. (now known as OSI Pharmaceuticals, Inc.), dated as of April 8, 2004 | ||
10 | .45††* | License Agreement by and between Archemix Corp. and Isis Pharmaceuticals, Inc., dated as of July 23, 2007 | ||
10 | .46††* | Exclusive License Agreement by and between Archemix Corp. and Ophthotech Corporation, dated as of July 31, 2007 | ||
10 | .47††* | Feasibility Study, License and Option Agreement by and between Archemix Corp. and Eli Lilly and Company, dated as of August 31, 2008 |
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Exhibit | ||||
Number | Description | |||
10 | .48††* | Exclusive License Agreement by and between Archemix Corp. and Ribomic, Inc., dated effective as of December 10, 2007, as amended on June 11, 2008 | ||
10 | .49††* | Research License and Option Agreement by and between Archemix Corp. and Ribomic, Inc., dated effective as of June 11, 2008 | ||
10 | .50 | Loan and Security Agreement by and between Archemix Corp. and Silicon Valley Bank, dated as of April 11, 2005, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .51#* | Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended | ||
10 | .52# | Form of Non-Qualified Stock Option Agreement for Directors under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .53# | Form of Incentive Stock Option Agreement for Senior Executives under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .54# | Form of Non-Qualified Stock Option Agreement for Senior Executives under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
21 | .1* | Subsidiaries of NitroMed, Inc. | ||
23 | .2* | Consent of Ernst & Young LLP, independent registered public accounting firm of NitroMed, Inc. | ||
23 | .3* | Consent of Ernst & Young LLP, independent registered public accounting firm of Archemix Corp. | ||
23 | .4** | Consent of Wilmer Cutler Pickering Hale and Dorr LLP (Contained in Exhibit 5.1 hereto) | ||
23 | .5** | Consent of Wilmer Cutler Pickering Hale and Dorr LLP (Contained in Exhibit 8.1 hereto) | ||
23 | .6** | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (Contained in Exhibit 8.2 hereto) | ||
24 | .1 | Power of Attorney (Included on Signature Page of this Registration Statement) | ||
99 | .1* | Form of Proxy Card for holders of NitroMed’s common stock | ||
99 | .2* | Consent of Cowen and Company, LLC | ||
99 | .3* | Opinion of Cowen and Company, LLC, financial advisor to NitroMed (Included as Annex C to the joint proxy statement/prospectus) | ||
99 | .4* | Proposed Amendment to Certificate of Incorporation of NitroMed (Included as Annex D to this joint proxy statement/prospectus) | ||
99 | .5* | Proposed Amendment to Certificate of Incorporation of NitroMed (Included as Annex E to this joint proxy statement/prospectus) | ||
99 | .6* | Consent of Errol De Souza, Ph.D. to be named as a director | ||
99 | .7* | Consent of Alex Barkas, Ph.D. to be named as a director | ||
99 | .8* | Consent of Peter Barrett, Ph.D. to be named as a director | ||
99 | .9* | Consent of John Maraganore, Ph.D. to be named as a director | ||
99 | .10* | Consent of Michael Ross, Ph.D. to be named as a director |
* | Filed herewith. | |
** | To be filed by amendment. | |
# | Indicates management contract or compensatory plan. | |
† | Confidential treatment granted as to certain portions, which portions have been filed separately with the Securities and Exchange Commission. | |
†† | Confidential treatment has been requested as to certain portions, which portions have been filed separately with the Securities and Exchange Commission. |
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Item 22. | Undertakings |
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Table of Contents
II-7
Table of Contents
By: | /s/ Kenneth M. Bate |
Signature | Title | Date | ||||
/s/ Kenneth M. Bate Kenneth M. Bate | Chief Executive Officer, President and Interim Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) | December 19, 2008 | ||||
/s/ Robert S. Cohen Robert S. Cohen | Director | December 19, 2008 | ||||
/s/ Frank L. Douglas Frank L. Douglas, M.D., Ph.D. | Director | December 19, 2008 | ||||
/s/ Zola Horovitz Zola Horovitz, Ph.D. | Director | December 19, 2008 | ||||
/s/ Argeris Karabelas Argeris Karabelas, Ph.D. | Director | December 19, 2008 |
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Table of Contents
Signature | Title | Date | ||||
/s/ Mark Leschly Mark Leschly | Director | December 19, 2008 | ||||
/s/ John W. Littlechild John W. Littlechild | Director | December 19, 2008 | ||||
/s/ Joseph Loscalzo Joseph Loscalzo, M.D., Ph.D. | Director | December 19, 2008 | ||||
/s/ Davey S. Scoon Davey S. Scoon | Director | December 19, 2008 | ||||
/s/ Christopher Sobecki Christopher Sobecki | Director | December 19, 2008 |
II-9
Table of Contents
Exhibit | ||||
Number | Description | |||
2 | .1 | Agreement and Plan of Merger, dated as of November 18, 2008, among Archemix Corp., Newport Acquisition Corp. and NitroMed, Inc. (Included asAnnex Ato the joint proxy statement/prospectus forming a part of this Registration Statement) | ||
2 | .2 | Form of NitroMed Stockholder Agreement and a schedule of signatories thereto (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 18, 2008 (FileNo. 000-50439)) | ||
2 | .3 | Form of Archemix Stockholder Agreement and a schedule of signatories thereto (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 18, 2008 (FileNo. 000-50439)) | ||
3 | .1 | Restated Certificate of Incorporation of NitroMed (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
3 | .2 | Amended and Restated Bylaws of NitroMed (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
4 | .1** | Form of NitroMed common stock certificate to be effective upon completion of the merger | ||
4 | .2 | Warrant to Purchase Series A Convertible Preferred Stock issued to Comerica Bank-California by Archemix Corp., dated December 18, 2002 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
4 | .3 | Warrant to Purchase Common Stock issued to Isis Pharmaceuticals, Inc. by Archemix Corp., dated July 23, 2007 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
5 | .1** | Opinion of Wilmer Cutler Pickering Hale and Dorr LLP regarding the legality of securities | ||
8 | .1** | Opinion of Wilmer Cutler Pickering Hale and Dorr LLP regarding tax matters | ||
8 | .2** | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding tax matters | ||
10 | .1# | Restated 1993 Equity Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .2# | Amended and Restated 2003 Stock Incentive Plan, as amended (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .3# | Form of Incentive Stock Option Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .4# | Form of Nonstatutory Stock Option Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .5# | Form of Restricted Stock Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan entered into between NitroMed and certain of NitroMed’s executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on March 22, 2007 (FileNo. 000-50439)) | ||
10 | .6# | 2003 Employee Stock Purchase Plan, as amended (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .7† | Collaboration and License Agreement between NitroMed and Professor Jay N. Cohn dated January 22, 1999, as amended January 29, 2001 and March 15, 2002 (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .8† | Amendment No. 1 to Collaboration and License Agreement between NitroMed and Professor Jay N. Cohn dated August 10, 2000 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .9† | Letter Agreement, dated as of September 5, 2008, between NitroMed, Inc. and Jay N. Cohn, M.D. (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2008 (FileNo. 000-50439)) | ||
10 | .10† | Agreement between NitroMed and FoxKiser dated April 26, 2001 (Incorporated by reference to the exhibits to NitroMed’s Registration Statement onForm S-1 (FileNo. 333-108104)) | ||
10 | .11† | Supply Agreement between NitroMed and Schwarz Pharma Manufacturing, Inc. dated as of February 16, 2005 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2004 (FileNo. 000-50439)) | ||
10 | .12# | Executive Severance Benefit Plan (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2006 (FileNo. 000-50439)) | ||
10 | .13# | Amendment No. 1 to Executive Severance Benefit Plan (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on August 22, 2006 (FileNo. 000-50439)) | ||
10 | .14# | Form of Agreement entered into by and between NitroMed and certain of its executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2006 (FileNo. 000-50439)) | ||
10 | .15# | Form of Amendment No. 1 to Agreement entered into by and between NitroMed and certain of its executive officers, together with a schedule of such officers (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on August 22, 2006 (FileNo. 000-50439)) | ||
10 | .16# | Employment Offer Letter between NitroMed and Kenneth M. Bate, dated as of January 19, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .17# | Retention Agreement between NitroMed and Kenneth M. Bate, dated as of January 23, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .18# | Severance Agreement between NitroMed and Kenneth M. Bate, dated as of January 23, 2007 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 25, 2007 (FileNo. 000-50439)) | ||
10 | .19# | Retention Agreement between NitroMed and Kenneth M. Bate, dated as of January 15, 2008 (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on January 17, 2008 (FileNo. 000-50439)) | ||
10 | .20† | License Agreement between the Company and Elan Pharma International Limited, dated as of February 9, 2007 (Incorporated by reference to the exhibits to NitroMed’s Annual Report onForm 10-K for the year ended December 31, 2006 (FileNo. 000-50439)) | ||
10 | .21# | Consulting Agreement, dated as of October 31, 2008, between NitroMed, Inc. and Jane A. Kramer (Incorporated by reference to the exhibits to NitroMed’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2008 (FileNo. 000-50439)) | ||
10 | .22 | Purchase and Sale Agreement, dated as of October 22, 2008, by and between NitroMed, Inc. and JHP Pharmaceuticals, LLC (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on October 23, 2008 (FileNo. 000-50439)) | ||
10 | .23 | Voting Agreement, dated October 22, 2008, by and between NitroMed, Inc., JHP Pharmaceuticals, LLC and certain funds affiliated with HealthCare Ventures LLC, Rho Ventures and Invus Public Equities, L.P. (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on October 23, 2008 (FileNo. 000-50439)) | ||
10 | .24 | Voting Agreement, dated November 21, 2008, effective as of November 17, 2008, by and between NitroMed, Inc., JHP Pharmaceuticals, LLC and certain funds affiliated with Care Capital LLC. (Incorporated by reference to the exhibits to NitroMed’s Current Report onForm 8-K filed on November 26, 2008 (FileNo. 000-50439)) | ||
10 | .25# | Employment Agreement by and between Archemix Corp. and Errol De Souza, dated March 7, 2003 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .26#* | First Amendment to Employment Agreement by and between Archemix Corp. and Errol De Souza, dated June 30, 2008 |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .27# | Employment Agreement by and between Archemix Corp. and Duncan Higgons, dated December 15, 2005 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .28# | Offer Letter from Archemix Corp. to James Gilbert, dated September 8, 2006 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .29# | Offer Letter from Archemix Corp. to Gregg Beloff, dated November 14, 2003 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .30# | Offer Letter from Archemix Corp. to Page Bouchard, dated August 24, 2004 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .31#* | Form of Change in Control Agreement by and between Archemix Corp. and each of the persons listed on Schedule I attached thereto dated September 30, 2008 | ||
10 | .32 | Lease by and between Archemix Corp. and Three Hundred Third Street, LLC, dated April 11, 2005, as amended by the First Amendment to Lease dated July 9, 2006 and the Second Amendment to Lease dated October 31, 2007 (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .33††* | Amended and Restated Collaboration Agreement by and between Archemix Corp. and Nuvelo, Inc., dated July 31, 2006 | ||
10 | .34††* | Collaborative Research and License Agreement by and between Archemix Corp. and Merck KGaA, dated January 17, 2007, as amended June 6, 2007 | ||
10 | .35††* | Collaborative Research and License Agreement between Archemix Corp. and Merck KGaA, dated as of June 6, 2007 | ||
10 | .36††* | License Agreement between Gilead Sciences, Inc. and Archemix Corp., dated as of October 23, 2001 | ||
10 | .37††* | Settlement Agreement and Release by and among Archemix Corp., Gilead Sciences, Inc. and University License Equity Holdings, Inc., dated September 4, 2003 | ||
10 | .38††* | Amended and Restated License Agreement by and between Archemix Corp. and SomaLogic, Inc., dated as of June 14, 2007 | ||
10 | .39††* | License Agreement by and between Archemix Corp. and Regado Biosciences, Inc., dated as of October, 2003 | ||
10 | .40††* | Collaborative Research and License Agreement by and between Archemix Corp. and Takeda Pharmaceutical Company Limited, dated June 11, 2007 | ||
10 | .41††* | Collaborative Research and License Agreement by and between Archemix Corp. and Elan Pharma International Limited, dated June 30, 2006 | ||
10 | .42††* | Collaborative Research, Services and License Agreement by and between Archemix Corp. and Pfizer Inc., dated as of December 21, 2006 | ||
10 | .43††* | Technology Development and License Agreement by and between Archemix Corp. and Aptamera, Inc. (now known as Antisoma plc), dated as of August 6, 2003 | ||
10 | .44††* | Research and License Agreement by and between Archemix Corp. and Eyetech Pharmaceuticals, Inc. (now known as OSI Pharmaceuticals, Inc.), dated as of April 8, 2004 | ||
10 | .45††* | License Agreement by and between Archemix Corp. and Isis Pharmaceuticals, Inc., dated as of July 23, 2007 | ||
10 | .46††* | Exclusive License Agreement by and between Archemix Corp. and Ophthotech Corporation, dated as of July 31, 2007 | ||
10 | .47††* | Feasibility Study, License and Option Agreement by and between Archemix Corp. and Eli Lilly and Company, dated as of August 31, 2008 | ||
10 | .48††* | Exclusive License Agreement by and between Archemix Corp. and Ribomic, Inc., dated effective as of December 10, 2007, as amended on June 11, 2008 |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .49††* | Research License and Option Agreement by and between Archemix Corp. and Ribomic, Inc., dated effective as of June 11, 2008 | ||
10 | .50 | Loan and Security Agreement by and between Archemix Corp. and Silicon Valley Bank, dated as of April 11, 2005, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .51#* | Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended | ||
10 | .52# | Form of Non-Qualified Stock Option Agreement for Directors under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .53# | Form of Incentive Stock Option Agreement for Senior Executives under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
10 | .54# | Form of Non-Qualified Stock Option Agreement for Senior Executives under the Archemix Corp. Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended (Incorporated by reference to the exhibits to Archemix’s Registration Statement onForm S-1, as amended (FileNo. 333-144837)) | ||
21 | .1* | Subsidiaries of the NitroMed, Inc. | ||
23 | .2* | Consent of Ernst & Young LLP, independent registered public accounting firm of NitroMed, Inc. | ||
23 | .3* | Consent of Ernst & Young LLP, independent registered public accounting firm of Archemix Corp. | ||
23 | .4** | Consent of Wilmer Cutler Pickering Hale and Dorr LLP (Contained in Exhibit 5.1 hereto) | ||
23 | .5** | Consent of Wilmer Cutler Pickering Hale and Dorr LLP (Contained in Exhibit 8.1 hereto) | ||
23 | .6** | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (Contained in Exhibit 8.2 hereto) | ||
24 | .1 | Power of Attorney (included on Signature Page of this Registration Statement) | ||
99 | .1* | Form of Proxy Card for holders of NitroMed’s common stock | ||
99 | .2* | Consent of Cowen and Company, LLC | ||
99 | .3 | Opinion of Cowen and Company, LLC, financial advisor to NitroMed (Included as Annex C to the joint proxy statement/prospectus) | ||
99 | .4* | Proposed Amendment to Certificate of Incorporation of NitroMed (Included as Annex D to this joint proxy statement/prospectus) | ||
99 | .5* | Proposed Amendment to Certificate of Incorporation of NitroMed (Included as Annex E to this joint proxy statement/prospectus) | ||
99 | .6* | Consent of Errol De Souza, Ph.D. to be named as a director | ||
99 | .7* | Consent of Alex Barkas, Ph.D. to be named as a director | ||
99 | .8* | Consent of Peter Barrett, Ph.D. to be named as a director | ||
99 | .9* | Consent of John Maraganore, Ph.D. to be named as a director | ||
99 | .10* | Consent of Michael Ross, Ph.D. to be named as a director |
* | Filed herewith. | |
** | To be filed by amendment. | |
# | Indicates management contract or compensatory plan. | |
† | Confidential treatment granted as to certain portions, which portions have been filed separately with the Securities and Exchange Commission. | |
†† | Confidential treatment has been requested as to certain portions, which portions have been filed separately with the Securities and Exchange Commission. |