SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 9, 2001
PHARMOS CORPORATION
(Exact name of Registrant as Specified in its Charter)
Nevada 0-11550 36-3207413
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) file Number) Identification No.)
99 Wood Avenue South, Suite 301, Iselin, New Jersey 08830
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (732) 452-9556
Item 2. Acquisition or Disposition of Assets
On October 9, 2001, Pharmos Corporation sold all of its rights to its
loteprednol etabonate (LE) ophthalmic business to Bausch & Lomb Incorporated for
cash and assumption of certain ongoing obligations. The acquisition had two
parts, one for products already on the market, the second for a medication now
in clinical trials. Based on meeting certain new product milestones, the price
of the total acquisition may reach $49 million.
Pharmos received approximately $25 million in cash for its rights to
Lotemax(R) and Alrex(R), prescription anti-inflammation and allergy products
that are currently made and marketed by Bausch & Lomb under a 1995 Marketing
Agreement with Pharmos.
Bausch & Lomb also acquired future extensions of LE formulations including
LE-T, a combination product using tobramycin and currently in Phase III clinical
trials, for approximately $14 million, with the actual payment price based on
the date of market introduction of this new combination therapy. An additional
milestone payment of up to $10 million could be paid to Pharmos to the extent
sales of the new product exceed an agreed-upon forecast in the first two years.
Subject to certain conditions and limitations as described in the purchase
agreement, Pharmos has agreed to share in the R&D costs associated in conducting
the Phase III clinical trials and FDA approval for LE-T. Pharmos expects these
costs to be approximately $1 million.
Pharmos compensated the LE patent owner and licensor with approximately
$2.7 million from the proceeds of the sale of Lotemax and Alrex in return for
his consent to Pharmos' assignment of its rights under the license agreement to
Bausch & Lomb, and will also pay the him a portion of the LE-T sale proceeds and
a portion of its milestone payment.
The transaction provides Pharmos with significant capital to invest in its
strategic growth in the marketplace for CNS, neurological and inflammation-based
disorders. Pharmos plans to devote its resources toward three primary areas of
activity: to support the successful completion of its current Phase III pivotal
trial of dexanabinol for traumatic brain injury (TBI), to ramp-up efforts in
advancing its other drug candidates from preclinical to clinical stages, and to
support potential partnering arrangements, strategic collaborations,
in-licensing and other tactical moves that could provide new drug candidates for
clinical development.
Exhibits
2.1 Asset Purchase Agreement between Bausch & Lomb Incorporated and Pharmos
Corporation dated October 9, 2001.
2.2 License Assignment and Amendment Agreement dated as of October 9, 2001 by
and among Dr. Nicholas S. Bodor, Pharmos Corporation and Bausch & Lomb
Incorporated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on this 15th day of October, 2001.
PHARMOS CORPORATION
By: /s/ Robert W. Cook
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Name: Robert W. Cook
Title: Executive Vice President and
Chief Financial Officer