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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): JANUARY 8, 1998
AXYS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-22788 22-2969941
(Commission File No.) (IRS Employer Identification No.)
180 KIMBALL WAY
SOUTH SAN FRANCISCO, CA 94080
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (650) 829-1000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
This Current Report on Form 8-K (the "Report") contains forward looking
statements that involve risks and uncertainties, including risks that the
integration of the operations, technologies and employees of AxyS
Pharmaceuticals, Inc. (formerly Arris Pharmaceutical Corporation), a Delaware
corporation ("AxyS"), and Sequana Therapeutics, Inc., a California corporation
("Sequana"), might not occur as anticipated; that the synergies expected to
result from the merger described below might not occur as anticipated; that
certain of the corporate partners of AxyS and Sequana may view the Merger as
disadvantageous to them and as a consequence, the combined company's
relationship with these strategic partners could be adversely affected; that
management's attention might be diverted from day-to-day business activities;
and that greater than normal employee turnover might occur. In addition, there
are normal risks and uncertainties associated with the businesses of AxyS and
Sequana, including the companies' early stage of development, the companies'
dependence on collaborative relationships, the uncertainties relating to
clinical trials and regulatory clearance, the uncertainty relating to Sequana's
ability to commercialize gene discoveries, the intense competition and rapid
technological change in the biotechnology and pharmaceutical industries, the
companies' dependence on their ability to attract and retain professional staff,
the uncertainty of additional funding and the uncertainty relating to
intellectual property rights. Actual results and developments may differ
materially from those described in this Report. For more information about AxyS
and risks relating to investing in AxyS, refer to AxyS' (formerly Arris
Pharmaceutical Corporation) most recent reports on Form 10-K and Form 10-Q, and
the recent registration statement on Form S-4 related to the merger described
below, as filed with the United States Securities and Exchange Commission (the
"Commission") on November 26, 1997.
Beagle Acquisition Sub, Inc. ("Merger Sub"), which was a wholly owned
subsidiary of AxyS, was merged with and into Sequana, pursuant to an Agreement
and Plan of Merger and Reorganization, dated as of November 2, 1997, among AxyS,
Merger Sub and Sequana (the "Agreement"). The terms of the Agreement were
determined through arms' length negotiations between AxyS and Sequana.
The merger of Merger Sub with and into Sequana (the "Merger") became
effective at the time of the filing of an Agreement of Merger with the
California Secretary of State on January 8, 1998 (the "Effective Time"). At the
Effective Time: (i) Merger Sub ceased to exist; (ii) Sequana, as the surviving
corporation in the Merger, became a wholly owned subsidiary of AxyS; and (iii)
subject to the provisions of the Agreement relating to the payment of cash in
lieu of fractional shares, each share of Sequana Common Stock, par value $0.001
per share ("Sequana Common Stock"), outstanding immediately prior to the
Effective was converted into the right to receive one and thirty-five
one-hundredths (1.35) shares of Common Stock, $.001 par value per share, of AxyS
("AxyS Common Stock").
In addition, pursuant to the Agreement, at the Effective Time, all
rights with respect to Sequana warrants then outstanding, were converted into
and became rights with respect to AxyS Common Stock, and AxyS assumed each such
outstanding Sequana warrant in accordance with the terms of such warrants. By
virtue of the assumption by AxyS of such Sequana warrants, from and after the
Effective Time: (i) each Sequana warrant assumed by AxyS may be exercised solely
for AxyS Common Stock; (ii) the number of shares of AxyS Common Stock subject to
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each such Sequana warrant is equal to the number of shares of Sequana Common
Stock subject to such Sequana warrant immediately prior to the Effective Time
multiplied by 1.35 (the exchange ratio in the Merger), rounded down to the
nearest whole share (with cash, less the applicable exercise price, being
payable for any fraction of a share); and (iii) the per share exercise price
under each such Sequana warrant was adjusted by dividing the per share exercise
price under such Sequana warrant by 1.35 and rounding up to the nearest cent.
The former stockholders of Sequana are receiving approximately
15,000,000 shares of AxyS Common Stock pursuant to the Merger. In addition,
approximately 500,000 shares may be issued in connection with the exercise of
the Sequana warrants assumed by AxyS or the exercise of AxyS warrants issued to
replace Sequana warrants in connection with the Merger.
The Merger is intended to be a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and is expected to be accounted for
as a purchase. A copy of the press release announcing the consummation of the
Merger is attached hereto as Exhibit 99.1.
Sequana is a leading genomics company that uses industrial-scale gene
discovery and functional genomics technologies to facilitate the development and
commercialization of prognostic, diagnostic and therapeutic products. Sequana
has ongoing discovery programs in asthma, diabetes, obesity, osteoporosis,
schizophrenia and manic depression, among other important disease areas, and has
scientific collaborations with several major pharmaceutical companies worldwide.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of the Business Acquired
(1) The required financial statements with respect to the
acquired business referred to in item 2 of this report are incorporated by
reference to such financial statements as filed with the Securities and Exchange
Commission (the "Commission") by Sequana (Commission File Number 000-26244) in
Sequana's Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and in Sequana's Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1997, June 30, 1997 and September 30, 1997.
(b) Pro Forma Financial Information
(1) The required pro forma financial information with respect
to the acquired business referred to in Item 2 of this Report is incorporated by
reference to such pro forma financial information as filed with the Commission
by AxyS in the Registration Statement on Form S-4 (Registration No. 333-41205)
on November 26, 1997.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
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2 Agreement and Plan of Merger and Reorganization,
dated as of November 2, 1997, among Arris
Pharmaceutical Corporation, a Delaware corporation,
Beagle Acquisition Sub, Inc., a California
corporation, and
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
Sequana Therapeutics, Inc. a Delaware corporation
(incorporated by reference to AxyS' Current Report on
Form 8-K filed with the Commission on November 12,
1997)
23.1 Consent of Ernst & Young LLP
99.1 Press Release of AxyS, dated January 9, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
AXYS Pharmaceuticals, Inc.
Dated: January 23, 1998 /s/ Frederick J. Ruegsegger
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Frederick J. Ruegsegger
Vice President, Finance and Business
Development
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2 Agreement and Plan of Merger and Reorganization,
dated as of November 2, 1997, among Arris
Pharmaceutical Corporation, a Delaware corporation,
Beagle Acquisition Sub, Inc., a California
corporation, and Sequana Therapeutics, Inc. a
Delaware corporation (incorporated by reference to
AxyS' Current Report on Form 8-K filed with the
Commission on November 12, 1997)
23.1 Consent of Ernst & Young LLP
99.1 Press Release of AxyS, dated January 9, 1998
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