SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number 0-14656
REPLIGEN CORPORATION
(exact name of registrant as specified in its charter)
Delaware 04-2729386
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
117 Fourth Avenue
Needham, Massachusetts 02494
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 449-9560
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 4, 2000.
Common Stock, par value $.01 per share 26,558,400
- -------------------------------------- -------------------
Class Number of Shares
REPLIGEN CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements 3
Balance Sheets as of June 30, 2000 (Unaudited) and March 31, 2000
Statements of Operations for the Three Ended June 30, 2000 and 1999 (Unaudited) 4
Statement of Cash Flows for the Three Months Ended
June 30, 2000 and 1999 (Unaudited) 5
Notes to Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities
None
Item 4. Submissions of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
Exhibit Index 14
Exhibits 15
2
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
REPLIGEN CORPORATION
BALANCE SHEETS
ASSETS JUNE 30, 2000 MARCH 31, 2000
------------- --------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 26,014,851 $ 25,226,546
Marketable securities 7,821,730 8,806,367
Accounts receivable, net 411,450 847,838
Inventories 543,002 547,448
Prepaid expenses and other current assets 237,711 241,654
------------- --------------
Total current assets 35,028,744 35,669,853
------------- --------------
Property and equipment, at cost:
Equipment 1,021,981 1,092,831
Furniture and fixtures 275,908 157,476
Leasehold improvements 473,288 473,288
------------- --------------
1,771,177 1,723,595
Less: accumulated depreciation and amortization 1,274,767 1,187,343
------------- --------------
496,410 536,252
Other assets, net 81,382 81,382
------------- --------------
$ 35,606,536 $ 36,287,487
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 417,976 $ 425,565
Accrued expenses 367,352 771,520
Unearned income 640 --
------------- --------------
Total current liabilities 785,968 1,197,085
------------- --------------
Stockholders' equity:
Preferred stock, $.01 par value --authorized - 5,000,000
shares --outstanding - none -- --
Common stock, $.01 par value --authorized - 40,000,000
shares --outstanding - 26,510,550 shares at June 30, 2000
and 26,315,979 shares at March 31, 2000
265,511 263,160
Additional paid-in capital 166,205,941 165,507,183
Accumulated deficit (131,650,884) (130,679,941)
------------- --------------
Total stockholders' equity 34,820,568 35,090,402
------------- --------------
$ 35,606,536 $ 36,287,487
============= ==============
See accompanying notes to financial statements.
3
REPLIGEN CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Three-Months Ended June 30,
2000 1999
----------------------------------
Revenues:
Product $ 555,794 $ 232,470
Investment income 512,605 46,538
Research and development 30,000 378,502
Other 75,000 30,658
----------- -----------
1,173,399 688,168
----------- -----------
Costs and expenses:
Research and development 1,083,070 488,203
Selling, general and administrative 731,084 426,169
Cost of products sold 330,188 196,383
----------- -----------
2,144,342 1,110,755
----------- -----------
Net loss $ (970,943) $ (422,587)
=========== ===========
Basic and diluted net loss per share $ (0.04) $ (0.02)
=========== ===========
Basic and diluted weighted average common shares 26,455,944 18,744,863
outstanding =========== ===========
See accompanying notes to financial statements.
4
REPLIGEN CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Three-Months Ended June 30,
2000 1999
---------- -----------
Cash flows from operating activities
Net loss $ (970,943) $ (422,587)
Adjustments to reconcile net loss to net cash
used in operating activities -
Depreciation and amortization 87,424 73,119
Non cash charges relating to stock and warrant issuance 251,360 --
Changes in assets and liabilities -
Accounts receivable 436,388 25,349
Inventories 4,446 48,567
Prepaid expenses and other current assets 3,943 (86,087)
Accounts payable (7,589) 84,094
Accrued expenses (404,168) 24,318
Unearned income 640 (22,585)
---------- -----------
Net cash used in operating activities (598,499) (275,812)
---------- -----------
Cash flows from investing activities
Proceeds of sale of marketable securities 984,637 --
Purchases of property and equipment (47,582) (69,886)
Changes in other assets -- 7,061
---------- -----------
Net cash provided by (used in) for investing activities 937,055 (62,825)
---------- -----------
Cash flows from financing activities:
Net proceeds from the issuance of common stock and warrants, net of
issuance costs -- 8,905,358
Exercise of warrants 437,249 --
Exercise of stock options 12,500 --
---------- -----------
Net cash provided by financing activities 449,749 8,905,358
---------- -----------
Net increase in cash and cash equivalents 788,350 8,566,721
Cash and cash equivalents, beginning of period 25,226,546 3,250,751
---------- -----------
Cash and cash equivalents, end of period $26,014,851 $11,817,472
=========== ===========
See accompanying notes to financial statements.
5
REPLIGEN CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial statements included herein have been prepared by Repligen
Corporation (the "Company" or "Repligen"), pursuant to the rules and regulations
of the Securities and Exchange Commission for quarterly reports on Form 10-Q and
do not include all of the information and footnote disclosures required by
generally accepted accounting principles. These financial statements should be
read in conjunction with the audited financial statements and notes thereto
included in the Company's Form 10-K for the year ended March 31, 2000.
In the opinion of management, the accompanying unaudited financial
statements include all adjustments, consisting of only normal, recurring
adjustments, necessary to present fairly, the consolidated financial position,
results of operations and cash flows of the Company. The results of operations
for the interim periods presented are not necessarily indicative of results to
be expected for the entire year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. REVENUE RECOGNITION
The Company recognizes revenue related to product sales upon shipment of
the product.
Research and development revenue derived from collaborative arrangements is
recognized as earned under cost plus fixed-fee contracts, or on a straight-line
basis over development contracts, which approximates when work is performed and
costs are incurred. Research and development expenses in the accompanying
statements of operations include funded and unfunded expenses. In addition,
under certain contracts, the Company recognizes research and development
revenues as milestones are achieved. Licensing and royalties from the Company's
licensed technologies are recognized as earned. Unearned income represents
amounts received prior to recognition of revenue.
Staff Accounting Bulletin (SAB) No. 101, REVENUE RECOGNITION, was issued by
the S.E.C in December 1999. SAB 101 will require companies to recognize certain
upfront nonrefundable fees and milestone payments over the life of the related
alliance when such fees are received in conjunction with alliances that have
multiple elements. The Company is required to adopt this new accounting
principle through a cumulative charge to the statement of operations, in
accordance with Accounting Principles Board Opinion (APB) No. 20, ACCOUNTING
CHANGES, no later than the third quarter of fiscal 2001. Management is currently
evaluating the effects on SAB No. 101 on the Company's financial statements and,
based upon current guidance, does not expect it will have a significant impact
on the Company's financial statements.
3. NET LOSS PER SHARE
The Company applies Statement of Financial Accounting Standards (SFAS) No.
128, EARNINGS PER SHARE, effective December 15, 1998. SFAS No. 128 establishes
standards for computing and presenting earnings per share and applies to
entities with publicly held common stock or potential common stock. Basic and
diluted net loss per share represents net loss divided by the weighted average
number of common shares outstanding during the period. The dilutive effect of
the potential common shares consisting of outstanding stock options and warrants
is determined using the treasury stock
6
method in accordance with SFAS No. 128. Diluted weighted average shares
outstanding at June 30, 2000 and 1999 excluded the potential common shares from
warrants and stock options because to do so would be antidilutive for the
periods presented. At June 30, 2000, there was outstanding options to purchase
1,367,041 shares of the Company's common stock with a weighted average exercise
price of $2.33 per share and warrants to purchase 954,782 shares of the
Company's common stock with a weighted average exercise price of $3.91 price per
share. At June 30, 1999, there was outstanding options to purchase 1,335,491
shares of the Company's common stock with a weighted average exercise price of
$1.82 per share and warrants to purchase 3,207,050 shares of the Company's
common stock with a weighted average exercise price of $3.19 per share.
4. CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company applies SFAS No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN
DEBT AND EQUITY SECURITIES. At June 30, 2000, the Company's cash equivalents and
marketable securities are classified as held-to-maturity, as the Company has the
positive intent to hold these securities to maturity. The Company considers
highly liquid investments purchased with original maturities at the date of
acquisition of three months or less to be cash equivalents. Marketable
securities are accounted for at amortized cost, which approximates fair value.
All of the marketable securities held at June 30, 2000 mature in one year or
less. Cash, cash equivalents and marketable securities consist of the following
at June 30, 2000 and March 31, 2000:
Three Months Ended
June 30, 2000 March 31, 2000
Cash and equivalents
Commercial paper $ 16,345,160 $ 17,031,292
U.S. Government and Agency securities 6,959,337 7,342,874
Money markets 1,974,165 801,434
Cash 736,189 50,946
------------ --------------
Total cash and cash equivalents $ 26,014,851 $ 25,226,546
============ ==============
Marketable securities
Commercial paper $ 7,821,730 $ 5,854,544
U.S. Government and Agency securities -- 2,951,823
------------ --------------
$ 7,821,730 $ 8,806,367
============ ==============
5. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of the following:
Three Months Ended
June 30, 2000 March 31, 2000
Raw materials and work-in-process $ 424,964 $ 371,405
Finished goods 118,038 176,043
------------- --------------
Total $ 543,002 $ 547,448
============= ==============
Work in process and finished goods inventories consist of material, labor,
outside processing costs and manufacturing overhead.
6. COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted SFAS No. 130 REPORTING
COMPREHENSIVE INCOME, effective January 1, 1998. SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its components
in financial statements. Comprehensive income includes all changes in equity
during a period except those resulting from investments by owners and
distributions to owners. The comprehensive net loss is the same as net loss for
all periods presented.
7
7. DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND SIGNIFICANT CUSTOMERS
The Company applies SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION, in the fiscal year ended March 31, 1999.
SFAS No. 131 establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS No. 131 also establishes standards for related disclosures
about products and services and geographic areas. Operating segments are
identified as components of an enterprise about which separate discrete
financial information is available for evaluation by the chief operating
decision maker, or decision making group, in making decisions now to allocate
resources and assess performance. To date, the Company has viewed its operations
and manages its business as principally one operating segment. As a result, the
financial information disclosed herein, represents all of the material financial
information related to the Company's principal operating segment.
The following table represents the Company's revenue by geographic area:
Three Months Ended
June 30,
2000 1999
--------------------
US 77% 65%
Europe 23% 31%
Other --% 4%
---- ----
Total 100% 100%
During the three months ended June 30, 2000, there were two significant
customers who accounted for approximately 14% and 20% of the Company's revenues.
The related accounts receivable for these customers at June 30, 2000 was $0 and
$239,000, respectively. During the three months ended June 30,1999, there were
two significant customers which accounted for approximately 25% and 14% of the
Company's revenues or $172,000 and $96,000. The related accounts receivable for
these two customers at June 30, 1999 was $0 and $96,000, respectively.
8. PATENT APPLICATION PURCHASE
In May 2000, the Company purchased from Tolerance Therapeutics LLC the
rights to a U.S. patent application claiming the use of CTLA4-Ig in the
treatment of diseases of the immune system. Under terms of the agreement, the
Company paid cash and issued stock for the purchase. The Company is also
obligated to make an additional cash payment if certain conditions are met.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q as well as oral statements
that may be made by the Company or by officers, directors or employees of the
Company acting on the Company's behalf, that are not historical facts constitute
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause the actual results of
the Company to be materially different from the historical results or from any
results expressed or implied by such forward-looking statements. The Company's
future operating results are subject to risks and uncertainties and are
dependent upon many factors, including, without limitation, the Company's
ability to (i) meet its
8
working capital and future liquidity needs, (ii) successfully implement its
strategic growth strategies, (iii) understand, anticipate and respond to rapidly
changing technologies and market trends, (iv) develop, manufacture and deliver
high quality, technologically advanced products on a timely basis to withstand
competition from competitors which may have greater financial, information
gathering and marketing resources than the Company, (v) obtain and protect
licensing and intellectual property rights necessary for the Company's
technology and product development on terms favorable to the Company, (vi)
recruit and retain highly talented professionals in a competitive job market,
(vii) realize future revenues, (viii) maintain a timeline for clinical activity,
(ix) obtain successful results of pending or future clinical trials, (x)
continue to establish collaborative arrangements with third parties, and (xi)
compete against the biotechnology and pharmaceutical industries. Further
information on potential factors that could affect the Company's financial
results are included in filings made by the Company from time to time with the
Securities and Exchange Commission included in the section entitled "Risk
Factors" contained in the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2000 (File No.000-14656).
OVERVIEW
We develop innovative therapeutic products for debilitating pediatric
diseases for autism, organ transplantation and immune system diseases based on
naturally-occurring peptides and proteins. Our lead therapeutic products are
secretin for autism and CTLA4-Ig for organ transplantation and autoimmune
diseases.
On March 9, 1999, we acquired the exclusive rights to patent applications
for the use of secretin in the treatment of autism. Autism is a developmental
disorder characterized by poor communicative and social skills, repetitive and
restricted behaviors and in some patients, gastrointestinal problems and
irregular sleep patterns. Secretin is a hormone produced in the small intestine
which regulates the function of the pancreas as part of the process of
digestion. A form of secretin derived from pigs is approved by the United States
Food and Drug Administration ("FDA") for use in diagnosing problems with
pancreatic function. Recent anecdotal reports indicate that secretin may have
beneficial effects in autism, including improvements in sleep, digestive
function, communicative and social behavior. Following media reports of the
potential benefits of secretin, more than 2,000 autistic children have been
treated with the pig-derived hormone. We intend to manufacture a human,
synthetic form of secretin and evaluate it in clinical trials in order to
confirm the benefits of secretin in treating autism and to determine the optimal
dosing schedule. In February 2000, we were issued a broad U.S. patent covering
the use of secretin in the treatment of autism. There are currently no drugs
approved by the FDA for the treatment of autism.
We are also developing a product named "CTLA4-Ig," which has been shown to
suppress unwanted immune responses in animal models of organ transplants and
autoimmune diseases, such as lupus or multiple sclerosis, in which the immune
system mistakenly attacks the body. Our product candidate is a derivative of a
natural protein whose role is to turn-off an immune response. In animal models
of organ transplantation and autoimmune diseases, CTLA-Ig has been shown to
block the rejection of a transplanted organ or the effects of the autoimmune
disease. Initial clinical testing of CTLA4-Ig has been carried out in patients
receiving a bone marrow transplant, which is a potential cure for several
diseases of the immune system, including leukemia, myeloma, lymphoma and sickle
cell anemia. Despite the clinical success of bone marrow transplants, a
significant number of patients experience a severe and potentially
life-threatening complication known as Graft Versus Host Disease, in which the
newly transplanted immune system attacks the host (i.e., the patient). In June
1999, results from a Phase 1 clinical trial reported that treatment of bone
marrow from a family member with Repligen's CTLA4-Ig prevented Graft Versus Host
Disease in eight of eleven transplant patients
We develop, manufacture and market products for the production of
therapeutic antibodies. We currently market a line of products for the
purification of antibodies based on a naturally occurring protein, Protein A,
which can specifically bind to antibodies. Repligen owns composition of matter
patents for recombinant Protein A in the United States and in Europe. In
December 1998, we entered into a ten year agreement to supply recombinant
Protein A to Amersham Pharmacia Biotech, a leading supplier to the
biopharmaceutical market.
9
In October 1999, Repligen obtained a license from ChiRhoClin, Inc., a
private company, to commercialize two diagnostic secretin products. These
products are synthetic, injectable forms of the natural hormone which has
been traditionally been used by gastroenterologists to assess the function of
the pancreas. A New Drug Application for one of these products,
Secretin-Repligen-TM-, has been reviewed by the FDA, which indicated the
product could be approved for marketing in the United States pending
additional administrative review. Secretin-Repligen-TM- has been granted
orphan drug status by the FDA, which means it would be the only secretin
product available in the United States for a period of seven years following
approval. If Secretin-Repligen-TM- is approved by the FDA, the agreement
obligates Repligen to pay ChiRhoClin future milestones in cash and Repligen
common stock and royalties. We can not be certain that the FDA will approve
Secretin-Repligen-TM-.
RESULTS OF OPERATIONS
REVENUES
Total revenues for the three month period ended June 30, 2000 compared to
the three-month period ended June 30, 1999 were approximately $1,173,000 and
$688,000, respectively, an increase of approximately $485,000 or 71%. This
increase was largely attributable to increased product sales of recombinant
Protein A and an increase in investment income due to higher average cash and
investment balances
Product revenues for the three month period ended June 30, 2000 compared to
the three-month period ended June 30, 1999 were approximately $556,000 and
$232,000, respectively, an increase of $324,000 or 139%. This increase is due to
product shipments to Amersham Pharmacia Biotech and strong demand from
monoclonal antibody producers during such period.
Investment income for the three month period ended June 30, 2000 compared
to the three-month period ended June 30, 1999 was approximately $513,000 and
$47,000, respectively, an increase of approximately $466,000 or 991%. This
increase is largely attributable to higher average funds available for
investment arising principally out of the completion of a private placement of
common stock for $22,400,000 on March 9, 2000.
Research and development revenues for the three month period ended June 30,
2000 compared to the three-month period ended June 30, 1999 were approximately
$30,000 and $379,000, respectively, a decrease of approximately $349,000 or 92%.
This decrease is a result of the discontinuation of government sponsored
research on drug discovery programs that generated revenue during the three
months ended June 30, 1999.
Other revenues for the three month period ended June 30, 2000 compared to
the three-month period ended June 30, 1999 were approximately $75,000 and
$31,000, respectively, an increase of approximately $44,000 or 142%. This
increase is primarily due to a termination fee paid by a sublessee in the three
months ended June 30, 2000.
EXPENSES
Total expenses for the three-month period ended June 30, 2000 compared to
the three-month period ended June 30, 1999 were approximately $2,144,000 and
$1,111,000, an increase of $1,033,000 or 93%. The increase in expenses is
attributable to our increased product development expenses and patent
acquisition costs paid to Tolerance Therapeutics LLC.
Research and development expenses for the three month period ended June 30,
2000 compared to the three-month period ended June 30, 1999 were approximately
$1,083,000 and $488,000, respectively, an increase of $595,000 or 122%. The
increase in R&D expenses was attributable to costs associated with a patent
application acquisition from Tolerance Therapeutics LLC and increased costs
associated with Repligen's drug development programs for secretin and CTLA4-Ig.
Selling, general and administrative expenses for the three months ended
June 30, 2000 compared
10
to the three-month period ended June 30, 1999 were approximately $731,000 and
$426,000, respectively, an increase of $305,000 or 72%. The increase is a result
of increased spending on shareholder services, legal and patent costs. In
addition, during the three months ended June 30, 2000 a non-cash charge was
incurred for warrants issued to consultants who provided shareholder services.
Cost of products sold for the three months ended June 30, 2000 compared to
the three-month period ended June 30, 1999 were approximately $330,000 and
$196,000, respectively, an increase of $134,000, or 68%. Cost of products sold
in the three months ended June 30, 2000 and 1999 were 59% and 85%, respectively,
of product revenues. The decrease in cost of revenues as a percentage of revenue
is due primarily to increased Protein A product sales.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations primarily through placements of equity
securities and revenues derived from product sales, collaborative research
agreements, government grants, and payments on licensing and royalty agreements.
Total cash, cash equivalents and marketable securities at June 30, 2000 was
$33,837,000, a decrease of $196,000 from $34,033,000 at March 31, 2000.
Repligen's operating activities used cash of approximately $599,000
consisting of a net loss from operations incurred during the three months ended
June 30, 2000 of approximately $971,000 and a decrease of accrued expenses of
$404,000. This decrease in cash was offset by noncash charges of $338,000 for
depreciation and amortization and charges associated with the issuance of
warrant and stock and a decrease in accounts receivable of $436,000. Our
investing activities provided cash of approximately $985,000 from the redemption
of marketable securities, offset by capital expenditures of $48,000. Our
financing activities provided cash of approximately $450,000 from the proceeds
of stock and warrant exercises.
Working capital decreased to $33,836,000 at June 30, 2000 from $34,473,000
at March 31, 2000.
While Repligen anticipates that the cost of operations will increase in
fiscal 2001 as it continues to expand its investment in proprietary product
development, Repligen believes it has sufficient funding to satisfy its
working capital and capital expenditure requirements for the next twenty-four
months. Should Repligen need to secure additional financing to meet its
future liquidity requirements, there can be no assurances that Repligen will
be able to secure such financing, or that such financing, if available, will
be on terms favorable to Repligen.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
As reported in Form 10-Q dated for the period ended December 31, 1999, on
July 17, 1998, Repligen filed a complaint against Bristol Meyers Squibb ("BMS")
at the United States District Court for the District of Massachusetts in Boston,
Massachusetts seeking correction of inventorship of certain United States
patents which claim compositions and methods of use for CTLA4 as well as
unspecified monetary damages. A correction of inventorship would result in the
University of Michigan being designated as a co-assignee on any corrected BMS
patent. Repligen would then have rights to such technology pursuant to a 1992
License Agreement with the University of Michigan, a 1995 Asset Acquisition
Agreement with Genetics Institute, and other related agreements. On July 13,
1999, the court dismissed the complaint without prejudice citing a lack of legal
standing of Repligen to bring such a complaint. We believe that the court's
finding on standing was in error. The court did not rule on the validity of
Repligen's inventorship claim. Repligen continues to believe that the University
of Michigan is a rightful co-assignee of the aforesaid BMS patents and we intend
to continue to pursue the correction of inventorship. Repligen's failure to
obtain shared ownership rights in the patents may restrict Repligen's ability to
commercialize CTLA4-Ig. We have also filed our own patents related to
compositions of matter and methods of use of CTLA4-Ig. In addition, we believe
that the patents issued to Bristol-Meyers Squibb do not extend to the use of
CTLA4-Ig in bone marrow transplantation.
11
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On April 7, 2000, Repligen issued to each of its investor relation firm
and public relations firm, in consideration for services, a warrant,
exercisable through July 2001, to purchase 10,000 shares of common stock of
Repligen at $8.56 per share. There were no underwriters involved in the
transaction. Based on the fact that Repligen was issuing the warrants to only
two entities, Repligen issued the warrants without registration and effected
the private placement on reliance on Rule 4(2) of the Securities Act of 1933.
On April 7, 2000, Repligen issued a warrant, exercisable through July
2000, to purchase 2,900 shares of common stock at $9.00 per share to an
existing shareholder. There were no underwriters involved in the transaction.
Based on the fact that Repligen was issuing the warrant to only one entity,
Repligen issued the warrant without registration and effected the private
placement on reliance on Rule 4(2) of the Securities Act of 1933.
On May 10, 2000, pursuant to a patent purchase agreement, Repligen
issued to Tolerance Therapeutics LLC ("Tolerance"), in partial consideration
for the assignment by Tolerance to Repligen of a U.S. patent application
claiming the use of CTLA4-Ig in treatment of diseases of the immune system,
30,000 shares of Repligen common stock. There were no underwriters involved
in the transaction. Based on representations from Tolerance that it was
acquiring the shares for investment purposes only, without a view to selling
or distributing the shares, and based on the fact that Repligen was issuing
the shares to only one entity, Repligen issued the shares without
registration and effected the private placement on reliance on Rule 4(2) of
the Securities Act of 1933.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation, dated June 30, 1992 and
filed July 13, 1992, as amended (filed as Exhibit 3.1 to
Repligen Corporation's Quarterly Report on Form 10-Q dated
September 30, 1999)
3.2 By-laws (filed as Exhibit 3.4 to Repligen Corporation's Form
S-1 Registration Statement No. 33-3959 and incorporated herein
by reference)
10.1 * Patent Purchase Agreement dated as of May 9, 2000 by and
between Tolerance Therapeutics LLC and Repligen Corporation
(filed herewith)
27.1 Financial Data Schedule (filed herewith)
*Confidential Treatment has been requested as to omitted portions pursuant
to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended
(b) Reports on Form 8-K
1. Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 19, 2000 (description of patent purchase agreement
with Tolerance Therapeutics LLC.).
12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REPLIGEN CORPORATION
(Registrant)
Date: August 11, 2000 By: /s/ WALTER C. HERLIHY
--------------------------
Chief Executive Officer and President,
Principal Financial and Accounting Officer
13
Repligen Corporation
Exhibit Index
EXHIBIT DESCRIPTION
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3.1 Restated Certificate of Incorporation, dated June 30, 1992 and
filed July 13, 1992, as amended (filed as Exhibit 3.1 to
Repligen Corporation's Quarterly Report on Form 10-Q dated
September 30, 1999)
3.2 By-laws (filed as Exhibit 3.4 to Repligen Corporation's Form
S-1 Registration Statement No. 33-3959 and incorporated herein
by reference)
10.1 * Patent Purchase Agreement dated as of May 9, 2000 by and
between Tolerance Therapeutics LLC and Repligen Corporation
(filed herewith)
27.1 Financial Data Schedule (filed herewith)
*Confidential Treatment has been requested as to omitted portions
pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934,
as amended.