SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITY EXCHANGE
ACT OF 1934
Date of report December 19, 1996
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NPS PHARMACEUTICALS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-23272 87-0439579
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(Commission File Number) (I.R.S. Employer Identification No.)
420 Chipeta Way, Salt Lake City, Utah 84108-1256
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(Address of Principal Executive Offices) (Zip Code)
(801) 583-4939
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
PRECLINICAL AND CLINICAL (PRODUCT) DEVELOPMENT PROGRAMS.
HYPERPARATHYROIDISM PROGRAM.
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NPS Pharmaceuticals, Inc.'s (the "Company" or the "Registrant")
corporate licensee (for the territory of Japan, China, Korea and Taiwan), the
Pharmaceutical Division of Kirin Brewery Company, Ltd. ("Kirin"), has
commenced Phase I clinical trials in Japan on R-568, the lead drug candidate
for treating hyperparathyroidism ("HPT"). As a result, pursuant to the terms
of the Collaboration and License Agreement between Kirin and Registrant,
Registrant has earned and Kirin has paid to Registrant a $2 million milestone
payment. Registrant's corporate licensee for the "rest of the world" Amgen
Inc. ("Amgen"), expects to begin a Phase II clinical trial in the United
States on R-568 before the end of 1996. Registrant continues to conduct
research with Kirin and Amgen to discover, identify and characterize back-up
and later generation compounds in the Registrant's HPT Program.
OSTEOPOROSIS PROGRAM.
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The Registrant has executed an agreement with SmithKline Beecham
Corporation ("SB") to extend the Collaborative Research and License Agreement
between the Registrant and SB for an additional period of one (1) year
through October 1997. Under the terms of the extended agreement, the
Registrant and SB will continue to work together to develop one or more novel
therapeutic approaches to the treatment of osteoporosis utilizing the
Registrant's calcium receptor technology. A copy of the Amendment Agreement
is attached hereto as Exhibit 99.1 and is incorporated herein by reference
and made a part of this report on Form 8-K.
ADOPTION OF SHAREHOLDER RIGHTS AGREEMENT
On December 3, 1996, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $0.001 per share (the "Common Shares"). The
dividend is payable to the stockholders of record on December 31, 1996 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $0.001 per share (the "Preferred Stock"), at a price of fifty
dollars ($50.00) per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. Each one one-hundredth of a share of Preferred
Stock has such designations, powers, preferences, rights, qualifications,
limitations and restrictions which make its value approximately equal to the
market price of a Common Share. The description and terms of the Rights are
set forth in a Rights Agreement dated as of December 4, 1996 (the "Rights
Agreement"), between the Company and the Company's stock transfer agent American
Securities Transfer & Trust, Inc., as Rights Agent (the "Rights Agent").
Initially, the Rights will be evidenced by the stock certificates
representing the Common Shares then outstanding, and no separate Right
Certificates, as defined below, will be distributed. Until the earlier to occur
of (i) a public announcement that a person, entity or group of affiliated or
associated persons, with certain limited exceptions for the Company's existing
corporate partners (an "Acquiring Person"), has acquired beneficial ownership of
twenty percent (20%) or more of the outstanding Common Shares, or (ii) ten (10)
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or entity becomes an Acquiring
Person) following the commencement of, or
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announcement of an intention to make, a tender offer or exchange offer for
Common Shares of the Company the consummation of which would result in the
beneficial ownership by a person or group of twenty (20%) or more of such
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate, with or without a copy of the Summary of Rights, which is
included in the Rights Agreement as Exhibit C (the "Summary of Rights"),
attached to the Common Share certificate.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, as the case may be, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender or transfer
of any certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of the Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 31, 2001 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above). The exercise of Rights
for Preferred Shares is at all times subject to the availability of a sufficient
number of authorized but unissued Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidation or combinations of the Common Shares occurring, in any case, prior
to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of one dollar ($1.00) but will be entitled to an
aggregate dividend of one hundred (100) times the dividend declared per Common
Share. In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of one hundred dollars
($100) per preferred share but will be entitled to an aggregate payment of one
hundred (100) times the payment made per Common Share. Each Preferred Share
will have one hundred (100) votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
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one hundred (100) times the amount of consideration received per Common
Share. These rights are protected by customary anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend and liquidation
rights, the value of one one-hundredth of a Preferred Share should
approximate the value of one (1) Common Share.
In the event that any person becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void as a
result of such person becoming an Acquiring Person), will for a sixty (60) day
period have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right (or, if such
number of shares is not and cannot be authorized, the Company may issue
Preferred Stock, cash, debt, stock or a combination thereof in exchange for the
Rights). This right will terminate sixty (60) days after the date on which the
Rights become nonredeemable (as described below), unless there is an injunction
or similar obstacle to exercise of the Rights, in which event this right will
terminate sixty (60) days after the date on which the Rights again become
exercisable.
In the event that the Company is acquired in a merger or other business
combination transaction or fifty percent (50%) or more of its consolidated
assets or earning power are sold, proper provision will be made so that each
holder of a Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the acquiring company which at the time of such transaction
will have a market value of two (2) times the exercise price of the Right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of twenty percent (20%) or more of
the outstanding Common Shares and prior to the acquisition by such person or
group of fifty percent (50%) or more of the outstanding Common Shares, the Board
of Directors of the Company may exchange the Rights (other than Rights owned by
such person or group which have become void as a result of such person becoming
an Acquiring Person), in whole or in part, at an exchange ratio of one (1)
Common Share, per Right (or, if the number of shares is not and cannot be
authorized, the Company may issue cash, debt, stock or a combination thereof in
exchange for the Rights), subject to adjustment.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent (1%) in such Purchase Price. No fractional Preferred Shares will be
issued (other than fractions which are integral multiples of the number of one
one-hundredths of a Preferred Share issuable upon the exercise of one Right,
which may, at the option of the Company, be evidenced by depositary receipts),
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the earlier of (i) the close of business on the day of
the first public announcement that a person has become an Acquiring Person, or
(ii) the Final Expiration Date, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Following the expiration of the above periods, the Rights
become nonredeemable. Immediately upon the effective date (as determined by the
Board) of any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower the threshold for exercisability of the Rights from twenty percent
(20%) to any percentage which is (i) greater than the largest percentage of the
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outstanding Common Shares then known to the Company to be beneficially owned by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary, or any entity holding Common
Shares pursuant to the terms of any such plan), and (ii) not less than ten
percent (10%), except that from and after such time as any person becomes an
Acquiring Person no such amendment may adversely affect the interest of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights are not
expected to interfere with any merger or other business combination approved by
the Board of Directors since the Rights may be redeemed by the Company at $.01
per Right prior to the earliest of (i) the Shares Acquisition Date, (ii) a
Change of Control, or (iii) the Final Expiration Date of the Rights.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
c. Exhibits
4.1 Rights Agreement, dated as of December 4, 1996,
between NPS Pharmaceuticals, Inc. and American Stock
Transfer & Trust, Inc., with Exhibit A, Form of
Certificate of Designation of Series A Junior
Participating Preferred Stock; Exhibit B, Form of Right
Certificate; and Exhibit C, Summary of Rights to
Purchase Shares of Preferred Stock.
99.1* Amendment Agreement between SmithKline Beecham
Corporation and NPS Pharmaceuticals, Inc. dated October
28, 1996.
*Confidential Treatment Requested
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.
NPS PHARMACEUTICALS, INC.
/s/ James U. Jensen
Date: December 19, 1996 --------------------------------------------
James U. Jensen, Vice President
SEC\8k.nov
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INDEX TO EXHIBITS
Sequentially
Exhibit Number Description Numbered Page
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4.1 Rights Agreement, dated as of December
4, 1996, between NPS Pharmaceuticals,
Inc. and American Stock Transfer &
Trust, Inc., with Exhibit A, Form of
Certificate of Designation of Series A Junior
Participating Preferred Stock; Exhibit B, Form of Right
Certificate; and Exhibit C, Summary of Rights to
Purchase Shares of Preferred Stock.
99.1* Amendment Agreement between
SmithKline Beecham Corporation and
NPS Pharmaceuticals, Inc., dated
October 28, 1996.
*CONFIDENTIAL TREATMENT REQUESTED