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: July 15, 1997
(Date of earliest event reported)
Unigene Laboratories, Inc.
(Exact name of Registrant as specified in its charter)
0-16005
(Commission File Number)
Delaware 22-2328609
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
110 Little Falls Road, Fairfield, NJ 07004
(Address of principal executive offices and zip code)
(973) 882-0860
(Registrant's telephone number, including area code)
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Item 5. Other Events.
Unigene Laboratories, Inc., a Delaware corporation
("Unigene"), and Warner-Lambert Company, a Delaware corporation
("Warner-Lambert"), have entered into a License Agreement, dated as of July 15,
1997 (the "License Agreement"), which provides for the development, marketing
and sale by the Parke-Davis division of Warner-Lambert of an orally administered
calcitonin pharmaceutical product for the treatment of osteoporosis and other
disorders in humans (the "Product"). Unigene and Warner-Lambert also have
entered into a Stock Purchase Agreement, dated as of July 15, 1997 (the "Stock
Purchase Agreement"), pursuant to which Warner-Lambert has made an equity
investment in the Company.
The License Agreement, the Stock Purchase Agreement and press
releases, dated July 16, 1997 and August 4, 1997, issued in connection with the
execution of the agreements are filed as exhibits to this report and are
incorporated herein by references. The description of the License Agreement and
the Stock Purchase Agreement set forth herein is a summary of the principal
terms of the respective agreements, and is qualified in its entirety by the
provisions of the License Agreement and the Stock Purchase Agreement.
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License Agreement
License of Technology. On the terms and conditions set forth
in the License Agreement, Unigene has granted to Warner-Lambert a worldwide
license to use Unigene's proprietary salmon calcitonin oral delivery technology
to develop, market and sell the Product for human use. The license is exclusive,
except that Unigene may grant a license to one third party, with the right to
sublicense, in each country in North America (other than the United States and
Canada), Central America, South America and the Caribbean. With Unigene's
consent, Warner-Lambert may sublicense the technology as necessary to perform
its obligations under the License Agreement, and Warner-Lambert has agreed to
use its best efforts to enter into a sublicense agreement with a Japanese
pharmaceutical company that would develop, commercialize and co-promote or
co-market the Product in Japan.
Product Development and Marketing. Warner-Lambert, at its
expense, will be responsible for the development and testing of the Product
(other than analytical testing in connection with the formulation of the Product
which will be conducted by Unigene at its expense). These responsibilities will
include the conduct of clinical trials, and for obtaining all necessary
regulatory approvals in each country where the Product is sold, including the
approval of the U.S. Food and Drug Administration. The product development and
regulatory approval process will be managed by a "Development Team" formed by
Warner-Lambert to which Unigene
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may appoint three members. Following development of the Product and obtaining
the necessary regulatory approvals, Warner-Lambert will be responsible for the
formulation of bulk salmon calcitonin (the "Raw Material") into the finished
Product and for the marketing of the Product. Warner-Lambert is required to
market, distribute and sell the Product with the same degree of commitment
(financial and otherwise) as Warner-Lambert markets its other products with
similar commercial potential that it actively and aggressively promotes.
Unigene Supply Obligations. Warner-Lambert is obligated to
purchase from Unigene, and Unigene is obligated to supply to Warner-Lambert, at
agreed-upon prices, all of Warner-Lambert's Raw Material requirements for use
both in the development of the Product and in the formulation of the finished
Product for sale and distribution in each country. The Raw Material purchase and
supply obligations will continue in effect for each country until the earlier of
(i) the termination of the License Agreement with respect to such country (as
described below) and (ii) the later of (A) the second anniversary of the date on
which either party notifies the other of its intent to terminate the supply and
purchase arrangements and (B) the Royalty Transition Date (as defined below)
with respect to such country. Unigene will bear all costs related to the
production of the Raw Material, including the costs of construction or expansion
of its facilities for the manufacture of Raw Material in commercial quantities.
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Milestone Payments and Royalties. Warner-Lambert made an
initial payment to Unigene of $3 million upon execution of the License
Agreement, and agreed to make, during the development phase of the Product,
additional payments aggregating up to a total of $48.5 million upon the
achievement of various product development and regulatory milestones. In
addition, Warner-Lambert has agreed to pay to Unigene royalties on commercial
sales of the Product in each country until the date (a "Royalty Transition
Date") that is the later to occur of (i) (A) in each country excluding those in
the European Union, the later of (x) the tenth anniversary of the first
commercial sale of the Product in such country and (y) the launch of another
oral calcitonin product, the sales of which materially adversely affect the
sales of the Product in such country, and (B) in each country in the European
Union, the tenth anniversary of the first commercial sale of the Product in such
country, and (ii) the date on which Unigene no longer holds a patent in such
country relating to (A) an improvement to the Product developed solely by
Unigene or jointly by Unigene and Warner-Lambert, (B) the manufacture of Raw
Material, or (C) Unigene's oral patent applications that would be infringed by
the manufacture and marketing of the Product by a third party.
Expansion of the Product Scope of the License Agreement.
Unigene and Warner-Lambert have agreed to use good faith efforts to negotiate an
agreement pursuant to which Warner-Lambert would develop and commercialize a
nasally administered form of salmon calcitonin in the United States and Europe.
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Indemnification. Unigene has agreed to indemnify
Warner-Lambert for any losses suffered by Warner-Lambert as a result of (i) any
breach by Unigene of the License Agreement, or (ii) any act or omission of
Unigene with respect to matters for which it has responsibility under the
License Agreement, including generally losses resulting from the manufacture of
Raw Material. Warner-Lambert has agreed to indemnify Unigene for any losses
suffered by Unigene as a result of (i) any breach by Warner-Lambert of the
License Agreement or (ii) any act or omission of Warner-Lambert with respect to
matters for which it has responsibility under the License Agreement, including
losses resulting from the formulation, marketing and distribution of the Product
and the failure of Warner-Lambert to conduct a recall of the Product when
advised to do so by Unigene for reasons relating to the Raw Material.
Termination of the License Agreement. The License Agreement
will continue in effect until terminated by either party under the circumstances
described below:
Unigene may terminate the License Agreement with respect to
any country other than the United States, Canada, Japan or a member country of
the European Union (in each case, a "Secondary Market") in the event that
Warner-Lambert (i) fails to perform clinical tests or studies necessary for a
Secondary Market, (ii) fails to file submissions necessary to obtain regulatory
approval in a Secondary Market, or (iii) fails to
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commence commercial sales of the Product within 12 months of obtaining
regulatory approval in a Secondary Market. Unigene also may terminate the
License Agreement with respect to the United States, Japan or the European Union
if Warner-Lambert fails to pay specified minimum royalties with respect to any
such country within specified timeframes. Termination of the License Agreement
is Unigene's sole remedy upon the occurrence of any of the foregoing
circumstances.
Warner-Lambert may terminate the License Agreement with
respect to any Secondary Market by giving Unigene written notice at least 12
months in advance. After the first anniversary of the date of the License
Agreement, Warner-Lambert may terminate the License Agreement by giving Unigene
written notice at least six months in advance if (i) a product containing the
Raw Material is disapproved by the relevant regulatory authorities in the United
States and the European Union, (ii) clinical tests and studies indicate that the
Product does not achieve certain specified blood levels indicating
effectiveness, (iii) Warner-Lambert demonstrates that completion of the
development and approval process for the Product is scientifically or
technically infeasible, or (iv) sales of the Product will fail or have failed to
achieve a certain percentage of specified revenue projections.
Either Unigene or Warner-Lambert may terminate the License
Agreement with respect to any country under certain
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conditions if a patent relating to the marketing and sale of the Product has
issued to a third party in such country and Warner-Lambert is unable to obtain a
license , if necessary, from such third party under the applicable patent on
commercially feasible terms. Unigene may terminate the License Agreement with
respect to any country under certain conditions if a patent relating to the Raw
Material has issued to a third party in such country and Unigene and
Warner-Lambert are unable to obtain a license, if necessary, from such third
party under the applicable patent on commercially feasible terms.
Either Unigene or Warner-Lambert also may terminate the
License Agreement if the other (i) materially breaches its obligations under the
agreement, which breach is not cured within 60 days (or 30 days for a payment
default), (ii) voluntarily files, or has served against it involuntarily, a
petition in bankruptcy or insolvency which, in the case of involuntary
proceedings, remains undismissed for 60 days, or (iii) proposes or is a party to
any dissolution or liquidation or makes an assignment for the benefit of
creditors.
Either Unigene or Warner-Lambert may terminate the Raw
Material supply and purchase obligations with respect to any country by giving
at least two years prior notice to the other, provided that such termination
cannot take effect prior to the Royalty Transition Date in such country.
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Stock Purchase Agreement
In connection with the entry into the License Agreement,
Warner-Lambert has agreed to make a $3 million equity investment in Unigene
pursuant to the Stock Purchase Agreement. Under the Stock Purchase Agreement,
Warner-Lambert will purchase from Unigene that number of shares of the Common
Stock of Unigene equal to (i) $3 million, divided by (ii) the average of the
closing sale prices of the Common Stock as reported by the Nasdaq Stock Market
for each trading day during the period commencing June 16, 1997 and ending
August 14, 1997.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description of Exhibit
----------- ----------------------
10.1 License Agreement,
dated as of July 15,
1997, between Unigene
and Warner-Lambert*
10.2 Stock Purchase Agreement,
dated as of July 15, 1997,
between Unigene and Warner-Lambert
99.1 Press Release of Unigene
dated July 16, 1997
99.2 Press Release of Unigene
dated August 4, 1997
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*Portions of the document have been omitted pursuant to a confidential treatment
request.
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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.
UNIGENE LABORATORIES, INC.
By /s/ Warren P. Levy
------------------
Warren P. Levy
President
Date: August 4, 1997