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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): April 1, 1996
ONCOGENE SCIENCE, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-15190 13-3159796
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
106 CHARLES LINDBERGH BLVD., UNIONDALE, NY 11553
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (516) 222-0023
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ITEM 2. ACQUISITION OF ASSETS
On April 11, 1996, Oncogene Science, Inc. (the "Company") acquired
MYCOsearch, Inc., a privately owned North Carolina corporation ("MYCOsearch"),
in a transaction in which MYCOsearch was merged into a newly formed subsidiary
(the "Subsidiary") of the Company pursuant to an Agreement and Plan of Merger
dated April 11, 1996 among the Company, MYCOsearch Acquisition Corp.,
MYCOsearch and the shareholders of MYCOsearch (the "Merger"). The Subsidiary
was the surviving corporation in the Merger, and in connection therewith, its
name was changed to MYCOsearch, Inc. MYCOsearch specializes in the collection
of fungi cultures and the development of extracts derived therefrom. These
fungal extracts contain natural chemical structures that the Company tests
against target proteins in its high throughput drug screens. The Company and
MYCOsearch have collaborated since July 1993 in the development of automated
fungal microfermentation technology for the generation of compound samples for
drug screening. MYCOsearch has developed a collection of approximately 80,000
distinct fungi cultures, from which the Company has screened over 500,000
compound samples. Since 1993, the Company has made payments to MYCOsearch for
research and fungal extracts in an aggregate amount of approximately $1.5
million.
The purchase price paid by the Company to the shareholders of
MYCOsearch consisted of $1.75 million in cash, $2.95 million in common stock of
the Company (316,553 shares at $9.319 per share, plus cash for fractional
shares) and warrants to purchase 100,000 shares of the Company's common stock
at $9.319 per share (the "Warrants"). The Company funded the cash portion of
the purchase price out of its internal cash resources. The per share value of
the common stock was based on the average closing price thereof on the Nasdaq
National Market for the twenty consecutive trading days preceding April 11,
1996. The Warrants will be exercisable for a three-year period commencing on
April 11, 1998. The Company has filed a registration statement on Form S-3
covering the 316,553 shares issued in the Merger, and the 100,000 shares
issuable upon exercise of the Warrants. The purchase price was determined in
negotiations between the Company and the four shareholders of MYCOsearch, who
include Barry Katz, Barry S. Roberts, John McLaughlin and Cedric Pearce. In
connection with the Merger, Dr. Katz (the founder of MYCOsearch) and Dr. Pearce
became employed by the Company as its Vice President, Microbial Discovery,
Pharmaceutical Division and Director, Fermentation Biology, respectively.
MYCOsearch's assets consisted principally of its inventory of fungi
cultures, certain intellectual property, including patent and trademark rights,
trade secrets and know-how, certain contract rights (e.g., royalties and rights
under contracts with customers), leased laboratory and office space, laboratory
and office equipment, and customer and supplier lists. The business of
MYCOsearch will continue to be operated out of its facilities, or comparable
facilities, located in the Raleigh/Durham, North Carolina area.
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ITEM 5. OTHER EVENTS
(a) COMPLETION OF PUBLIC OFFERING.
On April 17, 1996, the Company completed a public offering of an
aggregate of 3,618,750 shares of Common Stock, including 3,118,750 shares
underwritten by Robertson, Stephens & Company LLC (the "Underwriter") and
500,000 shares sold directly by the Company to BioChem Pharma Inc. The Company
sold 2,825,000 shares to the Underwriter and 500,000 shares to BioChem Pharma
Inc. on March 19, 1996. On April 17, 1996 the Company sold an additional 293,750
shares of common stock to the Underwriter pursuant to the Underwriter's exercise
of its over-allotment option. The purchase price to the public, including
BioChem Pharma Inc., in the offering was $9.125 per share. The total net
proceeds to the Company of the offering are estimated to be approximately $30.6
million.
(b) RENEWAL OF PFIZER COLLABORATION.
Effective April 1, 1996, the Company and Pfizer Inc. ("Pfizer") renewed
their ten-year-old collaboration for a new five-year term by entering into new
Collaborative Research and License Agreements. Under these documents, all patent
rights and patentable inventions derived from the research under this
collaboration are owned jointly by the Company and Pfizer. The Company is
obligated to file, prosecute and maintain all such patents, except for patents
covering compositions of matter and methods of making, formulating or using such
compositions in the treatment of diseases, which patents Pfizer is obligated to
file, prosecute and maintain. The Company has granted Pfizer an exclusive,
worldwide license to make, use, and sell the therapeutic products resulting from
this collaboration in exchange for royalty payments. This license terminates on
the date of the last to expire of the Company's relevant patent rights.
Pfizer will be responsible for the clinical development, regulatory
approval, manufacturing and marketing of any products derived from the
collaborative research program. However, the collaborative research agreement
does not obligate Pfizer to pursue these activities. Generally, the Company is
prohibited during the term of the contract from pursuing or sponsoring research
aimed at discovery of drugs for the treatment of cancer. If the Company becomes
aware of an opportunity to pursue such research, it must notify Pfizer of this
opportunity and negotiate in good faith for a period of 120 days. If the parties
fail to reach agreement to include this opportunity in their collaboration, the
Company may pursue the opportunity independently. Pfizer is subject to a similar
restriction to the extent it desires to pursue any opportunity with a third
party, but Pfizer is not prohibited from pursing any cancer research on its own.
Under the collaborative research agreement, Pfizer has committed to
provide research funding to the Company in an aggregate amount of approximately
$18.8 million. Pursuant to a schedule set forth in the collaborative research
agreement, Pfizer will make maximum annual payments to the Company, which will
gradually increase from approximately
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$3.5 million in the first year of the five-year term to approximately $4 million
in the fifth year.
The collaborative research agreement will expire on April 11, 2001.
However, it may be terminated early by either party upon the occurrence of
certain defaults by the other party. Any termination of the collaboration
resulting from a Pfizer default will cause a termination of Pfizer's license
rights. Pfizer will retain its license rights if it terminates the agreement in
response to a default by the Company. In addition, between July 1 and September
30, 1998, Pfizer may terminate the collaborative research agreement, with or
without cause, effective March 31, 1999. Furthermore, between July 1 and
September 30, 1999, Pfizer may terminate the collaborative research agreement,
with or without cause, effective March 31, 2000. Upon such early termination by
Pfizer, Pfizer will retain its license rights.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
It is impracticable for the Company to provide audited financial
statements for MYCOsearch for its most recent fiscal year on the date this
report is being filed. The Company intends to file the required financial
statements in an amendment to this report as soon as practicable, but not later
than 60 days after the date on which this report is filed.
(b) PRO FORMA FINANCIAL INFORMATION.
It is impracticable for the Company to provide the required pro forma
financial information on the date this report is being filed. The Company
intends to file the required pro forma financial information in an amendment to
this report as soon as practicable, but not later than 60 days after the date on
which this report is filed.
(b) EXHIBITS.
2.1 Agreement and Plan of Merger dated as of
April 11, 1996 among the Company, MYCOsearch
Acquisition Corp., MYCOsearch and the
shareholders of MYCOsearch.
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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.
ONCOGENE SCIENCE, INC.
By: /s/ Robert L. Van Nostrand
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Robert L. Van Nostrand,
Vice President, Finance and Administration
Dated: April 26, 1996
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger dated as of April 11,
1996 among the Company, MYCOsearch Acquisition Corp.,
MYCOsearch and the shareholders of MYCOsearch.