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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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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 11, 1997 (April 2, 1997)
CHIREX INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27698 04-3296309
(State or other jurisdiction (Commission File No.) (IRS Employer Identification No.)
of incorporation)
65 William Street
Suite 330
Wellesley, Massachusetts
(Address of principal executive offices)
(704) 423-7000
(Registrant's telephone number, including area code)
Page 1 of 4 Pages
Exhibit Index on Page 4
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 9, 1997, ChiRex Inc., a Delaware corporation (the "Company" or
"ChiRex"), announced the sale of its acetaminophen business, including related
intellectual property, to the French pharmaceutical company, Rhone-Poulenc
Chimie S.A. ("RPC") pursuant to an Asset Purchase Agreement between ChiRex,
ChiRex Limited, an indirect wholly-owned subsidiary of ChiRex, and RPC dated
April 2, 1997 (the "Agreement"). Under the terms of the Agreement, ChiRex will
continue to manufacture acetaminophen (also known as paracetamol or APAP) for
RPC pursuant to a Supply Agreement for a period to effect a seamless transfer of
customers. In addition, the parties are seriously exploring opportunities to
develop a partnership whereby ChiRex and RPC will jointly develop and ChiRex
will manufacture intermediates and active ingredients for RPC.
In connection with the sale, ChiRex expects to receive total net proceeds of
U.S.$6.3 ((pound)3.8) million, of which U.S.$4.1 ((pound)2.5) million has been
received, with the balance being paid over three years subject to certain
conditions. ChiRex will record a second quarter charge of U.S.$4.4 million
(approximately 5.0% of networth) or U.S.$0.39 per share in connection with the
sale including: (i) a net asset write-off of U.S.$5.6 million, (ii) severance
and restructuring of U.S.$3.1 million offset by, (iii) net after-tax proceeds of
U.S.$4.2 million. ChiRex expects to file pro forma financial statements with its
1997 first quarter 10Q Securities and Exchange Commission filing that reflect
the sale of the acetaminophen business.
"The sale of the acetaminophen business reflects our commitment to eliminate
low-margin, low-growth non-core products and to focus on the production of
high-margin, high-growth core products," said Alan R. Clark, Chairman and CEO of
ChiRex. "Unfortunately, one of the results is a reduction of employment at our
Dudley site. In addition, we have embarked on an across-the-board expense
reduction, which is metered to make this divestiture earnings-neutral in
1997. Significantly, this sale is the final strategic measure to position
ChiRex as a leading contract manufacturing organization for the pharmaceutical
industry and to focus management attention on the growth opportunity before
us."
ChiRex is a Contract Manufacturing Organization serving the outsourcing needs
of the pharmaceutical industry through its extensive pharmaceutical fine
chemical manufacturing and process development capabilities and proprietary
technologies. The Company supports and supplements the in-house development and
manufacturing capabilities of its pharmaceutical and biotechnology customers
with a broad range of fully integrated services, accelerating the time from
drug discovery to commercialization. ChiRex currently produces 54 products, of
which 29 are core products, in its world-class, cGMP manufacturing facilities
located in Dudley, Northumberland, England. ChiRex holds 54 patents and patent
applications in the field of chiral chemistry.
Any statements contained in this Current Report on Form 8-K that relate to
future plans, events or performance, including the scheduled disposition of the
acetaminophen business, are forward-looking statements that involve risks and
uncertainties, including, but not limited to, product development and market
acceptance risks, product manufacturing risks, the impact of competitive
products and pricing, the results of current and future licensing and other
collaborative relationships, the results of financing efforts, developments
regarding intellectual property rights and litigation, risks of product
nonapproval or delays or post-approval reviews by the FDA or foreign regulatory
authorities, and other risks identified in ChiRex's other Securities and
Exchange Commission filings. Actual results, events or performance may differ
materially. Readers are cautioned not to place undo reliance on these
forward-looking statements, which speak only as the date hereof. ChiRex
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Statements.
The Pro Forma Financial Statements required to be filed with this Current
Report on Form 8-K will be filed with the Securities and Exchange Commission on
or prior to June 16, 1997.
(c) Exhibits.
The exhibits listed on the accompanying Index to Exhibits are filed as part
of this Current Report on Form 8-K.
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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 hereunto duly authorized.
CHIREX INC.
By:
Date: April 11, 1997 /S/ MICHAEL A. GRIFFITH
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Name: Michael A. Griffith
Title: Chief Financial Officer
and
Secretary
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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2.1 Asset Purchase Agreement between
ChiRex Limited, ChiRex Inc. and
Rhone-Poulenc Chimie S.A.
99 Press release dated April 9, 1997,
announcing the sale of ChiRex Inc.'s
Acetaminophen Business to Rhone-
Poulenc Chimie S.A.