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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): March 3, 1999
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 340-23520 56-1714315
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification Number)
4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200,
DURHAM, NORTH CAROLINA 27703-8411
(Address of principal executive offices)
(919) 998-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On January 5, 1999, Quintiles announced the completion of its
previously announced acquisition of substantial assets of Hoechst Marion
Roussel's Kansas City-based Drug Innovation and Approval facility and the
opening of a Kansas City contract research facility. A copy of the Agreement for
the Provision of Research Services and Purchase of Business Assets between
Hoechst Marion Roussel, Inc. and Quintiles, Inc. is attached hereto as
Exhibit 10.01 and incorporated herein by reference.
In connection with certain acquisitions accounted for as pooling of
interests which were consummated between January 1, 1996 and September 30, 1998,
Quintiles Transnational Corp. (the "Company") has restated certain of its
historical consolidated financial data, as included in the Company's Current
Report on Form 8-K dated January 27, 1999, and provides the restated selected
consolidated financial data table below.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected Consolidated Statement of Income Data set forth below for each
of the years in the three-year period ending December 31, 1997 and the
Consolidated Balance Sheet Data set forth below as of December 31, 1996 and 1997
are derived from the audited consolidated financial statements of the Company
and notes thereto, as restated for certain pooling transactions, included in
this Current Report on Form 8-K dated January 27, 1999. The selected
Consolidated Statement of Income Data set forth below for the years ended
December 1994 and 1993, and the Consolidated Balance Sheet Data set forth below
as of December 31, 1995, 1994 and 1993 are derived from the audited consolidated
financial statements of the Company as subsequently restated for certain pooling
transactions. The data provided as of September 30, 1998 and for the nine months
ended September 30, 1997 and 1998 are derived from unaudited consolidated
financial statements included in the Company's Quarterly Report on Form 10-Q for
the period ended September 30, 1998, as subsequently restated herein for certain
pooling transactions, but in the opinion of management, contain all adjustments,
consisting only of normal recurring accruals, which are necessary for a fair
statement of the results of such periods. The consolidated financial statements
of the Company have been restated to reflect material acquisitions by the
Company in transactions accounted for as poolings of interests. However, the
consolidated financial statements have not been restated to reflect certain
other acquisitions accounted for as pooling of interests where the Company
determined that the consolidated financial data would not have been materially
different if the pooled companies had been included. For such immaterial pooling
of interests transactions, which include two transactions in 1997 and two
transactions in 1996, the Company's financial statements for the year of each
transaction have been restated to include the pooled companies from January 1 of
that year, but the financial statements for years prior to the year of each
transaction have not been restated because the effect of such restatement would
be immaterial. The selected consolidated financial data presented below should
be read in conjunction with the Company's audited and unaudited consolidated
financial statements and notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included herein.
Nine Months Ended
Year Ended December 31, September 30,
-------------------------------------------------------------- ----------------
1997 1996(1) 1995(1) 1994(1) 1993(1) 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
Net revenue $852,900 $600,100 $368,056 $230,583 $169,623 $848,379 $608,436
Income from operations 88,812 43,851 25,900 17,456 12,545 88,654 63,387
Income before income taxes 86,535 24,241 24,655 16,567 9,785 86,737 61,387
Net income available for common
shareholders 55,683 7,648 14,626 10,598 5,230 58,914 38,862
Basic net income per share 0.76 0.11 0.23 0.18 0.11 0.77 0.53
Diluted net income per share $ 0.74 $ 0.11 $ 0.23 $ 0.18 $ 0.10 $ 0.76 $ 0.52
Weighted average shares outstanding(2):
Basic 73,739 69,148 63,171 58,128 49,681 76,476 73,283
Diluted 75,275 71,785 64,946 58,512 50,191 77,987 74,967
As of December 31, As of September 30,
------------------------------------------------------------ -------------------
1997 1996(1) 1995(1) 1994(1) 1993(1) 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except employees)
Cash and cash equivalents $ 80,247 $ 74,474 $ 84,569 $ 52,011 $ 18,188 $ 88,499 $ 77,338
Working capital 164,987 99,787 72,102 48,245 18,879 197,667 141,204
Total assets 814,027 554,619 352,277 208,944 136,272 937,952 741,544
Long-term debt including current portion 185,511 185,493 52,662 21,386 20,855 191,570 187,690
Shareholders' equity $388,639 $150,528 $165,943 $ 90,193 $ 89,015 $464,947 $339,628
Employees 11,540 7,896 4,835 3,115 2,346 14,682 9,682
(1) Prior to the Company's November 29, 1996 share exchange with Innovex
Limited (Innovex), Innovex had a fiscal year end of March 31 and the
Company had (and continues to have) a fiscal year end of December 31.
As a result, the pooled data presented above for 1993 through 1995
include Innovex's March 31 fiscal year data in combination with the
Company's December 31 fiscal year data. In connection with the share
exchange, Innovex changed its fiscal year end to December 31.
Accordingly, the pooled data presented above for 1996 include both
Innovex's and the Company's data on a December 31 year end basis.
Because of the difference between Innovex's fiscal year end in 1995
compared with 1996, Innovex's quarter ended March 31, 1996 data are
included in the Company's pooled data for both 1995 and 1996.
(2) Restated to reflect the two-for-one stock splits of the Company's
Common Stock effected as a 100% stock dividend in November 1995 and
December 1997.
On February 12, 1999, Kenneth Hodges ("Plaintiff") filed a civil
lawsuit in the State Court of Fulton County Georgia naming as defendants Richard
L. Borison, Bruce I. Diamond, BASF Corporation, Pfizer, Inc., Merck & Company,
Inc., Wyeth-Ayerst Laboratories Company, Zeneca, Inc., Janssen Pharmaceutica
Inc., Smithkline Beecham Corporation, Hoechst Marion Roussel, Inc., Glaxo
Wellcome, Inc., Abbott Laboratories, Bristol-Myers Squibb Company,
Warner-Lambert Company, Monsanto Company, Novartis Pharmaceuticals Corporation
and Quintiles Laboratories Limited, a subsidiary of the Company. The complaint
alleges that certain drug trials conducted by Drs. Borison and Diamond in which
Plaintiff alleges he participated between 1988 and 1996 were not properly
conducted or supervised, that Plaintiff had violent adverse reactions to many of
the drugs and that his schizophrenia was aggravated by the drug trials.
Consequently, Plaintiff alleges that he was subject to severe mortification,
injured feelings, shame, public humiliation, victimization, emotional turmoil
and distress. The complaint alleges claims for battery, fraudulent inducement to
participate in the drug experiments, medical malpractice, negligence in
conducting the experiments, and intentional infliction of emotional distress.
Plaintiff seeks to recover his actual damages in unspecified amounts, medical
expenses, litigation costs, and punitive damages.
Nowhere in the complaint are found any specific allegations against
Quintiles Laboratories Limited nor any specific factual connection between the
Company and the Plaintiff's claims. The Company believes the claims alleged
against it are vague and meritless, and the recovery sought is baseless. The
Company intends to vigorously defend against these claims.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
10.01 Agreement for the Provision of Research Services and Purchase of
Business Assets between Hoechst Marion Roussel, Inc. and
Quintiles, Inc., dated January 1, 1999 [Note: Certain
confidential portions of this exhibit have been omitted, as
indicated in the exhibit by an asterisk (*), and filed
separately with the Securities and Exchange Commission.]
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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.
QUINTILES TRANSNATIONAL CORP.
By: /S/ RACHEL R. SELISKER
---------------------------------------
Dated: March 3, 1999 Rachel R. Selisker
Chief Financial Officer and Executive Vice
President Finance
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
10.01 Agreement for the Provision of Research Services and Purchase of
Business Assets between Hoechst Marion Roussel, Inc. and
Quintiles, Inc., dated January 1, 1999 [Note: Certain
confidential portions of this exhibit have been omitted, as
indicated in the exhibit by an asterisk (*), and filed
separately with the Securities and Exchange Commission.]