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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): MAY 15, 2000
AXYS PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-2969941
(STATE OR OTHER JURISDICTION OF INCORPORATION) (IRS EMPLOYER
IDENTIFICATION NO.)
(COMMISSION FILE NUMBER)
180 KIMBALL WAY
SOUTH SAN FRANCISCO, CA 94080
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 829-1000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 28, 2000, Axys Pharmaceuticals, Inc. ("Axys") completed the
sale of its Axys Advanced Technologies, Inc. ("AAT") business unit, a subsidiary
of Axys that produces and markets novel compound diversity libraries for drug
screening to a privately held company - Discovery Partners International, Inc.
("DPI"). The sale was completed pursuant to the terms of a merger agreement
dated April 11, 2000 between AAT and DPI. In conjunction with the merger, Axys
received $50,000 in cash, $550,000 in the form of a note receivable, 7,425,000
shares of common stock (valued at $8 per share), and a warrant to purchase
200,000 additional shares of DPI at $8 per share. Axys will account for its
investment in DPI under the equity method of accounting.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 2000.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the three months ended March 31, 2000 and the fiscal year ended
December 31, 1999.
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
(c) Exhibits
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AXYS PHARMACEUTICALS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(in thousands)
Pro Forma
Historical Adjustments Pro Forma
-------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 48,484 50 (a) $ 48,534
Accounts receivable, net 4,861 (4,637)(a) 224
Inventories 2,072 (2,072)(a) --
Prepaid expenses and other current assets 2,239 (67)(a) 2,172
------------------------------------------
Total current assets 57,656 (6,726) 50,930
Property, plant and equipment, net 18,254 (3,025)(a) 15,229
Equity investment in affiliate -- (39,793)(a) 39,793
Other long term investments 1,500 -- 1,500
Note receivable from sale of AAT -- 550 (a) 550
Note receivable from officer 480 -- 480
Other assets 949 (76)(a) 873
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Total assets $ 78,839 $ 30,516 $ 109,355
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 2,337 $ (398)(a) $ 1,939
Accrued compensation 2,657 (378)(a) 2,279
Other accrued liabilities 3,592 (322)(a) 3,270
Deferred revenue 1,327 (1,105)(a) 222
Current portion of capital lease and debt
obligations 26,392 -- 26,392
------------------------------------------
Total current liabilities 36,305 (2,203) 34,102
Capital lease and debt obligations 42 -- 42
Minority interest in joint venture 2,665 -- 2,665
Stockholders' Equity
Preferred stock -- -- --
Common stock 325,601 (10)(a) 325,591
Accumulated other comprehensive loss (71) -- (71)
Retained earnings (deficit) (285,703) 32,729(a) (252,974)
------------------------------------------
Total stockholders' equity 39,827 32,719 72,546
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Total liabilities and stockholders' equity $ 78,839 $ 30,516 $ 109,355
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AXYS PHARMACEUTICALS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
Pro Forma
Historical Adjustments Pro Forma
-------------------------------------
Revenues
Collaborative and licensing revenues $ 25,329 $ (1,244)(b) $ 24,085
Product revenues 12,928 (12,042)(b) 886
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Total Revenues 38,257 (13,286) 24,971
Operating expenses:
Cost of sales 2,698 (2,698)(b) --
Research and development 65,504 (5,262)(b) 60,242
General and administrative 14,093 (1,320)(b) 12,773
Restructuring charge 5,175 -- 5,175
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Total operating expenses 87,470 (9,280) 78,190
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Operating loss (49,213) (4,006) (53,219)
Interest income 2,346 44 (b) 2,390
Interest expense (2,086) -- (2,086)
Equity interest in affiliates (836) (1,503)(b) (2,339)
Minority interest 1,879 -- 1,879
Other (expense) (853) -- (853)
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Net loss $(48,763) $ (5,465) $(54,228)
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Basic and diluted net loss per share $ (1.60) $ (1.78)
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Weighed average number of shares 30,385 30,385
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AXYS PHARMACEUTICALS, INC.
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
(In thousands)
Pro Forma
Historical Adjustments Pro Forma
--------------------------------------
Revenues
Collaboration and licensing revenue $ 1,931 $ (533)(b) $ 1,398
Product revenues 5,060 (4,807)(b) 253
--
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Total Revenues 6,991 (5,340) 1,651
Operating expenses:
Cost of sales 1,124 (1,124)(b) --
Research and development 11,301 (1,482)(b) 9,819
General and administrative 3,888 (617)(b) 3,271
Restructuring charge (545) -- (545)
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Total operating expenses 15,768 (3,223) 12,545
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Operating loss (8,777) (2,117) (10,894)
Interest income 161 11 (b) 172
Interest expense (284) -- (284)
Equity interest in affiliate -- (384)(b) (384)
Minority interest 408 -- 408
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Net loss $ (8,492) $ (2,490) $(10,982)
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Basic and diluted net loss per share $ (0.26) $ (0.34)
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Weighed average number of shares 32,067 32,067
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AXYS PHARMACEUTICALS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS:
The pro forma condensed consolidated balance sheet assumes that the sale
of Axys Advanced Technologies, Inc. ("AAT") to Discovery Partners International,
Inc. ("DPI") occurred as of March 31, 2000. Assumptions and adjustments
included in the unaudited pro forma condensed consolidated balance sheet are
summarized as follows:
(a) Cash received of $50.
Note receivable of $550. A three-year note with interest due at
8% per annum, interest payable only. Note is due immediately upon
completion of an initial public offering by DPI.
Valuation of 7,425,000 shares in stock received from DPI at $8.00
per share.
Valuation of warrant for 200,000 shares of common stock.
Elimination of all AAT accounts
Recording of the investment in DPI was calculated in accordance
with APB 18, and reflects Axys' 43% ownership interest at the
close of the AAT sales transaction net of the book value of AAT.
The pro forma condensed combined statement of operations assumes that
the sale of Axys Advanced Technologies, Inc. ("AAT") to Discovery Partners
Internationals, Inc. ("DPI") occurred as of January 1, 1999. Assumptions and
adjustments included in the unaudited pro forma condensed statement of
operations are summarized as follows:
(b) Interest income on note receivable.
Elimination of all AAT accounts.
Recorded the change in equity interest in affiliates.
The unaudited pro forma statements do not include any impact of the gain
on disposal or costs related to the sale. In future public filings, historical
results will be restated from those previously filed to reflect results of AAT
as discontinued operations in accordance with Accounting Principles Board
Opinion No. 30.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
2.1+ Agreement and Plan of Merger among us DPII Newco, LLC, Axys
Pharmaceuticals, Inc., and Axys Advanced Technologies, Inc., dated April
11, 2000.
- - ------------
+ Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text. This Exhibit has been filed separately with
the Secretary of the Commission without the Mark pursuant to the Company's
Application Requesting Confidential Treatment under the rules of the
Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
Axys Pharmaceuticals, Inc.
Date: May 15, 2000 By /s/ WILLIAM J. NEWELL
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Senior Vice President