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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): December 22, 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.)
0-22788
(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.
Axys Pharmaceuticals, Inc. ("Axys") completed the sale of PPGx, Inc. ("PPGx"), a
majority-owned subsidiary of Axys that performs genetic testing and contract
research services for pharmaceutical companies, to a privately held company -
DNA Sciences, Inc. ("DNAS"). This event was filed in our Form 8-K on January 31,
2001 as an Item 5 transaction. This amendment updates the previous filing as an
Item 2 transaction including the required pro forma financial information.
The sale was completed pursuant to the terms of a merger agreement dated
December 17, 2000 between PPGx, DNAS, and PIPO Acquisition Corp. In conjunction
with the merger, Axys received 1,478,550 shares of DNAS Series D preferred stock
and 108 shares of DNAS common stock. Concurrent with this transaction,
Pharmaceutical Product Development, Inc. ("PPD") exercised its right to purchase
up to 50% of the outstanding shares of PPGx. As a result of this exercise, Axys
received $5.9 million in cash proceeds, and paid PPGx debt obligations totaling
$4.6 million.
Axys owns approximately 5% of DNAS outstanding stock and will account for its
investment under the cost method. The total gain recognized from the sale of
PPGx is approximately $26 million.
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
September 30, 2000.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the nine months ended September 30, 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
SEPTEMBER 30, 2000
(in thousands)
Pro Forma
Historical Adjustments Pro Forma
---------- ------------ ---------
Current assets:
Cash and cash equivalents $ 40,008 $ 988 (b,c) $ 40,996
Marketable investments 11,307 - 11,307
Accounts receivable 1,163 (394) (c) 769
Due from affiliates 3,195 - 3,195
Prepaid expenses and other current assets 2,635 (116) (c) 2,519
--------- -------- ---------
Total current assets 58,308 478 58,786
Property and equipment, net 13,492 (2,283) (c) 11,209
Investment in equity method investee 40,370 - 40,370
Debt issuance costs 7,068 - 7,068
Other assets 1,585 14,959 (a,c) 16,544
--------- --------- ----------
Total assets $120,823 $ 13,154 $ 133,977
========= ========= ==========
Liabilities & Stockholders' Equity
Current Liabilities:
Accounts payable $ 1,852 $ (412) (c) $ 1,440
Accrued Compensation 1,932 (538) (c) 1,394
Other accrued liabilities 2,905 (8) (c) 2,897
Current portion of capital lease and debt
obligations 9,499 (9,350) (c) 149
--------- --------- ----------
Total current liabilities 16,188 (10,308) 5,880
Debt obligations, net of current portion 26,000 26,000
Capital lease, net of current portion 2,500 - 2,500
Minority Interest 1,918 (1,918) (c) -
Stockholders' equity:
Common stock 343,171 - 343,171
Accumulated other comprehensive income 2,072 - 2,072
Accumulated deficit (271,026) 25,380 (c) (245,646)
--------- --------- ----------
Total stockholders' equity 74,217 25,380 99,597
--------- --------- ----------
Total liabilities & stockholders' equity $120,823 $13,154 $ 133,977
========= ========= ==========
See accompanying notes to the unaudited pro forma
condensed consolidated financial statements
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AXYS PHARMACEUTICALS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
AAT PPGx
Historical Adjustments Adjustments Pro Forma
Collaborative & licensing revenues $ 25,329 (1,244) $ - $ 24,085
Product revenues 12,928 (12,042) (f) (886) (e) -
---------- ----------- --- ----------- ----- ----------
Total revenues 38,257 (13,286) (886) 24,085
Operating expenses
Cost of Sales 2,698 (2,698) (f) - -
Research and development 65,504 (5,262) (f) (5,068) (e) 55,174
General and administrative 14,093 (1,320) (f) (1,901) (e) 10,872
Restructuring charge 5,175 - - 5,175
---------- ----------- --- ----------- ----- ----------
Total operating expenses 87,470 (9,280) (6,969) 71,221
$ (49,213) (4,006) $6,083 $ (47,136)
Other income/(expense), net 450 (1,459) (f) (1,767) (d,e) (2,776)
---------- ----------- --- ----------- ----- ----------
Net loss $ (48,763) $ (5,465) $ 4,316 $ (49,912)
========== =========== =========== ==========
Basic and diluted loss per share from continuing
operations $(1.60) $ (1.64)
========== ==========
Weighed average number of shares 30,385 30,385
========== ==========
See accompanying notes to the unaudited pro forma
condensed consolidated financial statements
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AXYS PHARMACEUTICALS, INC.
UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(In thousands)
Pro Forma
Historical Adjustments Pro Forma
----------- ----------- ---------
Collaborative & licensing revenues $ 5,496 $ - $ 5,496
Product revenues 1,209 (1,172) (e) 37
----------- ----------- ---- ---------
Total revenues 6,705 (1,172) 5,533
Operating expenses
Research and development 28,829 (4,552) (e) 24,277
General and administrative 9,765 (2,654) (e) 7,111
Restructuring charge (625) - (625)
----------- ----------- ----- ---------
Total operating expenses 37,969 (7,206) 30,763
----------- ----------- ----- ---------
Operating loss $(31,264) $ 6,034 $ (25,230)
Other income/(expense) 1,608 (715) (d,e) 893
----------- ----------- ----- ---------
(Loss)/ income from continuing operations
$ (29,656) $ 5,319 $ (24,337)
----------- ----------- ----- ---------
Basic and diluted loss per share from continuing
operations $(.86) $ (.70)
=========== =========
Weighed average number of shares 34,653 34,653
=========== =========
See accompanying notes to the unaudited pro forma
condensed consolidated financial statements
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AXYS PHARMACEUTICALS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS:
The unaudited pro forma condensed consolidated balance sheet assumes that the
sale of PPGx, Inc. ("PPGx") to DNA Sciences, Inc. ("DNAS") and related
transactions, including payment of assumed obligations occurred as of SEPTEMBER
30, 2000. Assumptions and adjustments included in the unaudited pro forma
condensed consolidated balance sheet are summarized as follows:
(a) Valuation of 1,478,550 shares of DNAS Series D preferred stock
and 108 shares of DNAS common stock at $10.15.
(b) Net cash proceeds resulting from the sale of PPGx.
(c) Elimination of all PPGx accounts from the reporting entity.
The unaudited pro forma condensed combined statement of operations assumes that
the sale of PPGx occurred as of January 1, 1999. All significant pro forma
adjustments related to the sale of PPGx are described below. The pro forma
adjustments for fiscal year ended 1999 are presented on a disaggregated basis in
order to present pro forma adjustments related to the April 2000 sale of a
previously consolidated entity, Axys Advanced Technologies ("AAT") to Discovery
Partners International, Inc. ("DPI"). The nine month period ended historical
September 30, 2000 results of AAT have been reclassified in accordance with
Accounting Principals Board No. 30 Reporting the Results of
Operations--Discontinued Events and Extraordinary Items, as such, pro forma
adjustments to results of operations of AAT is not presented. The sale of AAT is
described in more detail in our May 15, 2000 Form 8-K.
Assumptions and adjustments included in the unaudited pro forma condensed
statement of operations are summarized as follows:
(d) Interest income on net cash received.
(e) Elimination of all PPGx accounts.
(f) Elimination of all AAT accounts.
The unaudited pro forma results of operations do not include any impact of the
gain on disposal or costs related to the sale, due to their non-recurring
nature. In future public filings, historical results will be reclassified from
those previously filed to reflect results of PPGx as discontinued operations in
accordance with Accounting Principles Board Opinion No. 30. The unaudited pro
forma condensed combined financial statements should be read in conjunction with
the respective financial statements and related notes thereto of the Company.
The unaudited pro forma condensed combined financial statements are presented
for illustrative purposes only and are not necessarily indicative of the results
of operations or financial position that would have been achieved had the
transactions reflected therein been consummated as of the dates indicated, or of
the results of operations or financial positions for any future periods or
dates.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
* 2.1 Agreement and Plan of Merger among us DNA Sciences, Inc., Axys
Pharmaceuticals, Inc., and PPGx, Inc., dated December 17, 2000.
- ------------
* Previously filed with January 31, 2001 Form 8-K.
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: March 29, 2001 By /s/ DOUGLAS ALTSCHULER
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Vice President and General Counsel
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