1
Filed by Axys Pharmaceuticals, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Axys Pharmaceuticals,
Inc. Commission File No. 000-22788
Contact:
AXYS PHARMACEUTICALS, INC.
Paul J. Hastings
President and CEO
(650) 829-1000
For Immediate Release
AXYS PHARMACEUTICALS REPORTS SECOND QUARTER 2001 FINANCIAL RESULTS
SOUTH SAN FRANCISCO, CA - AUGUST 7, 2001 -- Axys Pharmaceuticals, Inc. (Nasdaq:
AXPH) today reported revenues for the quarter ended June 30, 2001 of $820,000
compared to $1.5 million in the second quarter of 2000. Revenues for the six
months ended June 30, 2001 were $3.9 million compared to $2.9 million for the
same period in 2000. The increase in the year-to-date amount was due to
milestones earned from Merck & Co. (NYSE:MRK) and Aventis S.A. (NYSE:AVE) in the
first quarter of 2001.
Axys also reported a net loss of $13.4 million, or $0.36 per share, for the
second quarter of 2001, compared to a profit of $21.4 million or $.61 per share
for the second quarter of 2000. The profit in 2000 reflected the sale of Axys
Advanced Technologies to Discovery Partners International in April 2000. Results
for the six months ended June 30, 2001 reflect a net loss of $31.5 million, or
$.84 per share, compared to a net profit of $12.9 million, or $.38 per share,
for the same period of 2000. Year-to-date results for 2001 included a $9.0
million non-cash charge representing the write-off of an investment in Akkadix
Corporation.
Second quarter 2001 operating expenses were $12.5 million, compared to $10.9
million incurred in the comparable quarter last year. Research and development
expenses were $8.4 million in second quarter of 2001, compared to $8.0 million
for the same period in 2000. The increase in research and development expenses
was associated with APC 2059 clinical development. General and administrative
expenses were $4.5 million in the second quarter of 2001 compared to $2.9
million for the same quarter in 2000. The increase in general and administrative
expenses is associated with expenses incurred in connection with the company's
proposed acquisition by Applera Corporation -- Celera Genomics Group (NYSE:
CRA).
Applera and Axys announced in a June 13, 2001 press release that they had
entered into a definitive agreement whereby Applera would acquire Axys in a
stock-for-stock transaction. Under the terms of the agreement, each share of
Axys common stock will convert into that number of shares of newly issued Celera
Genomics common stock to be determined at the time of the merger, based upon the
market price of Celera Genomics common stock, subject to a collar mechanism.
Following the June 13, 2001 announcement, Applera and Axys made filings to
obtain the necessary regulatory approvals of the proposed acquisition. These
included the filing by Applera of a Registration Statement on Form S-4 with the
Securities and Exchange Commission (SEC), which included Axys' preliminary proxy
statement relating to the solicitation of shareholder approval of the
acquisition. The parties are currently awaiting comments from the SEC on that
Registration Statement. Following completion of the SEC review, which is the
last remaining governmental approval for the acquisition, Axys plans to mail its
proxy statement soliciting shareholder approval. Axys has not yet set a date for
its shareholder meeting to approve the acquisition.
--more--
2
Axys Q1 Results
Page Two
About Axys
Axys Pharmaceuticals, Inc., an integrated small molecule drug discovery and
development company, has a broad pipeline of products for chronic therapeutic
applications that are partnered with world-class pharmaceutical companies and a
proprietary product portfolio in oncology. Axys also has investments in
affiliated businesses that leverage the Axys technologies. Currently, these
companies include Discovery Partners International, Inc. (Nasdaq:DPII), a
chemistry services company; and DNA Sciences, a genetics company. On June 12,
2001, Axys entered into a definitive agreement with Applera Corporation --
Celera Genomics Group whereby Celera will acquire Axys.
Investors and security holders are advised to read the Form S-4, filed by
Applera Corporation with the Securities and Exchange Commission dated July 9,
2001, for more information regarding the acquisition. It is currently
anticipated that the Form S-4/proxy statement/prospectus will be mailed to
stockholders of Axys later this year, seeking their approval of the proposed
transaction. Investors and security holders may obtain a free copy of the proxy
statement/prospectus and other documents filed by Axys at the Securities and
Exchange Commission's web site at www.sec.gov http://www.sec.gov. The proxy
statement/prospectus and such other documents may also be obtained from Axys by
directing such request to Axys Pharmaceuticals, 180 Kimball Way, South San
Francisco, CA 94080, Attn: Investor Relations, tel: (650) 829-1363.
Certain statements in this press release are forward-looking. These may be
identified by the use of forward-looking words or phrases such as "believe,"
"expect," "anticipate," and "potential," among others. These forward-looking
statements are based on Axys' current expectations. The Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking
statements. In order to comply with the terms of the safe harbor, Axys notes
that a variety of factors could cause actual results and experience to differ
materially from the anticipated results or other expectations expressed in
forward-looking statements within this press release. The risks and
uncertainties include but are not limited to: (1) failure of the merger
transaction with Applera to close due to the failure to obtain regulatory or
other approvals; (2) failure of the Axys shareholders to approve the
transaction; (3) the risk that the Axys business will not be integrated
successfully into Celera; (4) unanticipated costs of such integration; (5)
failure to successfully manage relationships with customers, suppliers and
strategic partners during the pendency of and following the transaction; (6)
unproven use of genomics information to develop products; (7) dependence on
computer hardware, software, and internet applications; (8) potential adverse
effect on the Celera Genomics group's intellectual property protection and the
value of its products and services due to public disclosure of genomics sequence
data; (9) government regulation of Celera's or Axys' products and services; (10)
Axys' reliance on the efforts of its collaborative partners; (11) the risk that
Axys' collaborations will not be successful; (12) the risk that clinical trials
will not proceed as anticipated or may not be successful; (13) the risk that
Axys will not be successful in entering into new collaborations; (14) market
risk associated with Axys' substantial ownership interest in Discovery Partners
International, Inc. and Axys' investments in its other affiliated businesses;
and (15) other factors that might be described from time to time in Axys'
filings with the Securities and Exchange Commission.
Axys and its directors, executive officers and certain members of management and
employees may solicit proxies from Axys shareholders in favor of the adoption of
the merger agreement and the transactions associated with the acquisition. A
description of any interests that Axys directors and executive officers have in
the acquisition are available in the joint proxy statement/prospectus.
--Table to follow--
3
Axys Q1 Results
Page Three
AXYS PHARMACEUTICALS, INC.
Statements of Operations
(unaudited)
Three Months ended Six Months ended
June 30, June 30,
---------------------- ----------------------
2001 2000* 2001 2000*
-------- -------- -------- --------
(in thousands, except per share amounts)
Collaboration and license revenue $ 820 $ 1,508 $ 3,890 $ 2,922
-------- -------- -------- --------
Operating expenses:
Research and development 8,435 8,039 17,364 15,897
General and administrative 4,480 2,908 7,722 5,722
Non-cash compensation expense (income) (397) -- (1,448) --
Restructure charge -- (78) -- (623)
-------- -------- -------- --------
Total operating expenses 12,518 10,869 23,638 20,996
-------- -------- -------- --------
Operating loss (11,698) (9,361) (19,748) (18,074)
Other income (expense): (1,710) 554 (12,690) 519
-------- -------- -------- --------
Loss from continuing operations, before
cumulative effect, gain from sale of
subsidiary and discontinued operations (13,408) (8,807) (32,438) (17,555)
Cumulative effect of a change in accounting policy -- -- 972 --
Gain from sale of subsidiary -- 32,987 -- 32,987
Loss from discontinued operations -- (2,785) -- (2,529)
-------- -------- -------- --------
Net (loss)/income $(13,408) $ 21,395 $(31,466) $ 12,903
======== ======== ======== ========
Basic and diluted net loss per share from
continuing operations $ (0.36) $ (0.25) $ (0.87) $ (0.52)
Basic and diluted net loss per share from
cumulative effect of a change in accounting policy $ -- $ -- $ 0.03 $ --
Basic and diluted earnings per share from gain
on sale of subsidiary $ -- $ 0.94 $ -- $ 0.98
Basic and diluted net loss per share from
discontinued segments $ -- $ (0.08) $ -- $ (0.08)
-------- -------- -------- --------
Basic and diluted net loss per share $ (0.36) $ 0.61 $ (0.84) $ 0.38
======== ======== ======== ========
Shares used in computing basic and diluted net
loss per share 37,611 35,289 37,480 33,678
- ----------------
* The 2000 results of the Company's former subsidiaries, Axys Advanced
Technologies and PPGx, have been reclassified in accordance with APB 30
Reporting the Results of Operations
CONDENSED BALANCE SHEET DATA
June 30, December 31,
2001 2000
--------- -----------
(unaudited)
(in thousands)
Cash, cash equivalents and marketable investments
(includes $4.0M of restricted cash) $ 20,827 $ 41,776
Total assets 99,244 118,696
Accumulated deficit (298,821) (267,355)
Total stockholders' equity 59,695 79,565