UNITED STATES
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): March 26, 2008
ARIAD Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-21696 22-3106987
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
26 Landsdowne Street, Cambridge, Massachusetts 02139
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 494-0400
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 Entry into a Material Definitive Agreement.
On March 26, 2008, ARIAD Pharmaceuticals, Inc. (the "Registrant") and its
subsidiaries, ARIAD Corporation and ARIAD Gene Therapeutics, Inc. (together with
the Registrant, the "Borrowers"), entered into an Amendment No. 3 to Credit
Agreement (the "Amendment") to the Credit Agreement dated March 12, 2003, as
previously amended on December 31, 2003 and December 31, 2004, among the
Borrowers and RBS Citizens, National Association, successor by merger to
Citizens Bank of Massachusetts (as amended, the "Credit Agreement").
The Amendment increases the balance of the term loan authorized under the Credit
Agreement to $14.0 million, extends the maturity date from March 31, 2008 until
March 31, 2013, and changes the repayment provisions to require quarterly
payments of a portion of the principal, increasing from 2.5% in the first
quarter to 8.75% in the final quarter, together with interest, throughout the
term of the loan rather than fixed monthly payments with a balloon payment at
maturity. Payments will commence on June 30, 2008. The Amendment also increases
the minimum amount of unrestricted cash, cash equivalents and investments to be
maintained by the Borrowers by $2 million to $15 million. In connection with the
Amendment, the Borrowers also delivered a Third Amended and Restated Term Note
in the amount of $14.0 million (the "Third Restated Note") to replace the Second
Amended and Restated Term Note dated December 31, 2004 which had been due on
March 31, 2008.
The loan bears interest at LIBOR plus 1.25% to 2.25%, depending on the
percentage of Borrowers' liquid assets on deposit with or invested through the
lender, or at the prime rate as provided in the Credit Agreement, and is secured
by a lien on all assets of the Borrowers excluding intellectual property, which
the Borrowers have agreed not to pledge to any other party except for certain
permitted licensing arrangements. Any amounts drawn by the Registrant under the
development advance credit facility provisions of its Collaboration Agreement
with Merck & Co., Inc. dated July 11, 2007 must be subordinated to the amounts
owed under the Credit Agreement. In addition to the requirements to maintain a
minimum amount of cash, cash equivalents and investments noted above, the Credit
Agreement requires the Borrowers to comply with various affirmative and negative
financial and other covenants, including but not limited to restrictions on
additional indebtedness, investments in subsidiaries, additional liens and sales
of assets, and dividends, distributions or repurchases of common stock. Failure
to comply with those covenants, or with the representations and warranties or
other provisions of the Credit Agreement, may result in the acceleration of the
Borrowers' debt thereunder.
Copies of the Amendment and the Third Restated Note are filed as Exhibits 10.2.4
and 10.6 to this Form 8-K, and the information contained therein is incorporated
herein by reference.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information disclosed above in Item 1.01 "Entry into a Material Definitive
Agreement" is hereby incorporated herein by reference.
ITEM 7.01 Regulation FD Disclosure.
In its press release dated February 7, 2008, the Registrant announced financial
guidance for the year ending December 31, 2008, including estimated cash used in
operations for fiscal 2008 of $41 million to $44 million. The Registrant's
guidance on cash used in operations for fiscal 2008 has not changed as a result
of the amendment to the Credit Agreement identified in Item 1.01 of this Form
8-K.
ITEM 9.01 Financial Statements and Exhibits.
(d) The following exhibits are filed with this report:
Exhibit
Number Description
- ------ -----------
10.2.4 Amendment No. 3 to Credit Agreement, dated as of March 26, 2008,
by and among ARIAD Pharmaceuticals, Inc., ARIAD Corporation,
ARIAD Gene Therapeutics, Inc. and RBS Citizens, National
Association, successor by merger to Citizens Bank of
Massachusetts
10.6 Third Amended and Restated Term Note, dated March 26, 2008,
issued by ARIAD Pharmaceuticals, Inc., ARIAD Corporation and
ARIAD Gene Therapeutics, Inc. to RBS Citizens, National
Association, successor by merger to Citizens Bank of
Massachusetts
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.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Edward M. Fitzgerald
----------------------------------------------
Edward M. Fitzgerald
Senior Vice President, Chief Financial Officer
and Treasurer
Date: March 27, 2008
EXHIBIT LIST
Exhibit
Number Description
- ------ -----------
10.2.4 Amendment No. 3 to Credit Agreement, dated as of March 26, 2008,
by and among ARIAD Pharmaceuticals, Inc., ARIAD Corporation,
ARIAD Gene Therapeutics, Inc. and RBS Citizens, National
Association, successor by merger to Citizens Bank of
Massachusetts
10.6 Third Amended and Restated Term Note, dated March 26, 2008,
issued by ARIAD Pharmaceuticals, Inc., ARIAD Corporation and
ARIAD Gene Therapeutics, Inc. to RBS Citizens, National
Association, successor by merger to Citizens Bank of
Massachusetts