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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): JULY 6, 1998
GENE LOGIC INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-23317 06-1411336
(Commission File No.) (IRS Employer Identification No.)
708 QUINCE ORCHARD ROAD
GAITHERSBURG, MARYLAND 20878
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (301) 987-1700
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ITEM 5. OTHER EVENTS.
THIS CURRENT REPORT ON FORM 8-K CONTAINS OR INCORPORATES FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
ASCRIBED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE POTENTIAL
INABILITY TO COMPLETE THE MERGER TRANSACTION INVOLVING GENE LOGIC INC., A
DELAWARE CORPORATION (THE "COMPANY"), GENE LOGIC ACQUISITION CORP., A
DELAWARE CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY ("MERGER
SUB") AND ONCORMED, INC., A DELAWARE CORPORATION ("ONCORMED"), AS SCHEDULED,
OR AT ALL, THE POSSIBILITY THAT SOME OR ALL OF THE OBJECTIVES OF THE MERGER
WILL NOT BE ACHIEVED, POTENTIAL PROBLEMS ASSOCIATED WITH INTEGRATING THE TWO
COMPANIES, INCLUDING THE RISK THAT KEY EMPLOYEES WILL CHOOSE TO LEAVE,
ACCEPTANCE OF THE MERGER BY CORPORATE PARTNERS AND THE MARKET, AS WELL AS
RISKS AND UNCERTAINTIES ASSOCIATED WITH THE ONGOING BUSINESSES OF THE COMPANY
AND ONCORMED AS DISCUSSED IN THEIR RESPECTIVE ANNUAL REPORTS ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1997 AND THEIR OTHER REPORTS AND DOCUMENTS FILED
PERIODICALLY WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC").
On July 6, 1998, the Company entered into an Agreement and Plan of
Merger and Reorganization (the "Merger Agreement"), among the Company, Merger
Sub and Oncormed. The description contained in this Item 5 of the
transactions contemplated by the Merger Agreement is qualified in its
entirety by reference to the full text of the Merger Agreement, a copy of
which is attached hereto as Exhibit 99.1.
The Merger Agreement contemplates that, subject to the satisfaction of
certain conditions set forth therein, including without limitation the
approval and adoption of the Merger Agreement by the requisite vote of the
Company's stockholders and the approval of the issuance of the Company's
Common Stock in the Merger by the Company's stockholders and the approval and
adoption of the Merger Agreement by the requisite vote of Oncormed's
stockholders, Oncormed will be merged with and into Merger Sub (the
"Merger"), whereby Merger Sub will be the surviving corporation in the Merger
and a wholly owned subsidiary of the Company and the separate existence of
Oncormed will cease.
Under the terms of the Merger Agreement, approximately 4,849,815 newly
issued shares of Company Common Stock (the "Total Merger Shares") will be
issued in exchange for all outstanding shares of Oncormed Common Stock
(including all outstanding shares of Oncormed Preferred Stock, which will be
converted into Oncormed Common Stock prior to the Merger); PROVIDED, HOWEVER,
that in the event the average closing price of Company Common Stock as
reported on the Nasdaq National Market System for the fifteen (15) trading
days ending the second day prior to the day of the Company Stockholders'
Meeting (the "Closing Price") is more than $7.88, then Total Merger Shares
shall equal (x) $38,204,420, divided by (y) the Closing Price.
Each share of Oncormed Common Stock (including Oncormed Common Stock
issued upon conversion of the Oncormed Preferred Stock) outstanding at the
time the Merger is consummated (except for any such shares held by Oncormed
as treasury stock and any such
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shares held by the Company, Merger Sub or any subsidiary of the Company or
Oncormed) will be converted into the right to receive that number of whole
shares of Company Common Stock equal to (A) one share of Company Common
Stock, multiplied by (B) the Exchange Ratio. The "Exchange Ratio" will be
equal to (A) the Total Merger Shares divided by (B) the total number of
shares of Oncormed Common Stock (after giving effect to the conversion of the
Oncormed Preferred Stock) outstanding immediately prior to the effective time
of the Merger. Cash will be paid in lieu of any fractional shares. In
addition, the Company will assume outstanding warrants to purchase Oncormed
Common Stock on the terms set forth in Section 1.9 of the Merger Agreement.
The Merger is intended to qualify as a tax-free reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended, and is intended to be accounted for as a purchase.
In connection with the execution of the Merger Agreement, each of the
directors and executive officers of Oncormed, which include Dr. Timothy J.
Triche, Dr. Douglas Dolginow, L. Robert Johnston, Jr., John Pappajohn, Dr.
Leslie Alexandre, John W. Colloton, Stephen Turner and Dr. Wayne Patterson
(collectively, the "Affiliates"), has entered into a Voting Agreement with
the Company dated as of July 6, 1998 in the form of Voting Agreement included
as Exhibit 99.2 to this Report (the "Executive's Voting Agreement"). Oncor,
Inc. ("Oncor") has entered into that certain Voting Agreement with the
Company dated as of July 6, 1998 attached hereto as Exhibit 99.3 (the "Oncor
Voting Agreement"). Incyte Pharmaceuticals, Inc. ("Incyte") has entered into
that certain Voting Agreement with the Company dated as of July 6, 1998
attached hereto as Exhibit 99.4 (the "Incyte Voting Agreement"). Each of
Southbrook International Investments, Ltd., Westover Investments L.P.,
Montrose Investments, Ltd., Brown Simpson Strategic Growth Fund, L.P., Brown
Simpson Strategic Growth Fund, Ltd. and Incyte (collectively, the "Preferred
Holders") has entered into that certain letter agreement dated as of July 6,
1998 with the Company containing provisions as to the voting of securities of
Oncormed, a copy of which is attached hereto as Exhibit 99.5 (the "Preferred
Holder Voting Agreements"). The Affiliates, Oncor, Incyte and the Preferred
Holders are referred to herein collectively as the "Voting Agreement
Stockholders." The Executive's Voting Agreement, the Oncor Voting Agreement,
the Incyte Voting Agreement and the Preferred Holder Voting Agreements are
referred to herein collectively as the "Voting Agreements." Pursuant to the
Voting Agreements, the Voting Agreement Stockholders, who collectively
beneficially own approximately 48.3% of the outstanding shares of Common
Stock of Oncormed (after giving effect to the conversion of the Oncormed
Preferred Stock into Oncormed Common Stock) have agreed, among other things,
to vote their shares in favor of the Merger. The description contained in
this Item 5 of the transactions contemplated by the Voting Agreements is
qualified in its entirety by reference to the full text of the Voting
Agreements attached hereto as Exhibits 99.2, 99.3, 99.4 and 99.5.
On July 7, 1998, the Company issued two press releases relating to the
execution of the Merger Agreement. Copies of the press releases are attached
hereto as Exhibits 99.6 and 99.7.
A registration statement relating to the Company Common Stock to be
issued in connection with the Merger has not yet been filed with the SEC, nor
has a prospectus/joint proxy statement relating to the vote of the Company's
and Oncormed's stockholders on the Merger, been filed with the SEC. The
Company Common Stock may not be offered, nor may offers to
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acquire such stock be accepted, prior to the time such registration statement
becomes effective. This Report shall not constitute an offer to sell or the
solicitation of an offer to buy any Company Common Stock or any other
security, and shall not constitute the solicitation of any vote with respect
to the Merger.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
Exhibit No. Description
99.1 Agreement and Plan of Merger and Reorganization dated July 6, 1998
by and between the Company, Merger Sub and Oncormed.*
99.2 Form of Voting Agreement dated as of July 6, 1998, a substantially
similar version of which has been executed by the Company and each
of the Affiliates.*
99.3 Voting Agreement dated as of July 6, 1998 by and between the
Company and Oncor.*
99.4 Voting Agreement dated as of July 6, 1998 by and between the
Company and Incyte.*
99.5 Form of the letter agreement dated as of July 6, 1998, a
substantially similar version of which has been executed by
the Company and each of the Preferred Holders.*
99.6 Press Release dated as of July 7, 1998 relating to the execution
of the Merger Agreement.
99.7 Press Release dated as of July 7, 1998 relating to the execution
of the Merger Agreement.
* Incorporated by reference from exhibit to Schedule 13D filed with the
Securities Exchange Commission by the Company on July 10, 1998.
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SIGNATURE
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.
GENE LOGIC INC.
Dated: July 10, 1998 By: /s/ Michael J. Brennan
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Michael J. Brennan, M.D., Ph.D.
President and Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit No. Description
99.1 Agreement and Plan of Merger and Reorganization dated July 6, 1998
by and between the Company, Merger Sub and Oncormed.*
99.2 Form of Voting Agreement dated as of July 6, 1998, a
substantially similar version of which has been executed
by the Company and each of the Affiliates.*
99.3 Voting Agreement dated as of July 6, 1998, by and between the
Company and Oncor.*
99.4 Voting Agreement dated as of July 6, 1998, by and between the
Company and Incyte.*
99.5 Form of the letter agreement dated as of July 6, 1998, a
substantially similar version of which has been executed by the
Company and each of the Preferred Holders.*
99.6 Press Release dated as of July 7, 1998 relating to the execution
of the Merger Agreement.
99.7 Press Release dated as of July 7, 1998 relating to the execution
of the Merger Agreement.
* Incorporated by reference from exhibit to Schedule 13D filed with the
Securities Exchange Commission by the Company on July 10, 1998.
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EXHIBIT 99.6
[LETTERHEAD OF GENE LOGIC]
Contacts:
Gene Logic Inc. Oncormed Inc.. Burns McClellan, Inc.
Mark D. Gessler Leslie M. Alexandre, Dr.P.H. Lisa Burns (Investors)
Senior Vice President Vice President, Corporate Liz Landy (Media)
Corporate Development Affairs & Marketing (212) 213-0006
& Chief Financial Officer Tel: (301) 208-1888 ext. 521
Tel: (301) 987-1700 Fax: (301) 926-6125
Fax: (301) 987-1701 [email protected]
[email protected]
FOR IMMEDIATE RELEASE
GENE LOGIC TO ACQUIRE ONCORMED
GAITHERSBURG, MD - JULY 7, 1998 - Gene Logic Inc. (Nasdaq:GLGC) and Oncormed,
Inc. (AMEX:ONM) today announced that they have signed a definitive agreement
pursuant to which Gene Logic will acquire all of the outstanding stock of
Oncormed for Gene Logic Common Stock in a forward triangular merger. Under
the terms of the agreement, Gene Logic will issue 4,849,815 shares of Gene
Logic Common Stock, which number may be reduced based on the value of Gene
Logic stock at the time of closing, giving the transaction a value not to
exceed approximately $38 million. Gene Logic will also assume outstanding
warrants to purchase Oncormed stock in connection with the merger. The
combination will be accounted for as a purchase and is expected to result in
a charge related to acquisition of in-process technology when the transaction
is completed, which is currently expected to take place early in the fourth
quarter of 1998. The transaction, which has been approved by the Boards of
Directors of both companies and will be subject to the approval of a majority
of the voting stock of each company, is expected to qualify as a tax-free
reorganization. During the period prior to the closing of the transaction,
Gene Logic has agreed to provide Oncormed with an operating capital loan line
collateralized by certain of Oncormed's tissue biorepository assets.
According to Michael J. Brennan, M.D., Ph.D., President and Chief Executive
Officer of Gene Logic, "With this transaction, Gene Logic acquires Oncormed's
proprietary technologies and resources and extensive clinical experience
together with a portfolio of pharmacogenomics alliances with top-tier
pharmaceutical companies. By adding these elements to our powerful genomics
and bioinformatics platform, we believe Gene Logic will achieve, in a highly
cost-effective way, the critical mass and range of technologies necessary to
support key aspects of the drug discovery and development process: from
target identification and validation, to the discovery of new drug leads,
through clinical trials. We believe that this combination will create major
new business opportunities and enable us to accelerate our rate of commercial
development and revenue growth. We are particularly excited by the prospect
of building a new
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franchise in pharmacogenomics, further enhancing Gene Logic's status as a
leading provider of genomic information to the pharmaceutical industry."
Timothy J. Triche, M.D., Ph.D., Chairman and Chief Executive Officer of
Oncormed stated, "There is an excellent fit between Oncormed and Gene Logic
and we are enthusiastic about our future as an integrated enterprise. Our
shared vision is to accelerate the pace, reduce the cost and improve the
predictability of drug discovery and development through the provision of an
integrated genomics, bioinformatics and pharmacogenomics platform. By merging
highly complementary technologies, intellectual property and organizational
teams, we believe that the combined company will be able to achieve rapid
penetration of the growing market for genomic information and bioinformatics
technologies."
Gene Logic and the combined company resulting from the merger, which will be
a subsidiary of Gene Logic, will continue operations in Gene Logic's 50,000
square foot facility located in Gaithersburg, MD, and will employ
approximately 175 personnel. Michael J. Brennan will serve as President and
Chief Executive Officer. Douglas Dolginow, M.D., Oncormed's President and
Chief Operating Officer, will become a Senior Vice President of Gene Logic
focusing initially on the pharmacogenomics business. Upon closing of the
transaction, Timothy J. Triche will step down as Chairman and Chief Executive
Officer of Oncormed but will remain as a consultant to Gene Logic. The
composition of Gene Logic's Board of Directors, chaired by Alan G. Walton,
D.Sc., will remain unchanged.
Furman Selz LLC and Hambrecht and Quist LLC acted as financial advisers to
Gene Logic and Oncormed, respectively, in connection with the transaction.
ONCORMED uses proprietary genomics technologies and software to characterize
genes to establish clinical relevance and to profile patients for
pharmacogenomic and therapeutic purposes. The company's mission is to
accelerate the translation of genetic discoveries into clinically-useful
products and services through strategic collaborations with pharmaceutical,
genomic and biotechnology companies. Oncormed has established corporate
alliances with major pharmaceutical companies, including Merck & Co.,
Schering-Plough, Rhone-Poulenc Rorer and ZENECA Diagnostics, with
biotechnology companies Introgen Therapeutics and Onyx Pharmaceuticals, and
with Affymetrix and Incyte Pharmaceuticals.
Gene Logic combines powerful genomics technologies and bioinformatics
expertise to accelerate the discovery and development of new drugs. Gene
Logic provides its pharmaceutical company partners with products designed to
reduce the time, cost and risk associated with drug discovery and
development. These include proprietary genomic databases of gene expression
for new drug target discovery and development, a novel screening technology
for identifying new drug leads, and a comprehensive bioinformatics system for
analyzing, managing and integrating biological information into the drug
discovery process. Gene Logic has established strategic alliances with N.V.
Organon, a pharmaceutical business unit of Akzo Nobel, Procter & Gamble
Pharmaceuticals, Inc., Japan Tobacco, Inc., SmithKline Beecham and the
Wyeth-Ayerst Research Division of American Home Products. In addition, Gene
Logic has an exclusive alliance with Hoechst Schering AgrEvo for discovery of
genes to develop crop protection and improvement products.
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THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
ASCRIBED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE POTENTIAL
INABILITY TO COMPLETE THE MERGER AS SCHEDULED, OR AT ALL, THE POSSIBILITY
THAT SOME OR ALL OF THE OBJECTIVES OF THE MERGER WILL NOT BE ACHIEVED,
POTENTIAL PROBLEMS ASSOCIATED WITH INTEGRATING THE TWO COMPANIES, INCLUDING
THE RISK THAT KEY EMPLOYEES WILL CHOOSE TO LEAVE, ACCEPTANCE OF THE MERGER BY
CORPORATE PARTNERS AND THE MARKET, AS WELL AS RISKS AND UNCERTAINTIES
ASSOCIATED WITH THE ONGOING BUSINESSES OF EACH COMPANY AS DISCUSSED IN THEIR
RESPECTIVE ANNUAL REPORTS ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997
AND THEIR OTHER REPORTS AND DOCUMENTS FILED FROM TIME TO TIME WITH THE
SECURITIES AND EXCHANGE COMMISSION.
3
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EXHIBIT 99.7
[LETTERHEAD OF GENE LOGIC]
NEWS RELEASE
Contacts:
GENE LOGIC INC. ONCORMED INC. BURNS MCCLELLAN
Mark D. Gessler Leslie M. Alexandre, Dr.P.H. Lisa Burns (Investors)
Senior Vice President Vice President, Corporate Liz Landy (Media)
Corporate Development Affairs & Marketing (212) 213-0006
& Chief Financial Officer Tel: (301) 208-1888 ext. 521
Tel: (301) 987-1700 Fax: (301) 926-6125
Fax: (301) 987-1701 [email protected]
[email protected] [email protected]
[email protected]
FOR IMMEDIATE RELEASE
GENE LOGIC AND ONCORMED RELEASE ADDITIONAL DETAILS OF GENE LOGIC'S
ACQUISITION OF ONCORMED
Gaithersburg, MD - July 7, 1998 - In response to inquiries related to the
acquisition of Oncormed, Inc. (AMEX:ONM) by Gene Logic Inc. (Nasdaq:GLGC),
the companies announced additional details related to the transaction. As
reported earlier in the day, Gene Logic and Oncormed Inc. have signed a
definitive agreement pursuant to which Gene Logic will acquire all of the
outstanding stock of Oncormed for Gene Logic Common Stock in a forward
triangular merger. Under the terms of the agreement, Gene Logic will issue a
maximum of 4,849,815 shares of Gene Logic Common Stock to the stockholders of
Oncormed, which number may be reduced based on the value of Gene Logic stock
at the time of the stockholder meeting to approve the transaction, giving the
transaction a value not to exceed approximately $38 million. Such price was
set by using a 15-day trailing average from June 12th by which calculation
Gene Logic stock was at $6.85 per share and Oncormed stock was at $3.29 per
share, yielding an exchange ratio of approximately 0.48 per share (based on
the companies' respective fully-diluted capitalization, excluding warrants
and out-of-the-money options, as of the date of the definitive agreement).
However, if the 15-day average closing price of Gene Logic Common Stock prior
to the stockholder meeting to approve this transaction is more than $7.88 per
share, then the total number of shares of Gene Logic Common Stock to be
issued will be determined by dividing a maximum total transaction value of
approximately $38 million by such average closing price, resulting in a
maximum value per share of Oncormed stock of $3.79.
Oncormed (http://www.oncormed.com) uses proprietary genomics technologies and
software to characterize genes to establish clinical relevance and to profile
patients for pharmacogenomic and therapeutic purposes. The company's mission
is to accelerate the translation of genetic discoveries into
clinically-useful products and services through strategic collaborations with
pharmaceutical, genomic and biotechnology companies. Oncormed has
established corporate alliances with major pharmaceutical companies,
including Merck & Co., Schering-Plough,
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Rhone-Poulenc Rorer and ZENECA Diagnostics, with biotechnology companies
Introgen Therapeutics and Onyx Pharmaceuticals, and with Affymetrix and
Incyte Pharmaceuticals.
Gene Logic combines powerful genomics technologies and bioinformatics
expertise to accelerate the discovery and development of new drugs. Gene
Logic provides its pharmaceutical company partners with products designed to
reduce the time, cost and risk associated with drug discovery and
development. These include proprietary genomic databases of gene expression
for new drug target discovery and development, a novel screening technology
for identifying new drug leads, and a comprehensive bioinformatics system for
analyzing, managing and integrating biological information into the drug
discovery process. Gene Logic has established strategic alliances with N.V.
Organon, a pharmaceutical business unit of Akzo Nobel, Procter & Gamble
Pharmaceuticals, Inc., Japan Tobacco, Inc., SmithKline Beecham and the
Wyeth-Ayerst Research Division of American Home Products. In addition, Gene
Logic has an exclusive alliance with Hoechst Schering AgrEvo for discovery of
genes to develop crop protection and improvement products.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
ASCRIBED IN SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE POTENTIAL
INABILITY TO COMPLETE THE MERGER AS SCHEDULED, OR AT ALL, THE POSSIBILITY
THAT SOME OR ALL OF THE OBJECTIVES OF THE MERGER WILL NOT BE ACHIEVED,
POTENTIAL PROBLEMS ASSOCIATED WITH INTEGRATING THE TWO COMPANIES, INCLUDING
THE RISK THAT KEY EMPLOYEES WILL CHOOSE TO LEAVE, ACCEPTANCE OF THE MERGER BY
CORPORATE PARTNERS AND THE MARKET, AS WELL AS RISKS AND UNCERTAINTIES
ASSOCIATED WITH THE ONGOING BUSINESSES OF EACH COMPANY AS DISCUSSED IN THEIR
RESPECTIVE ANNUAL REPORTS ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997
AND THEIR OTHER REPORTS AND DOCUMENTS FILED FROM TIME TO TIME WITH THE
SECURITIES AND EXCHANGE COMMISSION.
2
