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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
(Amendment No. 6)
IDEC Pharmaceuticals Corporation
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
449370 10 5
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(CUSIP Number)
IDEC Pharmaceuticals Corporation
William H. Rastetter, Ph.D.
11011 Torreyana Road, San Diego, California 92121 (858) 431-8500
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 23, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement. [ ] (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class).
(See Rule 13d-7.)
Note: This document is being electronically filed with the Commission, using the
EDGAR system. See Rule 13d-1(a) for other parties to whom copies are to be sent.
*The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
Genentech, Inc.
94-2347624
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(2) Check the Appropriate Box if a Member of a Group
Not Applicable
(a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) Source of Funds
WC
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ x ]
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(6) Citizenship or Place of Organization
Delaware
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(7) Sole Voting Power: 182,944 shares of non-voting
Series A-1, A-2, A-3 and A-6 Preferred Stock
convertible into 2,091,586* shares of Common Stock
and 200,000* shares Common Stock
Number of Shares
Beneficially (8) Shared Voting Power: 0
Owned by Each
Reporting Person
(9) Sole Dispositive Power: 182,944 shares of
non-voting Series A-1, A-2, A-3 and A-6 Preferred
Stock convertible into 2,091,586* shares of Common
Stock and 200,000* shares Common Stock
(10) Shared Dispositive Power: 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person:
182,944 shares of non-voting Series A-1, A-2, A-3 and A-6
Preferred Stock convertible into 2,091,586* shares of Common Stock
and 200,000* shares Common Stock
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
Not Applicable
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(13) Percent of Class Represented by Amount in Row (11)
5.16% of Common Stock
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(14) Type of Reporting Person (See Instructions)
CO
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Genentech, Inc. ("Genentech" or "Reporting Person") hereby amends its statement
on Schedule 13D filed with the Securities and Exchange Commission on March 25,
1995 (the "Original Schedule 13D") and previously amended on August 25, 1995,
April 11, 1996, May 21, 1996, February 13, 1998 and March 21, 2000 with respect
to the Convertible Preferred Stock (defined below) and Common Stock of IDEC
Pharmaceuticals Corporation.
*POST IDEC'S 2:1 STOCK SPLIT EFFECTIVE AS OF DECEMBER 21, 1999.
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ITEM 1: SECURITY AND ISSUER
1. Class of Securities: Common Stock and Common Stock issuable upon
conversion of Preferred Stock
2. Issuer: IDEC Pharmaceuticals Corporation ("IDEC")
3. Principal Address: 11011 Torreyana Road, San Diego, CA 92121
ITEM 2: IDENTITY AND BACKGROUND
a. Reporting Person: Genentech, Inc. ("Genentech")
b. Place of Organization: Delaware
c. Principal Business: Pharmaceutical Company
d. Principal Business Address: 1 DNA Way, South San
Francisco, CA 94080
e. Principal Office: As above
f. Criminal Convictions: Genentech plead guilty on April 14,
1999 to a single count of the introduction of a misbranded
drug in interstate commerce, in violation of
21 U.S.C.ss.ss.331(a), 333(a)(2) and 352 before the
United States District Court of the Northern District of
California. Genentech paid a criminal fine of $30 million
and paid restitution of $20 million pursuant to a civil
settlement agreement between the United States
and Genentech.
g. Civil Adjudication of Violation of Securities Laws: None
Attached hereto as Exhibit A is a list of Genentech's executive officers and
directors as required by Instruction C to Schedule 13D.
ITEM 3: SOURCE AND AMOUNT OF FUNDS
Pursuant to the terms of a Preferred Stock Purchase Agreement between Genentech
and IDEC dated March 16, 1995 (the "Purchase Agreement"), a copy of which was
attached as Exhibit B to the Original Schedule 13D, Genentech agreed to purchase
up to six subseries of IDEC's Series A Preferred Stock. The six subseries of
Series A Preferred Stock issuable pursuant to the Purchase Agreement are
hereinafter referred to as the "Convertible Preferred Stock."
Under the terms of the Purchase Agreement, on April 4, 1995, Genentech purchased
100,000 shares of IDEC's Series A-1 Preferred Stock (initially convertible into
1,000,000 shares of IDEC Common Stock) for $50.00 per share of Series A-1
Preferred Stock. The total purchase price of $5,000,000 for the Series A-1
Preferred Stock was paid from Genentech's working capital. Under the terms of
the Purchase Agreement, on August 22, 1995, Genentech purchased 37,521 shares of
IDEC's Series A-2 Preferred Stock (initially convertible into 375,210 shares of
IDEC Common Stock) for $66.63 per share of Series A-2 Preferred Stock. The total
purchase price of $2,500,000 for the Series A-2 Preferred Stock was paid from
Genentech's working capital. Under the terms of the Purchase Agreement, on March
15, 1996, Genentech purchased 22,993 shares of IDEC's Series A-3 Preferred Stock
(initially convertible into 229,930 shares of IDEC Common Stock) for $217.46 per
share of Series A-3 Preferred Stock. The total purchase price of $5,000,000 for
the Series A-3 Preferred Stock was paid from Genentech's working capital.
Under the terms of an Acceleration Agreement between Genentech and IDEC dated
May 9, 1996 (the "Acceleration Agreement"), a copy of which was attached as
Exhibit B to the Amended Schedule 13D filed with the Securities and Exchange
Commission on May 21, 1996, Genentech purchased 100,000 shares of IDEC's Series
A-6 Preferred Stock at $75.00 per share of Series A-6 Preferred Stock. The total
purchase price of $7,500,000 for the Series A-6 Preferred Stock was paid from
Genentech's working capital. Each share of Series A-6 Preferred Stock became
convertible into 2.15653 shares of IDEC Common Stock on December 24, 1997, the
date that was 20 trading days following the date of marketing approval of IDEC's
C2B8 (Rituxan(R))by the U.S. Food and Drug Administration.
Each share of Convertible Preferred Stock is convertible, at the option of
Genentech, into shares of IDEC's Common Stock at predetermined rates described
in IDEC's Certificate of Determination of Preferences (the "Certificate") and
will not have voting rights until converted into shares of IDEC Common Stock.
Each share of Convertible Preferred
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Stock also will automatically convert into shares of IDEC's Common Stock at
predetermined rates described in the Certificate upon transfer of ownership to a
third party unaffiliated with Genentech. Under the 1995 Registration Rights
Agreement between IDEC and Genentech, IDEC, at Genentech's request, will file
resale registration statements covering certain of the shares of Common Stock
issuable upon conversion of the Convertible Preferred Stock.
Genentech and IDEC also entered into a Collaboration Agreement dated as of March
16, 1995, as amended (the "Collaboration Agreement"), and an Expression
Technology License dated as of March 16, 1995. Under the terms of the
Collaboration Agreement, Genentech and IDEC will collaborate in the development
of C2B8 for the treatment of humans of non-Hodgkins B Cell Lymphoma in the
United States and Canada. The two companies will co-promote C2B8 for the
treatment in humans of non-Hodgkins B Cell Lymphoma in the United States and
Canada, and share profits from its commercialization. IDEC also granted
Genentech exclusive marketing rights to all other markets outside the United
States and Canada, and IDEC will receive a royalty on sales in such markets.
Genentech has sublicensed its marketing rights in Japan to an unrelated third
party and has agreed to sublicense its marketing rights other than in the United
States and Japan to a related third party. Under the terms of the Expression
Technology License, IDEC licensed its proprietary vector technology for high
expression of recombinant proteins in mammalian cells in consideration for an
up-front licensing fee and royalties on sales of Genentech products manufactured
using the technology.
ITEM 4: PURPOSE OF TRANSACTION
The purpose of the purchases of the shares of Convertible Preferred Stock on
April 4, 1995, August 22, 1995, March 15, 1996 and May 9, 1996 is investment.
Depending on its evaluation of IDEC's business, prospects, financial condition,
the market for IDEC securities, other opportunities available to Genentech,
general economic conditions, general market conditions, other future
developments and the contractual restrictions described in Items 3 and 6,
Genentech may decide to sell some or all of its investment in the capital stock
of IDEC through public market sales or in negotiated transactions, to or through
one or more broker-dealers, or in underwritten offerings, block trades, agency
placements, brokerage transactions or otherwise. Depending on the same factors,
Genentech may in the future purchase additional capital stock of IDEC or enter
into hedging or similar transactions as described in Item 6.
Except as described in Items 3 and 6 and the foregoing paragraph, Genentech does
not have any plan or proposal relating to, or which would result in, any event
described in (a) - (j) of the instructions to this Item 4.
ITEM 5: INTEREST IN SECURITIES OF ISSUER
a. Beneficial Ownership by Genentech: 2,091,586(1)
Percentage Ownership by Genentech: 5.16%
To the best of Genentech's knowledge, none of the persons listed on Exhibit A
hereto beneficially owns any Common Stock of IDEC.
b. Sole Voting Power of Genentech: 2,091,586
Shared Voting Power: 0
Sole Dispositive Power of Genentech: 2,091,586
Shared Dispositive Power: 0
To the best of Genentech's knowledge, none of the persons listed on Exhibit A
hereto has any sole or shared power to vote or to direct the vote of any IDEC
Common Stock nor sole or shared power to dispose of or direct the disposition of
any IDEC Common Stock.
c. Recent Transactions: Shares of IDEC Common Stock were sold by
Genentech in the public market through broker transactions during May 2000 and
the hedging transactions described in Item 6 were entered into by Genentech
during May 2000. The sales and hedging transactions are set forth on Exhibits B
and C, respectively, attached hereto and are hereby incorporated by reference.
Except as set forth on Exhibits B and C hereto and as described in Item 6, no
transactions in IDEC's Common Stock have been effected during the past 60 days
by Genentech nor, to the best of its knowledge, by any of the persons listed on
Exhibit A hereto.
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(1) On a Common Stock equivalent basis.
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d. Receipt of dividends, etc.: Not applicable
e. Ownership below 5%: Not applicable
ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH RESPECT
TO SECURITIES OF THE ISSUER
To the best knowledge of the undersigned, except as described below and in Item
3, there are no contracts, arrangements, understandings or relationships (legal
or otherwise) among the persons named in Item 2 and between such persons and any
person with respect to any securities of IDEC, including but not limited to
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option agreements, puts or calls, guarantees or profits, division of profits
or losses, or the giving or withholding of proxies.
Under the Standstill Agreement between the parties dated as of March 16, 1995
(the "Standstill Agreement"), a copy of which was attached to the Original
Schedule 13D as Exhibit D, Genentech and IDEC have agreed as follows:
1. Prior to March 16, 2001, Genentech will not acquire any
IDEC equity securities without the written consent of IDEC, except as described
in Item 3; and
2. Prior to March 16, 2001, Genentech will not, without the
written consent of IDEC, make, directly or indirectly, any solicitation of
proxies from stockholders to vote (i) in any contest regarding the election of
directors of IDEC except to the extent necessary to maintain the election of one
director representing Genentech; or (ii) in any contest or on any proposition
regarding any business combination, restructuring, liquidation, sale of assets,
extraordinary dividend or other extraordinary transaction which (A) was
initiated by Genentech or any affiliate of Genentech, or (B) involves IDEC and
any third party or person controlled by, under common control with, controlling,
or otherwise affiliated with Genentech. The foregoing obligations terminate
earlier upon the occurrence of certain events described in the Standstill
Agreement.
Subject to the contractual restrictions described above, Genentech may from time
to time enter into hedging transactions, including short sales and buying puts
and selling calls, for its own account or with broker-dealers and the
broker-dealers may engage in short sales of Common Stock of IDEC in the course
of hedging the positions they assume with Genentech. In connection with such
transactions, Genentech may also loan or pledge shares of Convertible Preferred
Stock to a broker-dealer. Genentech has recently entered into the following
hedging transactions:
On May 4, 2000, in privately negotiated transactions, Genentech sold call
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the call options was $41.60 per share. The call options can only be
exercised on and expire on February 28, 2001.
On May 19, 2000, in privately negotiated transactions, Genentech sold call
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the call options was $99.30 per share. The call options can only be
exercised on and expire on February 28, 2001.
On May 24, 2000, in privately negotiated transactions, Genentech sold call
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the call options was $84.75. The call options can only be exercised on
and expire on February 23, 2001.
The call options, if exercised, will be settled in cash, unless Genentech elects
to physically settle with shares of IDEC stock. If cash settled, Genentech will
pay to the counterparty an amount equal to (a) the number of shares subject to
the call option multiplied by (b) the positive amount, if any, determined by
subtracting the call option strike price from the market price per share of the
Common Stock on the expiration date (the "Market Price"). No payment would be
made under the call options if the Market Price is less than the strike price of
the call options on the expiration date.
On May 4, 2000, in privately negotiated transactions, Genentech purchased put
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the put options was $57.39 per share. The put options can only be
exercised on and expire on February 28, 2001.
On May 19, 2000, in privately negotiated transactions, Genentech purchased put
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the put options was $62.40 per share. The put options can only be
exercised on and expire on February 28, 2001.
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On May 24, 2000, in privately negotiated transactions, Genentech purchased put
options covering an aggregate of 300,000 shares of IDEC Common Stock. The strike
price of the put options was $53.57 per share. The put options can only be
exercised on and expire on February 23, 2001.
The put options, if exercised, will be settled in cash, unless Genentech elects
to physically settle with shares of IDEC stock. If cash settled, the
counterparty will pay to Genentech an amount equal to (a) the number of shares
subject to the put option multiplied by (b) the positive amount, if any,
determined by subtracting the Market Price from the put option strike price. No
payment would be made under the put options if the Market Price is greater than
the put option strike price on the expiration date.
Genentech entered into the call and put options to reduce the investment risk
associated with its rights to convert its Convertible Preferred Stock into
shares of the Common Stock. Genentech intends to engage in additional hedging
activity, which may include the sale of additional call options and the purchase
of additional put options, in connection with hedging the investment risk
associated with its conversion rights with respect to its Convertible Preferred
Stock.
ITEM 7: EXHIBITS
Exhibit A: Additional information regarding Item 2 hereof.
Exhibit B: Additional information regarding Item 5.c. hereof.
Exhibit C: Schedule of Call and Put Options (additional information
regarding item 6 hereof)
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: July 18, 2000
GENENTECH, INC.
/s/ Stephen G. Juelsgaard
Stephen G. Juelsgaard
Senior Vice President,
General Counsel and Secretary
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EXHIBIT A
ITEM 2 (ADDITIONAL INFORMATION):
LIST OF EXECUTIVE OFFICERS AND DIRECTORS OF GENENTECH, INC.
<TABLE>
<CAPTION>
NAME PRESENT PRINCIPAL OCCUPATION
---- ----------------------------
<S> <C>
EXECUTIVE OFFICERS
William R. Arathoon, Ph.D. Vice President, Process Sciences and Manufacturing
Joffre B. Baker, Ph.D. Vice President, Research Discovery
J. Joseph Barta Vice President, Quality
Stephen G. Dilly, M. D., Ph.D. Vice President, Medical Affairs
David Ebersman Vice President, Product Development
Robert L. Garnick, Ph.D. Vice President, Regulatory Affairs
Susan D. Desmond-Hellmann, M.D., M.P.H. Executive Vice President, Development and Product Operations and Chief
Medical Officer
Roy C. Hardiman Vice President, Corporate Law
Dennis J. Henner, Ph.D. Senior Vice President, Research
Judith A. Heyboer Senior Vice President, Human Resources
Paula M. Jardieu, Ph.D. Vice President, Pharmacological Sciences
Sean A. Johnston, Ph.D. Vice President, Intellectual Property
Stephen G. Juelsgaard Senior Vice President, General Counsel and Secretary
R. Guy Kraines Vice President, Finance
Louis J. Lavigne, Jr. Executive Vice President and Chief Financial Officer
Laura Leber Vice President, Corporate Communications
Arthur D. Levinson, Ph.D. Director, Chairman, President and Chief Executive Officer
Walter K. Moore Vice President, Government Affairs
James P. Panek Senior Vice President, Product Operations
Diane L. Parks Vice President, Marketing
Kimberly J. Popovits Vice President, Sales
Myrtle S. Potter Executive Vice President, Commercial Operations and Chief Operating Officer
Andrew Scherer Vice President, Facilities and Engineering
Daniel S. Sulzbach, Ph.D. Vice President, Information Resources
John M. Whiting Controller and Chief Accounting Officer
DIRECTORS
Herbert W. Boyer, Ph.D. Director of Genentech, Inc.
Franz B. Humer, Ph.D. Chief Executive Officer of Roche Holding Ltd and Head of the
Pharmaceuticals Division of Roche Holding Ltd
Jonathan K. C. Knowles, Ph.D. President of Global Research of F. Hoffmann-La Roche Holding Ltd
Sir Mark Richmond, Ph.D. Senior Research Fellow at the School of Public Policy, University
College London
Charles Sanders, M.D. Director of Genentech, Inc.
MAILING ADDRESS FOR ALL
EXECUTIVE OFFICERS AND DIRECTORS: 1 DNA Way
South San Francisco, CA 94080-4990
</TABLE>
During the last five years: (i) none of the individuals described above has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); and (ii) none of the individuals described above has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction which as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws. Each of the individuals listed above is
a U.S. citizen, except Dr. Humer who is a citizen of Switzerland, Dr. Knowles
who is a citizen of England and Sir Richmond who is a citizen of the United
Kingdom.
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EXHIBIT B
ITEM 5.C. (ADDITIONAL INFORMATION):
SALES OF IDEC COMMON STOCK BY GENENTECH
<TABLE>
<CAPTION>
NO. OF
DATE SOLD SHARES SALE PRICE
--------- ------ ----------
<S> <C> <C>
5/25/00 25,000 $61.41
5/26/00 75,000 $58.35
5/30/00 100,000 $63.78
5/31/00 50,000 $62.98
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TOTAL 250,000
</TABLE>
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EXHIBIT C
ITEM 7. (ADDITIONAL INFORMATION):
SCHEDULE OF CALL AND PUT OPTIONS
CALL OPTIONS
<TABLE>
<CAPTION>
TRADE DATE COUNTERPARTY NUMBER OF SHARES STRIKE PRICE
<C> <C> <C> <C>
5/4/00 UBS AG 300,000 $91.99
5/19/00 UBS AG 300,000 $99.30
5/24/00 UBS AG 300,000 $84.75
</TABLE>
PUT OPTIONS
<TABLE>
<CAPTION>
TRADE DATE COUNTERPARTY NUMBER OF SHARES STRIKE PRICE
<C> <C> <C> <C>
5/4/00 UBS AG 300,000 $57.39
5/19/00 UBS AG 300,000 $62.40
5/24/00 UBS AG 300,000 $53.57
</TABLE>
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