SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TRANSKARYOTIC THERAPIES, INC.
----------------------------
(Name of Issuer)
Common Stock par value $.01 per share
- ---------------------------------------------------------------------------
(Title of Class of Securities)
893735 10 0
-----------------
(CUSIP Number)
William K. Hoskins, Esq. Harry R. Benz
General Counsel Hoechst Corporation
Hoechst Marion Roussel, Inc. Route 202-206
10236 Marion Park Drive P.O. Box 2500
Kansas City, Missouri 64137-1405 Somerville, NJ 08876-1258
(816) 966-4000 (517) 636-1000
- ---------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 22, 1996
-------------------------------------------------------
(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 because of Rule 13d-1(b)(4)(i)(A) or (B), check the
following box. [ ]
Check the following box if a fee is being paid with this statement [ ].
Page 1 of 11
Exhibit Index is at Page 10
<PAGE> 2
CUSIP No. 893735 10 0
___________________________________________________________________________
1) Name of Reporting Person and its Hoechst Marion Roussel, Inc.
I.R.S. Identification Number 44-0565557
___________________________________________________________________________
2) Check the Appropriate Box if (a)[ ]
a Member of a Group (b)[ X ]
___________________________________________________________________________
3) SEC Use Only
___________________________________________________________________________
4) Source of Funds WC
___________________________________________________________________________
5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
___________________________________________________________________________
6) Citizenship or Place of Organization Delaware
___________________________________________________________________________
7) Sole Voting Power 2,187,408
Number of ____________________________________________________________
Shares
Beneficially 8) Shared Voting Power 0
Owned by ____________________________________________________________
Each
Reporting 9) Sole Dispositive Power 2,187,408
Person With ____________________________________________________________
10) Shared Dispositive Power 0
___________________________________________________________________________
11) Aggregate Amount Beneficially Owned 2,187,408
by Each Reporting Person
___________________________________________________________________________
12) Check Box If the Aggregate Amount [ ]
in Row (11) Excludes Certain Shares
___________________________________________________________________________
13) Percent of Class Represented 13.2%
by Amount in Row (11)
___________________________________________________________________________
14) Type of Reporting Person CO
___________________________________________________________________________
<PAGE> 3
CUSIP No. 893735 10 0
___________________________________________________________________________
1) Name of Reporting Person and its Hoechst Corporation
I.R.S. Identification Number 22-1862783
___________________________________________________________________________
2) Check the Appropriate Box if (a)[ ]
a Member of a Group (b)[ X ]
___________________________________________________________________________
3) SEC Use Only
___________________________________________________________________________
4) Source of Funds Not applicable
___________________________________________________________________________
5) Check Box if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
___________________________________________________________________________
6) Citizenship or Place of Organization Delaware
___________________________________________________________________________
7) Sole Voting Power 2,187,408
Number of ____________________________________________________________
Shares
Beneficially 8) Shared Voting Power 0
Owned by ____________________________________________________________
Each
Reporting 9) Sole Dispositive Power 2,187,408
Person With ____________________________________________________________
10) Shared Dispositive Power 0
___________________________________________________________________________
11) Aggregate Amount Beneficially Owned 2,187,408
by Each Reporting Person
___________________________________________________________________________
12) Check Box If the Aggregate Amount [ ]
in Row (11) Excludes Certain Shares
___________________________________________________________________________
13) Percent of Class Represented 13.2%
by Amount in Row (11)
___________________________________________________________________________
14) Type of Reporting Person CO
___________________________________________________________________________
<PAGE> 4
ITEM 1. SECURITY AND ISSUER.
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The securities to which this Schedule relates are shares of common
stock, par value $0.01 per share ("Common Stock"), of Transkaryotic Thera-
pies, Inc., a Delaware corporation (the "Issuer"). The Issuer's principal
executive offices are at 195 Albany Street, Cambridge, Massachusetts 02139.
ITEM 2. IDENTITY AND BACKGROUND.
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(a) - (c), (f) This Schedule is filed on behalf of Hoechst Marion
Roussel, Inc., a Delaware corporation ("HMRI"), with a principal place of
business and principal office located at 10236 Marion Park Drive, Kansas
City, Missouri 64137-1405. The principal business of HMRI is the
discovery, development, manufacturing, marketing, and sale of pharmaceuti-
cal compounds for the treatment of human diseases. Information as to the
executive officers and directors of HMRI is set forth in Exhibit I hereto.
This Schedule also is filed on behalf of Hoechst Corporation, a
Delaware corporation ("HCorp"), and wholly owned subsidiary of Hoechst
Aktiengesellschaft, a German corporation ("Hoechst AG"). HCorp is a
holding company for most of the U.S. operations of Hoechst AG, a
multinational pharmaceutical and chemical company headquartered in
Frankfurt, Germany. The principal place of business and principal office
of HCorp is Route 202-206, Somerville, New Jersey 08876-1258. Information
as to the executive officers and directors of HCorp and Hoechst AG is set
forth in Exhibit J hereto.
HCorp beneficially owns 98.2% of the outstanding common stock of HMRI
and is filing this Schedule solely with respect to its potential deemed
indirect ownership of HMRI's holdings of the securities.
(d) - (e) During the last five years, neither HMRI, HCorp, nor, to
their knowledge, any of the persons listed in Exhibits I and J hereto, has
been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors). During the last five years, neither HMRI nor HCorp
nor, to their knowledge, any of the persons listed in Exhibits I and J
hereto, has been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any of
them was or is subject to a judgment, decree, or final order enjoining
future violation of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
- ------- --------------------------------------------------
In May 1994, HMRI and the Issuer entered into a Class D Preferred
Stock Purchase Agreement pursuant to which HMRI purchased $5 million of the
Issuer's Class D Preferred Stock and agreed to purchase $5 million of
Common Stock at the initial public offering price at the time of the
Issuer's initial public offering of Common Stock (the "IPO"). In March
1995, HMRI purchased $10 million of the Issuer's Class E Preferred Stock
pursuant to a Class E Preferred Stock Purchase Agreement. In December
1995, HMRI purchased $7.9 million of the Issuer's Class F Preferred Stock
pursuant to a Class F Preferred Stock Purchase Agreement among HMRI, the
Issuer, and other investors. Pursuant to their respective terms, HMRI's
shares of Class D, Class E, and Class F Preferred Stock were converted into
<PAGE> 5
an aggregate of 1,854,075 shares of Common Stock automatically upon the
closing of the IPO on October 22, 1996. Immediately following the closing
of the IPO, HMRI purchased 333,333 shares of Common Stock for $4,999,995 to
fulfill its purchase obligation under the Class D Preferred Stock Purchase
Agreement. The source of funds for the aggregate purchase price of
$27,899,995 paid by HMRI for its aggregate ownership of 2,187,408 shares of
Common Stock (the "Shares") was the working capital of HMRI. None of such
funds were borrowed or otherwise obtained for the purpose of acquiring,
holding, trading, or voting the Shares.
ITEM 4. PURPOSE OF TRANSACTION.
- ------- -----------------------
HMRI acquired the Shares in connection with certain strategic
alliances between HMRI and the Issuer. In May 1994 and March 1995, HMRI
and the Issuer entered into certain agreements pursuant to which the Issuer
granted HMRI exclusive rights to make, use and sell worldwide two
therapeutic products -- gene activated protein erythropoietin ("GA-EPO")
and a second, undisclosed protein -- produced under patent rights and
technologies owned by the Issuer. Under the terms of the agreements, HMRI
is obligated to pay the Issuer a total of $58 million related to GA-EPO and
$67 million related to the second protein, consisting of license fees,
equity investments, milestone payments, and research funding, in addition
to royalties on sales of the products. Through October 22, 1996, under the
GA-EPO arrangement, HMRI has paid the Issuer a total of $17 million, which
includes up-front fees of $10 million for a license to the Issuer's gene
activation technology for GA-EPO, $5 million for the purchase of shares of
Class D Preferred Stock, a $2 million milestone payment in November 1995,
and $5 million for the purchase of Common Stock in connection with the IPO.
Through October 22, 1996, under the arrangement for the second protein,
HMRI has paid the Issuer a total of approximately $25 million, including
up-front fees of $10 million for a license to the gene activation
technology for the second protein, $10 million for the purchase of shares
of Class E Preferred Stock, and $4.5 million to fund basic research at the
Issuer. HMRI's future obligations primarily consist of milestone payments
based on the development of products resulting from the licensed
technology. The Issuer is responsible for delivering cell lines suitable
for large scale manufacturing. HMRI is responsible for the worldwide
development, manufacturing and marketing of the products and the Issuer
will receive a royalty based on net sales.
In December 1995, HMRI paid the Issuer $7.9 million to purchase shares
of Class F Preferred Stock in a private offering by the Issuer to HMRI and
other investors. Such shares were purchased for investment.
The foregoing descriptions are qualified in their entirety by
reference to the the Amended and Restated License Agreement dated March 1,
1995, the License Agreement dated March 1, 1995, the Class D Preferred
Stock Purchase Agreement dated May 18, 1994, the Class E Preferred Stock
Purchase Agreement dated March 1, 1995, and the Class F Preferred Stock
Purchase Agreement dated October 26, 1995, which are set forth as Exhibits
A through E to this Schedule.
Neither HMRI, HCorp, nor Hoechst AG currently has any plans or
proposals that relate to or would result in the acquisition by any person
of additional shares of Common Stock other than the Shares or the
disposition of any of the Shares. However, any of such persons may elect
to acquire or dispose of securities of the Issuer in the future, depending
on its evaluation of the Issuer's business, prospects, and financial
<PAGE> 6
condition, the market for the Common Stock, other opportunities available
to HMRI and its affiliates, prospects for the businesses of HMRI and its
affiliates, general economic conditions, money and stock market conditions,
and other future developments.
Except as set forth in this Schedule, neither HMRI, HCorp, nor Hoechst
AG has any plans or proposals that relate to or would result in any of the
events described in paragraphs (a) through (j) of this Item.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
- ------- -------------------------------------
(a) The Shares represent approximately 13.2% of the Issuer's Common
Stock outstanding at August 15, 1996, on a fully-diluted basis. Except as
may be set forth in any subsequent amendment to this Schedule, neither
Hoechst AG nor HCorp, nor any executive officer or director of Hoechst AG,
HMRI, or HCorp, beneficially owns any of the Shares or any other shares of
Common Stock other than through their beneficial ownership, if any, of
stock of Hoechst AG, HCorp, or HMRI. HCorp, which is a wholly-owned
subsidiary of Hoechst AG, beneficially owns more than 98% of the
outstanding stock of HMRI.
(b) HMRI has sole power to vote and to dispose of the Shares.
Neither Hoechst AG, HCorp, nor any executive officer or director of either
HMRI, HCorp, or Hoechst AG has any power to vote or to direct the vote, or
to dispose of or to direct the disposition of, the Shares except to the
extent that Hoechst AG, HCorp, or any such executive officer or director
may be deemed to have any such power by reason of such person's relation-
ship to or position with HMRI, HCorp, or Hoechst AG.
(c) On October 22, 1996, pursuant to the terms of the Class D
Preferred Stock Purchase Agreement (which required HMRI to purchase $5
million of Common Stock at the public offering price upon completion of the
Issuer's initial public offering of Common Stock), HMRI purchased 333,333
shares of Common Stock at a price of $15.00 per share, for a total purchase
price of $4,999,995. Such shares were not purchased from the underwriter
as part of the IPO.
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH
- ------- RESPECT TO SECURITIES OF THE ISSUER.
------------------------------------
HMRI and the Issuer are parties with certain other shareholders to a
Registration Rights Agreement dated as of November 3, 1993 (as currently
amended together with Amendment No. 5 thereto dated October 1, 1996, the
"Registration Rights Agreement"), which provides that, subject to certain
conditions, certain stockholders are entitled to certain rights with
respect to registration under the Securities Act of 1933, as amended (the
"Act"), of shares of Common Stock received upon conversion of Preferred
Stock and of shares of Common Stock purchased by HMRI in connection with
the IPO ("Registrable Securities"). If the Issuer proposes to register any
of its securities under the Act, either for its own account or for the
account of other security holders, the Issuer is required under the
Registration Rights Agreement to use its best efforts to include in such
registration the Registrable Securities requested to be so included by the
<PAGE> 7
holders thereof, subject to such reduction as may be required by the
Issuer's underwriters. In addition, subject to certain conditions, the
holders of not less than 30% of the Registrable Securities may require the
Issuer on not more than two occasions to file a registration statement
under the Act with respect to Registrable Securities. Furthermore, HMRI may
require the Issuer on one occasion to file a registration statement under
the Act with respect to the shares of Common Stock purchased by it in
connection with the IPO. Subject to certain conditions, the holders of at
least 15% of the Registrable Shares have the right to require the Issuer to
file an unlimited number of registration statements on Form S-3, provided
that such right is not exercised more than once during any consecutive
twelve-month period.
The description of the Registration Rights Agreement is qualified in
its entirety by reference to such agreement, a copy of which is set forth
as Exhibits F and G hereto.
HMRI and the other holders of Registrable Securities have agreed not
to exercise their respective registration rights for a period of 180 days
following the effective date of the Issuer's IPO registration statement,
which was October 16, 1996.
Other than the Registration Rights Agreement, the Class D Preferred
Stock Purchase Agreement, the Class E Preferred Stock Purchase Agreement,
the Class F Preferred Stock Purchase Agreement, and as described herein,
there are no contracts, arrangements, understandings or relationships
between or among HMRI, HCorp, and/or Hoechst AG and any other person with
respect to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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A Class D Preferred Stock Purchase Agreement, dated May 18,
1994, by and among the Issuer and HMRI.
B Class E Preferred Stock Purchase Agreement, dated March 1, 1995,
by and among the Issuer and HMRI.
C Class F Preferred Stock Purchase Agreement, dated October 26,
1995, by and among the Issuer and certain Purchasers named
therein.
D Amended and Restated License Agreement, dated March 1, 1995, by
and between HMRI and the Issuer.
E License Agreement, dated March 1, 1995, by and between HMRI and
the Issuer.
F Amended and Restated Registration Rights Agreement, dated
November 3, 1993 and amended on May 13, 1994, March 1, 1995,
October 26, 1995, July 10, 1996 and August 7, 1996, by and among
the Issuer and certain holders of the Issuer's Preferred
Stock named therein.
G Fifth Amendment to Registration Rights Agreement dated October 1,
1996 by and among the Issuer and certain holders of the
Issuer's Preferred Stock named therein.
H Agreement to File Jointly dated October 28, 1996, by and between
HMRI and HCorp.
I Information concerning directors and executive officers of HMRI.
J Information concerning directors and executive officers of HCorp
and Hoechst AG.
<PAGE> 8
SIGNATURE
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.
HOECHST MARION ROUSSEL, INC.
Date: October 28, 1996 By: /s/ William K. Hoskins
William K. Hoskins
Vice President,
General Counsel, and
Corporate Secretary
<PAGE> 9
SIGNATURE
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.
HOECHST CORPORATION
Date: October 28, 1996 By: /s/ David A. Jenkins
David A. Jenkins
Vice President, General
Counsel and Secretary
<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ------------ ---------
A Class D Preferred Stock Purchase Agreement,
dated May 18, 1994, by and between the Issuer
and HMRI (incorporated by reference from
Exhibit 10.6 to Amendment No. 5 to the
Registration Statement on Form S-1 of the
Issuer filed with the Securities and Exchange
Commission (the "Commission") on October 15,
1996 (the "Registration Statement")).
B Class E Preferred Stock Purchase Agreement,
dated March 1, 1995, by and between the Issuer
and HMRI (incorporated by reference from
Exhibit 10.7 to Amendment No. 5 to the
Registration Statement).
C Class F Preferred Stock Purchase Agreement,
dated October 26, 1995, by and among the
Issuer and certain Purchasers named therein
(incorporated by reference from Exhibit 10.8
to Amendment No. 5 to the Registration
Statement).
D Amended and Restated License Agreement, dated
March 1, 1995, by and between HMRI and the
Issuer (incorporated by reference from
Exhibit 10.33 to Amendment No. 5 to the
Registration Statement).
E License Agreement, dated March 1, 1995, by
and between HMRI and the Issuer (incorporated
by reference from Exhibit 10.34 to Amendment
No. 5 to the Registration Statement).
F Amended and Restated Registration Rights
Agreement, dated November 3, 1993 and amended
on May 13, 1994, March 1, 1995, October 26,
1995, July 10, 1996 and August 7, 1996, by
and among the Issuer and certain holders of
the Issuer's Preferred Stock named therein
(incorporated by reference from Exhibit 10.11
to Amendment No. 5 to the Registration
Statement).
G Fifth Amendment to Registration Rights
Agreement dated October 1, 1996 by and among
the Issuer and certain holders of the
Issuer's Preferred Stock named therein
(incorporated by reference from Exhibit 10.36
to Amendment No. 5 to the Registration
Statement).
H Agreement to File Jointly dated October 28, 11
1996, by and between HMRI and HCorp.
I Information concerning directors and
executive officers of HMRI (to be filed by
amendment).
J Information concerning directors and
executive officers of HCorp and Hoechst AG (to be
filed by amendment).
<PAGE> 11
EXHIBIT H
AGREEMENT TO FILE JOINTLY
We, the undersigned, hereby express our agreement that the attached
Schedule 13D is filed on behalf of each of us.
HOECHST CORPORATION
Date: October 28, 1996 By: /s/ David A Jenkins
David A. Jenkins
Vice President, General
Counsel and Secretary
HOECHST MARION ROUSSEL, INC.
Date: October 28, 1996 By: /s/ William K. Hoskins
Vice President,
General Counsel, and
Corporate Secretary
