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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 14, 1998
MGI PHARMA, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-10736 41-1364647
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(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
9900 Bren Road East, Ste. 300E, Minnetonka, MN 55343
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 935-7335
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
A. ADOPTION OF SHAREHOLDER RIGHTS PLAN
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On July 14, 1998, the Board of Directors of MGI PHARMA, INC. (the
"Company"), declared a dividend of one preferred share purchase right (a
"Right") per share for each outstanding share of Common Stock, par value $.01
per share (the "Common Shares"), of the Company. The dividend is payable to
shareholders of record on July 27, 1998 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $.10 per share (the "Preferred Shares"), of the Company at a price of
$50.00 per one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of July 14, 1998, between the
Company and Norwest Bank Minnesota, N. A., as Rights Agent (the "Rights Agent").
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding and no separate Right Certificates
will be distributed. The Rights will separate from the Common Shares, and a
Distribution Date for the Rights will occur, upon the earlier of: (i) the first
date of public announcement that a Person or group of affiliated or associated
Persons has become an "Acquiring Person" (i.e., has become, subject to certain
exceptions, the beneficial owner of 15% or more of the outstanding Common Shares
(other than as a result of a Permitted Offer and subject to certain exceptions))
and (ii) the close of business on the 10th day following the commencement or
public announcement of a tender offer or exchange offer, the consummation of
which would result in a person or group of affiliated or associated persons
becoming an Acquiring Person.
A "Permitted Offer" is a tender offer or an exchange offer for all
outstanding Common Shares of the Company determined by the Board of Directors of
the Company, after receiving such advice as it deems necessary and giving due
consideration to all relevant factors, to be in the best interests of the
Company and its shareholders.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with the Common
Shares, (ii) new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any Common Share certificate, even without such notation or a copy
of this Summary of Rights attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
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As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 14, 2008, unless extended or earlier redeemed or exchanged
by the Company as described below. No fraction of a Preferred Share (other than
fractions in integral multiples of one one-hundredth of a share) will be issued
and, in lieu thereof, an adjustment in cash will be made based on the closing
price on the last trading date prior to the date of exercise.
The Purchase Price payable and the number of Preferred Shares issuable
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution: (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights, options or warrants to
subscribe for or purchase Preferred Shares or convertible securities at less
than the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
described in clause (ii) of this paragraph). With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in the Purchase Price.
The number of outstanding Rights and the number of Preferred Shares
issuable upon exercise of the Rights are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100.00 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are subject
to
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adjustment in the event of a stock dividend on the Common Shares or a
subdivision, combination or consolidation of the Common Shares.
In the event any Person becomes an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise thereof at the
then current aggregate exercise price, in lieu of Preferred Shares, such number
of Common Shares of the Company having a current aggregate market price equal to
twice the current aggregate exercise price. In the event that at any time after
there is an Acquiring Person the Company is acquired in certain mergers or other
business combination transactions or 50% or more of the assets or earning power
of the Company and its subsidiaries (taken as a whole) are sold, holders of the
Rights will thereafter have the Right to receive, upon exercise thereof at the
then current aggregate exercise price, such number of Common Shares of the
acquiring company (or, in certain cases, one of its affiliates) having a current
aggregate market price equal to twice the current aggregate exercise price.
At any time after a Person becomes an Acquiring Person (subject to
certain exceptions), and prior to the acquisition by a Person of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange all or part of the Rights for Common Shares at an exchange ratio of one
Common Share per right, subject to adjustment.
At any time before a Person has become an Acquiring Person, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the "Redemption Price"), subject to adjustment. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including without limitation, the right
to vote or to receive dividends.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
B. EXPANSION OF BOARD OF DIRECTORS AND APPOINTMENT OF CHAIRMAN
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The Company also announced that its board of directors has been
expanded to nine, adding Arthur L. Weaver, M.D., a rheumatologist and past
president of the American College of Rheumatology, and Rodolfo C. Bryce,
president of Schering-Plough Healthcare Products, as its newest members. Their
election follows the addition of Michael E. Hanson, retired president of the
Internal Medicine Business Unit at Eli Lilly and Company, and Andrew J. Ferrara,
president and chief executive officer of Boston Healthcare, during the
re-election of the entire board at the company's annual shareholders' meeting
on May 12, 1998. Additionally, Hugh E. Miller, who joined MGI PHARMA's board in
October 1992, has been appointed chairman.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release, dated July 14, 1998
99.2 Rights Agreement, dated as of July 14, 1998, between the Company and
Norwest Bank Minnesota, N.A., as Rights Agent, (incorporated by
reference to the Company's Registration Statement on Form 8-A, filed
July 15, 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.
July 14, 1998 MGI PHARMA, INC.
By /s/ Charles N. Blitzer
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Charles N. Blitzer,
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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99.1 Press Release, dated July 14, 1998
99.2 Rights Agreement, dated as of July 14, 1998, between the
Company and Norwest Bank Minnesota, N.A., as Rights Agent,
(incorporated by reference to the Company's Registration
Statement on Form 8-A, filed July 15, 1998).
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EXHIBIT 99.1
[MGI PHARMA LOGO]
MGI PHARMA, INC.
Suite 300 E. Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343-9667
(Telephone) 612-935-7335
(Facsimile) 612-935-0468
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT:
July 14, 1998 Lori Weiman
(612) 939-4666
MGI PRARMA EXPANDS BOARD OF DIRECTORS, APPOINTS CHAIRMAN
AND ADOPTS SHAREHOLDER RIGHTS PLAN
MINNEAPOLIS, JULY 14, 1998 ---- MGI PHARMA (Nasdaq: MOGN), a pharmaceutical
company, announced today that its board of directors has been expanded to nine,
adding Arthur L. Weaver, M.D., a rheumatologist and past president of the
American College of Rheumatology, and Rodolfo C. Bryce, president of Schering-
Plough Healthcare Products, as its newest members. Their election follows the
addition of Michael E. Hanson, retired president of the Internal Medicine
Business Unit at Eli Lilly and Company, and Andrew J. Ferrara, president and
chief executive officer of Boston Healthcare, during the re-election of the
entire board at the company's annual shareholders' meeting on May 12, 1998.
Additionally, Hugh E. Miller, who joined MGI PHARMA's board in October 1992, has
been appointed chairman.
MGI PHARMA also announced that its board of directors has adopted a new
Shareholder Rights Plan that gives each of its shareholders rights to purchase
shares of a newly authorized series of preferred stock in the event that a
tender offer for the company is announced or an acquiror purchases at least 15
percent of the common stock. The new plan replaces a prior plan that expired in
February of this year.
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The New Shareholder Rights Plan
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The rights issued under the new Shareholder Rights Plan will become
exercisable by shareholders other than a potential acquiror only following an
acquisition by the acquiror, without prior approval by the company's board of
directors, of 15 percent or more of the common stock, or the announcement of a
tender offer for 15 percent or more of the common stock. After a potential
acquiror purchases at least 15 percent of the outstanding common stock,
shareholders other than the acquiror would be able to exercise the Rights issued
under the plan to purchase shares of common stock, or in some cases cash,
property or other securities of the company or shares of the acquiror's common
stock, at a 50 percent discount from the market price, rendering any hostile
takeover prohibitively expensive for the would-be acquiror.
The new purchase rights will be distributed as a non-taxable dividend
at the rate of one right for each share of common stock held as of the close of
business on July 27, 1998. The Rights will trade with common stock. There will
be no rights certificates issued unless the rights become exercisable. The
company's board of directors will be entitled to redeem the rights at $.0l per
right at any time prior to an acquiror purchasing 15 percent or more of the
company's common stock. The right will expire on July 14, 2008.
Charles N. Blitzer, MGI PHARMA's president and chief executive officer,
stated, "The shareholder right's plan was not adopted in response to any
acquisition or merger proposal. The purpose of the plan is to encourage any
prospective buyer to negotiate with the company's board before launching a
hostile takeover. In this way, we believe we can best insure that all
shareholders receive equal treatment and a fair price in any business
combination involving MGI PHARMA."
New Board Members
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Commenting on the company's new board members, Blitzer said, "Our
newest board members, all of whom bring a wealth of medical and pharmaceutical
experience to our board of directors, join us at an exciting point in the
company's evolution. We are on the doorstep of profitability thanks to growing
revenues. We recently launched a product that is the first
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prescription treatment of its kind for a chronic, autoimmune disease. We will
soon move a potentially exciting anti-cancer compound into its first exploratory
Phase II trial, and we expect to roll out additional studies through the
remainder of this year. As we evaluate additional products and opportunities
with which to further expand our business, we will look to our board for
continued guidance. I believe that their expertise will prove to be invaluable
as we move forward."
Rodolfo C. Bryce
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Rodolfo Bryce has been president of Schering-Plough Healthcare Products, the
consumer products arm of Schering-Plough Corporation, since April 1996. In this
position, he is responsible for the full range of activities involving the
company's U.S. non-prescription products operations. He joined Schering-Plough
in 1980 and since that time has held a number of senior management positions.
Prior to joining Schering-Plough, Bryce was employed by ITT Corporation in Peru,
Belgium and the United States. He holds bachelor's degree in financial
management from St. Mary's University, San Antonio, Texas.
Andrew J. Ferrara
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As president and chief executive officer of Boston Healthcare, Andrew Ferrara
provides consulting services to a number of pharmaceutical and biotechnology
firms. In addition, Ferrara is a managing partner of BioLicensing Consultants,
L.L.C., a company that assists biotechnology companies with opportunity
assessments, business planning and agreement implementation. Prior to founding
Boston Healthcare in 1993 and Boston BioLicensing, L.L.C. in 1997, Ferrara
founded Polygen, Inc., a computer software company in 1984. Previously, he spent
20 years with Eli Lilly & Company, serving in a number of business areas in the
United States and Europe, including sales, marketing, and public relations.
Ferrara holds a degree in pharmacy from the Philadelphia College of Pharmacy &
Science.
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Michael E. Hanson
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Michael Hanson retired from Eli Lilly & Company in December 1997, having served
as president of Lilly's Internal Medicine Business Unit since July 1994. He
joined Lilly in 1973 as a sales representative, and advanced steadily throughout
his career, during which he held a number of management and marketing positions.
Prior to joining Lilly he was a pharmacist at the University of Minnesota
Hospital. Hanson has a bachelor's in pharmacy from the North Dakota State
University and a master's degree in hospital pharmacy administration from the
University of Minnesota.
Hugh E. Miller
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Hugh Miller retired in December 1990 from ICI Americas Inc. (ICI), a chemical,
pharmaceutical, agricultural, consumer and specialty products company, as vice
chairman and director after a 22-year career, during which he held a number of
domestic and international positions, including president of Stuart
Pharmaceuticals. He also managed ICI's marketing and manufacturing operations in
Europe, the Middle East and Africa, and was chairman of a joint venture company
in Japan, while serving as a director of ICI Japan. During his tenure at ICI he
also was on the governing board of Pharmaceutical Research and Manufacturers of
America, as well as that of the National Pharmaceutical Council. Prior to ICI,
Miller was with Jefferson Chemical for 13 years. He has a bachelor's degree in
chemical engineering from Rice University.
Arthur L. Weaver, M.D.
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Dr. Arthur Weaver is a leading rheumatologist in the United States. He serves as
medical director of Arthritis Center of Nebraska and is a clinical professor in
the department of medicine at the University of Nebraska Medical Center. He is
on the medical advisory boards for several recognized pharmaceutical and
biotechnology companies. He has been the primary investigator on over 70
clinical studies, written 82 papers and 28 abstracts, and conducted over 350
presentations to regional, national and international medical and scientific
meetings. Weaver
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received his bachelor's degree from the University of Nebraska, his medical
degree from Northwestern University Medical School, a master's degree from the
University of Minnesota, and completed his residency and fellowship in internal
medicine and rheumatology at the Mayor Clinic in Rochester, Minnesota.
MGI PHARMA is a pharmaceutical company, headquartered in Minnetonka,
Minn., that acquires, develops and markets innovative products for niche medical
markets of unmet medical need. The company currently markets Salagen(Registered
Trademark) Tablets (pilocarpine hydrochloride), INFeD(Registered Trademark)
(iron dextran injection 50mg/ml) and Didronel(Registered Trademark) I.V.
Infusion (etidronate disodium) in the United States.
This press release contains forward-looking statements that may include
statements regarding intent, belief or current expectations of the company and
its management. These forward-looking statements are not guarantees of future
performance and involve a number of risks and uncertainties that may cause the
company's actual results to differ materially from the results discussed in
these statements. Factors that might cause such differences include, but are not
limited to the continued growth in sales of Salagen(Registered Trademark)
Tablets, the successful development of MGI 114 and other products, the ability
to reach and sustain profitability, and the ability to acquire additional
products for development and/or sale, and other risks and uncertainties detailed
from time to time in the company's filings with the Securities and Exchange
Commission.
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