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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 28, 1998
ALPHA 1 BIOMEDICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-15070 52-1253406
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
6707 Democracy Boulevard
Suite 111
Bethesda, MD 20817
(Address, including Zip Code, of principal executive offices)
Registrant's telephone number, including area code:
301-564-4400
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
SALE OF THYMOSIN ALPHA 1 ROYALTY RIGHTS
Reference is made to (i) a Form 8-K, dated January 12, 1998 (Date of Report:
December 17, 1997), in which Alpha 1 Biomedicals, Inc. (the "Company")
reported the entry into an Alpha Rights Acquisition Agreement, dated December
17, 1997, with SciClone Pharmaceuticals, Inc. ("SciClone"), and (ii) a Form
8-K, dated May 15, 1998 (Date of Report: May 15, 1998), in which the Company
reported an amendment to the Alpha Rights Acquisition Agreement (as amended,
the "Acquisition Agreement"). The Acquisition Agreement provided that, in
exchange for a combination of cash and shares of SciClone common stock
("SciClone Common Stock"), (i) the Company would relinquish its rights to
royalties payments from SciClone for the sale by SciClone of all human and
animal therapeutic and diagnostic uses of products containing Thymosin alpha 1
and (ii) would assign to SciClone (A) all patents held by the Company with
respect to Thymosin alpha 1 and (B) all of the Company's rights and obligations
under licenses with third parties pursuant to which the Company has acquired
rights to Thymosin alpha 1 (other than rights acquired from F.
Hoffmann-LaRoche, Inc. and F. Hoffmann-LaRoche & Co. Limited Company, which the
Company would continue to sublicense to SciClone).
On July 15, 1998, the stockholders of the Company approved the sale to SciClone
of the Company's Thymosin alpha 1 royalty rights. On July 28, 1998, the
Closing of the transaction occurred. Pursuant to the terms of the Acquisition
Agreement, the Company has received payments consisting of (i) $130,000 in
cash, which was paid in December 1997 and January 1998, and (ii) at least
444,135 shares of SciClone Common Stock (the "Initial Shares"). The Company
may acquire additional shares of SciClone Common Stock (the "Additional
Shares") under the circumstances more fully described in the January 12, 1998
Form 8-K. The Initial Shares and any Additional Shares are subject to resale
restriction and are entitled to the registration rights more fully described in
the January 12, 1998 Form 8-K.
The Company entered into the sale transaction in order to generate the cash
needed to continue operating as a going concern. The Company intends to use
proceeds from the sale of the SciClone Common Stock to pay existing
indebtedness, including $280,000 in loans from SciClone which are
collateralized by a portion of the shares of SciClone Common Stock, and to fund
current operations while it continues its efforts to secure additional
financing or to effect a business combination.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information.
Unaudited Pro forma financial statements reflecting the effect
of the Alpha Rights Acquisition Agreement at March 31, 1998
are set forth in the Company Proxy Statement (pages F-1
through F-6), filed June 5, 1998, and are hereby incorporated
by reference.
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(c) Exhibits
(1) Press Release, dated August 3, 1998.
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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 thereunto duly authorized.
Date: August 10, 1998 ALPHA 1 BIOMEDICALS, INC.
By: /s/ R.J. Lanham
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R.J. Lanham
Vice President &
Chief Financial Officer
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EXHIBIT 1
FOR IMMEDIATE RELEASE
CONTACT: R. J. Lanham Michael L. Berman
Vice President President and
Chief Financial Officer Chief Executive Officer
301-564-4400 301-564-4400
ALPHA 1 BIOMEDICALS, INC.
CONCLUDES THE SALE OF RIGHTS TO ZADAXIN(R) THYMOSIN ALPHA 1
BETHESDA, MARYLAND, AUGUST 3, 1998 -- ALPHA 1 BIOMEDICALS, INC. (OTC BULLETIN
BOARD:ALBM) today announced the closing of the transaction whereby the
Company's royalty rights relating to Thymosin alpha 1 were sold to SciClone
Pharmaceuticals, Inc. (Nasdaq: SCLN). SciClone originally licensed from the
Company the rights to Thymosin alpha 1 in certain territories in 1990, with an
expanded license completed in 1994. SciClone currently markets Thymosin alpha
1 under the trademark ZADAXIN.
The transaction provides for an aggregate consideration to the Company,
consisting of $130,000 in cash, which was paid in December 1997 and January
1998, and at least 444,155 shares of SciClone common stock. In exchange,
SciClone will no longer pay royalties to Alpha 1 on future sales of ZADAXIN.
The transaction was approved by Alpha 1's shareholders at its annual
shareholder meeting on July 15, 1998 and will allow the Company to effect a
substantial reduction in its outstanding liabilities, including $280,000 in
loans from SciClone which are collateralized by the shares.
"The completion of this transaction represents an important step for the
Company. We can now focus our energies on the development of Thymosin beta 4
as well as new in-licensing business opportunities," according to Michael
Berman, Alpha 1's President and Chief Executive Officer. "However,
notwithstanding this transaction, the survival of the Company as a going
concern will require additional financing. The conclusion of this transaction
gives SciClone maximum flexibility and control in the commercialization of its
ZADAXIN product."
During 1997, the Company entered into a Material Transfer Agreement-Cooperative
Research and Development Agreement ("MTA-CRADA") with the National Institutes
of Health ("NIH"), whereby the NIH investigator will use Thymosin beta 4
material provided by the Company in tissue growth studies. In exchange, the
Company may license from the NIH any patent rights that might result from
research studies that relate to the use of Thymosin beta 4 as a clinical
treatment. This research is continuing.
Any statements which are not actual facts contained in this document are
forward looking statements that involve risks and uncertainties, including but
not limited to, those relating to product demand, pricing, market acceptance,
the effect of economic conditions, intellectual property rights and litigation,
clinical trials, governmental regulations, competitive products, risks in
product and technology development, the results of financing efforts,
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the ability to complete transactions and other risks identified in other of the
Company's Securities and Exchange Commission filings.
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