Page 1 of 9 pages
Exhibit Index at
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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): September 7, 1995
MOLECULAR BIOSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10546 36-30878632
(State or other juris- Commission file (IRS employer
diction of incorporation) number) identification
number)
10030 Barnes Canyon Road, San Diego, California 92121
(Address of principal executive offices)
Registrant's telephone number, including area code: (619) 452-0681
Item 5. Other Events.
On September 7, 1995, Molecular Biosystems, Inc. (the "Company") entered
into an amended and restated distribution agreement and a related investment
agreement with Mallinckrodt Medical, Inc. ("Mallinckrodt")
Amended and Restated Distribution Agreement
The amended and restated distribution agreement (the "amended
distribution agreement") modifies the December 1988 distribution agreement
between the Company and Mallinckrodt in a number of respects. Under the
amended distribution agreement, the geographical scope of Mallinckrodt's
exclusive right to market the Company's proprietary contrast agent for
transpulmonary cardiac ultrasound imaging, ALBUNEX (R), the Company's second
generation ultrasound contrast agent, FS069 (which is currently under
development), and related products was expanded to include all of the
countries of the world other than those covered by the Company's license
agreements with Shionogi & Co., Ltd. and Nycomed AS. The duration of
Mallinckrodt's exclusive right was also extended from October 1999 until the
later of July 1, 2003 or three years after the date that Company obtains
approval from the U.S. Food and Drug Administration ("FDA") to market FS069
for an intravenous myocardial perfusion indication (use).
Under the amended distribution agreement, Mallinckrodt will pay MBI $20
million over four years to support clinical trials of FS069, related
regulatory submissions and associated product development. These payments
will be made in 16 quarterly installments ranging from $1 million to $1.5
million beginning after the amended distribution agreement becomes effective
(see the section, "Effective Dates").
The amended distribution agreement requires the Company to spend at
least $10 million of this $20 million on clinical trials to support
regulatory filings with the FDA for cardiac indications of FS069. The
Company's expenditure of this $10 million will be made in accordance with
the directions of a joint steering committee which the Company and
Mallinckrodt will establish in order to expedite the development and
regulatory approval of FS069 by enabling the parties to share their
expertise relating to clinical trials and the regulatory approval process.
The Company and Mallinckrodt will each appoint two of the four members of
the joint steering committee.
After the Company has spent this $10 million, the amended distribution
agreement requires the Company and Mallinckrodt to share equally in the cost
of any additional clinical trials of FS069 in the United States which the
joint steering committee may direct to be performed, up to a maximum of $5
million on a combined basis.
The amended distribution agreement also provides for potential payments
to the Company of up to $12 million upon the satisfaction of certain
milestones. (There can be no assurance, however, that all or any of these
milestones will be satisfied.)
In addition, the amended distribution agreement grants the Company the
option to repurchase all of the shares of the Company's common stock that
Mallinckrodt will purchase under the investment agreement (see the following
section, "Investment Agreement") for $45 million, subject to various price
adjustments. This option is exercisable after the later of July 1, 2000 or
three years after the date that Company obtains approval from the FDA to
market FS069 for an intravenous myocardial perfusion indication. If the
Company exercises this option, the Company may co-market ALBUNEX (R), FS069
and related products in all of the countries covered by the amended
distribution agreement.
Investment Agreement
Under the investment agreement, the Company will sell 1,118,671
unregistered shares of its common stock to Mallinckrodt for $13,000,000, or
a price of $11.62 per share.
These shares will be subject to certain anti-dilution and registration
rights of Mallinckrodt and certain first refusal and "standstill" rights of
MBI.
With the 181,818 shares of the Company's common stock that Mallinckrodt
acquired in December 1988 (under an investment agreement which the Company
and Mallinckrodt entered into at the same time as they entered into the
original distribution agreement), Mallinckrodt will own approximately 9.8%
of the Company's outstanding stock.
Effective Dates
Both the amended distribution agreement and the investment agreement
will become effective if and when all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 have expired or have
otherwise terminated.
Press Release
A copy of the press release that the Company and Mallinckrodt jointly
issued on September 7, 1995 to announce the two agreements is attached to
this Report as Exhibit 10.1.
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 hereunto duly authorized.
Date: September 25, 1995.
MOLECULAR BIOSYSTEMS, INC.
By /s/Steven Lawson
Steven Lawson
Vice President, Legal Affairs
and General Counsel
Exhibit Index
Sequentially
Numbered
Exhibit Description Page
10.1 Press release (September 7, 1995) 6
Exhibit 10.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
For more information:
Molecular Biosystems
Gerard A. Wills, Chief Financial Officer
Stephen A. Keane, Director, Investor Relations
(619) 452-0681, ext. 2212
Mallinckrodt Group
Barbara Abbett, Vice President, Communications, (314) 854-5230
Cole Lannum, Director, Investor Relations, (314) 854-5370
Bea Miller, Director, Communications, Mallinckrodt Medical, (314) 895-
7337
MOLECULAR BIOSYSTEMS, MALLINCKRODT GROUP
ANNOUNCE NEW ALLIANCE
SAN DIEGO, California and ST. LOUIS, Missouri, September 7,1995 --
Molecular Biosystems, Inc. (NYSE:MB) and Mallinckrodt Group Inc.
(NYSE:MKG) today announced that they have entered into a new distribution and
investment agreement for ALBUNEX (R), the first commercially available
contrast agent for ultrasound imaging, and FS069, a major new ultrasound
contrast product in development. The new agreement provides for
Mallinckrodt to make an additional equity investment in MBI, fund FS069
clinical development and make various milestone payments.
Under the terms of the agreement, Mallinckrodt will purchase $13
million of MBI common stock at $11.62 a share, giving Mallinckrodt a 10
percent ownership stake in MBI. Mallinckrodt also will pay MBI an
additional $20 million over four years to support FS069 clinical trials and
associated product development. MBI also may receive up to an additional
$14.5 million for further clinical funding and milestone achievements. The
total potential payment under the agreement will be $47.5 million.
The new agreement extends and expands a 1988 alliance which
provides for cooperative development and marketing of contrast agents
designed to materially improve the clinical utility of ultrasound imaging, a
non-invasive, non-radioactive, cost-effective diagnostic imaging modality.
The distribution agreement extends Mallinckrodt Medical, Inc.'s
sales and marketing exclusivity on these products from October 1999 until
the latter of July 2003 or three years after FDA approves FS069 to visualize
blood perfusing the heart muscle. It also expands Mallinckrodt Medical's
exclusive rights to all countries of the world not already covered by MBI's
existing agreements with Shionogi & Co., Ltd. and Nycomed AS.
A key feature of the new arrangement is a collaborative effort
to expedite clinical development of FS069. The agreement also permits MBI
to reacquire coexclusive rights to products covered in the agreement after
the year 2000.
According to Kenneth J. Widder, M.D., MBI's chairman and chief
executive officer, the financing associated with the agreements, cash
resources currently on hand and the anticipated revenue from ALBUNEX (R)
sales will substantially enhance MBI's financial position and move the
company well toward FS069 commercialization. Widder added, "The new
agreements demonstrate our companies' confidence in the significant market
potential of ultrasound contrast. With FS069, we hope to take the field of
ultrasound contrast imaging to a much higher degree of clinical utility than
we envisioned when we entered the field in 1987."
Robert G. Moussa, Mallinckrodt Medical president and chief
executive officer, said, "Our additional investment in MBI is a clear
indication of our belief that future generation ultrasound imaging agents
will allow us to maintain our leadership and pioneering position in the
ultrasound contrast market that we are gaining with ALBUNEX (R). We expect
to establish FS069 as the leader for contrast-enhanced ultrasound imaging in
cardiology and radiology applications."
In May, MBI announced that it successfully completed FS069
Phase I trials in the United States. No significant adverse effects were
noted in the Phase I results, even at relatively high dosage levels. More
importantly, intravenously administered doses starting at 0.5 cc resulted in
visually apparent and significant myocardial brightening (myocardial
perfusion). Phase II trials for FS069 are expected to begin within the next
several months.
The agreement will become effective upon approval following
review of the transaction by the Federal Trade Commission (FTC) under the
Hart-Scott-Rodino Act. The parties are confident that the transaction does
not raise any antitrust issues and that it will be approved by the FTC.
Mallinckrodt Group, headquartered in St. Louis, provides
specialty chemical and human and animal health products through its three
international, technology-based operating companies: Mallinckrodt Chemical
and Mallinckrodt medical, also headquartered in the St. Louis area, and
Mallinckrodt Veterinary, headquartered in the Chicago, Illinois area. The
company had fiscal 1995 sales of $2.2 billion.
Molecular Biosystems, Inc., based in San Diego, California, is a
leader in the development of ultrasound contrast agents for medical
imagining. In August 1994, MBI received final approval form the U.S. Food
and Drug Administration to begin domestic marketing of ALBUNEX (R), MBI's
flagship ultrasound contrast agent. ALBUNEX (R) currently is marketed in
Japan by Shionogi & Co., Ltd., and in the United States by Mallinckrodt
Medical, Inc., an operating company of Mallinckrodt Group Inc. Hafslund
Nycomed AS (NYSE:HN) will market ALBUNEX (R) in Europe. MBI shares are
listed on the New York Stock Exchange under the symbol "MB."
