Medco Research, Inc.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 For the quarterly period ended September 30, 1996
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 Commission file number 1-9771
MEDCO RESEARCH, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3318451
(State or other Jurisdiction of (I.R.S. Identification No.)
Employer incorporation or
organization)
85 T W Alexander Drive,
Research Triangle Park, North Carolina 27709
(Address of principal executive offices) (Zip Code)
(919) 549-8117
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock American Stock Exchange
(Title of Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (b) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of common stock, as of the
latest practical date 10,860,532 as of November 4, 1996.
Pursuant to the Securities Exchange Act of 1934 Release 15502 and Rule
240.03 (b), the pages of this document have been numbered sequentially. The
total pages contained herein are 12.
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Medco Research, Inc.
Part II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
1. Incorporated herein by reference is Class Action Litigation paragraph 4,
inclusive, set forth in the Notes to the Financial Statements set forth in Item
1 of Part I of this Report, set forth on page 7 hereof.
2. Dr. Eliezer Rapaport, the licensor of the Company's potential adenosine
triphosphate ("ATP") drug, has notified the Company that he has requested
arbitration by the American Arbitration Association of his claim that the
Company has breached its May 20, 1991 license agreement by failing to devote
reasonable efforts in preparing and filing within three years of FDA approval of
its Investigational New Drug application, that is, by May 8, 1995, a New Drug
Application ("NDA") for the use of ATP in the treatment of at least one type of
human cancer. (Arbitration is the binding dispute resolution method provided for
in the agreement).
The licensor is seeking the return of all licensed ATP patent rights for Medco's
alledged breach of contract and the failure to return such rights. He also is
seeking an unspecified amount of punitive damages and $44 million in
compensatory damages. He has computed such compensatory damages on the basis of
"total worldwide bilings of an approved ATP medication for treatment of
cancer..." As discussed below, ATP demonstrated no tumor response in non-small
cell lung cancer patients. Therefore, Medco believes such damage claim, which is
based on ATP as a cancer treatment, is not only extremely speculative but also
is unfounded. The Company believes Dr. Rapaport has incurred no damages from
Medco's drug development activities.
The Company intends to vigorsly defend itself against the allegations of Dr.
Rapaport, which the Company believes are without any merit.
In discussions with Dr. Rapaport held as early as May 1995, the Company
continuously maintained, and it currently believes, that it has not breached the
agreement. Data from the Company's Phase II clinical trials for ATP did not show
any tumor response, as defined in the protocol, in patients with non-small
cell lung cancer, and the Company so advised its licensor. (The Company
believes that such responses are the benchmark accepted in the
pharmaceutical industry for filing an NDA for a cancer treatment drug.) However,
data from the Company's multicenter clinical trial completed in 1995 indicated
that the administration of ATP to such patients may have produced an
anti-cachexic effect, that is, it may have reduced the weight loss associated
with cancer, and it may have improved quality of life, in late stage cancer
patients.
With Dr. Rapaport's knowledge and consent, the Company has been attempting to
sublicense ATP to a partner interested in further developing its anti-cachexic
effect.
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SIGNATURES
Pursuant to 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.
Medco Research, Inc.
Date: November 18, 1996 By: /s/ Roger D. Blevins
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Roger D. Blevins, Pharm.D.
President and
Chief Operating Officer
Date: November 18, 1996 By: /s/ Glenn C. Andrews
- ------------------------------------- --------------------
Glenn C. Andrews
Chief Financial Officer
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