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WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-15190
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ONCOGENE SCIENCE, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3159796
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
106 Charles Lindbergh Blvd., Uniondale, New York 11553
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(Address of principal executive offices) (Zip Code)
516-222-0023
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
At May 9, 1996 the registrant had outstanding 21,482,353 shares of common stock
.$01 par value.
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This Form 10-Q/A is being filed in order to amend Items 1 and 2 of Part I and
Item 5 of Part II of the Quarterly Report on Form 10-Q of Oncogene Science,
Inc. (the "Company") for the quarter ended March 31, 1996, which was filed on
May 14, 1996.
ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I - FINANCIAL INFORMATION - UNAUDITED 3-12
Item 1. Financial Information
Consolidated Balance Sheets - March 31, 1996
and September 30, 1995 3
Consolidated Statements of Operations
- Three months ended March 31, 1996 and 1995 4
Consolidated Statements of Operations
- Six months ended March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows
- Six months ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II - OTHER INFORMATION 12-15
Item 4. Submission of Matters to a Vote
of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 16
</TABLE>
* * * *
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Item 1. FINANCIAL INFORMATION.
ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, September 30,
1996 1995
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<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 28,765,848 $ 17,919,609
Short-term investments 20,013,287 8,866,957
Receivables, including
trade receivables of $62,363 and
$163,132 at March 31, 1996 and
September 30, 1995, respectively 3,129,056 1,320,015
Interest receivable 231,765 45,263
Grants receivable 216,039 433,530
Prepaid expenses and other 686,465 518,150
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Total current assets 53,042,460 29,103,524
Property, equipment and leasehold
improvements - net 5,429,752 5,709,515
Other receivables 594,815 262,703
Loans to officers and employees 25,343 25,516
Other assets 380,751 325,582
Intangible assets, net 7,904,203 8,630,581
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$ 67,377,324 $ 44,057,421
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 1,787,957 $ 2,825,702
Current portion of unearned revenue 91,539 150,041
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Total current liabilities 1,879,496 2,975,743
Other liabilities:
Long-term portion of unearned revenue 137,178 165,839
Accrued post-retirement benefit cost 434,018 366,203
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Total liabilities 2,450,692 3,507,785
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Stockholders' equity:
Common stock, $.01 par value;
50,000,000 shares authorized,
21,091,971 and 17,683,047 shares
issued at March 31, 1996 and
September 30, 1995, respectively 210,920 176,830
Additional paid-in capital 95,020,176 66,735,375
Accumulated deficit (29,893,685) (26,129,341)
Cumulative foreign currency
translation adjustment (40,220) (55,669)
Unrealized holding loss on
short-term investments (228,000) (35,000)
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65,069,191 40,692,195
Less: treasury stock, at cost,
222,521 shares at March 31, 1996
and September 30, 1995 (142,559) (142,559)
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Total stockholders' equity 64,926,632 40,549,636
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Commitments and contingencies $ 67,377,324 $ 44,057,421
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
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ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
Revenues: 1996 1995
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<S> <C> <C>
Collaborative program revenues,
principally from related parties $ 2,298,649 $ 2,461,403
Sales 31,525 1,283,899
Other research revenue 216,039 523,780
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2,546,213 4,269,082
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Expenses:
Research and development 3,231,892 3,348,571
Production 41,525 393,974
Selling, general and administrative 1,320,014 1,826,436
Amortization of intangibles 363,188 436,507
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4,956,619 6,005,488
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Loss from operations (2,410,406) (1,736,406)
Other income:
Net investment income 390,540 221,219
Other 26,116 46,419
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Net loss $ (1,993,750) $ (1,468,768)
============ ============
Weighted average number of shares
of common stock outstanding 18,016,251 16,343,241
============ ============
Net loss per weighted share of
common stock outstanding $ (.11) $ (.09)
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
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ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
--------------------------------
Revenues: 1996 1995
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<S> <C> <C>
Collaborative program revenues,
principally from related parties $ 4,286,107 $ 4,779,777
Sales 60,567 2,597,588
Other research revenue 475,787 1,099,698
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4,822,461 8,477,063
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Expenses:
Research and development 5,915,154 6,425,536
Production 63,388 799,252
Selling, general and administrative 2,651,553 3,700,865
Amortization of intangibles 726,377 872,841
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9,356,472 11,798,494
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Loss from operations (4,534,011) (3,321,431)
Other income:
Net investment income 755,065 441,891
Other 14,602 19,785
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Net loss $ (3,764,344) (2,859,755)
============ ============
Weighted average number of shares
of common stock outstanding 17,745,190 16,342,919
============ ============
Net loss per weighted share of
common stock outstanding $ (.21) $ (.18)
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
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ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
------------------------------
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,764,344) $(2,859,755)
Adjustments to reconcile net loss
to net cash used by operating activities:
Gain on sale of investments (61,276) --
Depreciation and amortization 665,312 650,187
Amortization of intangibles 726,377 872,841
Foreign exchange (gain) loss 15,449 (44,034)
Changes in assets and liabilities:
Receivables (1,809,041) 21,980
Inventory -- 152,902
Interest receivable (186,502) (140,721)
Grants receivable 217,491 160,686
Prepaid expenses and other (168,315) 122,164
Other receivables (332,112) 168,460
Other assets (55,169) (3,430)
Accounts payable
and accrued expenses (1,037,745) (680,103)
Unearned revenue (87,163) 397,935
Accrued postretirement
benefit cost 67,815 69,378
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Net cash used by
operating activities $(5,809,223) $(1,111,510)
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</TABLE>
Continued
See accompanying notes to consolidated financial statements.
6
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ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
--------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from investing activities:
Additions to short-term
investments $(22,564,209) $ (499,688)
Maturities and sales of short-term
investments 11,286,155 3,441,932
Additions to property,
equipment and leasehold
improvements (385,548) (539,668)
Net change in loans to officers
and employees 173 10,400
Other -- (13,306)
------------ ------------
Net cash provided by (used in)
investing activities (11,663,429) 2,399,670
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Cash flows from financing activities:
Net proceeds from issuance
of common stock 27,995,708 --
Proceeds from exercise
of stock options and
employee stock purchase plan 323,183 3,622
------------ ------------
Net cash provided by
financing activities 28,318,891 3,622
Net increase in cash
and cash equivalents 10,846,239 1,291,782
Cash and cash equivalents at
beginning of period 17,919,609 322,308
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Cash and cash equivalents
at end of period $ 28,765,848 $ 1,614,090
============ ============
</TABLE>
7
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ONCOGENE SCIENCE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Opinion of Management
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the Company's financial position as of
March 31, 1996 and September 30, 1995, its results of operations for the three
and six months ended March 31, 1996 and 1995 and its cash flows for the six
months ended March 31, 1996 and 1995. Certain reclassifications have been made
to the prior period financial statements to conform them to the current
presentation.
It is recommended that these consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto in the
Company's 1995 Annual Report on Form 10-K.
Results for interim periods are not necessarily indicative of results for the
entire year.
Net loss per share of common stock outstanding is based on the weighted average
number of shares outstanding. Common share equivalents (stock options) are not
included in the computation for the three months and six months ended March 31,
1996 and 1995 since their inclusion would be anti-dilutive.
(2) Stock Offering
In March 1996, the Company completed a public offering for 2,825,000 shares of
common stock. The sale price was $9.125 per share. Concurrent with the public
offering, the Company sold 500,000 shares at $9.125 per share directly to
BioChem Pharma, Inc. The proceeds to the Company from these sales, net of
underwriting commissions and other costs, was approximately $28.0 million. The
net proceeds were added to the Company's general funds and are to be used for
research and development expenses, including funds for enhancing the Company's
drug discovery technologies, and for general corporate purposes. In April 1996,
the Company's underwriter exercised its option to purchase an additional 293,750
shares of common stock at $9.125 per share to cover over-allotments. The
additional net proceeds to the Company from this sale was approximately $2.5
million.
(3) Subsequent Events
Effective April 1, 1996, the Company and Pfizer Inc. ("Pfizer") renewed their
ten-year-old collaboration for a new five-year term by entering into new
Collaborative Research and License Agreements. Under these documents, all patent
rights and patentable inventions derived from the research under this
collaboration are owned jointly by the Company and Pfizer. Under the
collaborative research agreement, Pfizer has committed to provide research
funding to the Company in an aggregate amount of approximately $18.8 million.
Pursuant to a schedule set forth in the collaborative research agreement, Pfizer
will make maximum annual research funding payments to the company, which will
gradually increase from approximately $3.5 million in the first year of the
five-year term to approximately $4 million in the fifth year. The collaborative
research agreement will expire on April 1, 2001. However, it may be terminated
earlier by either party upon the occurrence of certain defaults by the other
party. Any termination of the collaboration resulting
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from a Pfizer default will cause a termination of Pfizer's license rights.
Pfizer will retain its license rights if it terminates the agreement in response
to a default by the Company. In addition, between July 1 and September 30, 1998,
Pfizer may terminate the collaborative research agreement, with or without
cause, effective March 31, 1999. Furthermore, between July 1 and September 30,
1999, Pfizer may terminate the collaborative research agreement, with or
without cause, effective March 31, 2000. Upon such early termination by Pfizer,
Pfizer will retain its license rights. The Company has granted Pfizer an
exclusive, worldwide license to make, use, and sell the therapeutic products
resulting from this collaboration in exchange for royalty payments. This license
terminates on the date of the last to expire of the Company's relevant patent
rights.
On April 11, 1996, the Company acquired MYCOsearch, Inc., a privately owned
North Carolina corporation ("MYCOsearch"), in a transaction in which MYCOsearch
was merged into a newly formed subsidiary (the "Subsidiary") of the Company
pursuant to an Agreement and Plan of Merger dated April 11, 1996 among the
Company, MYCOsearch Acquisition Corp., MYCOsearch and the shareholders of
MYCOsearch (the "Merger"). The Subsidiary was the surviving corporation in the
Merger, and in connection therewith, its name was changed to MYCOsearch, Inc.
The purchase price paid by the Company to the shareholders of MYCOsearch
consisted of $1.75 million in cash, $2.95 million in common stock of the Company
(316,553 shares at $9.319 per share, plus cash for fractional shares) and
warrants to purchase 100,000 shares of the Company's common stock at $9.319 per
share (the "Warrants"). The Warrants, which will be exercisable for a three-year
period starting on April 11, 1998, were valued at approximately $483,000. In
connection with the Merger, two principals of MYCOsearch became employed by the
Company as its Vice President, Microbial Discovery, Pharmaceutical Division and
Director, Fermentation Biology. MYCOsearch specializes in the collection of
fungi cultures and the development of extracts derived therefrom. These fungal
extracts contain natural chemical structures that the Company tests against
target proteins in its high throughput drug screens.
On April 23, 1996, in connection with the formation of Anaderm Research Corp., a
Delaware corporation ("Anaderm"), the Company entered into a Stockholders'
Agreement (the "Stockholders' Agreement") among the Company, Pfizer, Anaderm,
New York University ("NYU") and certain NYU faculty members (the "Faculty
Members"), and a Collaborative Research Agreement (the "Research Agreement")
among the Company, Pfizer and Anaderm. Anaderm has issued common stock to Pfizer
and the Company and options to purchase common stock to NYU and the Faculty
Members. If NYU and the Faculty Members exercise their options fully, then
Pfizer will hold 82%, the Company will hold 14%, and NYU and the Faculty Members
collectively will hold 4%, of Anaderm's common stock. In exchange for its 14% of
the outstanding shares of Anaderm common stock, the Company will provide
formatting for high-throughput screens and will conduct compound screening for
18 months at its own expense under the Research Agreement. The term of the
Research Agreement is three years. During the initial phase of the agreement
(the first 18 months) the Company is required to provide at its own cost
formatting for high throughput screens and perform screening of its own
compounds and those compounds provided by Pfizer. Upon the termination of the
initial phase, the Board of Directors of Anaderm will make a determination as to
whether the initial phase was successfully completed. If the board determines
that the initial phase was unsuccessful, the Research Agreement will then
terminate. If the Anaderm Board of Directors, with Pfizer's approval,
determines the initial phase was successful, then the funded phase will commence
and will continue for the term of the Research Agreement. During this phase,
Anaderm will make payments to the Company equal to its research costs, including
overhead, plus 10%. Anaderm or Pfizer will pay royalties to the Company on the
sales of products resulting from this collaboration.
Effective as of May 1, 1996, the Company entered into a Collaborative Research,
Development and Commercialization Agreement with BioChem Pharma (International)
Inc. ("BioChem Pharma"). Under this agreement, the parties will seek to discover
and develop antiviral drugs for the treatment of Hepatitis C virus and for HIV,
although the focus of the collaborative efforts may change at the discretion of
a joint steering committee. This agreement provides that the Company and BioChem
Pharma will jointly commit resources to the collaborative program. The Company
and BioChem Pharma will share equally the commercialization rights in the U.S.
and Europe for any product resulting from the collaboration. BioChem Pharma will
exclusively own commercialization rights in Canada. The agreement is for a term
of five years, with automatic, successive one-year renewal periods thereafter.
After May 1, 1999, however, either party may terminate the agreement by giving
the other party six-months prior written notice. The agreement is also subject
to early termination in the event of certain defaults by either party.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THREE AND SIX MONTHS ENDED MARCH 31, 1996 AND 1995
REVENUES
Revenues for the three and six months ended March 31, 1996 were approximately
$2.5 million and $4.8 million, respectively, a decrease of $1.7 million and $3.7
million or 40% and 43%, respectively, compared to revenues of $4.2 million and
$8.5 million, respectively, reported for the three and six months ended March
31, 1995. The decrease was due to lower sales of research products, which
accounted for approximately $1.3 million and $2.5 million, respectively, of the
decrease in revenues. The Company sold its Research Products Business for $6.0
million in cash plus other considerations in August 1995, and accordingly there
were no significant sales of research products recorded after this date. In the
sale agreement, the Company agreed to indemnify the purchaser for a period of
two years for certain breaches of the agreement. Collaborative program revenue
decreased approximately $163,000 and $494,000 or 7% and 10%, respectively. This
was largely due to a reduction in revenue under the collaborative arrangement
with Hoechst Marion Roussel, Inc. (HMRI) as compared to the total revenue in the
prior year's periods from Marion Merrell Dow Inc. (MMDI), Hoechst Roussel
Pharmaceuticals, Inc. (Hoechst Roussel) and Hoechst AG ("Hoechst"). Other
research revenues, representing primarily government grants, decreased
approximately $308,000 and $624,000, respectively, due in part to the expiration
of a U.S. government grant. The balance of the decrease represents changes in
the timing and amount of grant awards. The Company expects that grant revenue
will be somewhat lower in the current fiscal year.
EXPENSES
The Company's operating expenses decreased by approximately $1.0 million and
$2.4 million or 17% and 21%, respectively, for the three and six months ended
March 31, 1996, compared to the three and six months ended March 31, 1995.
Research and development expenses decreased approximately $117,000 and $510,000
or 3% and 8%, respectively, due to reductions in expenses in the collaborations
with HMRI and Becton Dickinson and Company ("Becton") commensurate with the
reduced funding in these programs. This was offset in part by increased
expenditures in the Company's proprietary research programs. Production expenses
and selling, general and administrative expenses decreased approximately
$859,000 and $1.8 million, respectively. These reductions were directly related
to expenses that were associated with the Company's Research Products Business
in the prior year's periods. The reduction of approximately $73,000 and
$146,000, respectively, of amortization of intangibles is due to a portion of
goodwill relating to the Research Products Business, which was expensed when the
business was sold in 1995.
OTHER INCOME AND EXPENSE
Net investment income increased approximately $169,000 and $313,000 or 77% and
71%, respectively, for the three and six months ended March 31, 1996 compared to
the three and six months ended March 31, 1995. This increase was largely due to
the increase in funds invested as a result of the proceeds from the sale of the
Research Products Business, the sale of stock to Ciba-Geigy, Ltd. ("Ciba") in
April 1995, and the public offering of common stock, the initial closing of
which occurred in March 1996.
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LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, working capital (representing primarily cash, cash
equivalents and short-term investments) aggregated approximately $51.2 million.
The Company has been, and will continue to be, dependent upon collaborative
research revenues, government research grants, interest income and cash balances
until products developed from its technology are commercially marketed. In April
1995, Ciba purchased 909,091 shares of the Company's common stock for an
aggregate purchase price of $5.0 million. In April 1996, the Company completed a
public offering of its common stock that provided total net proceeds of
approximately $30.5 million.
During 1995, the pharmaceutical operations of Hoechst, Hoechst Roussel and MMDI
were consolidated into HMRI. The Company is aware that HMRI is conducting a
review of all its research and development programs. Based on discussions with
HMRI, the Company expects its programs with HMRI to continue under one overall
agreement in the future, although there can be no assurance that the Company and
HMRI will enter into such an agreement, or if such an agreement is entered into,
that it will not be on terms less favorable than the existing agreements with
each of Hoechst, Hoechst Roussel and MMDI. The Company anticipates that the
total funding under the consolidated agreement will be lower than the aggregate
funding under the three previously separate agreements.
Since its commencement in 1991 and until the second quarter of fiscal 1995, the
cancer diagnostics collaborative program with Becton has focused on both
serum-based and histochemical immunoassays. During the second quarter of fiscal
1995, Becton decided to focus exclusively on cellular cancer diagnostics,
including histochemical immunoassays. Becton has reduced its funding under this
program in fiscal 1996, and the Company is uncertain as to Becton's ongoing
support for this program. The Company is continuing the development of
serum-based cancer diagnostic products and is in discussions with possible new
collaborative partners in this area. However, there can be no assurance that the
development of these products will not be terminated.
The Company believes that with the funding from its collaborative research
programs, government research grants, interest income, and cash balances, the
Company's financial resources are adequate for its operations through fiscal
1999. However, the Company's capital requirements may vary as a result of a
number of factors, including competitive and technological developments, funds
required for expansion of the Company's technology platorm, including possible
joint ventures, collaborations, and acquisitions, the time and expense required
to obtain governmental approval of products, and any potential indemnification
payments to the purchaser of the Research Products Business, some of which
factors are beyond the Company's control. The Company intends to substantially
increase its expenditures and capital investment over the next several years to
enhance its drug discovery technologies, pursue internal proprietary drug
discovery programs, and to commit resources to new collaborative ventures, such
as the new programs with Anaderm and BioChem Pharma. In April 1996, the Company
purchased MYCOsearch, Inc., owner of a collection of fungi and actinomycetes,
for approximately $1.7 million in cash and $3.4 million in common stock and
warrants. There can be no assurance that scheduled payments will be made by
third parties, that current agreements will not be cancelled, that government
research grants will continue to be received at current levels or that
unanticipated events requiring the expenditure of funds will not occur. Further,
there can be no assurance that the Company will be able to obtain any additional
required funds, or, if such funds are available, that such funds will be
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available on favorable terms. Failure to obtain additional funds when required
would have a material adverse effect on the company's business, financial
condition and result of operations.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
FORMATION OF ANADERM RESEARCH CORP.
In connection with the formation of Anaderm Research Corp. ("Anaderm"), a
Stockholders' Agreement dated April 23, 1996 (the "Stockholders' Agreement")
was entered into by Oncogene Science, Inc. (the "Company"), Pfizer Inc.
("Pfizer"), New York University ("NYU") and certain individual members of the
faculty of NYU (the "Faculty Members"). Anaderm will focus on the discovery and
development of new compounds for use in humans for the prevention or treatment
of baldness and wrinkles and for the control of skin and hair pigmentation.
Anaderm has issued common stock to
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Pfizer and the Company and options to purchase common stock to NYU and the
Faculty Members. If NYU and the Faculty Members exercise their options fully,
then Pfizer will hold 82%, the Company will hold 14%, and NYU and the Faculty
Members collectively will hold 4%, of Anaderm's common stock. Pfizer's shares of
Anaderm's common stock have been issued in exchange for a cash contribution and
cash commitments. In exchange for its 14% of the outstanding shares of Anaderm
common stock, the Company will provide formatting for high-throughput screens
and will conduct compound screening for 18 months at its own expense under a
Collaborative Research Agreement dated April 23, 1996 (the "Collaborative
Research Agreement") among the Company, Anaderm and Pfizer, which is discussed
below. Anaderm has granted the stock options to NYU and the Faculty Members as
partial consideration for NYU entering into a separate research agreement with
Pfizer and Anaderm. The Stockholders' Agreement also provides for the mutual
management of Anaderm by the Company and Pfizer, as well as certain
restrictions on the transfer of Anaderm's common stock and Anaderm's repurchase
of the shares of its common stock upon the occurrence of certain events. Under
this agreement, the Scientific Advisory Board of Anaderm, composed of
appointees of the Company, Pfizer and Anaderm will prepare a written plan
approved by the Anaderm Board of Directors that describes the research to be
carried out in the collaborative research program for each annual period.
The term of the Collaborative Research Agreement is three years. During the
initial phase of the agreement (the first 18 months) the Company is required to
provide at its own cost formatting for high throughput compound screens and
perform screening of its own compounds and those compounds provided by Pfizer.
Upon the termination of the initial phase, the Board of Directors of Anaderm
will make a determination as to whether the initial phase was successfully
completed. If the board determines that the initial phase was unsuccessful, the
collaborative Research Agreement will then terminate. If the Anaderm Board of
Directors, with Pfizer's approval, determines the initial phase was successful,
then the funded phase will commence and will continue for the term of the
Collaborative Research Agreement. During this phase, Anaderm will make
payments to the Company equal to its research costs, including overhead, plus
10%.
Subject to a right of first refusal granted to Pfizer and to any rights of
third parties, Anaderm has the right to develop and market any compounds that
are invented or for which a new use is invented for the prevention or treatment
of baldness and wrinkles and for the control of hair and skin pigmentation.
Anaderm also has the right to develop for its own use or to license to third
parties other than NYU, human therapeutic products for certain proliferative
and inflammatory disorders of the skin. The Company and Pfizer will assign to
Anaderm their worldwide rights in any patentable invention based on non-Pfizer
compounds that is made in the course of Anaderm's participation in the research
program. Furthermore, the Company will assign to Pfizer its worldwide rights in
any patentable invention based on Pfizer compounds and made in the course of
its participation in the research program.
Anaderm or Pfizer will pay royalties to the Company on the sales of products
resulting from this collaboration. Under the agreement, Anaderm will have the
right to prosecute and maintain all patents on research program inventions that
were made by any of the parties to the agreement in the course of their
participation in the program. During the term of the Collaborative Research
Agreement, the Company is prohibited from conducting or sponsoring any research
related to the purpose of the research program outside of this collaboration
without the prior unanimous written consent of the Anaderm Board of Directors.
COLLABORATION WITH BIOCHEM PHARMA (INTERNATIONAL) INC.
Effective as of May 1, 1996, the Company entered into a Collaborative Research,
Development and Commercialization Agreement with BioChem Pharma
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(International) Inc. ("BioChem Pharma"). Under this agreement, the parties will
seek to discover and develop antiviral drugs for the treatment of Hepatitis C
virus and HIV, although the focus of the collaborative efforts may change at
the discretion of a joint steering committee. This agreement provides that the
Company and BioChem Pharma will jointly commit resources to the collaborative
program. The Company and BioChem Pharma will share equally the
commercialization rights in the U.S. and Europe for any product resulting from
the collaboration. BioChem Pharma will exclusively own commercialization rights
in Canada. The agreement is for a term of five years, with automatic successive
one-year renewal periods thereafter. After May 1, 1999, however, either party
may terminate the agreement by giving the other party six-months prior written
notice. The agreement is also subject to early termination in the event of
certain defaults by either party.
14
<PAGE> 15
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.
ONCOGENE SCIENCE, INC.
(Registrant)
Date May 22, 1996 /s/ ROBERT L. VAN NOSTRAND
------------------- ----------------------------------------
Robert L. Van Nostrand
Vice President
Finance & Administration
16
<PAGE> 16
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
+3.1 Certificate of Incorporation, as amended (1)
+3.2 By-Laws, as amended (1)
+*10.1 Collaborative research Agreement dated April 1, 1996 between the
Company and Pfizer Inc.
+*10.2 License Agreement dated April 1, 1996 between the Company and
Pfizer Inc.
+*10.3 Stockholders' Agreement dated April 23, 1996 among Anaderm
Research Corp., the Company, Pfizer Inc., New York University
and certain individuals
+*10.4 Collaborative Research Agreement dated April 23, 1996 among the
Company, Pfizer Inc. and Anaderm Research Corp.
+10.5 Registration Rights Agreement dated April 11, 1996 among the
Company and the former stockholders of MYCOsearch, Inc. and
their designees
+10.6 Form of Warrants issued by the Company to the former
stockholders of MYCOsearch, Inc. and their designees covering an
aggregate of 100,000 shares of common stock
+10.7 Employment Agreement dated April 11, 1996 between the Company
and Dr. Barry Katz
+27 Financial Data Schedule
------------------
+ Previously filed.
* Portions of this exhibit have been redacted and are subject to a
confidential treatment request filed with the Secretary of the
Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.
(1) Included as an exhibit to the company's registration statement
on Form S-3 (File No. 333-937) initially filed on February 14,
1996, and incorporated herein by reference.
17
