<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
November 30, 1999
Date of Report (Date of earliest event reported)
OSI PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-15190 13-3159796
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
106 CHARLES LINDBERGH BOULEVARD
UNIONDALE, NY 11553
(Address of principal executive offices)
(516) 222-0023
(Registrant's telephone number, including area code)
This Current Report on Form 8-K filed by the Registrant on December 15,
1999 is hereby amended to revise Exhibit 99.1, Unaudited Pro Forma Condensed
Combined Balance Sheet and Statements of Operations of OSI Pharmaceuticals, Inc.
<PAGE> 2
ITEM 2. DISPOSITION OF ASSETS
Effective as of November 30, 1999 and pursuant to an Asset Purchase
Agreement dated as of November 17, 1999, and amended November 30, 1999, OSI
Pharmaceuticals, Inc. ("OSI" or the "Company") sold certain assets of its
diagnostics business to Bayer Corporation, including the assets of the Company's
wholly owned diagnostics subsidiary, Oncogene Science Diagnostics Inc., based in
Cambridge, Massachusetts ("OSDI"). The assets sold include certain contracts,
equipment and machinery, files and records, intangible assets, intellectual
property, inventory, prepaid expenses and other assets primarily related to the
operation of the diagnostics business. Bayer intends to retain all employees of
OSDI and will maintain the unit's headquarters in Cambridge. Under the terms of
the agreement, the Company received $9.75 million in cash up-front from Bayer
and will receive additional contingent payments of $1.25 million to be made to
the Company by 2001. The Company expects to apply the proceeds of the sale to
working capital.
In connection with the sale, the Company and OSDI entered into
certain agreements with Bayer including the following: (a) an Assignment and
Assumption of Lease with respect to the OSDI facility located in Cambridge, (b)
a Patent Assignment pursuant to which OSI assigned its right, title and interest
in, to and under certain patents to Bayer, (c) a Patent License Agreement
pursuant to which OSI obtained an exclusive license for the use of the patents
granted under the Patent Assignment with respect to therapeutic products, (d) an
Assignment of Trademarks pursuant to which OSI and OSDI assigned each of their
right, title and interest in and to certain unregistered trademarks to Bayer,
(e) an Assignment and Assumption of Assumed Contracts pursuant to which OSI and
OSDI assigned each of their right, title and interest in, to and under certain
contracts to Bayer, (f) a Domain Name Transfer Agreement pursuant to which OSI
and OSDI transferred the domain name www.oncogene.com to Bayer, and (g) a
Transition Services Agreement pursuant to which OSI agreed to provide certain
services to Bayer, including, without limitation, general ledger and financial
support and cash replenishment support. Furthermore, certain employees of OSI
and OSDI entered into Executive Employment Agreements with Bayer.
Effective January 1, 1997, the Company and Bayer entered into an
agreement to develop serum-based cancer diagnostic products. Under the
agreement, the Company granted to Bayer licenses to manufacture, use and sell
clinical diagnostic products based on the Company's cancer diagnostic technology
in exchange for royalties on net sales. The Company retained rights and was
actively selling non-automated, or manual, versions of these tests to the
clinical research market and retained the right to commercialize the manual
versions in the clinical diagnostic market. Upon the sale of the Company's
diagnostics business to Bayer, the agreement was terminated. Effective April 1,
1998, the Company, through OSDI, entered into a research collaboration and
license agreement with Fujirebio, Inc. creating a collaborative program focused
on discovering and developing certain proprietary cancer assays and
commercializing cancer products. Upon the sale of the Company's diagnostics
business to Bayer, the agreement was assigned to Bayer.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information
related to the sale of the diagnostics business by the Company is filed herewith
as Exhibit 99.1. The unaudited pro forma condensed combined financial statements
combine the historical balance sheets and statements of operations of the
Company giving effect to the sale.
The unaudited pro forma condensed combined balance sheet as of June
30, 1999 assumes that the asset sale to Bayer occurred on June 30, 1999 and the
statements of operations for the nine months ended June 30, 1999 and for the
year ended September 30, 1998 assume that the asset sale to Bayer occurred on
October 1, 1997.
The unaudited pro forma condensed combined financial statements have
been prepared by the Company based upon assumptions deemed proper by it. The
unaudited pro forma condensed combined financial statements are not necessarily
indicative of the future financial position or result of operations or actual
results that would have occurred had the transaction been in effect as of the
dates presented.
The unaudited pro forma financial information is only a summary and
should be read in conjunction with the Company's historical consolidated
financial statements and related notes contained in the annual reports and other
information that was previously filed with the Securities and Exchange
Commission.
(c) Exhibits.
+2.1* Asset Purchase Agreement, dated November 17, 1999, by
and among OSI Pharmaceuticals, Inc., Oncogene Science
Diagnostics, Inc. and Bayer Corporation (without
exhibits and schedules).
+2.2 Amendment No. 1 to Asset Purchase Agreement, dated
November 30, 1999.
++99.1 Unaudited Pro Forma Condensed Combined Balance Sheet
and Statements of Operations of OSI Pharmaceuticals,
Inc.
<PAGE> 4
+99.2 Press Release, dated November 18, 1999.
-----------------------
* The exhibits and schedules to the Asset Purchase
Agreement have been omitted pursuant to Item 601(b)(2)
of Regulation S-K under the Securities Exchange Act of
1934, as amended. The omitted exhibits and schedules
from this filing will be provided upon request.
+ Previously filed as an exhibit to the Form 8-K filed
on December 15, 1999.
++ Filed herewith.
<PAGE> 5
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.
Date: May 22, 2000 OSI PHARMACEUTICALS, INC.
By: /s/ Robert L. Van Nostrand
-----------------------------------------
Name: Robert L. Van Nostrand
Title: Vice President and Chief Financial
Officer, Secretary and Treasurer
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EXHIBIT INDEX
Exhibit No. Description
+2.1* Asset Purchase Agreement, dated November 17, 1999, by and among OSI
Pharmaceuticals, Inc., Oncogene Science Diagnostics, Inc. and Bayer
Corporation (without exhibits and schedules).
+2.2 Amendment No. 1 to Asset Purchase Agreement, dated November 30,
1999.
++99.1 Unaudited Pro Forma Condensed Combined Balance Sheet and
Statements of Operations of OSI Pharmaceuticals, Inc.
+99.2 Press Release, dated November 18, 1999.
-----------------------
* The exhibits and schedules to the Asset Purchase Agreement have been
omitted pursuant to Item 601(b)(2) of Regulation S-K under the Securities
Exchange Act of 1934, as amended. The omitted exhibits and schedules from
this filing will be provided upon request.
+ Previously filed as an exhibit to the Form 8-K filed on December 15, 1999.
++ Filed herewith.
<PAGE> 1
EXHIBIT 99.1
OSI PHARMACEUTICALS, INC.
Unaudited Pro Forma Condensed Combined Balance Sheet
<TABLE>
<CAPTION>
June 30, 1999 Pro Forma June 30, 1999
Actual Adjustments(1) Pro Forma
------------- ---------------- -------------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,497,363 $ 8,420,000(2) $ 18,917,363
Short-term investments 10,589,676 10,589,676
Receivables including trade receivables 2,300,993 2,300,993
Prepaid and other current assets 1,267,730 1,267,730
------------- -------------
Total current assets 24,655,762 33,075,762
Property, equipment and leasehold improvements - net 7,499,727 (683,000)(3) 6,816,727
Compound library assets - net 4,313,901 4,313,901
Other assets-net 1,351,512 1,351,512
Intangible assets-net 6,628,446 (5,068,000)(4) 1,560,446
------------- -------------
Total assets $ 44,449,348 $ 47,118,348
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 3,605,902 (58,000)(5) $ 3,547,902
Unearned revenue - current 982,196 (382,000)(6) 600,196
Loans payable - current 166,656 166,656
------------- -------------
Total current liabilities 4,754,754 4,314,754
Unearned revenue - long term 428,571 428,571
Loans payable - long term 319,140 319,140
Deferred acquisition costs 701,007 701,007
Accrued postretirement benefits cost 1,499,267 (160,000)(7) 1,339,267
------------- -------------
Total liabilities 7,702,739 7,102,739
Stockholders' equity:
Preferred stock -- --
Common stock 223,684 223,684
Additional paid-in capital 105,049,815 105,049,815
Accumulated deficit (62,202,589) 3,269,000(8) (58,933,589)
Accumulated other comprehensive loss (266,599) (266,599)
Treasury stock (6,057,702) (6,057,702)
------------- -------------
Total stockholders' equity 36,746,609 40,015,609
------------- -------------
Commitments and contingencies
$ 44,449,348 $ 47,118,348
============= =============
</TABLE>
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OSI PHARMACEUTICALS, INC.
Unaudited Pro Forma Condensed Combined Statements of Operations
<TABLE>
<CAPTION>
June 30, 1999 Pro Forma June 30, 1999
Actual Adjustments(9) Pro Forma
------------- --------------- -------------
<S> <C> <C> <C>
Revenues:
Collaborative program revenues, principally from related parties $ 12,600,139 (1,208,000)(10) $ 11,392,139
Sales 915,608 (201,000)(11) 714,608
Other research revenue 814,203 814,203
License revenue 2,171,016 2,171,016
------------ ------------
16,500,966 15,091,966
Expenses:
Research and development 14,765,720 (915,000)(12) 13,850,720
Production and service costs 1,239,443 (502,000)(13) 737,443
Selling, general and administrative 6,363,907 (207,000)(14) 6,156,907
Amortization of intangibles 1,095,555 (575,000)(15) 520,555
------------ ------------
23,464,625 21,265,625
Loss from operations (6,963,659) (6,173,659)
Net other income 603,251 603,251
------------ ------------
Net loss $ (6,360,408) $ (5,570,408)
============ ============
Basic and diluted net loss per weighted average share of common
stock outstanding $ (0.30) $ (0.26)
Shares used in calculation of basic and diluted net loss per share 21,430,958 21,430,958
</TABLE>
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OSI PHARMACEUTICALS, INC.
Unaudited Pro Forma Condensed Combined Statements of Operations
<TABLE>
<CAPTION>
September 30, 1998 Pro Forma September 30, 1998
Actual Adjustments(9) Pro Forma
------------------ -------------- ------------------
<S> <C> <C> <C>
Revenues:
Collaborative program revenues, principally from related parties $ 16,165,613 (1,600,000)(10) $ 14,565,613
Sales 1,121,449 (130,000)(11) 991,449
Other research revenue 1,428,853 1,428,853
License revenue 752,422 752,422
------------ ------------
19,468,337 17,738,337
Expenses:
Research and development 19,877,339 (1,665,000)(12) 18,212,339
Production and service costs 813,464 (328,000)(13) 485,464
Selling, general and administrative 8,691,386 (45,000)(14) 8,646,386
Amortization of intangibles 1,460,740 (767,000)(15) 693,740
------------ ------------
30,842,929 28,037,929
Loss from operations (11,374,592) (10,299,592)
Net other income 1,190,124 1,190,124
------------ ------------
Net loss $(10,184,468) $ (9,109,468)
============ ============
Basic and diluted net loss per weighted average share of common
stock outstanding $ (0.48) $ (0.43)
Shares used in calculation of basic and diluted net loss per share 21,372,655 21,372,655
</TABLE>
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Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
(1) All pro forma information contained in the June 30, 1999 balance sheet
assumes that the asset sale by the Company to Bayer occurred on June
30, 1999.
(2) This adjustment represents the cash received in connection with the
asset sale to Bayer, net of direct disposition costs of $730,000 and
amounts withheld by Bayer for OSI liabilities assumed by Bayer of
$600,000.
(3) This adjustment represents the net book value of the fixed assets that
were purchased by Bayer.
(4) This adjustment represents the net book value of the intellectual
property assets (capitalized patent costs) that were purchased by
Bayer.
(5) This adjustment represents the accrued vacation costs assumed by Bayer.
(6) This adjustment represents the deferred revenue obligation under the
Fujirebio collaboration that was assumed by Bayer.
(7) This adjustment represents the post retirement liability assumed by
Bayer.
(8) This adjustment represents the gain on the net assets sold to Bayer.
The gain on the sale of the assets has been excluded from the
accompanying pro forma condensed combined statements of operations
since the gain is non-recurring.
(9) All pro forma information presented for the nine months ended June 30,
1999 and for the year ended September 30, 1998 assumes that the asset
sale to Bayer was completed on October 1, 1997.
(10) This adjustment reflects the loss of revenue that would have resulted
had the Company consummated the asset sale to Bayer on October 1, 1997,
related to the research collaborations with Bayer and Fujirebio.
(11) This adjustment reflects the loss of revenue from diagnostic sales that
would have resulted had the Company consummated the asset sale to Bayer
on October 1, 1997.
(12) This adjustment represents the reduction of research and development
expenses that would have resulted if the Company consummated the asset
sale on October 1, 1997.
(13) This adjustment represents the reduction of diagnostic manufacturing
costs that would have resulted if the Company consummated the asset
sale on October 1, 1997.
(14) This adjustment represents the reduction of administrative costs that
would have resulted if the Company consummated the asset sale on
October 1, 1997.
(15) This adjustment represents the reduction of patent amortization that
would have resulted if the Company consummated the asset sale on
October 1, 1997.
