UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 14, 1998
IMCLONE SYSTEMS INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-19612 04-2834797
(State or other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
180 Varick Street, New York, New York 10014
(Address of Principal Executive Offices) (Zip Code)
(212) 645-1405
Registrant's telephone number, including area code
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ITEM 5. OTHER EVENTS
On December 14, 1998, ImClone Systems Incorporated ("ImClone" or the
"Company") and Merck KGaA ("Merck") entered into a Development and License
Agreement with respect to ImClone's lead product candidate, C225. Under the
Agreement, Merck was granted an exclusive license, with the right to sublicense
with ImClone's consent, to develop and commercialize C225 outside of North
America. ImClone retains the right to exclusively develop and commercialize C225
in North America. The companies will co-develop C225 in Japan. Under the
Agreement, ImClone is entitled to receive up to $30 million in upfront fees and
early cash-based milestone payments based upon achievement of milestones set
forth in the Agreement. ImClone is also entitled to receive upon achievement of
further milestones an additional $30 million for which Merck will receive equity
in ImClone which will be priced at varying premiums to the then market price of
the common stock depending upon the timing of the achievement of the respective
milestones. The Agreement also entitles ImClone to a $30 million line of credit
or guaranty from Merck for the build-out of a manufacturing facility by ImClone
for the commercial production of C225. Merck will fund clinical development
outside of North America. ImClone will be the manufacturer of C225 and Merck
will purchase product from ImClone for clinical trials and commercialization in
its territory. Royalties will be paid to ImClone by Merck in connection with
sales of C225 outside of North America. Under the terms of the Agreement, for a
proscribed multiple year period, Merck may not acquire equity in the Company
which, combined with all of its holdings, exceeds 19.9% of the Company's voting
securities. The Agreement may be terminated by either party in the event of the
material breach of the other party. It also may be terminated in various other
instances, including by Merck at its discretion on any date on which a milestone
payment is due, or upon Merck's reasonable determination that the product is
economically unfeasible. In the latter case, Merck is entitled to receive 50% of
the milestones then paid to date. In the event of termination of the Agreement,
the due date for the payment of the credit for the manufacturing facility will
be accelerated, or in the event of a guaranty, ImClone is required to use its
best reasonable efforts to release Merck as guarantor.
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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.
IMCLONE SYSTEMS INCORPORATED
Date: December 16, 1998 By:/s/ John B. Landes
John B. Landes
Vice President,
Business Development
and General Counsel
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