SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 14, 1997
GENSIA SICOR INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-18549 33-0176647
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
corporation)
19 Hughes, Irvine, CA 92618
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(Address of principal executive office) (Zip Code)
(714) 455-4700
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(Registrant's telephone number, including area code)
9360 Towne Centre Drive, San Diego, CA 92121
(619) 546-8300
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(Former address and telephone number)
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Item 5. Other Events.
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On November 14, 1997, Gensia Sicor Inc. (the "Company") accepted the
resignation of David F. Hale, who had held the positions of president and chief
executive officer. Donald E. Panoz, chairman of the Gensia Sicor Board of
Directors, assumed Mr. Hale's responsibilities on an interim basis and is
leading a committee of the Board of Directors in the search for a new president
and chief executive officer. Carlo Salvi, who represents Gensia Sicor's largest
stockholder and was previously the major shareholder of Rakepoll Holding B.V.,
with which Gensia Sicor combined in February 1997, was at the same time
appointed executive vice president of Gensia Sicor and assumed direct
responsibility for corporate and international operations. Mr. Hale remains a
member of the Gensia Sicor Board of Directors.
On December 17, 1997, the Company announced that in conjunction with
its previously announced relocation of the Company's offices to Irvine,
California to consolidate operations the Company was reducing its Southern
California workforce by approximately 42 people.
On December 18, 1998, Gensia Sicor announced that it had transferred
its San Diego-based proprietary pharmaceutical research and development business
to a subsidiary company called Metabasis Therapeutics, Inc. ("Metabasis
Therapeutics") and that Sankyo Co., Ltd. ("Sankyo") made a $7.25 million equity
investment in Metabasis Therapeutics. Sankyo owns approximately 8% of the equity
of Metabasis Therapeutics.
Gensia Sicor is continuing to pursue plans to establish Metabasis
Therapeutics as an independent company. Accomplishing this goal is dependent on
obtaining financing, certain third party consents and tax considerations.
On December 24, 1997, Gensia Sicor announced that as part of its
restructuring program to focus the Company on its core specialty pharmaceutical
businesses, it completed the transfer of assets of its medical products business
to Gensia Automedics, Inc. ("Automedics"). The assets transferred to Automedics
include certain interests in the GenESA(R) System, the Feedback Controlled
Heparin System ("FCHS") and the European distribution rights to Brevibloc(R). A
majority interest in Automedics was sold to a private investor group led by
Galen Associates and including The Wellcome Trust.
Gensia Sicor retains a 19% equity interest in Automedics and may
receive royalties and other payments based on Automedics' future performance.
Gensia Sicor will also receive contract manufacturing revenues related to the
final production of the drug, arbutamine HC1 injection, for use with the GenESA
System. In addition, if the FCHS is successfully developed by
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Automedics, Gensia Sicor will receive a cash payment as a result of U.S.
regulatory marketing clearance of the FCHS product. Due to the contingent nature
of the consideration, Gensia Sicor expects to record a charge of approximately
$10 million associated with the Automedics transaction, including the write-off
of approximately $7 million of prepaid royalties and capitalized milestone
payments, in its fourth quarter financial statements.
The private investors initially invested $6 million in Automedics and,
contingent upon certain conditions, may invest an additional $6 million.
Automedics also assumed responsibility for contractual commitments to Protocol
Systems, Inc. for the purchase of GenESA System devices and any exercise of the
Partnership Purchase Option payable in 1999 to Gensia Clinical Partners L.P.
Gensia Clinical Partners, L.P. owns certain rights to the GenESA System
technology which are subject to a purchase option. Gensia Sicor retains
potential obligations under agreements which have been assigned to Automedics,
Inc., which obligations could exceed $20 million.
In conjunction with this transaction, The Laryngeal Mask Company Ltd.
has formed a U.S. company, LMA (North America), Inc., which will hold the U.S.
distribution rights to the LMA product line. LMA (North America) has entered
into a service agreement with Automedics which began January 1, 1998 under which
Automedics will be selling the LMA product line, subject to future performance
criteria.
On December 29, 1997, Gensia Sicor announced that its wholly owned
subsidiary, SICOR S.p.A. ("Sicor"), acquired a 50% equity interest in Diaspa
S.p.A., a private Italian pharmaceutical company specializing in bulk
fermentation products. Sicor paid approximately $2.8 million U.S. dollars
("USD") in cash for its 50% equity interest in Diaspa. The remaining 50% equity
interest in Diaspa was purchased by Archimica S.p.A., an Italian bulk
pharmaceutical company in which Mr. Salvi has a 50% beneficial ownership. For
the nine month period through September 30, 1997, Diaspa had revenues of
approximately $12.3 million USD.
In the last week of December 1997, Gensia Sicor sold approximately 2.4
million Units in a private placement, each Unit consisting of one share of
Common Stock and a Warrant to purchase one-half share of Common Stock at a per
share exercise price of 125% of the Unit purchase price. The offering resulted
in net proceeds of approximately $14.4 million. The Units were sold to
accredited investors including two members of Gensia Sicor's senior management
as well as Mr. Panoz and Mr. Salvi. The private placement included the
conversion into Units of $2 million advanced by Fountainhead Holdings Ltd., a
family trust
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established by Mr. Panoz, and the conversion into Units of
$2 million advanced by Mr. Salvi.
As part of the transaction, Gensia Sicor agreed to file no later than
60 days following the closing of the transaction a registration statement on
Form S-3 with the Securities and Exchange Commission to cover the resale of the
Common Stock issued or issuable as the result of the Unit offering. If a
purchaser sells the Common Stock purchased in the Unit offering prior to June
30, 1998, then the purchaser will not be issued the Warrant component of the
Unit.
In December 1997, Gensia Sicor also sold approximately 434,000 shares
of Common Stock for approximately $2.5 million of Common Stock to SangStat, The
Transplant Company (R) in connection with an amended agreement for the
commercial supply of cyclosporine bulk drug substance.
In a separate transaction in December 1997, Gensia Sicor sold a parcel
of land adjacent to its former corporate offices in San Diego for net proceeds
of approximately $2.6 million.
This Report on Form 8-K contains forward looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward looking statements, including
whether Metabasis Therapeutics can be established as an independent company,
whether Gensia Sicor will receive royalties and other payments from Automedics,
whether Automedics will be able to fulfill the obligations under the contracts
assigned by Gensia Sicor to Automedics and those set forth in Gensia Sicor's
filings on Form 10-K and Forms 10-Q with the Securities and Exchange Commission.
These forward looking statements represent the Company's judgment as of the date
of this press release. The Company disclaims any intent or obligation to update
these forward looking statements.
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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 hereunto duly authorized.
Dated: January 20, 1998.
GENSIA SICOR, INC.
By /s/ John Sayward
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John Sayward
Vice President, Finance,
Chief Financial Officer
and Treasurer
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