UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-15609
AGOURON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0061928
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10350 NORTH TORREY PINES ROAD, LA JOLLA, CALIFORNIA
92037-1020 (Address and zip code of principal
executive offices)
(619) 622-3000
(Registrant's telephone number, including area code)
NONE
(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 ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: Approximately 13,563,000 shares
of the Company's Common Stock, no par value, were outstanding as of January 8,
1997.
1
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Item 6. Exhibits and Reports on Form 8-K:
a. Exhibits:
10.74 Letter of Intent between F. Hoffmann-La
Roche Ltd of Basel, Switzerland, Japan
Tobacco Inc., and the Company dated January
17, 1997. (Confidential treatment has been
requested for portions of this agreement
pursuant to an application dated January 27,
1997, as separately filed with the
Securities and Exchange Commission.)
2
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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 thereunto duly authorized.
AGOURON PHARMACEUTICALS, INC.
Date: June 25, 1997 /s/ Steven S. Cowell
-----------------------------
Steven S. Cowell
Vice President, Finance and Chief Financial
Officer and Chief Accounting Officer
3
EXHIBIT 10.74
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS AGREEMENT
PURSUANT TO AN APPLICATION DATED JANUARY 27, 1997, AS SEPARATELY FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL PORTIONS ARE INDICATED
WITH AN ASTERISK ("*"), EXCEPTING THOSE ASTERISKS CONTAINED IN SCIENTIFIC
FORMULAS CONTAINED IN SECTION 2(A) OF EXHIBIT A.
LETTER OF INTENT
THIS LETTER OF INTENT is made on the 17th day of January 1997, by and
between Agouron Pharmaceuticals, Inc., a corporation duly organized and existing
under the laws of the state of California, having a principal place of business
at 10350 North Torrey Pines Road, La Jolla, California, United States of America
(hereinafter called "Agouron"), Japan Tobacco Inc., a corporation duly organized
and existing under the laws of Japan, having its principal place of business at
JT Building, 2-1, Toranomon 2-chome, Minato-ku, Tokyo, Japan (hereinafter called
"JT"), and F. Hoffmann-La Roche Ltd., a corporation duly organized and existing
under the laws of Switzerland, having its principal place of business at
CH-4002-Basel, Switzerland (hereinafter called "Roche"). Agouron, JT and Roche
are sometimes hereinafter referred to as a party (collectively "parties") to
this Agreement.
Background
In December 1994, Agouron and JT entered into a Development and License
Agreement ("D&L Agreement") under which they have collaborated in the
development and commercialization of the chemical compound known as "nelfinavir
mesylate" to treat and prevent Human Immunodeficiency Virus infections. Agouron,
JT and Roche now agree to enter into a license agreement under which Roche will
be licensed to sell nelfinavir mesylate in certain countries of the world. This
Letter of Intent ("LOI") which shall be binding on the parties sets forth the
basic license terms upon which the parties have agreed. The full terms of the
license will be set forth in a definitive agreement to be prepared as described
below.
NOW THEREFORE, the parties agree as follows:
1. Terms. The parties hereby enter into this Letter of Intent to
confirm their entering into a license agreement on terms substantially in
accordance with those contained in Exhibit A attached hereto. The parties
acknowledge that Exhibit A only states the basic terms of the understanding
between the parties and is subject to the further negotiation and preparation of
an agreement containing the full terms of the license between the parties
("Definitive Agreement"). Each party agrees to act in good faith in an effort to
negotiate, execute and deliver the Definitive Agreement on or before * .
2. Disclosure. The parties shall jointly prepare and release a
statement about the existence of this Letter of Intent and of the license
between Agouron, JT and Roche. Except as agreed to by the parties, Agouron, JT
and Roche shall not release any further information to any third party who is
not under an obligation of confidentiality with respect thereto about any of the
terms of this Letter of Intent or of the license without the prior written
consent of the other parties, which consent shall not unreasonably be withheld.
This prohibition includes, but is not limited to, press releases, educational
and scientific conferences, promotional materials and discussions with the
media. If a party determines that it is required by law to release information
to any third party regarding the terms of this Letter of Intent or the subject
matter of the license, it shall notify the other parties of this fact prior to
releasing the information. The notice to the other parties shall include the
text of the information proposed for release. The other parties
<PAGE>
shall have the right to confer with the notifying party regarding the
necessity for the disclosure and the text of the information proposed for
release.
3. Miscellaneous. This Letter of Intent contains the entire agreement
between the parties as to the matters set forth herein and shall be construed in
accordance with the laws of the State of California, United States of America.
Exhibit A describes the parties' understanding with respect to the development
and sale of nelfinavir mesylate by Roche in certain countries of the world. This
Letter of Intent, including Exhibit A, shall not be amended, supplemented or
otherwise modified, except by an instrument in writing signed by duly authorized
officers of all of the parties. Roche shall bear all of the expenses incurred by
it in connection with the negotiation and preparation of this Letter of Intent
and the Definitive Agreement. Agouron and JT shall bear all of the expenses
incurred by them in connection with the negotiation and preparation of this
Letter of Intent and the Definitive Agreement. Notwithstanding the preceding,
the use and disclosure of confidential and proprietary information disclosed to
Roche for the purpose of determining Roche's interest in entering into (and for
the subsequent negotiation and performance of) a license agreement for Viracept
for certain countries of the world shall be governed by the terms of the
Confidentiality Agreement between the parties with an effective date of January
7, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Letter of
Intent by their respective officers thereunto duly authorized, the day and year
hereinabove written. This Letter of Intent may be executed in counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
AGOURON PHARMACEUTICALS, INC. JAPAN TOBACCO INC.
By: /s/ Kent Snyder By: /s/ Masamichi Nishimoto
Name: Kent Snyder Name: Masamichi Nishimoto
Title: Vice President Title: Executive Vice President
By: /s/ Gary Friedman By: /s/ Masakazu Kakei
Name: Gary Friedman Name: Masakazu Kakei
Title: Vice President Title: Managing Director
F. HOFFMANN-LA ROCHE LTD
By: /s/ Werner Henrich
Name: Werner Henrich
Title: Director
By: /s/ Dr. Bruno Maier
Name: Dr. Bruno Maier
Title: Deputy Director
<PAGE>
January 17, 1997
Exhibit A
1. JT and Agouron, individually and directly, under terms and conditions
specified below, hereby grant Roche the exclusive right, even as to
Agouron and JT, to sell the Product in the Field in the Licensed
Territory.
2. Definitions: Except as otherwise set forth herein, items
containing an initial capitalized letter shall have the meaning
stated in the Letter of Intent ("LOI") and/or this Exhibit A.
(a) "Product" means nelfinavir mesylate, however formulated,
whose chemical name is as follows:
[3S-(3R*, 4aR*, 8aR*, 2'S*, 3'S*)]-2-[2'-hydroxy-3'-
phenylthiomethyl-4'-aza-5'-oxo-5'-(2"-methyl-3"-
hydroxyphenyl)pentyl]-decahydroisoquinoline-3-N-t-
butyl carboxamide methanesulfonic acid salt,
and whose chemical structure is as follows:
[GRAPHIC OMITTED]
(b) "Licensed Territory" means all countries of the world, except
for the United States (and its territories, possessions and
protectorates, and the District of Columbia), Canada, Mexico,
Japan, Taiwan, South Korea, North Korea, and all the countries
of Asia listed on Schedule 1 attached hereto.
(c) "Field" means the treatment and prevention of Human
Immunodeficiency Virus ("HIV") infections.
(d) "Affiliate" means any person, organization or entity
which is, directly or indirectly, controlling, controlled
by, or under common control with Roche, Agouron or JT, as
the case may be. The term "control" (including, with
correlative meaning, the terms "controlled by" and "under
common control with"), as used with respect to any
person or entity, means the possession, directly or
indirectly, of the power to direct or cause the direction
of the management and
A-1
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January 17, 1997
policies of such person, organization or entity, whether
through the ownership of voting securities, or by contract,
or court order, or otherwise. The ownership of voting
securities of a person, organization or entity shall
not, in and of itself, constitute "control" for purposes
of this definition, unless said ownership is of a
majority of the outstanding securities entitled to vote of
such person, organization or entity. For purposes of this
Agreement, Genentech, Inc. shall be considered to be an
Affiliate of Roche.
(e) "Major European Country" means the *
(f) "MAA" means Marketing Authorization Application.
(g) "EMEA" means the European Agency for the Evaluation of
Medicinal Products.
(h) "D&L Agreement" means the December 1, 1994 Development and
License Agreement between Agouron and JT.
3. The term of this license will extend on a country-by-country basis from
the effective date of the signing of the LOI to which this Exhibit A is
an attachment, until the later of: (i) the last to expire of any
patents covering the Product in a country; or (ii) * years after the
date of the initial commercial launch of the Product in such country.
4. With the consent of JT and Agouron, whose consent shall not be
unreasonably withheld, Roche shall have the right to sublicense its
rights in the Product in one or more countries of the Licensed
Territory.
5. Subject to the provisions of the D&L Agreement, Agouron may *
be agreed upon by the parties after discussions between Roche and
Agouron. Subject to the provisions of the D&L Agreement, JT may *
to be agreed upon by the parties after discussions between Roche
and JT. The terms of the *
modified to reflect the *
6. Until * except for the countries of *
in countries where either JT or Agouron control
the exclusive rights to the Product, *
On or before *
the parties agree to further discuss the *
A-2
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January 17, 1997
For purposes of this paragraph, JT and Agouron shall not
be considered independent third parties.
7. Except as otherwise agreed to by the parties, Agouron and JT will be
responsible for completing in a reasonable manner and funding the
studies * these studies include the core development program studies
designed to achieve registration of the Product in the Field in the
major countries of the Licensed Territory. The parties acknowledge that
Agouron and JT despite reasonable diligence may be unable to complete
one or more of such studies because of lack of enrollment, changes in
clinical practices and/or other commercially or scientifically valid
reasons.
*
8. In collaboration with Roche, Agouron will be responsible for *
and will have the
primary responsibility for *
Roche and its Affiliates will provide assistance, as necessary, to *
Roche will have
the primary responsibility for the *
Roche will be
responsible for *
9. Alterations to the * which are required for *
will be the responsibility of *
Except as otherwise agreed to by the parties, Roche will be responsible
for *
10. Roche will be responsible for * (other than
those * ) which involve the *
(including *
). Roche will be responsible for the
*
A-3
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January 17, 1997
11. A party conducting a study involving the Product will assist the
other parties in the incorporation of the data from such study into
their dossiers, if necessary. *
12. Roche will be responsible for the cost and implementation (possibly in
cooperation with a previously-contracted contract research
organization) of an expanded access program in Europe and Australia
which will be consistent in scope with the expanded access program
implemented by Agouron in North America.
13. Roche shall use reasonable diligence in the development and
registration of the Product in the Field in the countries of the
Licensed Territory. Reasonable diligence shall mean at least the
comparable standard of effort used by Roche in *
If, after * days
written notice of the failure by Roche to use reasonable diligence in
the development and registration of the Product in the Field in a
country located in the Licensed Territory Roche fails to fulfill its
obligations under this paragraph, such failure shall be deemed to be an
election pursuant to *
14. Roche will purchase the Product from JT or Agouron directly as
determined by JT and Agouron, for use in such additional studies and
expanded access program in the Licensed Territory *
15. Roche will make the following license issue fee payments to Agouron
and JT directly.
On January 24, 1997
To Agouron USD 9 million
To JT USD 9 million
Within thirty (30) days
of first regulatory approval
in a Major European Country
or upon marketing authorization
from the European Commission
To Agouron USD 11 million
To JT USD 11 million
TOTAL USD 40 million
A-4
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January 17, 1997
16. *
will be consistent with the *
will modify the *
only to the extent required to respond to * and
implement *
As
they deem appropriate, Agouron, JT and their licensees will *
17. It is the intent of the parties that a single trademark be
identified and developed for use in connection with marketing the
Product in the Field wherever possible throughout the Territory.
The parties acknowledge their intention to use the VIRACEPT(R)
trademark in connection with the marketing of the Product in the Field
wherever possible. Unless otherwise agreed and as permitted by
law, Roche will sell the Product under the VIRACEPT brand name in
all countries of the Licensed Territory. The parties also
acknowledge their intention to use, if appropriate, the same trade
dress in connection with the marketing of the Product in the
Field wherever possible. In countries where Roche is
exclusively marketing the Product, unless prohibited by law or
regulation, the labeling for the Product shall state that the Product
is licensed from Agouron and JT.
18. *
19. * Roche using diligent marketing efforts,
agrees to provide sales and other promotional support for the
Product in each country in the Licensed Territory which is equivalent
to or greater than that which Roche, its Affiliates and/or
sublicenses are providing * After the
* Roche will provide a reasonable level of sales
and other promotional support for the Product in each country in the
Licensed Territory which, when measured as a percentage of adjusted
gross product sales in such country, is equivalent to or greater
than that which Roche, its Affiliates and/or sublicenses are
providing for *
shall be attributed to *. If, after * written notice of the failure by
Roche to
A-5
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January 17, 1997
provide the agreed upon level of sales and other promotional
support for the Product in a country located in the Licensed Territory
Roche fails to fulfill its obligation under this Paragraph, Agouron and
JT shall have the right, *
20. Roche shall keep Agouron and JT informed of its progress in the
development and registration of the Product. This shall include, at
least * the regular meetings of the parties and such written progress
reports as are agreed to by the parties summarizing Roche's activities
during each reporting period and Roche's planned activities for the
succeeding period. Agouron and JT shall keep Roche informed of their
development and registration activities to the extent that such
development and registration activities are relevant to the development
and registration of the Product by Roche in the Licensed Territory.
Each of the parties will *
each representative shall report to his/her
management on the matters discussed at each of the meetings of the
parties. Each party, prior to the
implementation of * will provide the other parties with a
copy of the * and an opportunity in a timely
manner to comment on the *
Roche agrees to use its diligent efforts in
responding in a timely manner, but not more than * to
requests from Agouron or JT for
information *
21. Roche shall keep Agouron and JT informed of *
This shall include, at least *
the regular meetings of
the parties and such written progress reports as are agreed to by the
parties summarizing Roche's activities during each reporting period and
Roche's planned activities for the Product for the succeeding period.
Each of the parties will *
each representative shall report to his management
on the matters discussed at each of the meetings of the parties. The
representatives of the parties at the meeting will review and discuss *
Each party
agrees to inform the other parties, *
A-6
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January 17, 1997
22. Agouron, JT and Roche each acknowledge the interests of the other
parties in publishing certain of their results of the development and
registration of the Product to obtain recognition within the scientific
community and to advance the state of scientific knowledge. The parties
also recognize their mutual interests in obtaining valid patent
protection for their drug products. Consequently, a party, its
employees or consultants *
Furthermore, in acknowledgment that certain *
the parties agree that each party shall
*
After giving reasonable consideration to the suggestions of
the objecting party, the party wishing to *
23. Roche will pay JT and Agouron directly, a royalty based on the net
sales of the Product by Roche, its Affiliates and sublicenses,
consolidated into CHF, in amounts which equal the greater of: (i)
the royalty amounts calculated according to Schedule 1 below
(Product only); or (ii) the royalty amounts calculated according to
Schedule 2 below (Product and any formulations of INVIRASE which
Roche markets with royalties being calculated separately for the
consolidated annual net sales of the Product and INVIRASE). Schedule
2 shall not apply to net sales in a country until the Product is
approved and available for sale in such country. The following
royalties shall be divided equally between JT and Agouron.
Schedule 1
Royalty Rate Consolidated Annual Net Sales
Per Consolidated Level of the Product in Licensed
Annual Net Sales Level Territory
---------------------- ----------------------------------
* <=CHF *
* > CHF * / <= CHF *
* > CHF *
A-7
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January 17, 1997
Schedule 2
Consolidated Annual Net Sales Level
for the Product and INVIRASE in the
Licensed Territory (With Royalties
Royalty Rate Being Calculated Separately for the
Per Consolidated Consolidated Annual Net Sales of the
Annual Net Sales Level Product and INVIRASE)
--------------------- ------------------------------------
* <=CHF *
* > CHF * / <= CHF *
* > CHF *
24. If either: (i) regulatory approval for the Product is not obtained
in a Major European Country prior to * or (ii) marketing
authorization for the Product is not obtained from the European
Commission prior to * the royalty rate for
Schedule 2 will be adjusted as follows:
Schedule 2
Consolidated Annual Net Sales Level
for the Product and INVIRASE in the
Licensed Territory (With Royalties
Royalty Rate Being Calculated Separately for the
Per Consolidated Consolidated Annual Net Annual
Net Sales Level Sales of the Product and INVIRASE)
------------------ ----------------------------------
* <=CHF *
* > CHF * / <= CHF *
* > CHF *
25. If either: (i) regulatory approval for the Product is not obtained in a
Major European Country prior to * or (ii) marketing authorization for
the Product is not obtained from the European Commission prior to *
Schedule 2 will not apply and Roche will be obligated to pay JT and
Agouron directly, royalties according to Schedule 1 only.
26. Roche agrees not to market any other HIV protease inhibitors in the
Licensed Territory during the term of the agreement, unless sales for
such product(s) are included in the consolidated net sales calculation
according to Schedule 2.
27. * despite reasonable efforts to *
provided,
however, that in no case will *
The parties acknowledge that the *
that the provisions of this paragraph do not apply to *
A-8
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January 17, 1997
The parties specifically
acknowledge that *
Notwithstanding the preceding, *
which are then being commercially used in the manufacture of the
Product, the parties will *
28. In any country where the amount of third party unlicensed sales of drug
products containing nelfinavir mesylate for a quarterly period exceed *
of the total sales of all drug products containing nelfinavir mesylate
in such country for such quarterly period, royalties due on the net
sales of the Product in such country for such quarterly period will be
*
29. Roche will purchase the Product from Agouron or JT directly, for
sale in the Licensed Territory at a price which *
30. * and if Agouron
or JT, independently or jointly, *
31. Roche will assist Agouron and JT in the identification of low-cost
manufacturing sources for the Product. Roche will also provide without
charge, to the extent available, technical and manufacturing assistance
and use of its technology and proprietary information to Agouron and JT
in an effort to decrease the production costs of the Product. Agouron
and JT agree to discuss in good faith with Roche an arrangement under
which Roche could be the contract manufacturer of the Product to be
used in the Licensed Territory, including the prerequisite requirement
that *
Notwithstanding the preceding, Agouron and JT shall be entitled to *
including the right to continue their *
32. *
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January 17, 1997
Subject to the provisions of the D&L Agreement, in the event
that *
Agouron and JT, their Affiliates and sublicensees
shall be free, without any further action by Agouron, JT or Roche and
without any further obligation to Roche and its Affiliates, to *
provided that Agouron and JT shall not
*
For purposes of this paragraph, Roche's *
In the event of *
pursuant to the
terms of this paragraph: (i) the *
(ii) Agouron and JT, their Affiliates and
sublicensees shall
*
(iii) Roche shall *
and (iv) Roche shall
*
Roche shall be
responsible for *
33. Roche may elect to *
In the event that Roche elects to *
, subject to the provisions of the D&L Agreement: (i)
Agouron and JT shall
*
(ii) Agouron and JT will *
(iii) Roche shall *
and (iv) Roche shall *
34. This Agreement shall be assignable by Agouron and JT, but shall not
be assignable by Roche, except to an Affiliate, without the prior
written consent of Agouron and JT, which consent may be withheld at
the sole discretion of Agouron and JT. Any such assignment without
the prior written consent of Agouron and JT shall be void. If this
Agreement is assigned to an Affiliate, Roche shall still be
responsible for all of its obligations specified in this Agreement.
Notwithstanding the preceding, in the event of: (i) a sale or
transfer of all or substantially all of Roche's assets; or (ii)
the merger or
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January 17, 1997
consolidation of Roche with another company, this Agreement shall
be assignable to the transferee or successor company.
35. *
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January 17, 1997
SCHEDULE 1 TO EXHIBIT A
ASIAN COUNTRIES
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Licenses in the above-listed countries shall be subject to compliance by Roche
with the United States laws and regulations governing exports and re-exports of
the Product and any technology developed or disclosed as a result of this
Agreement.
S1-1
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SCHEDULE 2 TO EXHIBIT A
NELFINAVIR MESYLATE CLINICAL STUDIES
*
-------------------------------
Protocol Title
- -------- -----
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
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January 17, 1997
SCHEDULE 2 TO EXHIBIT A (Continued)
*
---------------------------------
Protocol Title
- -------- -----
* *
* *
* *
* *
* *
* *
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January 17, 1997
SCHEDULE 2 TO EXHIBIT A (Continued)
*
---------------------------------
Protocol Title
- -------- -----
* *
* *
* *
* *
* *
* *
* *
* *
* *
S2-3
