UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
December 9, 1997
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ANGEION CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-17019 41-1579150
(State or other of Incorporation) (Commission (I.R.S. Employer
File Number) (Identification No.)
3650 Annapolis Lane, Suite 120, Minneapolis, Minnesota 55447-5434
(Address of principal executive offices) (Zip Code)
(612) 550-9388
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On December 10, 1997, Angeion Corporation, a Minnesota corporation (the
"Registrant") and ELA Medical, a French societe anonyme ("ELA") and indirect
subsidiary of Synthelabo, a French societe anonyme (the "Investor"), announced
the effectiveness of their relationship to market a full line of sophisticated
tachyarrhythmia and bradycardia products. A copy of the press release announcing
the effectiveness of this relationship, dated December 10, 1997, is attached as
an exhibit to this Report and is incorporated herein by reference.
In connection with the establishment of this relationship, the
Registrant has entered into certain agreements with the Investor and its
affiliates, including (i) an Amended and Restated Investment and Master
Strategic Relationship Agreement ("Investment Agreement") between the Registrant
and the Investor; (ii) a Limited Liability Company Agreement (the "Operating
Agreement") between the Registrant and ELA Medical, Inc., a Delaware corporation
and indirect, wholly-owned subsidiary of the Investor ("ELA Delaware"), relating
to the establishment of Angellan Medical Systems, LLC, a Delaware limited
liability company ("Angellan"); (iii) an Implantable Cardioverter Defibrillator
Product Manufacturing and Supply Agreement (the "Angellan Manufacturing and
Supply Agreement") between the Registrant and Angellan; and (iv) an Implantable
Cardioverter Defibrillator Product Manufacturing and Supply Agreement (the "ELA
Manufacturing and Supply Agreement") between the Registrant and ELA. In
addition, in connection with the establishment of this relationship, the
Registrant amended the Rights Agreement, dated as of April 8, 1996 (the "Rights
Agreement"), between the Registrant and Norwest Bank Minnesota, N.A.
Investment Agreement.
Pursuant to the Investment Agreement, the Investor agreed to purchase
up to $30 million of the Registrant's common stock, $.01 par value per share
("Common Stock"), and the Registrant agreed to issue to the Investor warrants to
purchase up to an additional $18 million of Common Stock. At the initial closing
of the Investment Agreement, held on December 9, 1997, the Investor invested $15
million for 2,251,408 shares of Common Stock and a four-year warrant to purchase
1,350,845 shares of Common Stock for an aggregate exercise price of $9 million,
with the number of shares subject to possible adjustments depending on the
future market price of the Common Stock. Upon the achievement by the Company of
certain milestones related to U.S. Food & Drug Administration approval of new
implantable cardioverter defibrillator ("ICD") products and lead systems, the
Investor will purchase up to an additional $15 million of Common Stock (in
installments of $5 million) at a price equal to a premium of the then current
market price formula with respect to the Common Stock. In connection with each
installment of Common Stock purchased, the Investor will also receive additional
warrants to purchase, at the applicable investment price, shares of Common Stock
equal to 60% of the number of shares purchased.
The Investment Agreement provides the Investor with certain pre-emptive
rights, registration rights and anti-dilution protection and entitles the
Investor to nominate one person to serve as a director of the Registrant. The
Investor is also subject to certain standstill provisions that, among other
things, limit the ability of the Investor to purchase Common Stock other than
pursuant to the Investment Agreement, to solicit proxies or otherwise to seek to
control the management of the Registrant for a period of time.
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Operating Agreement.
Pursuant to the Operating Agreement, the Registrant and ELA Delaware
established Angellan, a U.S. joint venture, to market and sell in the United
States cardiac stimulation and related devices manufactured by ELA and the
Registrant. Pursuant to the Operating Agreement, the term of Angellan is seven
years, which will be extended automatically for an additional three-year term,
unless terminated earlier by the Registrant or ELA Delaware or upon the
commencement of any dissolution or liquidation proceedings of Angellan. The
Registrant and ELA are the sole members of Angellan, each member possessing a
50% interest. Angellan will be managed by its members who have delegated certain
authority to a board of directors consisting of six members, three of whom will
be designated by the Registrant and three of whom will be designated by ELA
Delaware. The members have also delegated certain authority to Dennis L. Sellke,
the chief executive officer of Angellan and former director of the Registrant.
Certain significant matters must be approved unanimously by the members,
including, among other things, the sale of substantially all of Angellan's
assets, entering into a new line of business, calls for additional capital
contributions and distributions or dividends. In the case of a deadlock, until
certain conditions are satisfied, matters will be deemed to have received the
affirmative vote of a majority of the directors present at a meeting with ELA
Delaware's representatives having the casting (i.e., controlling) vote. Upon a
change in control of a member, such member may unilaterally withdraw as a member
subject to the right of the other member to continue Angellan and purchase such
withdrawing member's interest, in which case the withdrawing member must
continue to manufacture and supply products to Angellan pursuant to the terms of
the applicable supply agreement for the remainder of Angellan's initial term.
Angellan Manufacturing and Supply Agreement.
Pursuant to the Angellan Manufacturing and Supply Agreement, the
Registrant has agreed to manufacture and supply ICD products on an exclusive
basis for Angellan, such products to be labeled under Angellan's trademarks for
sale in the United States (the "Territory"). Angellan may not obtain the
Registrant's ICD products from any other source and may not sell any of the
Registrant's ICD products to others located outside the Territory or to others
in the Territory if such persons intend to resell in any country located outside
the Territory. The Registrant has agreed to use its best efforts to initiate and
complete clinical trials or studies in the Territory and to obtain an
Investigational Device Exemption, if required, and all other required or
desirable government approvals for clinical trials or studies and sale of each
ICD product in the Territory at its sole cost and expense after the Registrant
has completed the validation of such ICD product required for human implant. The
Angellan Manufacturing and Supply Agreement will terminate on the expiration or
termination of the Operating Agreement and upon the commencement of any
dissolution or liquidation proceedings of Angellan.
ELA Manufacturing and Supply Agreement.
Pursuant to the ELA Manufacturing and Supply Agreement, the Registrant
has agreed to manufacture and supply ICD products for ELA to be labeled under
ELA's trademarks and logos for sale in a defined territory, which currently
includes certain countries in Europe and Japan ("ELA's Territory"). ELA may not
obtain the Registrant's ICD products from any other source and may not sell any
of the Registrant's ICD products to others located outside ELA's Territory or to
others in ELA's Territory if such persons intend to resell in any country
located outside ELA's Territory. The Registrant has agreed to use its best
efforts to initiate and complete clinical trials or studies in ELA's Territory
and to obtain CE approval for each ICD product at its sole cost and expense
after the
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Registrant has completed validation of such product required for human implant.
The initial term of the ELA Manufacturing and Supply Agreement is seven years.
ELA may renew the agreement at its sole option for an additional three-year term
if minimum aggregate purchases for all regions have been met or waived for all
years prior to the end of the initial term. Additionally, the Registrant and ELA
may mutually agree to extend the agreement for an additional three-year term.
Rights Agreement Amendments.
The Registrant and Norwest amended the Rights Agreement to provide that
(i) neither the Investor, ELA nor ELA Delaware (collectively, the "the
Synthelabo Group") will be deemed an "Adverse Person" for purposes of the Rights
Agreement, and (ii) the threshold for determining whether a person is an
"Acquiring Person" for purposes of the Rights Agreement will, with respect to
the Synthelabo Group, be increased to 20% or more of the Common Shares (as
defined in the Rights Agreement) then outstanding or 0.1% above such higher
percentage of the Common Shares from time to time outstanding as may result from
the issuance to the Synthelabo Group of additional Common Shares pursuant to
Sections 2.1, 2.2, 2.3, 2.4, 4.1(d) or 4.2(b)(ii) of the Investment Agreement.
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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.
ANGEION CORPORATION
By: /s/ Whitney A. McFarlin
Whitney A. McFarlin
President and Chief Executive Officer
Dated: December 19, 1997
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INDEX TO EXHIBITS
Exhibit Description Method of Filing
99.1. Press Release of the Registrant, dated Filed herewith.
December 10, 1997.
Exhibit 99.1
ANGEION AND ELA MEDICAL COLLABORATION BECOMES EFFECTIVE
RELATIONSHIP TO GLOBALLY MARKET COMPLETE LINE OF CARDIAC RHYTHM MANAGEMENT
PRODUCTS
MINNEAPOLIS, Dec. 10 /PRNewswire/ -- Angeion Corporation (Nasdaq: ANGN - news)
and ELA Medical announced today that the relationship they have established to
exclusively market a full line of sophisticated tachyarrhythmia and
bradyarrhythmia products has become effective. ELA Medical is a subsidiary of
Synthelabo, a $2 billion French pharmaceutical group -- majority-owned by the
world's leading cosmetic company L'Oreal.
The relationship was initially announced in October. Closing of the investment
was subject to termination of the Hart-Scott-Rodino waiting periods.
The collaboration takes two forms: Angeion and ELA Medical have established a
joint venture, named Angellan Medical Systems, LLC, to expand the sales and
marketing efforts of both companies and establish one U.S. sales organization
for the products of both companies. Each party will own 50 percent of the U.S.
joint venture. In Europe and Japan, Angeion's line of implantable cardioverter
defibrillators (ICDs) will be marketed under ELA Medical's trademarks by ELA
Medical's established global sales and marketing network. ELA Medical has a
sales and marketing network servicing more than 20 countries worldwide.
The collaboration allows Angeion and ELA Medical to offer a complete line of
cardiac rhythm management products including single and dual chamber ICDs and
leads for the rapidly growing tachyarrhythmia (dangerously rapid heartbeats)
market as well as pacemakers and lead systems for the established
bradyarrhythmia (abnormally slow heartbeats) markets. Combined, these markets
are estimated at more than $2.8 billion worldwide.
Synthelabo has invested an initial $ 15 million in the form of an equity
investment in Angeion Corporation for 2,251,408 initial shares of Common Stock
and initial warrants to purchase 1,350,845 shares of Common Stock for an
additional aggregate exercise price of $9 million, subject to certain possible
future adjustments. An additional $15 million may be invested upon the
achievement of milestones related to the approval of new defibrillators and lead
systems. These milestones are expected to be reached in the next 12 to 18
months.
"Today, Angeion became a stronger company worldwide," said Whitney A. McFarlin,
Angeion's Chairman, President and CEO. "This relationship will increase the
presence of Angeion's products in all of the key ICD markets of the world. It is
an opportunity for Angeion's products to be part of a complete line of quality
cardiac rhythm management products. Financially, Angeion is significantly
stronger too."
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The companies expect that the joint venture will be operational in early 1998 at
about the same time that Angeion will introduce its 2020 ICD device in clinical
studies. "There is tremendous excitement for the 2020 ICD and the ELA Medical
pipeline of upcoming products including, the Defender(R) II dual chamber ICD and
Talent(TM) pacemaker," McFarlin added.
Angeion Corporation's pioneering advancements have led the way for the
implantation of smaller and longer-life defibrillators for the treatment of
tachyarrhythmias. In June 1997, Angeion submitted an application to the U.S.
Food and Drug Administration for Pre-Market Approval of the Sentinel(R) Series
ICDs, its first four ICD devices. Angeion's internet address is
http://www.angeion.com
ELA Medical's products have significantly advanced the treatment of
bradyarrhythmia. Its full line of pacemaker leads, and single and dual chamber
pacemakers incorporate the latest in rate responsive pacing and advanced
diagnostics for programming. ELA Medical expects to initiate U.S. clinical
trials of its Defender(R) II dual chamber ICD, a down-sized Defender(R), during
the first quarter of 1998. ELA Medical's internet address is http://www.
elamedical.com
The discussion above contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. A number of factors should
be considered in conjunction with these forward-looking statements. These
factors are set forth under "Certain Important Factors" included in Form 10-K
for the Fiscal year ended July 31, 1997 filed with the Securities and Exchange
Commission. Angeion cautions investors and others to review the statements set
forth and that other factors may prove to be important in affecting the business
and results of operations of Angeion.
