<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2000
Commission file number 0-17254
NOVEN PHARMACEUTICALS, INC.
STATE OF DELAWARE 59-2767632
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11960 S.W. 144TH STREET, MIAMI, FL 33186
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(Address of principal executive offices) (Zip Code)
(305) 253-5099
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(Registrant's telephone number, including area code)
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 last practicable date.
CLASS OUTSTANDING AT OCTOBER 31, 2000
------------------------------- --------------------------------
Common stock $.0001 par value 22,117,798
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NOVEN PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Statements of Operations for the Three and Nine Months Ended
September 30, 2000 and 1999 3
Balance Sheets as of September 30, 2000 and December 31, 1999 4
Statements of Cash Flows for the Nine Months Ended
September 30, 2000 and 1999 5
Notes to Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 12
PART II - OTHER INFORMATION
Item 5 - Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOVEN PHARMACEUTICALS, INC.
Statements of Operations
Three and Nine Months Ended September 30,
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
-------------------- ---------------------
2000 1999 2000 1999
------- ------- ------- --------
<S> <C> <C> <C> <C>
Revenues:
Product sales $11,016 $ 8,004 $30,807 $22,861
License revenue 147 56 440 169
------- ------- ------- -------
Total revenues 11,163 8,060 31,247 23,030
Expenses:
Cost of products sold 4,928 3,464 13,951 10,069
Research and development 3,307 1,585 8,687 4,727
Marketing, general and administrative 1,980 1,800 6,369 5,446
------- ------- ------- -------
Total operating costs and expenses 10,215 6,849 29,007 20,242
------- ------- ------- -------
Income from operations 948 1,211 2,240 2,788
Equity in earnings of Novogyne 2,653 -- 6,383 --
Interest income, net 306 78 773 193
------- ------- ------- -------
Income before income taxes 3,907 1,289 9,396 2,981
Provision for income taxes 282 50 470 68
------- ------- ------- -------
Net income $ 3,625 $ 1,239 $ 8,926 $ 2,913
======= ======= ======= =======
Basic earnings per share $ 0.16 $ 0.06 $ 0.41 $ 0.14
======= ======= ======= =======
Diluted earnings per share $ 0.15 $ 0.06 $ 0.39 $ 0.13
======= ======= ======= =======
Weighted average number of common shares outstanding:
Basic 22,042 21,511 21,841 21,501
======= ======= ======= =======
Diluted 23,586 21,783 23,104 21,673
======= ======= ======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
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NOVEN PHARMACEUTICALS, INC.
Balance Sheets
(in thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 20,800 $ 15,338
Accounts receivable (less allowance for doubtful accounts
of $141 in 2000 and $167 in 1999) 6,757 3,048
Due from Novogyne 2,398 3,651
Inventories 5,338 3,578
Prepaid and other current assets 272 415
-------- --------
35,565 26,030
Property, Plant and Equipment, net 15,402 15,329
Other Assets:
Investment in Novogyne 12,520 8,365
Net deferred income tax asset 5,000 5,000
Patent development costs, net 1,890 1,805
Deposits and other assets 162 359
-------- --------
19,572 15,529
-------- --------
$ 70,539 $ 56,888
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,734 $ 5,085
Notes payable - current portion 348 348
Accrued compensation and related liabilities 2,322 2,237
Other accrued liabilities 1,028 1,193
Deferred license revenue - current portion 586 586
-------- --------
11,018 9,449
Long Term Liabilities:
Notes payable 346 604
Deferred license revenue 7,002 7,442
-------- --------
18,366 17,495
Shareholders' Equity:
Preferred stock - authorized 100,000 shares of $.01 par
value; no shares issued or outstanding -- --
Common stock - authorized 40,000,000 shares,
par value $.0001 per share; issued and
outstanding 22,090,324 shares at September 30, 2000
and 21,546,271 at December 31, 1999 2 2
Additional paid-in capital 70,468 66,614
Accumulated deficit (18,297) (27,223)
-------- --------
52, 173 39,393
-------- --------
$ 70,539 $ 56,888
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
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NOVEN PHARMACEUTICALS, INC.
Statements of Cash Flows
Nine Months Ended September 30,
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,926 $ 2,913
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 963 1,047
Amortization of patent costs 158 156
Recognition of deferred license revenue (440) (169)
Equity in earnings of Novogyne (6,383) --
Increase in accounts receivable (3,709) (811)
Decrease in due from Novogyne 1,253 991
Increase in inventories (1,760) (405)
Decrease in prepaid and other current assets 143 147
Decrease (increase) in deposits and other assets 197 (300)
Increase (decrease) in accounts payable 1,649 (1,721)
Increase in accrued compensation and related liabilities 867 1,096
(Decrease) increase in other accrued liabilities (165) 538
-------- -------
Cash flows provided by operating activities 1,699 3,482
Cash flows from investing activities:
Purchase of fixed assets, net (1,036) (941)
Distribution from Novogyne 2,228 622
Payments for patent development costs (243) (192)
-------- -------
Cash flows provided by (used in) investing activities 949 (511)
Cash flows from financing activities:
Issuance of common stock 3,072 121
Notes payable (258) 968
-------- -------
Cash flows provided by financing activities 2,814 1,089
-------- -------
Net increase in cash and cash equivalents 5,462 4,060
Cash and cash equivalents - beginning of period 15,338 5,573
-------- -------
Cash and cash equivalents - end of period $ 20,800 $ 9,633
======== =======
</TABLE>
Cash payments for interest were $51 in 2000 and $29 in 1999.
Accrued compensation and related liabilities for the years ended December 31,
1999 and 1998 includes bonuses for employees and officers of $782 and $329 that
were settled by issuance of 55,000 and 62,000 shares of common stock during the
quarters ended March 31, 2000 and 1999, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
5
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NOVEN PHARMACEUTICALS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. Basis of Presentation:
In management's opinion, the accompanying unaudited financial
statements of Noven Pharmaceuticals, Inc. ("Noven") contain all
adjustments (consisting of only normal recurring adjustments) necessary
to present fairly the financial position of Noven as of September 30,
2000, and the results of its operations for the three and nine months
ended September 30, 2000 and 1999. The results of operations and cash
flows for the nine months ended September 30, 2000 are not necessarily
indicative of the results of operations or cash flows which may be
reported for the remainder of 2000.
The accompanying financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission
for reporting on Form 10-Q. Pursuant to such rules and regulations,
certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted. The financial statements should be read in conjunction with the
financial statements and the notes to the financial statements included
in Noven's Annual Report on Form 10-K for the year ended December 31,
1999.
The accounting policies followed for interim financial reporting
are the same as those disclosed in Note 1 of the notes to the financial
statements included in Noven's Annual Report on Form 10-K for the year
ended December 31, 1999.
Noven and Novartis Pharmaceuticals Corporation ("Novartis")
entered into a joint venture, Vivelle Ventures LLC (d/b/a Novogyne
Pharmaceuticals) ("Novogyne"), effective May 1, 1998, to market and sell
women's healthcare products in the United States and Canada, including
Noven's transdermal estrogen delivery systems marketed under the brand
names Vivelle(R) and Vivelle-Dot(TM). Noven accounts for its 49%
investment in Novogyne under the equity method and reports its share of
Novogyne's earnings as "Equity in earnings of Novogyne" on its Statements
of Operations. Noven has eliminated 49% of its profit on products sold to
Novogyne that remain in Novogyne's inventory.
Certain amounts presented in the financial statements for prior
periods have been reclassified to the current period's presentation.
2. Inventories:
The following are the major classes of inventories (in
thousands):
September 30, December 31,
2000 1999
------------- -----------
Finished goods $ 27 $ 125
Work in process 1,676 973
Raw materials 3,635 2,480
---------- ----------
Total $ 5,338 $ 3,578
========== ==========
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3. Income Taxes:
Provisions for income taxes for the three and nine months ended
September 30, 2000 and 1999 reflect provisions for the alternative
minimum tax and state income taxes.
4. Investment in Novogyne:
Noven shares in the earnings of Novogyne according to an
established formula after satisfaction of an annual preferred return of
$6.1 million to Novartis. Noven's share of earnings increases as product
sales increase, subject to a cap of 49%. Novogyne produced sufficient
income in the first quarter of 2000 to meet Novartis' preferred return
and for Noven to recognize earnings from Novogyne under the formula.
During the nine months ended September 30, 2000 and 1999, Noven
recognized $14.3 million and $7.6 million, respectively, of product sales
to Novogyne, which included $2.6 million and $1.5 million in royalties,
and was reimbursed for $11.4 million and $10.4 million, respectively, of
sales and marketing expenses incurred on behalf of Novogyne. As of
September 30, 2000 and 1999, Noven had amounts due from Novogyne of $2.4
million and $1.9 million, respectively, representing products sold to and
marketing expenses reimbursable by Novogyne.
During the three months ended September 30, 2000 and 1999, Noven
recognized $3.4 million and $2.6 million, respectively, of product sales
to Novogyne, which included $0.8 million and $0.5 million in royalties,
and was reimbursed for $4.1 million and $3.9 million, respectively, of
sales and marketing expenses incurred on behalf of Novogyne.
The condensed unaudited statements of operations for the three
and nine months ended September 30, 2000 and 1999 are as follows (in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
---------------------- -----------------------
2000 1999 2000 1999
------- ------ ------- -------
<S> <C> <C> <C> <C>
Revenues $13,534 $9,367 $42,623 $26,031
Cost of sales 2,285 1,927 6,998 5,037
Selling, general and administrative expenses 5,118 4,860 14,610 13,514
------- ------ ------- -------
Income from operations 6,131 2,580 21,015 7,480
Interest income 388 146 1,028 446
------- ------ ------- -------
Net income $ 6,519 $2,726 $22,043 $ 7,926
======= ====== ======= =======
</TABLE>
Subject to the approval of Novogyne's management committee, cash
may be distributed to Novartis and Noven based upon a contractual
formula. In April 2000, Noven received a cash distribution of $2.2
million from Novogyne based upon the results of operations for the year
ended December 31, 1999. This amount was recorded as a reduction in the
investment in Novogyne in the second quarter of 2000.
7
<PAGE> 8
5. Commitments:
In September 2000, Noven entered into a Severance and
Non-Competition Agreement with its Chairman of the Board of Directors.
Pursuant to the agreement, the Chairman's employment as an officer of
Noven will terminate on June 1, 2001. Noven will pay the Chairman $1.2
million on that date, which will be amortized over the period of the
Chairman's three year non-competition agreement.
6. Subsequent Event:
In November 2000, Noven entered into an exclusive license
agreement with Novartis Pharma AG ("Novartis") pursuant to which Noven
granted Novartis the right to market Noven's second generation
transdermal estrogen delivery system under the name Estradot(TM) in all
countries other than the United States, Canada and Japan. The agreement
also grants Novartis marketing rights to any product improvements and
future generations of estrogen patches developed by Noven. Noven received
an up-front license payment of $20 million upon execution of the
agreement and will receive an additional milestone payment upon
registration of Estradot(TM) in certain European countries. The up-front
payment as well as the milestone payment will be deferred and recognized
as license revenue over 10 years beginning in the fourth quarter of 2000.
Noven will manufacture Estradot(TM) for Novartis and will receive
continuing fees under the agreement based on product volume.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the financial statements, the related notes and management's discussion and
analysis of financial condition and results of operations included in Noven's
Annual Report on Form 10-K for the year ended December 31, 1999 and the
financial statements and related notes included in Item 1 of this Quarterly
Report on Form 10-Q. Except for historical information contained herein, the
matters discussed below are forward looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
statements involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting Noven's
operations, markets, products, prices, and other factors. These factors, which
are discussed elsewhere in this report and in the documents filed by Noven with
the Securities and Exchange Commission ("SEC"), may cause Noven's results to
differ materially from the forward looking statements made in this report or
otherwise made by or on behalf of Noven.
Noven recognizes revenues from product sales at the time of shipment.
Noven accrues royalty revenue, which is included in product sales, based on its
best estimates of its licensee's product sales. When no reasonable basis for
estimation exists because the information is not in Noven's control, Noven will
recognize royalty revenue when actual results are available. Because
substantially all of Noven's product sales are to its licensees, Noven's product
sales may fluctuate from quarter to quarter depending on various factors not in
Noven's control, including but not limited to the marketing efforts of each
licensee, inventory requirements of each licensee, the product pricing of each
licensee and the timing of certain royalty reconciliations and payments under
Noven's license agreements. Royalty reconciliations and payments under the
license agreements are generally made once or twice per year for product sales
made in the prior period.
Noven shares in the earnings of Novogyne according to an established
formula after satisfaction of an annual preferred return of $6.1 million to
Novartis. In the first quarter of 2000, Novartis' preferred return was satisfied
for all of 2000. Noven reports its share of Novogyne's earnings as "Equity in
earnings of Novogyne" on its Statements of Operations.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999
Total revenues for the nine months ended September 30, 2000 were $31.2
million, an increase of $8.2 million, or 36%, over the same period in the prior
year. The increase was attributable to increased sales of Estalis(R),
Vivelle-Dot(TM) and Vivelle(R), partially offset by lower sales of
CombiPatch(TM).
Gross profit (product sales less cost of products sold) for the nine
months ended September 30, 2000 was $16.9 million (55% of product sales),
compared to $12.8 million (56% of product sales) for the same period in the
prior year. The decrease in gross margin resulted primarily from the elimination
of 49% of Noven's profit on product sold to Novogyne that remained in Novogyne's
inventory at September 30, 2000. This profit will be recognized by Noven at the
time such inventory is sold by Novogyne. Novogyne increased its inventory in
anticipation of an increase in product demand.
9
<PAGE> 10
Research and development expenses increased approximately $4.0 million,
or 84%, for the nine months ended September 30, 2000 compared to the same period
in the prior year, primarily resulting from increased clinical study expenses.
Noven expects to increase research and development spending in the fourth
quarter of 2000 by a little more than 50% over the $3.3 million that was
invested in the third quarter of 2000. A major component of this amount relates
to the trials for Noven's methylphenidate transdermal delivery system. The
future level of research and development expenditure will depend on, among other
things, the status of products under development and the outcome of clinical
trials, strategic decisions by management, the consummation of new license
agreements and Noven's liquidity.
Marketing, general and administrative expenses increased approximately
$0.9 million, or 17%, for the nine months ended September 30, 2000 compared to
the same period in the prior year. This increase primarily resulted from an
increase in personnel and associated office expenses.
For the nine months ended September 30, 2000, Noven reported Equity in
earnings of Novogyne of $6.4 million; Noven reported no such equity in earnings
for the same period in the prior year. In the first nine months of 2000,
Novogyne had revenues of $42.6 million, an increase of 64% over the same period
in the prior year. All of this increase was associated with increased sales of
Vivelle-Dot(TM), which was launched in the second quarter of 1999. In the first
nine months of 2000, Novogyne had net income of $22.0 million, a 178% increase
over the same period in the prior year.
Provision for income taxes for the nine months ended September 30, 2000
reflected a provision for the alternative minimum tax and state income taxes.
Noven will continue to evaluate the appropriateness of recording an additional
tax benefit which, if recorded, would result in an increase in the Net Deferred
Income Tax Asset.
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999
Total revenues for the three months ended September 30, 2000 were
$11.2 million, an increase of $3.1 million, or 38%, over the same period in the
prior year. The increase was primarily attributable to increased sales of
Estalis(R), Vivelle-Dot(TM) and Vivelle(R), partially offset by lower sales of
CombiPatch(TM).
Gross profit (product sales less cost of products sold) for the three
months ended September 30, 2000 was $6.1 million (55% of product sales) compared
to $4.5 million (57% of product sales) for the same period in the prior year.
The decrease in gross margin resulted primarily from the elimination of 49% of
Noven's profit on product sold to Novogyne that remained in Novogyne's inventory
at September 30, 2000.
Research and development expenses increased approximately $1.7 million,
or 109%, for the three months ended September 30, 2000 compared to the same
period in the prior year, primarily resulting from clinical study expenses
associated with Noven's methylphenidate transdermal delivery system.
Marketing, general and administrative expenses increased approximately
$0.2 million, or 10%, for the three months ended September 30, 2000 compared to
the same period in the prior year. This increase primarily resulted from an
increase in personnel and associated office expenses.
10
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For the three months ended September 30, 2000, Noven reported Equity in
earnings of Novogyne of $2.7 million; Noven reported no such equity in earnings
for the same period in the prior year. For the three months ended September 30,
2000, Novogyne had revenues of $13.5 million, an increase of 44% over the same
period in the prior year. All of this increase was associated with increased
sales of Vivelle-Dot(TM), which was launched in the second quarter of 1999. For
the three months ended September 30, 2000, Novogyne had net income of $6.5
million, an increase of 139% over the same period in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000 and December 31, 1999, Noven had $20.8
million and $15.3 million, respectively, in cash and cash equivalents. Working
capital increased by $7.9 million from $16.6 million at December 31, 1999 to
$24.5 million at September 30, 2000.
Net cash of approximately $1.7 million was provided by operating
activities during the first nine months of 2000, compared to approximately $3.5
million provided by operating activities during the same period in the prior
year. Equity in earnings of Novogyne, a non-cash item, constituted $6.4 million
of Noven's $8.9 million net income in the 2000 period. Changes in working
capital accounted for most of the remaining fluctuations.
Net cash of approximately $.9 million was provided by investing
activities during the first nine months of 2000, compared to approximately $.5
million used in investing activities during the same period of the prior year.
Distributions from Novogyne increased $1.6 million from 1999 to 2000. This
increase was partially offset by higher purchases of fixed assets and higher
payments for patent development costs.
Net cash of approximately $2.8 million was provided by financing
activities during the first nine months of 2000, compared to approximately $1.1
million provided by financing activities during the same period of the prior
year. Cash received from the issuance of common stock in connection with the
exercise of stock options increased $2.9 million from 1999 to 2000. This
increase was partially offset by a net $1.2 million cash outflow related to
notes payable over the same period.
Noven's principal sources of short term liquidity are existing cash,
cash generated from product sales, fees and royalties under license agreements
and distributions from Novogyne. In April 2000, Noven received a cash
distribution of $2.2 million from Novogyne based upon the results of operations
for the year ended December 31, 1999. In November 2000, Noven entered into an
exclusive license agreement with Novartis Pharma AG pursuant to which Noven
received an up-front license payment of $20 million and will receive an
additional milestone payment upon registration of the licensed product in
certain European countries. Noven expects to invest up to $5 million in plant
and equipment over the next year in order to increase production capacity.
Pursuant to a Severance and Non-Competition Agreement entered into with Noven's
Chairman of the Board of Directors, Noven is required to pay its Chairman $1.2
million in June 2001 in consideration for, among other things, a three year
non-competition agreement. Cash requirements for clinical studies for products
under development, including Noven's methylphenidate transdermal delivery
system, as well as federal and state income taxes are also expected to increase.
Noven believes that it will have sufficient cash to meet its operating needs and
anticipated capital requirements over the short term.
For the long term, Noven intends to utilize funds derived from these
sources, as well as funds generated through sales of products under development.
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<PAGE> 12
Noven expects that such funds will be comprised of payments received pursuant to
future licensing arrangements, as well as Noven's direct sales of its own
products. Noven expects that its cash requirements will continue to increase,
primarily as a result of expected increases in expenditures associated with
clinical studies for products under development and for plant and equipment to
expand production capacity. There can be no assurance that Noven will
successfully complete the development of such products, that Noven will obtain
regulatory approval for any such products, that any approved product may be
produced in commercial quantities, at reasonable costs, and be successfully
marketed, or that Noven will successfully negotiate future licensing
arrangements. To the extent that capital requirements exceed available capital,
Noven will seek alternative sources of financing to fund its operations. Other
than a master lease facility, Noven has no credit facility. Noven is pursuing
financing alternatives, which include a revolving credit facility, and expects
to complete a financing arrangement in the near future. Noven could also seek to
issue debt or equity securities to finance long-term cash requirements. No
assurance can be given that alternative financing will be available, if at all,
in a timely manner, or on favorable terms. If Noven is unable to obtain
satisfactory alternative financing, Noven may be required to delay or reduce its
proposed expenditures, including expenditures for research and development and
plant and equipment, in order to meet its future cash requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Noven does not believe that it has material exposure to market risk.
Noven has no material debt obligations. Noven may, however, obtain financing in
the future and no assurance can be given that the terms of future sources of
financing will not expose Noven to material market risk.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
In September 2000, Noven entered into a Severance and Non-Competition
Agreement with its Chairman of the Board of Directors. Pursuant to the
agreement, the Chairman's employment as an officer of Noven will terminate on
June 1, 2001. Noven will pay the Chairman $1.2 million on that date, which will
be amortized over the period of the Chairman's three year non-competition
agreement.
In November 2000, Noven entered into an exclusive license agreement
with Novartis Pharma AG ("Novartis") pursuant to which Noven granted Novartis
the right to market Noven's second generation transdermal estrogen delivery
system under the name Estradot(TM) in all countries other than the United
States, Canada and Japan. The agreement also grants Novartis marketing rights to
any product improvements and future generations of estrogen patches developed by
Noven. Noven received an up-front license payment of $20 million upon execution
of the agreement and will receive an additional milestone payment upon
registration of Estradot(TM) in certain European countries. The up-front payment
as well as the milestone payment will be deferred and recognized as license
revenue over 10 years beginning in the fourth quarter of 2000. Noven will
manufacture Estradot(TM) for Novartis and will receive continuing fees under the
agreement based on product volume.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.1 Severance and Non-Competition Agreement, dated as of September
21, 2000, between Steven Sablotsky and Noven Pharmaceuticals,
Inc.
10.2 License Agreement, dated as of November 3, 2000, between
Novartis Pharma AG and Noven Pharmaceuticals, Inc. (with
certain provisions omitted pursuant to rule 24 b-2). *
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Registrant during the three
months ended September 30, 2000.
----------------------------------
* Noven agrees to furnish a copy of the exhibits and schedules to this
agreement to the Securities and Exchange Commission upon request.
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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.
NOVEN PHARMACEUTICALS, INC.
Date: NOVEMBER 13, 2000 By: /s/ JAMES B. MESSIRY
-------------------------
James B. Messiry
Vice President and
Chief Financial Officer
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EXHIBITS
--------
10.1 Severance and Non-Competition Agreement, dated as of September 21,
2000, between Steven Sablotsky and Noven Pharmaceuticals, Inc.
10.2 License Agreement, dated as of November 3, 2000, between Novartis
Pharma AG and Noven Pharmaceuticals, Inc. (with certain provisions
omitted pursuant to rule 24 b-2). *
27 Financial Data Schedule
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