UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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November 17, 1997 0-16132
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Date of Report (Date of earliest event reported) Commission File Number
Celgene Corporation
(Exact name of registrant as specified in its charter)
Delaware 22-2711928
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
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7 Powder Horn Drive
Warren, New Jersey 07059
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(Address of Principal Executive Offices) (Zip Code)
(732) 271-1001
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On November 18, 1997, Celgene Corporation and Cambrex Corporation issued a
press release announcing that they had entered into a letter of intent for
Cambrex to acquire Celgene's chiral intermediate business for approximately $15
million. A copy of the press release, dated November 18, 1997, is filed hereto
as an exhibit and is incorporated herein by reference.
Item 7. Financial Statements, Unaudited Pro Forma Financial Information and
Exhibits.
(a) Not applicable.
(b) Unaudited Pro forma financial information
The following pro forma financial information for the year ended December 31,
1996 and the nine months ended September 30, 1997 are unaudited. The unaudited
Pro Forma Statements of Operations for the year ended December 31, 1996 and the
nine months ended September 30, 1997 were prepared as if the sale of the chiral
intermediate business had occurred effective as of January 1, 1996. The
unaudited pro forma statements do not purport to represent what the Company's
results of operations would actually have been if the chiral intermediate
transaction had in fact occurred on such date or to project the Company's
results of operations for any future period.
The unaudited pro forma financial statements show how the transaction might
have affected the historical results of operations if the chiral intermediate
transaction had been consummated at an earlier time, and show the possible
scope of the change to results of operations caused by the chiral intermediate
transaction.
The unaudited pro forma financial statements do not include an unaudited pro
forma balance sheet, because the value of the assets expected to be sold in the
transaction is not material and any accounting gain cannot yet be determined
until the sale of the assets is finalized.
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Year Ended December 31, 1996
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Actual Adjustment Pro Forma
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Revenues:
Chirally pure intermediates $ 1,465,715 $ 1,400,715 (1) $ 65,000
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Research contracts 1,036,665 220,000 (2) 816,665
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Total revenues 2,502,380 1,620,715 881,665
Expenses:
Cost of goods sold 981,448 981,448 (3) --
Research and development 16,322,825 1,170,090 (4) 15,152,735
Selling, general and administrative 4,001,419 230,638 (5) 3,770,781
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Total expenses 21,305,692 2,382,176 18,923,516
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Loss from operations (18,803,312) (761,461) (18,041,851)
Other Income and Expense:
Interest income 1,308,244 -- 1,308,244
Interest expense 323,913 -- 323,913
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Net loss (17,818,981) (761,461) (17,057,520)
Accretion of premium payable on preferred stock
and warrants 1,012,881 -- 1,012,881
Deemed dividend for preferred stock conversion
discount 2,777,777 -- 2,777,777
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Net loss applicable to common stockholders (21,609,639) (761,461) (20,848,178)
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Net loss applicable to common stockholders per
share of common stock (2.29) (0.08) (2.21)
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Weighted average number of shares of common
stock outstanding 9,450,000 9,450,000
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(1) Eliminate sales of chirally pure intermediates.
(2) Eliminate revenues for chiral intermediates sold under research contracts.
(3) Eliminate cost of goods sold associated with chirally pure intermediate
sales.
(4) Eliminate research and development
expenses associated with the chiral chemistry business.
(5) Eliminate sales and marketing expenses associated with the chiral chemistry
business.
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<CAPTION>
Nine Months Ended September 30, 1997
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Actual Adjustment Pro Forma
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Revenues:
Chirally pure intermediates $ 896,870 $ 896,870 (1) $ --
Research contracts 919,068 112,000 (2) 807,068
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Total revenues 1,815,938 1,008,870 807,068
Expenses:
Cost of goods sold 641,862 641,862 (3) --
Research and development 13,285,060 865,370 (4) 12,419,690
Selling, general and administrative 5,780,827 247,714 (5) 5,533,113
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Total expenses 19,707,749 1,754,946 17,952,803
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Loss from operations (17,891,811) (746,076) (17,145,735)
Other Income and Expense:
Interest income 441,436 -- 441,436
Interest expense 104,866 -- 104,866
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Net loss (17,555,241) (746,076) (16,809,165)
Accretion of premium payable on preferred stock
and warrants 474,317 -- 474,317
Deemed dividend for preferred stock conversion
discount 953,077 -- 953,077
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Net loss applicable to common stockholders (18,982,635) (746,076) (18,236,559)
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Net loss applicable to common stockholders per
share of common stock (1.63) (0.06) (1.57)
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Weighted average number of shares of common
stock outstanding 11,647,000 11,647,000
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(1) Eliminate year to date sales of chirally pure intermediates.
(2) Eliminate year to date revenues for chiral intermediates sold under
research contracts.
(3) Eliminate year to date cost of goods sold associated with chirally pure
intermediate sales.
(4) Eliminate year to date research and development expenses associated with
the chiral chemistry business.
(5) Eliminate year to date research and development expenses associated with
the chiral chemistry business.
(c) Exhibits
99 Press Release, dated November 18, 1997.
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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.
Date: November 17, 1997 CELGENE CORPORATION
By: /s/John W. Jackson
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Name: John W. Jackson
Title: Chairman of the Board and
Chief Executive Officer
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Exhibit 99
Celgene Corporation
7 Powder Horn Drive
[CELGENE LOGO] Warren, New Jersey 07059
Tel 732-271-1001
Fax 732-271-4184
For Immediate Release
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Contact: Robert Butler Douglas MacMillan
Senior Vice President and CFO Vice President and CFO
CELGENE CORPORATION CAMBREX
732-271-4102 201-804-3025
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CELGENE CORPORATION TO SELL CHIRAL INTERMEDIATES BUSINESS TO
CAMBREX CORPORATION
WARREN, NJ (November 18, 1997)--Celgene Corporation (NASDAQ: CELG) and Cambrex
Corporation (AMEX: CBM) today announced that they have signed a letter of
intent for Cambrex to acquire Celgene's chiral intermediate business for
approximately $15 million. Included in the transaction will be the rights to
Celgene's enzymatic technology for the production of chirally pure products for
the pharmaceutical industry, including the current pipeline of third party
products and the equipment and personnel associated with the business. The
proposed transaction does not include the sale of any property or technology
related to Celgene's proprietary chiral pharmaceutical products including
chirally pure version of RITALIN[RegTM] and mexiletine. In addition, the
transaction does not include the Celgro[TM] agrochemical business.
Proposed terms provide for a payment of $7.5 million upon the closing of the
transaction, plus future royalties of up to a present value of $7.5 million,
with certain minimum royalty payments in the third through sixth year following
the closing of the transaction. The closing of the transaction is subject to
the execution of definitive documentation, which would require approval by
Celgene's and Cambrex's Board of Directors. There can be no assurance that a
transaction will be consummated in accordance with the terms of the letter of
intent, or at all.
John W. Jackson, Chairman and Chief Executive Officer of Celgene Corporation,
said, "the proposed transaction will enable Celgene to focus additional
financial and managerial resources on the continued development of our
pharmaceutical pipeline. Cambrex, with its strong manufacturing capacity, is in
an excellent position to drive our chiral intermediate technology to realize
its long-term sales potential."
Jim Mack, Chief Executive Officer of Cambrex Corporation, said, "the chiral
technology included in this transaction is a perfect bridge between Cambrex's
subsidiaries' supplying the pharmaceutical industry and Bio Whittaker, our
recently acquired cell culture business."
Since 1990, Celgene's revenues have been generated primarily through sales of
chirally pure intermediates to pharmaceutical companies for use in new drug
development. Celgene believes that, even in the absence of a sale of the
business, chiral intermediates will account for a less significant portion of
its overall revenues in the future as Celgene continues to develop and, subject
to the receipt of regulatory approvals, begins to generate revenues from
THALOMID[TM], its formulation of thalidomide, and from its pipeline of
immunotherapeutic, chirally pure pharmaceutical and agrochemical products.
Celgene's chiral intermediate business produced a net loss for the nine months
ended September 30, 1997 and for the year ended December 31, 1996. If the
transaction is consummated in accordance with the proposed terms, Celgene
expects to record an undetermined gain on the transaction.
Celgene Corporation, headquartered in Warren, NJ, is engaged in the development
of human pharmaceuticals and agrochemicals.
Cambrex Corporation, headquartered in East Rutherford, NJ, manufactures
specialty and fine chemicals.
This release contains certain forward-looking statements which involve known
and unknown risks, delays, uncertainties and other factors which may cause
actual results, performance or achievements to be materially different from the
results, performance or other expectations implied by these forward-looking
statements. These factors include the ability of the parties to negotiate
definitive documentation, the determination of accounting treatment, and the
ability of Celgene to commercialize and achieve market acceptance of THALOMID
and its chirally pure pharmaceutical and agrochemical products.
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