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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission File No. 0-18728
INTERNEURON PHARMACEUTICALS, INC.
(exact name of registrant as specified in its charter)
Delaware 04-3047911
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
One Ledgemont Center, 99 Hayden Avenue 02421
Lexington, Massachusetts (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (781) 861-8444
(Former name, former address and former fiscal year, if changed since last
report): Not Applicable
Indicate by check 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 periods 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
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Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at August 14, 1998:
Common Stock $.001 par value 41,809,719 shares
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company has been named, together with other pharmaceutical
companies, including AHP, as a defendant in approximately 580 legal actions,
many of which purport to be class actions, in federal and state courts relating
to the use of Redux. The actions generally have been brought by individuals in
their own right or on behalf of putative classes of persons who claim to have
suffered injury or who claim that they may suffer injury in the future due to
use of one or more weight loss drugs including Pondimin (fenfluramine),
phentermine and Redux. Plaintiffs' allegations of liability are based on various
theories of recovery, including, but not limited to, product liability, strict
liability, negligence, various breaches of warranty, conspiracy, fraud,
misrepresentation and deceit. These lawsuits typically allege that the short or
long-term use of Pondimin and/or Redux, independently or in combination
(including the combination of Pondimin and phentermine popularly known as
"fen/phen"), causes, among other things, primary pulmonary hypertension,
valvular heart disease and/or neurological dysfunction. In addition, some
lawsuits allege emotional distress caused by the purported increased risk of
injury in the future. Plaintiffs typically seek relief in the form of monetary
damages (including economic losses, medical care and monitoring expenses, loss
of earnings and earnings capacity, other compensatory damages and punitive
damages), generally in unspecified amounts, on behalf of the individual or the
class. In addition, some actions seeking class certification ask for certain
types of purportedly equitable relief, including, but not limited to,
declaratory judgments and the establishment of a research program or medical
surveillance fund. On December 10, 1997, the federal Judicial Panel on
Multidistrict Litigation issued an Order allowing for the transfer or potential
transfer of the federal actions to the Eastern District of Pennsylvania for
coordinated or consolidated pretrial proceedings.
Under certain circumstances, the Company may be required to indemnify
Servier, Boehringer and AHP, and the Company may be entitled to indemnification
by AHP and Boehringer, against certain claims, damages or liabilities incurred
in connection with Redux. The cross indemnification between the Company and AHP
generally relates to the activities and responsibilities of each company.
The Company and certain directors and/or officers of the Company have
also been named as defendants in several lawsuits filed in the United States
District for the District of Massachusetts (the "Court") by alleged purchasers
of the Company's Common Stock, purporting to be class actions, claiming among
other things that the Company publicly disseminated materially false and
misleading statements concerning the prospects and safety of Redux, resulting in
the artificial inflation of the Company's Common Stock price during various
alleged class periods, the earliest commencing December 16, 1996 through
September 17, 1997, in violation of the federal securities laws.
On January 23, 1998, the Court entered an order consolidating all of
these actions for pretrial purposes. The plaintiffs subsequently filed a first
amended and consolidated complaint [Corrected Version] (the "Complaint")
containing substantially similar substantive allegations and alleging a class
period of December 19, 1996 through September 15, 1997. On May 11, 1998, the
defendants moved to dismiss the Complaint. On August 14, 1998, the Company
received notice that the defendants' motion to dismiss was denied. A case
management conference is scheduled for September 23, 1998.
Although the Company maintains certain product liability and director
and officer liability insurance and intends to defend these and similar actions
vigorously, the Company may be required to devote significant management time
and resources to these legal actions and, in the event of successful uninsured
or insufficiently insured claims, or in the event a successful indemnification
claim was made against the Company, the Company's business, financial condition
and results of operations could be
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materially adversely affected. In addition, the costs and uncertainties
associated with these legal actions have had, and may continue to have, an
adverse effect on the market price of the Company's Common Stock, on the
Company's ability to obtain additional financing to satisfy cash requirements,
to retain and attract qualified personnel, to commercialize products on a timely
and adequate basis, to acquire or obtain rights to additional products, or to
obtain product liability insurance for other products at costs acceptable to the
Company, or at all, any or all of which may materially adversely affect the
Company's business and financial condition.
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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.
INTERNEURON PHARMACEUTICALS, INC.
Date: August 18, 1998 By: /s/ Glenn L. Cooper, M.D.
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Glenn L. Cooper, M.D., President
and Chief Executive Officer
(Principal Executive Officer)
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