SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission File No. 0-19131
MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1555759
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
35 West Watkins Mill Road, Gaithersburg, MD 20878
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301)417-0770
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 [ ]
As of June 30, 1998, 26,571,121 shares of Common Stock, par value $0.01
per share, were outstanding.
MEDIMMUNE, INC.
Index to Form 10-Q
Part I Financial Page
Item 1. Financial Statements
Balance Sheets 1
Statements of Operations 2
Condensed Statements of Cash Flows 3
Notes to Financial Statements 4-6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7-11
Part II Other Information 12-14
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
CytoGam and RespiGam are registered trademarks and Synagis is a
trademark of the Company.
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS
MEDIMMUNE, INC.
BALANCE SHEETS
(in thousands, except share data)
<S> <C> <C>
June 30, December 31,
1998 1997
---------- ----------
ASSETS: (Unaudited)
Cash and cash equivalents $ 35,524 $ 29,984
Marketable securities 95,443 20,342
Trade receivables, net 819 15,236
Contract receivables, net 1,154 3,064
Inventory, net 17,015 28,857
Other current assets 3,134 2,740
---------- ----------
Total Current Assets 153,089 100,223
Property and equipment, net 67,319 65,254
Inventory-noncurrent 11,922 2,446
Other assets 2,268 2,413
---------- ----------
Total Assets $ 234,598 $170,336
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable $ 2,267 $ 4,535
Accrued expenses 26,939 27,682
Product royalties payable 4,365 6,227
Accrued interest 2,658 2,583
Other current liabilities 3,000 2,633
---------- ----------
Total Current Liabilities 39,229 43,660
Long term debt 84,769 85,363
Other liabilities 810 777
---------- ----------
Total Liabilities 124,808 129,800
---------- ----------
Commitments and Contingencies
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized
5,524,525 shares; none issued or outstanding -- --
Common stock, $.01 par value; authorized
120,000,000 shares; issued and outstanding
26,571,121 at June 30, 1998 and
24,444,745 at December 31, 1997 266 244
Paid-in capital 251,159 176,564
Accumulated deficit (141,635) (136,272)
---------- ----------
Total Shareholders' Equity 109,790 40,536
---------- ----------
Total Liabilities and Shareholder's Equity $ 234,598 $170,336
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
(1)
<TABLE>
MEDIMMUNE, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except per share data)
<CAPTION>
For the For the
three months ended six months ended
June 30, June 30,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Product sales $8,150 $6,225 $51,043 $16,356
Other 16,441 186 32,886 193
------ ------- ------- -------
Total revenues 24,591 6,411 83,929 16,549
Costs and Expenses:
Cost of sales 14,483 3,430 36,758 8,645
Research and
development 7,327 10,573 12,995 23,941
Selling,
administrative
and general 3,218 4,621 16,144 10,768
Other operating
expenses 19,136 335 24,938 624
-------- -------- -------- -------
Total Expenses 44,164 18,959 90,835 43,978
Operating Loss (19,573) (12,548) (6,906) (27,429)
Interest Income 1,861 1,181 3,561 2,719
Interest expense (856) (842) (2,018) (1,821)
-------- -------- -------- --------
Net Loss ($18,568) ($12,209) ($5,363) ($26,531)
========= ========= ========= =========
Loss per common share,
basic and diluted ($0.70) ($0.55) ($0.20) ($1.20)
========= ========= ========= =========
Shares used in computing
Loss per common share,
basic and diluted 26,527 22,319 26,234 22,097
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
(2)
<TABLE>
<CAPTION>
MEDIMMUNE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
For the
six months ended
June 30,
1998 1997
-------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($5,363) ($26,531)
Noncash items:
Depreciation and amortization 1,422 1,124
Amortization of (discount) premium on
marketable securities (853) 520
Increase in reserve for inventory 10,557 --
Other (1,236) (622)
Other changes in assets and liabilities 3,097 (9,052)
-------- --------
Net cash provided by (used in)
operating activities 7,624 (34,561)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in marketable securities (74,248) 39,724
Capital expenditures (2,039) (22,852)
-------- --------
Net cash (used in) provided by (76,287) 16,872
investing activities
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock and exercise of stock options 74,617 741
(Decrease) increase in long term debt (414) 6,320
-------- --------
Net cash provided by financing
activities 74,203 7,061
-------- --------
Net increase (decrease) in cash and cash
equivalents 5,540 (10,628)
Cash and cash equivalents at beginning
of period 29,984 12,629
-------- --------
Cash and cash equivalents at end of period $35,524 $2,001
======== ========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
(3)
MEDIMMUNE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
General
The financial information presented as of June 30, 1998, and for the
periods ended June 30, 1998 and 1997, is unaudited. In the opinion of
the Company's management, the financial information contains all
adjustments (which consist only of normal recurring adjustments)
necessary for a fair presentation of such financial information.
Inventory
Inventory, net of reserves, is comprised of the following (in
thousands):
June 30, 1998 December 31, 1997
-------------- -----------------
Raw Materials $12,897 $14,503
Work in Process 14,551 12,990
Finished Goods 1,489 3,810
------ ------
28,937 31,303
Less noncurrent (11,922) (2,446)
------ ------
$17,015 $28,857
====== ======
In June 1998, the Company received marketing clearance from the FDA for
Synagis, its second generation anti-RSV drug. This clearance will
permit the Company to sell product manufactured at its Gaithersburg
Manufacturing and Development Facility ("GMDF"). Materials produced at
this location have been classified as current as of June 30, 1998. The
Company submitted an amendment to its BLA for manufacture of Synagis at
a third party manufacturer. Work-in-progress inventory of
approximately $7.3 million at June 30, 1998 produced at the third party
manufacturer has been classified as noncurrent as it has not yet been
approved for sale. Materials produced at the third party manufacturer
are expected to provide sufficient finished goods availability for
product launch.
As a result of the FDA approval and the expected market acceptance of
Synagis, the Company has reserved approximately $9.2 million against
its RespiGam inventory, as it does not anticipate any further product
sales to result from this inventory. The remaining RespiGam inventory
of raw plasma of $3.7 million has been written down to the value the
Company expects to recover upon sale to third parties. Should the
Company be unable to sell the raw plasma or unable to sell the plasma
at its net book value, a further adjustment in a
subsequent quarter may be necessary.
(4)
The Company also continues to purchase raw plasma for use in production
in the Company's manufacturing facility, which will also be subject to
FDA licensure and approval. Due to the uncertainty surrounding the
likelihood and timing of FDA approval, the plasma has been classified
as noncurrent in the accompanying balance sheet.
Finished goods at June 30, 1998 and December 31, 1997 include
approximately $1.3 million and $0.8 million, respectively, of by-
products that result from the production of the Company's
principal products at one of its contract manufacturers and are held
for resale. As of June 30, 1998, no sales of these by-products have
occurred. The June 30, 1998 balance is net of a reserve of $1.3
million.
Property and Equipment
Property and equipment, stated at cost, is comprised of the following
(in thousands):
June 30, December 31,
1998 1997
---------- -----------
Land $1,521 $1,521
Leasehold improvements 11,331 11,042
Laboratory equipment 10,498 9,355
Office furniture, computers,
and equipment 4,878 4,377
Construction in progress 50,594 49,040
-------- --------
78,822 75,335
Less accumulated depreciation and (11,503) (10,081)
amortization
-------- --------
$67,319 $65,254
======== ========
Property and equipment at June 30, 1998 and December 31, 1997 includes
$3.9 million and $2.4 million, respectively, of capitalized interest
related to the design and construction of the Company's manufacturing
facility in Frederick, Maryland. Construction of the manufacturing
facility is substantially complete and validation activities are
ongoing. The Company will continue to capitalize costs, primarily
capitalized interest, related to the facility for at least the next 12
months. The portions of the facility that are subject to inspection
and approval by the FDA will be placed in service upon receipt of such
approval.
Earnings per Share
The Company computes earnings (loss) per share in accordance with
Statement of Financial Accounting Standards("SFAS") No. 128, "Earnings
Per Share." Basic earnings (loss) per share is
(5)
computed based on the weighted average number of common shares
outstanding during the period. Diluted earnings (loss) per share is
computed based on the weighted average shares outstanding and the
dilutive common stock equivalents outstanding during the period. The
dilutive effect of convertible debt is measured using the "if
converted" method. The dilutive effect of stock options is measured
using the treasury stock method. Common stock equivalents are not
included in periods where there is a loss as they are anti-dilutive.
No reconciliation of the numerators and denominators is provided, as
the Company reported a loss for the periods and the inclusion of common
stock equivalents would be anti-dilutive.
Income Taxes
No provision for income taxes has been recorded for the six months
ended June 30, 1998 because of the loss for the six months and the
existence of net operating loss carryforwards of $159 million. The
Company's deferred tax asset has been reduced by a full valuation
allowance. Reversal of the allowance will occur when it is determined
to be more likely than not that the Company will be able to realize all
or a portion of the tax benefits of its carryforwards. In future
quarters, the Company will review the impact, if any, that the
introduction of Synagis will have on the need for a full valuation
allowance.
Restatements
Certain 1997 amounts have been restated to conform with the current
presentation.
Comprehensive Income
In 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 requires additional reporting with respect to
certain changes in assets and liabilities that previously were included
in shareholders' equity. The Company has no comprehensive income items
to report for the current presentation.
Segment Reporting
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," requires financial and descriptive information with
respect to operating segments of an entity based on the way management
disaggregates the entity for making internal operating decisions. The
Company will begin making the required disclosures with financial
statements for the period ending December 31, 1998.
Derivative Instruments and Hedging Activities
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
and for hedging activities. The Company will begin complying with the
provisions of the Statement in third quarter 1998, but does not expect
it to have a material impact on its financial statements.
(6)
ITEM 2.
MEDIMMUNE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
Total revenues for the three months ended June 30, 1998 increased 284%
to $24.6 million from $6.4 million in the 1997 period. Product sales
grew to $8.2 million in second quarter 1998 from $6.2 million in second
quarter 1997, an increase of 31%. CytoGam sales increased 45% to $7.6
million from $5.3 million in second quarter 1997 reflecting a 34%
increase in units sold as well as two price increases since July 1997.
In addition to growth in the core business for CytoGam, the increase in
CytoGam sales includes product substitution occurring as a result of
the current worldwide shortage of standard intravenous immune globulin
("IVIG") products. The duration of this shortage and continued impact,
if any, on CytoGam sales cannot be determined at this time. Off-season
sales of RespiGam decreased to $0.5 million in second quarter 1998 from
$1.0 million in second quarter 1997. Other revenues in the 1998 second
quarter of $16.4 million primarily reflect a $15 million milestone
payment received from Abbott Laboratories upon FDA approval of Synagis
in June 1998, and funding from SmithKline Beecham for development of a
human papillomavirus vaccine.
Cost of sales in second quarter 1998 increased to $14.5 million from
$3.4 million in second quarter 1997, an increase of 322%. This
increase was attributable to a 24% increase in combined unit volume for
CytoGam and RespiGam, and an increase in the per-unit costs of both
CytoGam and RespiGam due to higher production costs. As a result of
the FDA approval of Synagis and the expected market acceptance of
Synagis, the Company recorded a charge to cost of sales of $10.5
million which included $9.2 million for the writedown of certain
RespiGam inventories and $1.3 million in RSV plasma contract
termination costs. Cost of sales also reflects a charge of $1.3 million
for the writedown of certain by-product inventories. In addition, cost
of sales was reduced by amounts previously recorded for additional
royalties expected to be due to Massachusetts Health Research Institute
("MHRI").
Research, development and clinical spending decreased 31% to $7.3
million in this year's quarter from $10.6 million in last year's
quarter. Expenses in 1997 included costs of conducting the Company's
1,502 patient Phase 3 Synagis (RSV monoclonal antibody, formerly MEDI-
493) clinical trial. Expenses in 1998 included a $0.5 million milestone
payment due to a third party upon FDA approval of Synagis. Selling,
administrative and general expenses decreased to $3.2 million in this
year's quarter versus $4.6 million in the 1997 quarter, a decrease of
30%. Expenses in 1998 and 1997 are net of $4.2 million and $1.6
million, respectively, due from American Home Products ("AHP") for its
share of RespiGam product line loss as computed under the terms
(7)
of the Company's alliance with AHP. The decrease in selling, general
and administrative expenses was partially offset by a $1.2 million
increase in expenses incurred for the launch of Synagis, as well as
increased wage and related expenses. Other operating expenses of $19.1
million in the 1998 period increased from $0.3 million in the 1997
period, reflecting a $10.3 million charge incurred prior to FDA
approval of Synagis related to the buy down of certain Synagis royalty
obligations, costs incurred for start-up at the Company's manufacturing
facility in Frederick, Maryland, and costs related to scale-up of
production of Synagis at a third-party manufacturer and at the
Company's Gaithersburg Manufacturing and Development Facility.
The Company expects to continue to incur significant start-up and scale-
up costs in 1998 and 1999.
Interest income of $1.9 million was earned in the 1998 second quarter,
compared to $1.2 million in the second quarter of 1997 reflecting
higher cash balances available for investment, partially offset by a
decrease in interest rates which lowered the overall portfolio yield.
Interest expense of $0.9 million was incurred in both the 1998 and 1997
quarters, reflecting primarily interest due on the Company's
convertible debt, net of capitalized interest. Interest expense in the
1998 period also includes interest on equipment financing.
The net loss in the 1998 second quarter was $18.6 million, or $0.70
basic and diluted loss per share. Shares used in computing basic and
diluted loss per share were 26.5 million. The net loss for the second
quarter of 1997 was $12.2 million, or $0.55 basic and diluted loss per
share, on 22.3 million shares.
Quarterly financial results may vary significantly due to seasonality
of Synagis product sales, fluctuation in sales of CytoGam, milestones,
research funding and expenditures for research, development and
marketing programs. Synagis sales are expected to occur primarily
during, and in proximity to, the RSV season, which typically occurs
between November and April in the United States. No assurances can be
given that adequate product supply will be available to meet demand.
As a result of the FDA approval of Synagis, wholesalers may request
that RespiGam vials they previously purchased be returned to the
Company for refund or exchanged for Synagis vials, resulting in a
possible reduction of previously recorded revenues. Currently such
rights of product return do not exist. The magnitude of such
reduction, if any, cannot be determined at this time and would be
impacted by factors, including but not limited to, the timing of
approval of the Company's BLA supplement for its third party
manufacturer of Synagis, if granted by the FDA, and market acceptance
of Synagis.
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Total revenues for the six months ended June 30, 1998 were $83.9
million compared to $16.5 million for the 1997 period, a 407%
increase. Product sales of $51.0 million in the 1998 six months
increased 212% from $16.4 million in the 1997 six months.
(8)
CytoGam sales increased 80% from $10.2 million in the 1997 period to
$18.4 in the 1998 period reflecting a 68% increase in units sold and
two price increases since July 1997. RespiGam sales increased 433% to
$32.6 million from $6.1 million in the 1997 six months, reflecting an
increase in units sold resulting from increased demand. Sales in 1997
were limited by supply. Other revenues in the 1998 period of $32.9
million reflect funding from SmithKline Beecham related to the
agreement signed in December 1997 for development of a human
papillomavirus vaccine and a milestone payment from Abbott Laboratories
received upon FDA approval of Synagis in June 1998.
Cost of sales for the 1998 six months increased 325% to $36.8
million from $8.6 million in the 1997 six months reflecting a 184%
increase in units sold. Cost of sales in 1998 includes approximately
$11.8 million related to the writedown of RespiGam inventory and by-
product inventory. Cost of sales in 1998 also includes a credit for
previously recorded royalties expected to be due to MHRI.
Research and development expenses of $13.0 million in the 1998 six
months decreased 46% from $23.9 million in the 1997 six months.
Expenses in 1998 include a $0.5 million milestone due to a third party
upon FDA approval of Synagis. Expenses in 1997 include the costs of
conducting the Company's 1,502 patient Phase 3 Synagis clinical trial.
Selling, general and administrative expenses were $16.1 million and
$10.8 million for the 1998 and 1997 periods, respectively, an increase
of 50%. Expenses in 1998 include $0.9 million due to AHP for its share
of RespiGam product line profit. Expenses in 1997 are net of $2.5
million of reimbursement due from AHP for its share of RespiGam product
line loss as computed under the terms of the agreement.
Other operating expenses in the 1998 period of $24.9 million increased
from $0.6 million in the 1997 period. Expenses in 1998 include a $10.3
million charge for the buy down of certain Synagis royalty obligations
prior to FDA approval, as well as start-up costs for the Company's
manufacturing facility and costs related to scale-up of production of
Synagis at a third-party manufacturer and at the Company's Gaithersburg
Facility. The Company expects to incur significant start-up and scale-up
costs in 1998 and 1999.
Interest income of $3.6 million and $2.7 million was recorded in the
1998 and 1997 six months, respectively, reflecting higher cash balances
available for investment partially offset by lower interest rates which
decreased the overall portfolio yield.
Interest expense of $2.0 million in the 1998 period versus $1.8
million in the 1997 period reflects primarily interest on the Company's
convertible debt, net of capitalized interest, as well as interest on
equipment financing.
The net loss in the 1998 six months was $5.4 million, or $0.20
basic and diluted loss per share versus $26.5 million in the 1997 six
months, or $1.20 basic and diluted loss per share. Shares
used in computing basic and diluted loss per share in the 1998 and 1997
periods were 26.2 million and 22.1 million,
(9)
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities at June 30, 1998 were $131.0 million
compared to $50.3 million at 1997 year end. Net cash provided by
operating activities in the six months ended June 30, 1998 was $7.6
million, reflecting primarily a decrease in accounts receivable, offset
by the net loss for the six months. Capital expenditures of $2.0
million, net of capitalized interest, for the six months were
primarily for lab equipment and facilities expansion at the Company's
Gaithersburg headquarters. The Company expects inventory to grow
significantly during 1998, as it purchases Synagis inventory from its
third party manufacturer in anticipation of the launch of Synagis. In
January 1998, the Company completed a private placement of stock to
three institutional investors for net proceeds of $66.3 million. The
Company also sold 83,410 shares of stock to SmithKline Beecham in first
quarter 1998 for proceeds of $5.0 million. The Company's existing
funds at June 30, 1998, together with funds expected to be generated
from product sales and investment income are expected to provide
sufficient liquidity to meet the anticipated needs of the business for
at least the next 24 months, absent the occurrence of any unforeseen
events.
YEAR 2000 COMPLIANCE
The Company is in the process of completing a review of its internal
and external systems for Year 2000 compliance. The Company has
identified those internal information technology systems and equipment
or devices that it believes are dependent on compliance with Year 2000
programming (including embedded systems) and is currently in the
process determining whether these systems and equipment are Year 2000
compliant. Additionally, the Company has compiled a list of all third
parties with whom the Company has material relationships and is in the
process of seeking information from these third parties regarding their
state of readiness for Year 2000 compliance. The Company considers
many of its relationships with third parties to be of a material
nature, such that if these third parties are unable to become Year 2000
compliant, the Company would be adversely affected. These
relationships encompass many areas that affect the Company's ability to
do business including but not limited to third party manufacturers,
distributors, customers, suppliers, public utility companies, and
financial institutions.
The Company anticipates that sometime before the end of 1998, an
assessment will have been made of the status of most of the Company's
internal systems and equipment. Once this list is compiled, it will be
prioritized for corrective actions and costs to correct will be
estimated. Corrective actions, if needed, may include the purchase of
new information technology applications, purchase of new equipment or
devices, and identification of alternative suppliers. The costs for
these corrective actions, if any, cannot be determined at this time. A
contingency plan may
(10)
need to be established if the corrective actions, if any, cannot be
completed by the end of 1999. Such a plan has not yet been developed.
At this time, the Company is unable to determine whether the Year 2000
issue will have a material adverse effect on the Company's results of
operations, liquidity or financial position.
There can be no assurances: 1) that the Company will be able to
identify all aspects of its business that are subject to Year 2000
problems, including issues of its customers or suppliers, 2) that the
Company's software vendors, third parties and others will be correct in
their assertions that they are Year 2000 compliant, and 3) that the
Company's estimate of the cost of systems preparation for Year 2000
compliance will prove ultimately to be accurate.
____________________
THE STATEMENTS IN THIS QUARTERLY REPORT THAT ARE NOT DESCRIPTIONS OF
HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS
REFLECT MANAGEMENT'S CURRENT VIEWS, ARE BASED ON CERTAIN ASSUMPTIONS
AND ARE SUBJECT TO RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED
TO, REGULATORY APPROVAL TIMING, PRODUCT DEMAND AND MARKET ACCEPTANCE
RISKS, PATENT AND INTELLECTUAL PROPERTY RISKS, YEAR 2000 RISKS, THE
EARLY STAGE OF PRODUCT DEVELOPMENT AND RELIANCE ON THIRD-PARTY
MANUFACTURERS INCLUDING, BUT NOT LIMITED TO, CAPACITY AND SUPPLY
CONSTRAINTS, PRODUCTION YIELDS, REGULATORY APPROVAL TIMING AND FOREIGN
EXCHANGE RISKS, AS WELL AS OTHER RISKS DETAILED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THE FDA IS
CURRENTLY REVIEWING A SUPPLEMENT TO MEDIMMUNE'S BIOLOGIC LICENSE
APPLICATION TO ALLOW PRODUCTION OF SYNAGIS AT BOEHRINGER INGELHEIM'S
(BI) MANUFACTURING FACILITY. SUPPLY FROM BI IS EXPECTED TO BE REQUIRED
TO MEET MARKET DEMAND. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE CURRENTLY ANTICIPATED AS A RESULT OF THE FOREGOING OR OTHER
FACTORS.
(11)
PART II
OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
On May 15, 1998 the Company held its Annual Meeting of Stockholders.
By vote of the Company's stockholders at such
meeting, all of the director nominees were re-elected to one year
terms. An amendment to the Company's Restated Certificate of
Incorporation increasing the number of authorized shares of common
stock from 60,000,000 to 120,000,000 and the appointment of Coopers &
Lybrand L.L.P. as the Company's independent auditors were also
approved. The results of the voting were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Election of Directors
Abstain/
For Against Withheld Non-vote
Wayne T. Hockmeyer 18,465,702 -- 1,577,295 --
David M. Mott 18,465,962 -- 1,577,035 --
Franklin H. Top, Jr. 18,465,887 -- 1,577,110 --
M. James Barrett 18,465,962 -- 1,577,035 --
James H. Cavanaugh 18,465,887 -- 1,577,110 --
Barbara Hackman Franklin 18,466,292 -- 1,576,705 --
Lawrence C. Hoff 18,465,687 -- 1,577,310 --
Gordon S. Macklin 18,465,287 -- 1,577,710 --
Amendment to Restated
Certificate of
Incorporation 18,256,574 1,739,161 47,262
Appointment of Coopers & Lybrand
L.L.P. 19,975,737 30,930 -- 36,330
</TABLE>
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(12)
<TABLE>
<CAPTION>
<C> <S>
Exhibit<F1> Description
10.82 Termination of MEDI-SB Agreement, dated as
of May 28, 1998 by and between MedImmune,
Inc. and SmithKline Beecham Corporation
10.83 Second Amendment, dated as of June 12,
1998 by and between Lonza Biologics PLC
and MedImmune, Inc.
<FN>
<F1> Confidential Treatment has been requested for certain portions of
Exhibits 10.82 and 10.83.
</FN>
</TABLE>
(b) Reports on Form 8-K:
Report Date Event reported
4/23/98 MedImmune Posts Record First Quarter
Sales and Earnings
5/15/98 Biotransplant and MedImmune Announce
Initial Clinical Safety and
Pharmacokinetics Data for MEDI-507
6/10/98 Letter to Shareholders for 1st Quarter
1998
6/18/98 MedImmune Buys Out Certain Synagis
Royalty Obligations
6/19/98 MedImmune Synagis (palivizumab)
Approved for Marketing by FDA
(13)
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.
MEDIMMUNE, INC.
(Registrant)
Date: August 13, 1998 /s/David M. Mott
President and
Chief Operating Officer
(Principal accounting and
financial officer)
(14)
EXHIBIT 10.82
TERMINATION OF MEDI-SB LETTER AGREEMENT OF OCTOBER 10, 1996
This agreement, effective as of May 28, 1998 by and between
MEDIMMUNE, INC., a corporation of the state of Delaware, having a
place of business at 35 Watkins Mill Road, Gaithersburg, Maryland
20878, U.S.A. ("MEDI") and SmithKline Beecham Corporation, a
corporation of the Commonwealth of Pennsylvania, having a place
of business at One Franklin Plaza, Philadelphia, Pennsylvania
19101, U.S.A. ("SB").
WHEREAS, MEDI and SB entered into a letter agreement
effective as of October 10, 1996 with respect to certain SB
information and a license to MEDI with respect to such
information for certain antibodies; and
WHEREAS, the parties have decided to terminate such letter
agreement in consideration of the covenants and obligations
expressed herein.
NOW THEREFORE, the parties agree as follows:
1. Definition
1.1 The terms "SB Product Information," "MEDI Product" and
"Effective Date" shall have the same meaning as in the
Letter Agreement.
1.2 "Letter Agreement" shall mean the letter agreement
between MEDI and SB effective as of October 10, 1996,
which relates to a license granted to MEDI with respect
to certain information of SB with respect to certain
antibodies.
2. Payments
2.1 Within thirty (30) days after the date first written
above, MEDI shall pay to SB (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED)
3. License
3.1 Subject to MEDI making the payment required by
Paragraph 2.1 of this Agreement within the time frame stated
therein, SB hereby grants to MEDI an exclusive, worldwide,
fully paid up, irrevocable license, with the right to grant
sublicenses, to use the SB Product Information provided to
MEDI under the Letter Agreement with respect to MEDI Product
for any purpose related to the Field, provided that such
license shall be subject to any non-exclusive residual
rights to such use which may be retained by any party under
any agreement which SB entered into prior to the Effective
Date of the Letter Agreement.
4. Termination
4.1 Except as provided in Paragraph 5.1 of this Agreement,
the Letter Agreement (including the survival provisions of
Paragraph 7(c) thereof) is terminated in its entirety.
5. Survival
5.1. The provisions of Paragraphs 4(a), 4(b), 4(c), 5(d) and
the entirety of Paragraph 8 of the Letter Agreement remain
in full force and effect and are a part of this Agreement.
IN WITNESS WHEREOF, the parties through their authorized
officers, have set their hands and seal, effective as of the date
first above written.
MedImmune, Inc. SmithKline
Beecham Corporation
By: /s/David M. Mott By: /s/Jean Pierre Garnier
Title: President and Chief Title: Chief Operating Officer
Operating Officer
EXHIBIT 10.83
SECOND AMENDMENT
THIS SECOND AMENDMENT is made the 16th day of June, 1998.
BETWEEN
1. LONZA BIOLOGICS PLC of 228 Bath Road, Slough, Berkshire SL1
4DY, England (hereinafter referred to as "LB"),
AND
2. MEDIMMUNE INC. of 35 West Watkins Mill Road, Gaithersburg,
Maryland 20878 USA (hereinafter referred to as "Licensee").
WHEREAS
A. Licensee entered into an agreement dated 10th January 1994
(hereinafter referred to as "the Agreement" with LB's then
Affiliate, known as Celltech Therapeutics Limited (formerly
known as Celltech Limited), relating to the Intellectual
Property and the Product (as therein defined), and
B. The rights and obligations of Celltech Therapeutics Limited
under the Agreement were novated in favour of L.B. by
agreement between the parties, with effect from 26 July
1996, and
C. LB and Licensee entered into a First Amendment to the
Agreement dated as of 8th April 1998 (hereinafter "the First
Amendment"), and
D. LB and Licensee now wish to amend the terms of the Agreement
and the First Amendment.
NOW THEREFORE it is hereby AGREED as follows:
1. Definitions and Interpretations
Unless otherwise stated, capitalized terms shall have the
same meanings herein as are ascribed to them by the
Agreement and the First Amendment.
2. Effective Date
Notwithstanding the date of signature of this second
amendment to the Agreement, the provisions of this amendment
shall be deemed to have taken effect on June 16, 1998.
3. Changes to the Agreement
3.1 Clause 3.1 of the Agreement is deleted in the
entirety and rewritten as follows:
3.1 LB hereby grants to Licensee a
worldwide, fully paid-up, non-exclusive
license under the Intellectual Property to
develop, manufacture, market and sell
Product.
3.2 Clauses 4.1, 5.1, 5.2, 5.3.1 and 5.4 of the
Agreement are deleted in the entirety.
4. Changes to the First Amendment
4.1 Clauses 3.2.4, 4.1.2 and 4.2 of the First
Amendment are deleted in the entirety.
5. Payments
Within thirty (30) days of the date of this Second
Amendment, Licensee shall pay LB (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED).
6. Irrevocable License
Notwithstanding any other provision to the contrary in the
Agreement, the First Amendment or this Second Amendment,
Licensee shall have the irrevocable right to continue to use
the Intellectual Property to develop, manufacture, market
and sell Product both during the term of the Agreement and
after termination or expiration of the Agreement or the
First Amendment, including the right to permit BI Pharma to
use the Intellectual Property to produce Product for
Licensee; provided, however, that LB shall have the right to
terminate the rights and licenses granted to Licensee in the
event that Licensee breaches the Agreement by unauthorized
release of Materials, Cell Lines or Material Know-How. Such
termination shall take effect sixty (60) days after written
notice by LB to Licensee specifying such breach, unless such
breach is cured prior to the expiration of such sixty (60)
day period.
7. Continuation of Terms
Save to the extent expressly set out herein, the terms and
conditions of the Agreement and the First Amendment shall
continue in full force and effect.
AS WITNESS the hands of the duly authorized representatives
of the parties hereto
Signed for and on behalf of
/s/Edward Robinson
LONZA BIOLOGICS PLC President
Signed for and on behalf of
/s/David M. Mott
MEDIMMUNE INC. President and Chief Operating
Officer
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIMMUNE,
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IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FILING.
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