<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
Commission File Number: 0-19700
AMYLIN PHARMACEUTICALS, INC.
(Exact name of registrant as in its charter)
Delaware 33-0266089
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9373 Towne Centre Drive, San Diego, California 92121
(Address of principal executive) (Zip code)
(619) 552-2200
(Registrant's telephone number, area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)
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 latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at September 30,1997
----- --------------------------------
<S> <C>
Common Stock, $.001 par value 32,252,058
</TABLE>
<PAGE> 2
AMYLIN PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PAGE NO.
COVER PAGE..................................................1
TABLE OF CONTENTS...........................................2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996...............3
Condensed Consolidated Statements of Operations
for the three months and nine months ended
September 30, 1997 and 1996............................4
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1997 and 1996..6
Notes to Condensed Consolidated Financial Statements...7
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations..........9
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings..............................*
ITEM 2. Changes in Securities.........................19
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..............20
SIGNATURE..................................................21
* No information provided due to inapplicability of item.
<PAGE> 3
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
(unaudited) (Note)
------------- -------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 54,747,000 $ 42,654,000
Short-term investments 9,999,000 19,469,000
Receivable from related party 685,000 2,089,000
Other current assets 1,115,000 1,142,000
------------- -------------
Total current assets 66,546,000 65,354,000
Property and equipment, at cost:
Equipment 14,409,000 11,480,000
Leasehold improvements 4,731,000 3,349,000
------------- -------------
19,140,000 14,829,000
Less accumulated depreciation and amortization (10,029,000) (8,075,000)
------------- -------------
9,111,000 6,754,000
Patents and other assets, net 1,664,000 1,425,000
------------- -------------
$ 77,321,000 $ 73,533,000
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 3,559,000 $ 4,829,000
Accrued liabilities 4,887,000 4,628,000
Deferred revenue from related party 9,358,000 7,954,000
Current portion of obligation under capital
leases and equipment notes payable 1,440,000 1,253,000
------------- -------------
Total current liabilities 19,244,000 18,664,000
Obligation under capital leases and
equipment notes payable 2,858,000 1,990,000
Notes payable to related party, net of discount 28,378,000 4,345,000
Stockholders' equity:
Common stock, $.001 par value, 50,000,000 shares authorized,
32,252,058 and 31,977,186 issued and outstanding at
September 30, 1997 and December 31, 1996, respectively 32,000 32,000
Additional paid-in capital 216,021,000 204,800,000
Accumulated deficit (188,195,000) (155,105,000)
Deferred compensation (1,018,000) (1,177,000)
Unrealized gains/(losses)on short-term investments 1,000 (16,000)
------------- -------------
Total stockholders' equity 26,841,000 48,534,000
------------- -------------
$ 77,321,000 $ 73,533,000
============= =============
</TABLE>
Note: The condensed consolidated balance sheet at December 31, 1996 has been
derived from audited condensed consolidated financial statements at that date
but does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
See accompanying notes.
<PAGE> 4
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended
September 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues under collaborative agreements
from related party $ 9,091,000 $ 13,192,000
Operating Expenses:
Research and development 21,836,000 14,355,000
General and administrative 3,484,000 2,915,000
------------ ------------
25,320,000 17,270,000
------------ ------------
Loss from operations (16,229,000) (4,078,000)
Interest and other income 526,000 449,000
Interest and other expense (233,000) (121,000)
------------ ------------
Net loss ($15,936,000) ($ 3,750,000)
============ ============
Net loss per share ($ 0.50) ($ 0.13)
============ ============
Shares used in computing net loss per share 32,187,000 28,261,000
============ ============
</TABLE>
See accompanying notes.
<PAGE> 5
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues under collaborative agreements
from related party $ 31,462,000 $ 23,922,000
Expenses:
Research and development 56,019,000 40,145,000
General and administrative 9,693,000 7,190,000
------------ ------------
65,712,000 47,335,000
------------ ------------
Loss from operations (34,250,000) (23,413,000)
Interest and other income 1,866,000 1,619,000
Interest and other expense (706,000) (292,000)
------------ ------------
Net loss ($33,090,000) ($22,086,000)
============ ============
Net loss per share ($ 1.03) ($ 0.78)
============ ============
Shares used in computing net loss per share 32,095,000 28,143,000
============ ============
</TABLE>
See accompanying notes.
<PAGE> 6
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Operating Activities:
Net Loss ($33,090,000) ($22,086,000)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 2,013,000 1,703,000
Deferred revenue from related party 1,404,000 3,335,000
Deferred rent and other expense (17,000) (19,000)
Amortization of deferred compensation 420,000 --
Changes in assets and liabilities:
Receivable from related party 1,404,000 (98,000)
Other current assets 27,000 100,000
Accounts payable (1,269,000) (422,000)
Accrued liabilities 275,000 745,000
------------ ------------
Net cash flows used for operating activities (28,833,000) (16,742,000)
Investing activities:
Decrease in short-term investments 9,486,000 18,297,000
Purchase of equipment and leasehold improvements (4,311,000) (2,388,000)
Increase in deposits, patents and other assets (298,000) (259,000)
------------ ------------
Net cash flows provided by investing activities 4,877,000 15,650,000
Financing activities:
Issuance of notes payable 35,993,000 3,617,000
Principal payments on capital leases and
equipment notes payable (1,413,000) (719,000)
Issuance of common stock, net 1,469,000 1,338,000
------------ ------------
Net cash flows provided by financing activities 36,049,000 4,236,000
------------ ------------
Increase in cash and cash equivalents 12,093,000 3,144,000
Cash and cash equivalents at beginning of period 42,654,000 16,709,000
------------ ------------
Cash and cash equivalents at end of period $ 54,747,000 $ 19,853,000
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 295,000 $ 197,000
</TABLE>
See accompanying notes.
<PAGE> 7
AMYLIN PHARMACEUTICALS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The information contained herein has been prepared in accordance with
instructions for Form 10-Q and Article 10 of Regulation S-X. The information at
September 30, 1997, and for the three months and nine months ended September 30,
1997 and 1996, is unaudited. In the opinion of management, the information
reflects all adjustments necessary to make the results of operations for the
interim periods a fair statement of such operations. All such adjustments are of
a normal recurring nature. Interim results are not necessarily indicative of
results for a full year. For a presentation including all disclosures required
by generally accepted accounting principles, these financial statements should
be read in conjunction with the audited financial statements included in the
Company's Annual Report to Shareholders for the year ended December 31, 1996.
Per Share Data
Net loss per share is computed using the weighted average number of shares
outstanding during the periods.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. The impact of Statement 128 on the calculation
of primary earnings per share for the periods presented is not expected to be
material.
Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, Amylin Europe Limited. All significant intercompany
transactions and balances have been eliminated.
2. Notes Payable to Related Party
In September 1997, the Company received proceeds of approximately $30.6 million
from a draw down under its development loan facility (the "Development Loan
Facility") with Johnson & Johnson. The
<PAGE> 8
proceeds will be applied against the Company's one-half share of development
expenses for pramlintide during the second through fourth quarters of 1997. The
loan carries an interest rate of 9.0%. In conjunction with the borrowing, the
Company issued warrants to Johnson & Johnson to purchase 1,530,950 shares of the
Company's common stock with a fixed exercise price of $12 per share and a
10-year exercise period. The estimated fair value of the warrants has been
accounted for as a discount from the face value of the note. The loan is
repayable 12 months after approval of a new drug application for pramlintide out
of 50% of the Company's one-half share of any pramlintide profits, subject to
certain exceptions set forth in the Loan and Security Agreement dated as of June
20, 1995 (the "Loan Agreement") between the Company and Johnson and Johnson. The
loan is secured by the Company's issued patents and patent applications relating
to amylin. Funding available to the Company as of September 30, 1997 under the
loan was $57.7 million, of which $30.6 million has been borrowed to date. This
amount is subject to adjustment for certain events as set forth in the Loan
Agreement.
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the discussion in
this report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, without limitation, those discussed in this "Management's
Discussion and Analysis" as well as those discussed in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 under the heading "Risk
Factors."
Since its inception in September 1987, Amylin Pharmaceuticals, Inc.
("Amylin Pharmaceuticals" or the "Company") has devoted substantially all of its
resources to its research and development programs. Substantially all of the
Company's revenues to date have been derived from fees and expense
reimbursements under collaborative agreements and from interest income. Amylin
Pharmaceuticals has not received any revenues from the sale of products. The
Company has been unprofitable since its inception and expects to incur
additional operating losses for the next several years. As of September 30,
1997, the Company's accumulated deficit was approximately $188.3 million.
RESULTS OF OPERATIONS
Revenue
The Company had $9.1 million and $31.5 million of revenue for the three
month and nine month periods ended September 30, 1997 as compared to $13.2
million and $23.9 million for the same periods in 1996. The revenues recognized
in 1997 and 1996 were related to the Company's Collaboration Agreement dated as
of June 20, 1995 (the Collaboration Agreement") with LifeScan, Inc., a wholly
owned subsidiary of Johnson & Johnson, hereinafter referred to as Johnson &
Johnson. Revenues in 1997 were comprised of Johnson & Johnson's one-half share
of collaboration development expenses incurred by Amylin and $9.0 million in
license fee payments made by Johnson & Johnson during the first nine months of
the year. The $9.0 million of license fee payments made by Johnson & Johnson
included $6.0 million received in the first quarter of the year related to the
exercise of Johnson & Johnson's option to broaden the scope of the collaboration
with the Company to include all amylin agonists for the treatment of fuel
metabolism disorders, including diabetes, and $3.0 million received in the
second quarter of the year related to the exercise of Johnson & Johnson's option
to broaden the scope of the collaboration with the Company to include all amylin
agonists for the treatment of all human diseases. Revenues in 1996 were
comprised of Johnson & Johnson's one-half share of collaboration development
expenses incurred by Amylin and $7.0 million of milestone and option fee
payments made to the Company in the third quarter of 1996. (See the "Liquidity
and Capital Resources" section
<PAGE> 10
herein for further discussion of payments expected to be received by the Company
in the future.)
Operating Expenses
The Company's total operating expenses for the quarter ended September 30,
1997 increased to $25.3 million from $17.3 million for the same period in 1996.
For the nine months ended September 30, 1997, operating expenses increased to
$65.7 million from $47.3 million for the same period in 1996.
Research and development expenses increased to $21.8 million for the three
months ended September 30, 1997 as compared to $14.4 million for the same period
in 1996. Research and development expenses for the nine months ended September
30, 1997 increased to $56.0 million from $40.1 million for the same period in
1996. The increase in these expenditures was primarily due to the costs of
expanding pramlintide clinical development efforts. Several other factors also
contributed to this increase, including increased staffing and increased
facilities related expenses.
General and administrative expenses increased to $3.5 million for the three
months ended September 30, 1997 as compared to $2.9 million for the same period
in 1996. General and administrative expenses for the nine months ended September
30, 1997 increased to $9.7 million from $7.2 million for the same period in
1996. The increase was primarily due to increased staffing, higher travel
expenses and increased facilities related expenses.
Other Income and Expense
Interest and other income is principally comprised of interest income from
investment of the Company's cash reserves. Interest and other income was $0.5
million for the quarter ended September 30, 1997 as compared to $0.4 million for
the same period in 1996. Interest and other income increased to $1.9 million for
the nine months ended September 30, 1997 from $1.6 million for the same period
in 1996. The increase in interest and other income was primarily due to higher
average cash reserves available for investment for the three months and nine
months ended September 30, 1997 as compared to the same periods in 1996.
Interest and other expense is principally comprised of interest expense
resulting from long-term debt obligations. Debt financing has been utilized by
the Company to acquire laboratory and other equipment and to fund tenant
improvements to the Company's facilities. In addition, in accordance with the
terms of the Collaboration Agreement, Johnson & Johnson has advanced Amylin's
share of pramlintide pre-launch marketing expenses incurred since the date of
the collaboration, to be repaid with interest over time out of Amylin's share of
future pramlintide profits if any. Interest and other expense increased to $0.2
million for the three months ended September 30, 1997 from $0.1 million for the
same period in 1996. Interest and other expense
<PAGE> 11
increased to $0.7 million for the nine months ended September 30, 1997 from $0.3
million for the same period in 1996. The increase in interest and other expense
reflects the overall higher long-term debt balance during the first nine months
of 1997 as compared to 1996 as well as a provision of approximately $0.1 million
made for the disposal of certain pieces of equipment.
Net Loss
The net loss for the quarter ended September 30, 1997 was $15.9 million
compared to a net loss for the same quarter in 1996 of $3.8 million. The
increase in the net loss was due to decreased collaborative revenues and
increased operating expenses during the third quarter of 1997 as compared to the
same period in 1996. The Company incurred a net loss of $33.1 million for the
nine months ended September 30, 1997 as compared to $22.1 million for the nine
months ended September 30, 1996. The increase in the net loss for the nine month
period was due to significantly increased operating expenses related to
pramlintide development.
Amylin expects to incur substantial operating losses over the next several
years due to continuing and increasing expenses associated with its research and
development programs, including clinical development of pramlintide, preclinical
and potential clinical testing of additional product candidates, and related
general and administrative support. Operating losses may fluctuate from quarter
to quarter as a result of differences in the timing of expenses incurred and
revenues recognized.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its operations primarily
through private placements of preferred stock, sales of common stock, its
collaboration with Johnson & Johnson, and operating and capital lease
obligations.
In June 1995, the Company entered into the Collaboration Agreement for the
development and commercialization of pramlintide, a diabetes drug candidate
currently in Phase III clinical trials. In conjunction with the Collaboration
Agreement, the Company simultaneously entered into a Stock Purchase Agreement
with Johnson & Johnson Development Corporation (a wholly owned subsidiary of
Johnson & Johnson and referred to herein as Johnson & Johnson) and the Loan
Agreement.
In March 1997, Johnson & Johnson exercised an option to broaden the scope
of the existing collaboration on pramlintide and paid the Company $6.0 million
to obtain additional rights for all amylin agonists for the treatment or
prevention of fuel metabolism disorders, including diabetes. In June 1997,
Johnson & Johnson exercised an option to broaden the scope of the existing
collaboration on pramlintide and paid the Company $3.0 million to obtain
additional rights for all amylin agonists for the treatment of human diseases.
The Company will lead the research and
<PAGE> 12
development while Johnson & Johnson will lead commercialization of any future
product candidates.
In September 1997, the Company received proceeds of approximately $30.6
million from a draw down under its development loan facility (the "Development
Loan Facility") with Johnson & Johnson. The proceeds will be applied against the
Company's one-half share of development expenses for pramlintide during the
second through fourth quarters of 1997. The loan carries an interest rate of
9.0%. In conjunction with the borrowing, the Company issued warrants to Johnson
& Johnson to purchase 1,530,950 shares of the Company's common stock with a
fixed exercise price of $12 per share and a 10-year exercise period. The loan is
repayable 12 months after approval of a new drug application for pramlintide out
of 50% of the Company's one-half share of any pramlintide profits, subject to
certain exceptions set forth in the Loan and Security Agreement dated June 20,
1995 (the "Loan Agreement") between the Company and Johnson and Johnson. The
loan is secured by the Company's issued patents and patent applications relating
to amylin.
In addition to the above mentioned payments and investment, Johnson &
Johnson's financial commitment to the Company now includes the funding of 50% of
development costs and 100% of pre-launch marketing costs (Amylin
Pharmaceutical's one-half share to be repaid over time from future profits), as
well as milestone payments, equity investments, and the Development Loan
Facility for use in certain circumstances. The Company will apply all of the
license fees, any cash milestone payments, 50% of the proceeds from Johnson &
Johnson's equity investments and proceeds from draw downs under the Development
Loan Facility towards its share of pramlintide development expenses.
Funding available to the Company from Johnson & Johnson as of September 30,
1997 under the Development Loan Facility was $57.7 million, of which $30.6
million has been borrowed to date. The aggregate amount of the Development Loan
Facility is subject to adjustment for certain events, e.g. increased by 50% of
any future increases in the pramlintide development budget and decreased by 50%
of the Company's net proceeds received from future debt or equity offerings to
investors other than Johnson & Johnson or other corporate partners. The Company
is required to issue a warrant to Johnson & Johnson to purchase 50,000 shares of
the Company's common stock at an exercise price of $12.00 per share for every $1
million of proceeds borrowed by the Company under the Development Loan Facility.
The Company is eligible in certain circumstances to make quarterly draw downs on
the then available Development Loan Facility based on pramlintide development
expenses during specified periods.
The Company is dependent on the future payments from Johnson & Johnson to
continue development and commercialization of pramlintide. Johnson & Johnson may
terminate the Collaboration Agreement subject to a notice period of six months.
Johnson & Johnson's financial and other obligations under the Collaboration
Agreement would continue during any such termination notice
<PAGE> 13
period. In addition, Johnson & Johnson has the right to terminate the
Collaboration Agreement at any time based on material safety or tolerability
issues. Without Johnson & Johnson's continued collaborative support, the Company
might not be able to continue the pramlintide development program, and the
Company's financial condition would be materially adversely affected.
As of September 30, 1997, Johnson & Johnson entities have made various
financial payments to the Company totaling approximately $155 million. These
payments primarily include funding of one half of the pramlintide development
costs, draw downs from the Development Loan Facility, the purchase of $30
million of the Company's common stock, milestone and option fee payments,
funding of pramlintide pre-marketing costs and license fees.
At September 30, 1997, the Company had $64.7 million in cash, cash
equivalents and short-term investments as compared to $62.1 million at December
31, 1996. The Company invests its cash in U.S. government and other highly rated
liquid debt instruments.
The Company intends to use its financial resources for the ongoing
development of pramlintide, including the Phase III clinical trials, for
expansion of its other research, drug discovery and development programs, and
for other general corporate purposes. To the extent that clinical trials of the
Company's compounds progress as planned, research and development expenses will
include costs of supplying materials for and conducting pramlintide clinical
trials, research activities to further explore amylin biology, and research and
development of other compounds targeted at metabolic diseases. The amounts
actually expended for each purpose may vary significantly depending upon
numerous factors, including the progress of the Company's research and
development programs, the results of preclinical and clinical studies, the
timing of regulatory submissions and approvals, if any, technological advances,
determinations as to commercial potential of the Company's compounds, and the
status of competitive products. Expenditures will also depend upon the continued
participation of Johnson & Johnson in the collaboration, the availability of
additional sources of funds, the establishment of collaborative arrangements
with other companies, and other factors.
The Company currently leases or sub-leases approximately 99,000 square feet
of space. At this time, the Company expects to incur approximately $5.9 million
of capital expenditures in 1997. These expenditures will primarily be directed
toward the purchase of new equipment to support research and development efforts
and for tenant improvements for newly sub-leased space. In addition, some
capital expenditures will be directed toward the purchase of equipment coming
off of lease lines which will expire during the year. The Company has entered
into a loan agreement for the financing of the majority of its equipment needs.
The Company anticipates that it will utilize approximately $3.4 million of debt
financing and $2.5 million of its own cash reserves for capital expenditures in
1997. The terms of the Company's loan agreement call for amounts drawn down
under the loan to be repaid monthly over a four year period.
<PAGE> 14
The Company does not expect to generate a positive internal cash flow for
several years due to substantial additional research and development costs,
including costs related to drug discovery, preclinical testing, clinical trials,
manufacturing costs, and general and administrative expenses necessary to
support such activities. In addition to the funding of 50% of the Phase III
studies and other ancillary studies in the pramlintide clinical program, the
Company plans to expand its research and development pipeline by licensing new
technologies and product candidates. The Company anticipates that its existing
cash, including interest income from cash investments, and financial payments
and loan facilities from Johnson & Johnson, will be adequate to satisfy the
Company's capital requirements through the first half of 1999. As an alternative
to the additional funding available through the Development Loan Facility, the
Company may also consider additional equity offerings. Assuming continued
participation by Johnson & Johnson, the Company believes it has reasonable
alternatives to meet the financial needs of its programs. However, there can be
no assurance that additional financial resources will be raised in the necessary
time frame or on terms favorable to the Company.
The Company cannot assure that any of its drug candidates will successfully
meet all of their development goals. Important technical milestones remain to be
achieved before Amylin Pharmaceuticals can commercialize any of its products,
and failure to achieve these milestones could seriously jeopardize the Company's
chances of success and its financial condition would be adversely affected. The
Company's future capital requirements will depend on many factors, including
continued scientific progress in its research and development programs, the
magnitude of these programs, progress with preclinical and clinical trials, the
time and costs involved in preparing regulatory submissions and seeking
regulatory approvals, the costs involved in preparing, filing, prosecuting,
maintaining, and enforcing patents, competing technological and market
developments, changes in the Johnson & Johnson collaboration, the ability of the
Company to establish collaborative arrangements for its other research and
development programs, and the cost of manufacturing scale-up.
Prior to marketing, any drug developed by the Company must undergo rigorous
preclinical and clinical testing and an extensive regulatory approval process
mandated by the Food and Drug Administration (FDA) and equivalent foreign
authorities. Human clinical testing is now underway on the Company's first
product candidate, pramlintide. Subject to compliance with FDA and foreign
authorities regulations, the Company plans to undertake extensive clinical
testing to demonstrate optimal dose, safety, and efficacy for its product
candidates in humans.
Recent Events in the Pramlintide Development Program
In August 1997, Amylin Pharmaceuticals announced that two, one-year Phase
III studies demonstrated that the Company's lead drug candidate, pramlintide,
can improve metabolic control in insulin-using patients with diabetes. Metabolic
benefits included
<PAGE> 15
improved glucose control without increased risk of hypoglycemia, and improved
weight control and healthier cholesterol profiles.
In the type 1 diabetes study, pramlintide's 12-month, intent-to-treat
effects on lowering glucose and improving weight and cholesterol profiles were
statistically significant and clinically meaningful.
In a parallel type 2 diabetes study, the lowering of glucose on an
intent-to-treat basis in two of the three pramlintide dose groups achieved
statistical significance after six months, but not after 12 months. These
results may not have achieved statistical significance due in part to the
smaller number of patients per group in this study compared to the type 1 study.
The Company believes that the glucose lowering effects observed in both
studies were lower than expected for two reasons; (1) Patients with chronic
blood glucose levels below the therapeutic intervention threshold recently
published by the American Diabetes Association were admitted to both studies;
since patients under reasonably good glucose control tend to be less responsive
to any glucose lowering agent, their presence mitigated the population average
effects, and (2) During the study patients receiving placebo tended to intensify
their use of insulin, while patients receiving pramlintide tended to relax their
use of insulin; since insulin alone lowers glucose concentrations, the Company
believes that this variability in insulin dosing obfuscated the pramlintide drug
effect.
With respect to other, secondary endpoints, the Company believes that the
studies showed health benefits important for treating diabetes. Pramlintide
produced statistically significant and clinically relevant weight loss in all
drug groups compared to placebo. In the type 1 study, pramlintide improved lipid
profiles (the ratio of "good" cholesterol to "bad" cholesterol) in a clinically
important way.
The safety and tolerability profile of the product continued to be
favorable with long-term dosing in these one-year studies. There was no increase
in the incidence of severe hypoglycemia and no apparent increase in the
frequency of other hypoglycemic events in the pramlintide treatment groups
compared to placebo. An estimated 75% of patients completing the studies have
chosen to continue open label dosing of pramlintide.
Based upon observations during the conduct of these two initial studies,
the study designs incorporated at the initiation of the other four ongoing Phase
III trials were improved to focus on patients with poor glucose control
(approximately 80% of insulin-using patients with diabetes) and to reduce the
variability in insulin dosing. The Company raised the entry glycated hemoglobin
(a measure of average glucose control over the prior 3 months) threshold for
patients to correspond with American Diabetes Association guidelines for glucose
control. To measure more clearly the effect of pramlintide without undue
influence of insulin on metabolic control, the Company introduced
<PAGE> 16
new protocol designs which should result in stable insulin dosing in a higher
percentage of enrolled patients. As a result of these protocol changes, the
Company believes that the intent-to-treat results for glucose lowering will be
more robust in the four ongoing PARADIGM trials.
Based on analysis of the results from the one-year clinical trials
announced in August 1997 and discussions with its commercial partner Johnson &
Johnson, outside clinical consultants, and regulatory authorities, Amylin
Pharmaceuticals has decided to expand the pramlintide development program in the
following ways:
- - Extend the duration of the two ongoing US Phase III studies to 12 months to
further substantiate the durability of the pramlintide drug effect (and
maintain the six-month duration of the two ongoing European Phase III
studies),
- - Increase the number of patients in the two ongoing studies in type 1
diabetes by approximately 20% to increase the probability of achieving
statistical significance in certain prospectively defined subsets of
patients, which may be most relevant from a clinical point of view, and
- - Accelerate the initiation of two planned clinical-practice trials in type 1
and type 2 diabetes to evaluate the interrelationship of insulin and
pramlintide dosing in order to improve drug labeling and thus assist
physicians in optimizing patients' metabolic control when the two drugs are
used in concert.
The Company is currently enrolling patients in the ongoing four PARADIGM
trials, which are summarized below:
<TABLE>
<CAPTION>
STUDY NUMBER 137-117 137-123 137-121 137-122
------- ------- ------- -------
<S> <C> <C> <C> <C>
Patients Type 1 Type 2 Type 1 Type 2
Location Euro Euro US US
Duration 6 mos. 6 mos. 12 mos. 12 mos.
# Evaluable Patients 480 400 480 600
Completion of Enrollment 1Q98 1Q98 2Q98 2Q98
</TABLE>
While the Company expects the results of the European Phase III clinical
trials in type 1 and type 2 diabetes in the fourth quarter of 1998, the
expansion of the pramlintide development program has extended the estimated
timeline for regulatory submissions by 12 to 18 months. The overall program
should enable the Company to file stronger marketing application packages to the
regulatory agencies, thus facilitating the approval process and optimizing the
commercial launch of the drug. In this regard, the Company plans to submit the
US and European regulatory filings during the first half of 2000.
Since 1995 Amylin Pharmaceuticals has been collaborating with Johnson and
Johnson to evaluate pramlintide's ability to
<PAGE> 17
improve metabolic control in insulin-using patients with diabetes. The
collaboration agreement calls for Johnson & Johnson to provide to Amylin
Pharmaceuticals a development loan facility for use in certain circumstances to
cover the Company's share of pramlintide development expenses.
Although the Company believes the initial Phase III clinical data about
pramlintide's clinical value warrants continuing with the Phase III development
program, there can be no assurance that these studies will confirm or improve
the results of the initial Phase III studies to date or that the data will
support regulatory approval of pramlintide. Further testing of pramlintide and
the Company's other product candidates in research or development may reveal
undesirable and unintended side effects or other characteristics that may
prevent or limit their commercial use. The Company or the regulatory authorities
may suspend clinical trials at any time if the subjects or patients
participating in such trials are being exposed to unacceptable health risks.
There can be no assurance that the Company will not encounter problems in
clinical trials which will cause the Company or the regulatory authorities to
delay or suspend clinical trials. In addition, there can be no assurance that
any of the Company's products will obtain regulatory approval for any
indication. Products, if any, resulting from Amylin Pharmaceuticals' research
and development programs are not expected to be commercially available for a
number of years.
Patents
The Company believes that patent and other proprietary rights are important
to its business, and in this regard intends to file applications as appropriate
for patents covering both its products and processes. Litigation, which could
result in substantial cost to the Company, may also be necessary to enforce any
patents issued to the Company or to determine the scope and validity of
third-party proprietary rights. The Company has received letters from the
University of Minnesota (the "University")and Per Westermark ("Westermark")
asserting that pramlintide is covered by a patent (the "University Patent")
which was licensed to the Company pursuant to a License Agreement dated November
11, 1991 among the Company, the University and Westermark (the "University
License Agreement"). In its letters, the University and Westermark claim that
they are entitled to 50% of any sublicense fees received by the Company from
sublicensing the University Patent to Johnson & Johnson pursuant to the
Collaboration Agreement, as well as future royalties as specified in the
University License Agreement. The Company has informed the University and
Westermark that no such sublicensing moneys have been received by the Company
from Johnson & Johnson, who is not a sublicensee under the University Patent. On
December 5, 1996, the Company filed a complaint against the University and
Westermark in the U.S. District Court for the Southern District of California
seeking a declaratory judgment that pramlintide is not covered by the University
Patent and that no moneys are owed to the University or Westermark. Although
discussions were underway with the University and Westermark, they did not
result
<PAGE> 18
in any agreement regarding the litigation. The Company's complaint was served on
the University and Westermark in April 1997. The Company believes that the
University's and Westermark's assertions are without merit and intends to defend
vigorously against any claims brought by the University and Westermark against
the Company related to the foregoing. In addition, should any of the Company's
competitors have prepared and filed patent applications in the United States
which claim technology also invented by the Company, Amylin Pharmaceuticals may
have to participate in interference proceedings declared by the U.S. Patent and
Trademark Office in order to determine priority of invention and, thus, the
right to a patent for the technology, all of which could result in substantial
cost to the Company to determine its rights. It is uncertain whether any
third-party patents will require the Company to alter its products or processes,
obtain licenses, or cease certain activities. If any licenses are required,
there can be no assurances that the Company will be able to obtain any such
license on commercially favorable terms, if at all. Failure by the Company to
obtain a license to any technology that it may require to commercialize its
products may have a material adverse impact on the Company.
<PAGE> 19
ITEM 2. CHANGES IN SECURITIES
(c) On September 30, 1997 the Company received proceeds of $30,619,000 from a
draw down under the Development Loan Facility with Johnson & Johnson. The loan
carries an interest rate of 9.0%. In conjunction with the borrowing the Company
issued to Johnson & Johnson a promissory note in the original principal amount
of $30,619,000 and a warrant to purchase 1,530,950 shares of the Company's
common stock at an exercise price of $12.00 per share which expires on September
29, 2007. The issuance of both the note and the warrant was exempted from
registration with the Securities and Exchange Commission in accordance with
Section 4(2) of the Securities Act of 1933, as amended. See "Management's
Discussion and Analysis --Liquidity and Capital Resources."
<PAGE> 20
ITEM 6
Exhibits and Reports Submitted on Form 8-K
(a) EXHIBITS. The exhibits listed below are filed with this report.
10.35 Warrant Agreement between the Registrant and the Medical
Research Council dated May 9, 1997.
10.36 Promissory Note dated September 30, 1997 issued by the
Registrant to Johnson & Johnson.
10.37 Warrant Agreement between the Registrant and Johnson &
Johnson dated September 30, 1997.
27.1 Financial Data Schedule.
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the
quarter for which this report is filed.
<PAGE> 21
AMYLIN PHARMACEUTICALS, INC.
September 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
Amylin Pharmaceuticals, Inc.
Date: November 13, 1997 By: /s/Marjorie T. Sennett
--------------------------------
Marjorie T. Sennett
Senior Vice President and
Chief Financial Officer
(on behalf of the registrant
and as the registrant's
principal financial officer)
<PAGE> 1
EXHIBIT 10.35
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED AND THAT AN APPLICABLE EXEMPTION IS AVAILABLE.
WARRANT TO PURCHASE
20,000 SHARES OF COMMON STOCK OF
AMYLIN PHARMACEUTICALS, INC.
(Void after May 8, 2007)
This certifies that Medical Research Council, a body corporate established
under Royal Charter in the United Kingdom, or its permitted assigns (the
"Holder"), for value received, is entitled to purchase from AMYLIN
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), having a place of
business at 9373 Towne Centre Drive, San Diego, California 92121, Twenty
Thousand (20,000) fully paid and nonassessable shares of the Company's Common
Stock ("Stock") for cash at a price of Eleven Dollars and Thirty-Seven and
One-Half Cents ($11.375) per share (the "Stock Purchase Price") at any time or
from time to time up to and including 5:00 p.m. (Pacific time) on May 8, 2007,
such day being referred to herein as the "Expiration Date", upon surrender to
the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
in cash or by check of the aggregate Stock Purchase Price for the number of
shares for which this Warrant is being exercised determined in accordance with
the provisions hereof. The Stock Purchase Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 3 of this
Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the holder
of record hereof, at any time or from time to time, up to the Expiration Date
for all or any part of the shares of Stock (but not for a fraction of a share)
which may be purchased hereunder. The Company agrees that the shares of Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed, executed Form of Subscription delivered and payment made for such
shares. Certificates for the shares of Stock so purchased,
1.
<PAGE> 2
together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by the
Company at the Company's expense within a reasonable time after the rights
represented by this Warrant have been so exercised. In case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver a new Warrant or Warrants of
like tenor for the balance of the shares purchasable under the Warrant
surrendered upon such purchase to the Holder hereof within a reasonable time.
Each stock certificate so delivered shall be in such denominations of Stock as
may be requested by the Holder hereof and shall be registered in the name of
such Holder.
Notwithstanding anything to the contrary contained in this Section 1,
the Holder shall either (i) exercise all outstanding Warrants by paying to the
Company, by cash or check, an amount equal to the aggregate Stock Purchase Price
of the shares being purchased, or (ii) receive shares equal to the value (as
determined below) of this Warrant by surrender of this Warrant a the principal
office of the Company together with the Form of Subscription in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
X = Y (A-B)
-------
A
Where: X = the number of shares of Common Stock to be issued to the Holder.
Y = the number of shares of Common Stock under this Warrant.
A = the fair market value of one share of Common Stock at the date of
such calculation).
B = the Stock Purchase Price (as adjusted to the date of calculation).
As used herein, current fair market value of Common Stock shall mean
with respect to each share of Common Stock the closing price of the Company's
Common Stock as quoted on the Nasdaq National Market System, or, if on any day
the Common Stock is not so listed, the average of the highest bid and the lowest
asked price on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, in each case averaged over a period of 15 days consisting of the
day as of which the current fair market value of Common Stock is being
determined and the 14 consecutive business days prior to such day. If at any
time the Common Stock is not listed on any securities exchange or quoted in the
over-the-counter market, the current fair market value of Common Stock shall be
used for the calculation of A above, and shall be the highest price per share
which the Company could obtain from a willing buyer (not a current employee or
director) for
2.
<PAGE> 3
shares of Common Stock sold by the Company, from authorized but unissued shares,
as determined in good faith by the Board of Directors of the Company.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any shareholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved, for the purpose of issue
or transfer upon exercise of the subscription rights evidenced by this Warrant,
a sufficient number of shares of authorized but unissued Stock, or other
securities and property, when and as required to provide for the exercise of the
rights represented by this Warrant. The Company will take all such action as may
be necessary to assure that such shares of Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Stock may be
listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as defined in Section 3 hereof) if the
total number of shares of Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Stock then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding, would exceed the total number of shares of Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Stock into a greater number of
shares, the Stock Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares
of Stock of the Company shall be combined into a smaller number of shares, the
Stock Purchase Price in effect immediately prior to such combination shall be
proportionately increased.
3.
<PAGE> 4
3.2 DIVIDENDS IN STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If at
any time or from time to time all holders of shares of the Company's Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(A) Stock or any shares of stock or other securities which are at
any time directly or indirectly convertible into or exchangeable for Stock, or
any rights or options to subscribe for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution, or
(B) Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Stock issued as
a stock split, adjustments in respect of which shall be covered by the terms of
Section 3.1 above), then and in each such case, the Holder hereof shall, upon
the exercise of this Warrant, be entitled to receive, in addition to the number
of shares of Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
which such Holder would hold on the date of such exercise had he been the holder
of record of such Stock as of the date on which holders of Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In any reorganization described
above, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock Purchase
Price and of the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.
3.4 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares purchasable upon the
exercise
4.
<PAGE> 5
of this Warrant, the Company shall give written notice thereof, by first class
mail, postage prepaid, addressed to the registered Holder of this Warrant at the
address of such Holder as shown on the books of the Company. The notice shall be
signed by the Company's chief financial officer and shall state the Stock
Purchase Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
3.5 OTHER NOTICES. If at any time:
(1) the Company shall declare any cash dividend upon its Common
Stock;
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any capital reorganization or reclassification
of the capital stock of the Company; or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(6) then, in any one or more of said cases, the Company shall
give, by first class mail, postage prepaid, addressed to the Holder of this
Warrant at the address of such Holder as shown on the books of the Company, (a)
at least 20 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or public offering, at least 20 days' prior written notice of the
date when the same shall take place; provided, however, that the Holder shall
make a best efforts attempt to respond to such notice as early as possible after
the receipt thereof. Any notice given in accordance with the foregoing clause
(a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification,
5.
<PAGE> 6
consolidation, merger, sale, dissolution, liquidation, winding-up, conversion or
public offering, as the case may be.
4. ISSUE TAX. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Stock issued or issuable
upon the exercise of any warrant in any manner which interferes with the timely
exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof the
right to vote or to consent or to receive notice as a shareholder of the Company
or any other matters or any rights whatsoever as a shareholder of the Company.
No dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Stock, and no mere enumeration herein of the rights or
privileges of the Holder hereof, shall give rise to any liability of such Holder
for the Stock Purchase Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by its creditors.
7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole, without charge to the Holder hereof (except for transfer taxes), upon
surrender of this Warrant properly endorsed. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed in blank, shall be deemed negotiable, and that the Holder hereof,
when this Warrant shall have been so endorsed, may be treated by the Company, at
the Company's option, and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant, or to the transfer hereof on the books of
the Company any notice to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered owner hereof as the owner
for all purposes.
8. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder.
6.
<PAGE> 7
9. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
10. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Stock issuable upon the exercise of this Warrant shall
survive the exercise and termination of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder hereof.
11. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware without regard to conflict of
laws principles.
12. LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
13. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
7.
<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its officers, thereunto duly authorized this 9th day of May 1997.
AMYLIN PHARMACEUTICALS, INC.
a Delaware corporation
By: /s/ RICHARD M. HAUGEN
--------------------------------
Richard M. Haugen
President and Chief Executive Officer
8.
<PAGE> 9
EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 19___
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by AMYLIN
PHARMACEUTICALS, INC. (the "Company") and dated ________________, 199__ (the
"Warrant") and to purchase thereunder __________________________________ shares
of the Common Stock of the Company (the "Shares") at a purchase price of
________________ ($______) per Share or an aggregate purchase price of
__________________ ________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on Exhibit B attached
to the Warrant.
Very truly yours,
MEDICAL RESEARCH COUNCIL
By
---------------------------------
Title
------------------------------
1.
<PAGE> 10
EXHIBIT B
TO WARRANT CERTIFICATE
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO AMYLIN PHARMACEUTICALS,
INC. ALONG WITH THE SUBSCRIPTION FORM BEFORE THE STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT CERTIFICATE DATED MAY 9, 1997 WILL BE ISSUED.
_____________________, 19__
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: President
The undersigned, Medical Research Council, a ______________ ("Purchaser"),
intends to acquire up to ______________ shares of the Common Stock (the "Stock")
of AMYLIN PHARMACEUTICALS, INC. (the "Company") from the Company pursuant to the
exercise of a certain Warrant to purchase Stock held by Purchaser. The Stock
will be issued to Purchaser in a transaction not involving a public offering and
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "1933 Act") and applicable state securities laws. In connection
with such purchase and in order to comply with the exemptions from registration
relied upon by the Company, Purchaser represents, warrants and agrees as
follows:
Purchaser is acquiring the Stock for its own account, to hold for
investment, and Purchaser shall not make any sale, transfer or other disposition
of the Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC") or
in violation of any applicable state securities law.
Purchaser has been advised that the Stock has not been registered under the
1933 Act or state securities laws on the ground that this transaction is exempt
from registration, and that reliance by the Company on such exemptions is
predicated in part on Purchaser's representations set forth in this letter.
2.
<PAGE> 11
Purchaser has been informed that under the 1933 Act, the Stock must be held
indefinitely unless it is subsequently registered under the 1933 Act or unless
an exemption from such registration (such as Rule 144) is available with respect
to any proposed transfer or disposition by Purchaser of the Stock. Purchaser
further agrees that the Company may refuse to permit Purchaser to sell, transfer
or dispose of the Stock (except as permitted under Rule 144) unless there is in
effect a registration statement under the 1933 Act and any applicable state
securities laws covering such transfer, or unless Purchaser furnishes an opinion
of counsel reasonably satisfactory to counsel for the Company, to the effect
that such registration is not required.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Stock, or any substitutions therefor, a legend stating in
substance:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. These shares have been acquired for investment and
may not be sold or otherwise transferred in the absence of an effective
registration statement for these shares under the Securities Act and
applicable state securities laws, or an opinion of counsel satisfactory to
the Company that registration is not required and that an applicable
exemption is available."
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Stock with
Purchaser's counsel.
Very truly yours,
Name of Purchaser:
MEDICAL RESEARCH COUNCIL
By:
--------------------------------
Title:
-----------------------------
3.
<PAGE> 1
EXHIBIT 10.36
PROMISSORY NOTE
$30,619,000.00 September 30, 1997
FOR VALUE RECEIVED, AMYLIN PHARMACEUTICALS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of JOHNSON & JOHNSON, a
New Jersey corporation (the "Lender"), its successors and assigns, at One
Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, or at such other place
as the holder hereof may designate in writing, in lawful money of the United
States of America, the principal sum of Thirty Million Six Hundred Nineteen
Thousand Dollars ($30,619,000.00), subject to the terms of this Note. This Note
shall bear interest compounded annually (computed on the basis of the actual
number of days elapsed over a year of 360 days) on the unpaid principal amount
hereof at the rate of Nine percent (9.0%) per annum. The unpaid principal amount
of this Note and all accrued interest thereon shall be paid solely in accordance
with the provisions of Section 2.3 and Section 2.4 of that certain Loan and
Security Agreement dated as of June 20, 1995, as amended on March 27, 1997 (the
"Loan and Security Agreement"), to which a copy of the form of this Note is
attached as Exhibit A; provided, however, that in the event that as a result of
any Equity Financing and/or Debt Financing by Borrower that closes after
December 31, 1995 and prior to the Repayment Commencement Date (or, if earlier,
the Alternative Payment Schedule Date), the Maximum Development Loan Commitment
in effect immediately prior to such Financing is reduced pursuant to the Loan
and Security Agreement to an amount that is less than the aggregate principal
amount of Development Loans then outstanding, Borrower shall pay to Lender, as a
mandatory prepayment of this Note (or, subject to Section 2.3(e) of the Loan and
Security Agreement, as a mandatory prepayment of other Notes outstanding under
the Loan and Security Agreement) out of the net proceeds received by Borrower
pursuant to such Financing, within ten (10) days after receipt thereof, such
amount as is necessary to reduce the aggregate principal amount of Development
Loans then outstanding to an amount equal to the Maximum Development Loan
Commitment in effect immediately after such Financing.
This Note is one of the promissory notes referred to in and is secured by
the Loan and Security Agreement and is subject to certain terms and conditions
set forth therein. Any capitalized terms used and not defined in this Note shall
have the respective meanings set forth in the Loan and Security Agreement.
Reference is made to the Loan and Security Agreement for certain rights of
the Lender hereunder, including, without limitation, the rights of the Lender in
the event that Borrower shall fail to pay when due any principal of or interest
on this Note, and the right of Lender to accelerate the principal balance hereof
and the interest accrued and unpaid
1.
<PAGE> 2
thereon upon the occurrence of an Event of Default under the Loan and Security
Agreement.
If this Note (or any interest payment hereunder) becomes due and payable on
a Saturday, Sunday, or public or other banking holiday under the laws of the
State of California, the maturity thereof shall be extended to the next
succeeding business day, and interest shall be payable thereon at the rate
herein specified during such extension.
The Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, all rights of setoff and all rights to interpose
counterclaims and cross-claims in any litigation with respect to this Note, and
assents to extensions of the time of payment, release, surrender or substitution
of security, or forbearance or other indulgence, without notice.
In the event that the Lender or any holder hereof shall refer this Note to
an attorney for enforcement or collection, the Borrower agrees to pay, in
addition to unpaid principal and interest, all reasonable costs and expenses
incurred in attempting or effecting enforcement or collection hereof, including
reasonable attorneys' fees, whether or not suit is instituted.
This Note may not be changed, modified or terminated orally, but only by an
agreement in writing signed by the Lender and the Borrower. This Note shall be
binding upon the successors and assigns of the Borrower and inure to the benefit
of the Lender, its successors, endorsees and assigns. If any term or provision
of this Note shall be held invalid, illegal or unenforceable the validity,
legality and enforceability of all other terms and provisions hereof shall in no
way be affected thereby.
Each of the Lender and the Borrower hereby waives trial by jury in any
action or proceeding of any kind or nature in any court or tribunal in which any
action may be commenced by or against the Borrower arising out of this Note.
The foregoing waivers have been made with the advice of counsel and with a
full understanding of the legal consequences thereof, and shall survive the
payment of all amounts payable hereunder.
BORROWER: AMYLIN PHARMACEUTICALS, INC.
By: /s/ MARJORIE T. SENNETT
--------------------------------
Marjorie T. Sennett
Senior Vice President and
Chief Financial Officer
2.
<PAGE> 1
EXHIBIT 10.37
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE
1,530,950 SHARES OF COMMON STOCK OF
AMYLIN PHARMACEUTICALS, INC.
(Void after September 29, 2007)
This certifies that Johnson & Johnson, a New Jersey Corporation, or its
permitted assigns (the "Holder"), for value received, is entitled to purchase
from AMYLIN PHARMACEUTICALS, INC., a Delaware corporation (the "Company"),
having a place of business at 9373 Towne Centre Drive, San Diego, California
92121, One Million Five Hundred Thirty Thousand Nine Hundred Fifty (1,530,950)
fully paid and nonassessable shares of the Company's Common Stock ("Stock") for
cash at a price of twelve dollars ($12.00) per share (the "Stock Purchase
Price") at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on September 29, 2007, such day being referred to herein as the
"Expiration Date", upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and upon payment in cash or by check of the aggregate Stock
Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof. The Stock
Purchase Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the holder
of record hereof, at any time or from time to time, up to the Expiration Date
for all or any part of the shares of Stock (but not for a fraction of a share)
which may be purchased hereunder. The Company agrees that the shares of Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered, properly endorsed, the
completed, executed Form of Subscription delivered and payment made for such
shares. Certificates for the shares of Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's
1.
<PAGE> 2
expense within a reasonable time after the rights represented by this Warrant
have been so exercised. In case of a purchase of less than all the shares which
may be purchased under this Warrant, the Company shall cancel this Warrant and
execute and deliver a new Warrant or Warrants of like tenor for the balance of
the shares purchasable under the Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Stock as may be requested by the Holder hereof
and shall be registered in the name of such Holder.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any shareholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved, for the purpose of issue
or transfer upon exercise of the subscription rights evidenced by this Warrant,
a sufficient number of shares of authorized but unissued Stock, or other
securities and property, when and as required to provide for the exercise of the
rights represented by this Warrant. The Company will take all such action as may
be necessary to assure that such shares of Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Stock may be
listed; provided, however, that subject to the provisions of Section 7, the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise. The Company will not take any
action which would result in any adjustment of the Stock Purchase Price (as
defined in Section 3 hereof) if the total number of shares of Stock issuable
after such action upon exercise of all outstanding warrants, together with all
shares of Stock then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding, would exceed the
total number of shares of Stock then authorized by the Company's Certificate of
Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
2.
<PAGE> 3
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Stock into a greater number of
shares, the Stock Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares
of Stock of the Company shall be combined into a smaller number of shares, the
Stock Purchase Price in effect immediately prior to such combination shall be
proportionately increased.
3.2 DIVIDENDS IN STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If at
any time or from time to time all holders of shares of the Company's Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(A) Stock or any shares of stock or other securities which are at
any time directly or indirectly convertible into or exchangeable for Stock, or
any rights or options to subscribe for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution, or
(B) Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Stock issued as
a stock split, adjustments in respect of which shall be covered by the terms of
Section 3.1 above), then and in each such case, the Holder hereof shall, upon
the exercise of this Warrant, be entitled to receive, in addition to the number
of shares of Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
which such Holder would hold on the date of such exercise had he been the holder
of record of such Stock as of the date on which holders of Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In any reorganization described
3.
<PAGE> 4
above, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock Purchase
Price and of the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.
3.4 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares purchasable upon the
exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
3.5 OTHER NOTICES. If at any time:
(1) the Company shall declare any cash dividend upon its Common
Stock;
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any capital reorganization or reclassification
of the capital stock of the Company; or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(6) then, in any one or more of said cases, the Company shall
give, by first class mail, postage prepaid, addressed to the Holder of this
Warrant at the address of such Holder as shown on the books of the Company, (a)
at least 20 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (b) in the case of any such reorganization,
4.
<PAGE> 5
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or public offering, at least 20 days' prior written notice of the
date when the same shall take place; provided, however, that the Holder shall
make a best efforts attempt to respond to such notice as early as possible after
the receipt thereof. Any notice given in accordance with the foregoing clause
(a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up, conversion or public offering, as the case may be.
4. ISSUE TAX. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Stock issued or issuable
upon the exercise of any warrant in any manner which interferes with the timely
exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof the
right to vote or to consent or to receive notice as a shareholder of the Company
or any other matters or any rights whatsoever as a shareholder of the Company.
No dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Stock, and no mere enumeration herein of the rights or
privileges of the Holder hereof, shall give rise to any liability of such Holder
for the Stock Purchase Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by its creditors.
7. REGISTRATION RIGHTS. The shares of Common Stock issuable pursuant to
this Warrant shall be deemed to be "Registrable Securities" for purposes of
Section 7 of that certain Stock Purchase Agreement dated June 20, 1995 between
Johnson & Johnson Development Corporation and the Company.
5.
<PAGE> 6
8. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole or in portions not less than 20,000 shares, without charge to the
Holder hereof (except for transfer taxes), upon surrender of this Warrant
properly endorsed. Each taker and holder of this Warrant, by taking or holding
the same, consents and agrees that this Warrant, when endorsed in blank, shall
be deemed negotiable, and that the Holder hereof, when this Warrant shall have
been so endorsed, may be treated by the Company, at the Company's option, and
all other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company any notice to the
contrary notwithstanding; but until such transfer on such books, the Company may
treat the registered owner hereof as the owner for all purposes.
9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder.
10. NOTICES. Any notice, request or other document required or permitted to
be given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Stock issuable upon the exercise of this Warrant shall
survive the exercise and termination of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder hereof.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware without regard to conflict of
laws principles.
13. LOST WARRANTS. The Company represents and warrants to the Holder hereof
that upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the
6.
<PAGE> 7
Company, at its expense, will make and deliver a new Warrant, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its officers, thereunto duly authorized this 30th day of September 1997.
AMYLIN PHARMACEUTICALS, INC.
a Delaware corporation
By: /s/ MARJORIE T. SENNETT
--------------------------------
Marjorie T. Sennett
Senior Vice President and
Chief Financial Officer
7.
<PAGE> 8
EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 19___
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by AMYLIN
PHARMACEUTICALS, INC. (the "Company") and dated ________________, 199__ (the
"Warrant") and to purchase thereunder __________________________________ shares
of the Common Stock of the Company (the "Shares") at a purchase price of Twelve
Dollars ($12.00) per Share or an aggregate purchase price of __________________
________________ Dollars ($__________) (the "Purchase Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on Exhibit B attached
to the Warrant.
Very truly yours,
Johnson & Johnson
By
---------------------------------
Title
------------------------------
1.
<PAGE> 9
EXHIBIT B
TO WARRANT CERTIFICATE
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO AMYLIN PHARMACEUTICALS,
INC. ALONG WITH THE SUBSCRIPTION FORM BEFORE THE STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT CERTIFICATE DATED _____________, 199__ WILL BE ISSUED.
_____________________, 19__
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: President
The undersigned, Johnson & Johnson, a New Jersey corporation ("Purchaser"),
intends to acquire up to ______________ shares of the Common Stock (the "Stock")
of AMYLIN PHARMACEUTICALS, INC. (the "Company") from the Company pursuant to the
exercise of a certain Warrant to purchase Stock held by Purchaser. The Stock
will be issued to Purchaser in a transaction not involving a public offering and
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "1933 Act") and applicable state securities laws. In connection
with such purchase and in order to comply with the exemptions from registration
relied upon by the Company, Purchaser represents, warrants and agrees as
follows:
Purchaser is acquiring the Stock for its own account, to hold for
investment, and Purchaser shall not make any sale, transfer or other disposition
of the Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC") or
in violation of any applicable state securities law.
Purchaser has been advised that the Stock has not been registered under the
1933 Act or state securities laws on the ground that this transaction is exempt
from registration, and that reliance by the Company on such exemptions is
predicated in part on Purchaser's representations set forth in this letter.
2.
<PAGE> 10
Purchaser has been informed that under the 1933 Act, the Stock must be held
indefinitely unless it is subsequently registered under the 1933 Act or unless
an exemption from such registration (such as Rule 144) is available with respect
to any proposed transfer or disposition by Purchaser of the Stock. Purchaser
further agrees that the Company may refuse to permit Purchaser to sell, transfer
or dispose of the Stock (except as permitted under Rule 144) unless there is in
effect a registration statement under the 1933 Act and any applicable state
securities laws covering such transfer, or unless Purchaser furnishes an opinion
of counsel reasonably satisfactory to counsel for the Company, to the effect
that such registration is not required.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Stock, or any substitutions therefor, a legend stating in
substance:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. These shares have been acquired for investment and
may not be sold or otherwise transferred in the absence of an effective
registration statement for these shares under the Securities Act and
applicable state securities laws, or an opinion of counsel satisfactory to
the Company that registration is not required and that an applicable
exemption is available."
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Stock with
Purchaser's counsel.
Very truly yours,
Name of Purchaser:
JOHNSON & JOHNSON
By:
--------------------------------
Title:
-----------------------------
3.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AND THE CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS AS FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 46,935,000
<SECURITIES> 17,811,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 66,546,000
<PP&E> 19,140,000
<DEPRECIATION> 10,029,000
<TOTAL-ASSETS> 77,321,000
<CURRENT-LIABILITIES> 19,243,000
<BONDS> 0
<COMMON> 32,000
0
0
<OTHER-SE> 26,809,000
<TOTAL-LIABILITY-AND-EQUITY> 77,321,000
<SALES> 0
<TOTAL-REVENUES> 33,329,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 65,712,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 706,000
<INCOME-PRETAX> (33,090,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (33,090,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,090,000)
<EPS-PRIMARY> (1.03)
<EPS-DILUTED> (1.03)
</TABLE>
