UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 13, 2000
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CHRONIMED INC.
(Exact name of registrant as specified in its charter)
MINNESOTA
(State or other jurisdiction of incorporation)
0-19952 41-1515691
(Commission File Number) (IRS Employer Identification Number)
10900 Red Circle Drive, Minnetonka, Minnesota 55343
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (612) 979-3600
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ITEM 5. OTHER EVENTS.
On March 13, 2000, Chronimed Inc. announced its intention to spin-off its
Diagnostic Products business to shareholders. At this time, the Company also
discontinued its engagement with PaineWebber, the purpose of which was to
explore strategic alternatives for the Company. See Exhibit 99.1 filed with this
Form 8-K for this announcement.
The spin-off of the Diagnostic Products business to Chronimed shareholders is
intended to allow Chronimed and Diagnostic Products to focus better on growing
their respective businesses to compete in today's highly competitive markets.
The spin-off will separate the businesses of Chronimed and Diagnostic Products
in a manner that reflects their different missions and different financial,
investment, and operating characteristics so that each can pursue business
strategies and objectives appropriate to its specific business. The spin-off
also will permit our investors, customers, lenders, and other constituencies to
evaluate the respective businesses of Chronimed and Diagnostic Products on a
stand-alone basis.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
(c) Exhibits.
99.1 Press Release of Chronimed, Inc. dated March 13, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the undersigned
thereunto duly authorized.
CHRONIMED INC.
Date: March 15, 2000
By /s/ Gregory H. Keane
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Gregory H. Keane
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT PAGE NUMBER
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99.1 Press Release of Chronimed, Inc. dated March 13, 2000 6
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EXHIBIT 99.1
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NEWS RELEASE
MARCH 13, 2000
CONTACTS: PAUL S. DUNN, INVESTOR RELATIONS, OR
MAURICE R. TAYLOR, II, CHAIRMAN AND CEO,
AT CHRONIMED INC. (612) 979-3600
CHRONIMED ANNOUNCES INTENT TO SPIN-OFF DIAGNOSTIC PRODUCTS UNIT
COMPANY DISCONTINUES PAINEWEBBER ENGAGEMENT
MINNEAPOLIS, MARCH 13, 2000 -- CHRONIMED INC.'S (NASDAQ: CHMD) Board of
Directors today announced its intent to spin-off its Diagnostic Products
business through a tax free dividend to shareholders. The dividend will provide
shares in the newly formed company to shareholders of Chronimed Inc. as of a
record date to be announced. Management and operations of the new Diagnostic
Products company will be independent of Chronimed Inc. Also, it is intended that
the Diagnostic Products business will trade on Nasdaq's National Market System,
independent from the remaining Pharmacy Services business. The spin-off, which
is contingent upon a favorable tax opinion and satisfaction of other conditions,
is expected to be completed within the next few months.
The Board indicated Mr. Taylor will be the chief executive officer and
Chairman of the Board of the Diagnostic Products company upon its formation. The
Board also directed that Henry F. Blissenbach, Pharm.D., Chronimed's current
president and chief operating officer, will be promoted to chief executive
officer and Chairman of the Board of Chronimed Inc., the Pharmacy Services
company.
Commenting on the decision, Chronimed's chairman and chief executive
officer, Maurice R. Taylor, II, said, "This action represents the culmination of
a thorough analysis, led by PaineWebber, of strategic alternatives available to
the Company. This analysis clearly demonstrated that Chronimed is really two
distinct businesses in different healthcare sectors -- a diagnostic products
business and a specialty pharmacy services business. We learned that our
integrated approach to healthcare was confusing to many people in the business
and investment communities, and therefore, the true value of the company was
being discounted. As a result, our Board of Directors concluded that creating
two separate public companies would be the best way to deliver to shareholders
the value it believes inherent in both Diagnostic Products and Pharmacy
Services. Each company will now be able to focus on its unique markets to
enhance its own growth and profitability. The Company appreciates the efforts of
the Board, management and employees during the past year as we have sorted
through various alternatives. We also thank PaineWebber, whose assignment is now
complete with this action, for its direction and assistance."
Commenting on the future of the Pharmacy Services company, Mr.
Blissenbach said, "The outlook for Chronimed as a stand-alone pharmacy services
provider is very exciting. The growth of the Pharmacy Services business has been
phenomenal, particularly in our biotech injectables, HIV/AIDS and hepatitis
lines. This split will allow Chronimed to be a "pure play" entity focused on
specialty pharmacy distribution, a group that has been one of the best
performing and most rewarded segments in the healthcare sector."
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CHRONIMED ANNOUNCES INTENT TO SPIN-OFF DIAGNOSTIC PRODUCTS UNIT
MARCH 13, 2000 - PAGE TWO
Chronimed also announced that Board member Travers (Terry) Wills, and
Senior Vice Presidents Steven Crees and Steven Russek have resigned their
respective positions. On the departures, Mr. Taylor stated, "We are extremely
grateful to them for their contributions to Chronimed's success. We wish them
well in their new endeavors."
Chronimed Inc. is a leading integrated healthcare company specializing
in diagnostic products and specialty pharmacy services for people with chronic
health conditions. The Company develops, manufactures, markets, and distributes
pharmaceuticals and medical diagnostic products. It provides specialized patient
management services nationwide for people with long-term chronic conditions such
as HIV/AIDS, hepatitis B and C, diabetes, organ transplants, and diseases
treated with injectable medications. Chronimed works directly with patients,
providers, and payors to improve clinical and cost-of-care outcomes. Chronimed's
web site address is www.chronimed.com.
As a cautionary note to investors, certain matters discussed in this
press release are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such matters involve risks and
uncertainties that may cause actual results to differ materially, including the
following: changes in economic conditions; general competitive factors; the
Company's ability to execute its service and product sales plans; changes in the
status of managed care contracts; the Company's ability to complete the spin-off
of its diagnostic products business; and the risks described from time to time
in the Company's SEC reports.
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