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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): OCTOBER 12, 1999
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ARIAD PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-21696 22-3106987
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
26 LANDSDOWNE STREET, CAMBRIDGE, MASSACHUSETTS 02139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 494-0400
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
1. On October 12, 1999, ARIAD Pharmaceuticals, Inc. (the "REGISTRANT")
announced that it had entered into a letter of intent (the "LETTER OF INTENT")
with Hoechst Marion Roussel, Inc. ("HMR"), pursuant to which HMR confirmed its
intention to purchase the Registrant's 50% ownership interest (the "ARIAD
INTEREST") in the Hoechst-ARIAD Genomics Center, LLC, a joint venture that was
created in 1997. Under the terms outlined in the Letter of Intent, the
Registrant shall receive the following consideration from HMR for the ARIAD
Interest: (i) $40 million in cash, of which $5 million has been advanced to the
Registrant as a down payment, (ii) the return of 3,004,436 shares of series B
convertible preferred stock, (iii) the forgiveness by HMR of all long-term debt,
including accrued interest, which as of September 30, 1999 was approximately
$1,828,000, and (iv) the rights to compounds and related technologies resulting
from a collaboration on the development of Src tyrosine kinase inhibitors. The
purchase and sale of the ARIAD Interest is subject to the negotiation and
execution of definitive documentation and the satisfaction of closing
conditions, including approval under the Hart-Scott-Rodino Anti-Trust
Improvement Act of 1976. A copy of the press release disclosing the sale of the
ARIAD Interest is filed herewith as Exhibit 99.1.
2. On October 28, 1999, the Registrant announced that it had entered into
an agreement with Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson
Strategic Growth Fund, L.P. (individually, a "FUND", and collectively, the
"FUNDS") to repurchase (the "REPURCHASE") an aggregate of 2,000 shares of series
C convertible preferred stock (the "SERIES C STOCK") held by the Funds and other
rights for an aggregate purchase price of $3,250,000, subject to adjustment
under certain circumstances. The closing of the Repurchase is presently expected
to occur on or before December 31, 1999, subject to the satisfaction of closing
conditions. In connection with the Repurchase, each of the Funds has agreed to
forbear during the time prior to the closing from exercising certain rights
arising under the Securities Purchase Agreement dated November 9, 1998 (the
"SECURITIES PURCHASE AGREEMENT"), the Registration Rights Agreement dated
November 9, 1998, and the Certificate of Designations, Preferences and Rights of
Series C Convertible Preferred Stock (the "CERTIFICATE OF DESIGNATIONS"),
including without limitation: (i) the right to convert or redeem any shares of
Series C Stock, (ii) the right to receive dividends, (iii) the right to purchase
additional shares of Series C Stock from the Registrant, and (iv) the right to
participate, through a right of first refusal, in certain future financings of
the Registrant. A copy of the press release disclosing the Repurchase is filed
herewith as Exhibit 99.2.
3. On October 28, 1999, the Registrant also announced that on October 26,
1999 it filed an action against both HFTP Investments, LLC ("HFTP"), an
affiliate of Promethean Investment Group, LLC ("PROMETHEAN"), and Promethean in
the United States District Court for the Southern District of New York entitled
ARIAD PHARMACEUTICALS, INC. V. PROMETHEAN INVESTMENT GROUP, LLC AND HFTP
INVESTMENTS, LLC, C.A. No. 99-Civ-10794, alleging (i) violations of the federal
securities laws by Promethean and HFTP, including insider trading and stock
manipulation through short sales of the Registrant's common stock, (ii) breach
of contract, and (iii) breach of the covenant of good faith and fair dealing. At
the time that the action was filed, the Registrant was in negotiations to
repurchase 3,000 shares of Series C Stock held by HFTP. The Registrant is
seeking an order enjoining Promethean and HFTP from further trading in the
Registrant's common stock and damages in an amount to be determined at trial.
Also on October 26, 1999, HFTP filed an action against the Registrant in the
Chancery Court of the State of Delaware entitled HFTP INVESTMENTS, LLC V. ARIAD
PHARMACEUTICALS, INC., C.A. No. 17501NC, principally alleging breach of contract
by the Registrant for failure to recognize and
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effectuate the conversion by HFTP of 612 shares of Series C Stock into 1,078,038
shares of the Registrant's common stock. HFTP is seeking an order requiring the
issuance of such shares and unspecified damages.
On November 1, 1999, HFTP filed a motion to amend and supplement its
complaint to include an allegation of breach of contract for the anticipated
failure by the Registrant to honor a right of redemption that HFTP attempted to
exercise on November 1, 1999 with respect to 650 shares of Series C Stock. HFTP
also alleges that Registrant will refuse to honor any additional redemptions of
Series C Stock attempted by HFTP. Based on these new allegations, HFTP seeks
damages in the amount of $2,403,256.50 for the redemption right that it has
attempted to exercise, plus additional amounts for any redemptions that are
refused by Registrant in the future. Thereafter, HFTP attempted to exercise its
right of redemption with respect to 170 shares of Series C Stock on November 2,
1999, with respect to 1,474 shares of Series C Stock on November 3, 1999 and
with respect to its remaining 94 shares of Series C Stock on November 4, 1999,
demanding a total cash payment of $6,644,724.13 with respect thereto. The
Registrant has not converted or redeemed any shares of its outstanding preferred
stock held by HFTP and has filed a motion to dismiss or stay the action filed by
HFTP in the Chancery Court of the State of Delaware.
On November 8, 1999, the Registrant amended its complaint against HFTP
and Promethean in the action pending before the United States District Court for
the Southern District of New York, principally seeking (i) to enjoin Promethean
and HFTP from further artificially manipulating the price of ARIAD common stock
and trading in ARIAD common stock on the basis of material non-public
information, (ii) to rescind the purchase by HFTP of the 3,000 shares of Series
C Stock, (iii) to obtain a judicial determination that Promethean and HFTP have
breached, and that the Registrant has complied with, the Securities Purchase
Agreement and the Certificate of Designations, and (iv) to obtain a judicial
declaration that HFTP is not entitled to convert or redeem any shares of Series
C Stock under the Securities Purchase Agreement and the Certificate of
Designations. A copy of the press release disclosing the initiation of the
litigation between the Registrant and HFTP and Promethean is filed herewith as
Exhibit 99.2.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits.
Exhibit
NO. DESCRIPTION
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99.1 Press Release, dated October 12, 1999.
99.2 Press Release, dated October 28, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ARIAD PHARMACEUTICALS, INC.
Dated: November 10, 1999 By: /s/ Jay R. Lamarche
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Jay R. LaMarche
Executive Vice President
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Press Release, dated October 12, 1999.
99.2 Press Release, dated October 28, 1999.
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EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Jay LaMarche
Chief Financial Officer
(617) 494-0400
Jennifer LaVin
Bridge Communications
(212) 554-4158
Lori Kraut
Hoechst Marion Roussel US
(908) 231-5752
HOECHST MARION ROUSSEL TO ACQUIRE ARIAD'S INTEREST
IN GENOMICS JOINT VENTURE
ARIAD TO RECEIVE RIGHTS FROM OSTEOPOROSIS COLLABORATION
FRANKFURT, GERMANY AND CAMBRIDGE, MA, OCTOBER 12, 1999 -- Hoechst
Marion Roussel, the pharmaceutical company of Hoechst AG, and ARIAD
Pharmaceuticals, Inc. (Nasdaq: "ARIA") today announced that Hoechst Marion
Roussel Inc. intends to purchase ARIAD's 50% ownership interest in the
Hoechst-ARIAD Genomics Center, LLC, a joint venture created in 1997.
ARIAD and Hoechst Marion Roussel established the Hoechst-ARIAD Genomics Center
to pursue functional genomics based upon state-of-the-art technologies in
molecular and cellular
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genetics and bioinformatics. The center's goal is to analyze human genes and
identify those genes that encode novel therapeutic proteins or targets for
small-molecule drug discovery.
ARIAD and HMR began collaborating on the discovery and development of drugs to
treat osteoporosis and related bone diseases in 1995. The collaboration has
focused on developing novel, small-molecule drugs that block the activity of
Src, an intracellular signaling protein that is critical to the osteoporosis
disease process.
Under the terms of an agreement outlined in a letter of intent
signed today, upon closing of the sale ARIAD will receive $40 million in cash;
return of approximately three million shares of ARIAD series B convertible
preferred stock; forgiveness of approximately $2 million of long-term debt held
by Hoechst Marion Roussel; and rights to compounds and related technologies
resulting from a collaboration on the development of Src tyrosine kinase
inhibitors. Hoechst Marion Roussel will receive certain payments related to
approval and commercial sale of Src inhibitors. ARIAD will be advanced $5
million of the purchase price immediately. Closing of the sale is expected
before year-end 1999, pending execution of definitive agreements and approval
under the Hart-Scott-Rodino Anti-Trust Improvement Act of 1976.
"Sole ownership of the Hoechst-ARIAD Genomics Center will further enhance our
drug discovery capabilities by affording us exclusive access to technologies
required to analyze human genes and identify novel therapeutic targets," said
Frank L. Douglas, M.D., member of the board and head of Drug Innovation and
Approval for Hoechst Marion Roussel.
"This transaction with Hoechst Marion Roussel is the first step in redefining
our business. This restructuring of our relationship with Hoechst Marion Roussel
will allow ARIAD to focus on near-term development programs and its own products
with the goal of bringing one of our proprietary osteoporosis drug candidates to
the clinic as soon as possible," said Harvey J. Berger, M.D., chairman and chief
executive officer of ARIAD.
Hoechst Marion Roussel, a world leader in pharmaceutical-based health care, is
dedicated to extending and enhancing human life through the discovery,
development, manufacture and
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sale of pharmaceutical products. Its major products are among the world's
leading therapies for allergic, metabolic, and central nervous systems disorders
and cardiovascular and infectious diseases. Based in Frankfurt, Germany, Hoechst
Marion Roussel is the pharmaceutical company of Hoechst AG, an international
company that focuses on life sciences.
ARIAD Pharmaceuticals (www.ariad.com) is engaged in the discovery and
development of novel therapeutics based on signal transduction technology. ARIAD
is developing small-molecule drugs to block intracellular signaling pathways
that play a critical role in major diseases, including osteoporosis and various
immune-related disorders. ARIAD is also developing ARGENT(TM), a proprietary
gene regulation technology for orally active protein therapy and cellular
immunotherapy that utilizes small-molecule drugs to control intracellular
signaling pathways in engineered cells.
Some of the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties, which include, but are not
limited to, risks and uncertainties regarding the successful completion of the
sale of ARIAD's interest in the Genomics Center under the terms described above,
if at all, ARIAD's preclinical studies, the ability of ARIAD to conduct clinical
trials of its products and the success of such trials, as well as risks and
uncertainties relating to economic conditions, markets, products, competition,
intellectual property, services and prices, key employees, future capital needs,
dependence on our collaborators and other factors under the heading "Cautionary
Statement Regarding Forward-Looking Statements" in ARIAD's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 filed with the Securities and
Exchange Commission.
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EXHIBIT 99.2
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Jay LaMarche
Chief Financial Officer
(617) 494-0400
Eytan Apter
Small Caps Online
Communications
(212) 554-4158
ARIAD SEEKS REPURCHASE OF SERIES C PREFERRED STOCK
ARIAD AGREES TO REPURCHASE 2,000 SHARES HELD BY BROWN SIMPSON FUNDS AND FILES
LAWSUIT AGAINST PROMETHEAN INVESTMENT GROUP AND HFTP INVESTMENTS
CAMBRIDGE, MA, OCTOBER 28, 1999 -- ARIAD Pharmaceuticals, Inc.
(Nasdaq: "ARIA") today announced that it has entered into an agreement with
Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson Strategic Growth
Fund, L.P. to repurchase their 2,000 shares of ARIAD's series C preferred stock
and other rights for an aggregate purchase price of $3,250,000, subject to
certain closing conditions and price adjustments under certain circumstances.
The closing is expected to occur during the fourth quarter of 1999. To
facilitate the repurchase, the Brown Simpson funds agreed to forbear during the
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time prior to the closing from exercising certain rights under the series C
purchase agreement, including the right to convert or redeem their preferred
stock, the right to receive dividends, the right to purchase additional shares
of series C preferred stock from ARIAD and the right to participate, through a
right of first refusal, in future financings of ARIAD. The 2,000 shares of
series C preferred stock were issued by ARIAD to the Brown Simpson funds in
November 1998 for $2,000,000.
Another 3,000 shares of series C preferred stock were issued
to HFTP Investments, LLC, an affiliate of Promethean Investment Group, LLC, in
November 1998 for $3,000,000. HFTP attempted earlier this month to convert
certain of these shares of series C preferred stock into ARIAD common stock.
Although ARIAD is in ongoing negotiations to repurchase these shares, on October
26, 1999, it filed an action in the United States District Court for the
Southern District of New York entitled ARIAD PHARMACEUTICALS, INC. V. PROMETHEAN
INVESTMENT GROUP, LLC AND HFTP INVESTMENTS, LLC, C.A. No. 99-Civ-10794. ARIAD's
complaint relies upon Promethean's admission of substantial short sales of ARIAD
common stock prior to sending its conversion notice, and ARIAD alleges
violations of the federal securities laws by Promethean and HFTP, including
insider trading and stock manipulation through short sales, breach of contract
and breach of the covenant of good faith and fair dealing, and is seeking an
order enjoining defendants from further trading in ARIAD's common stock and
damages in an amount to be determined at trial. On the same date, HFTP filed an
action against ARIAD in the Chancery Court of the State of Delaware entitled
HFTP INVESTMENTS, LLC V. ARIAD PHARMACEUTICALS, INC., C.A. No. 17501NC,
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alleging ARIAD's breach of contract for failure to convert certain shares of
series C preferred stock into approximately 1.1 million shares of ARIAD common
stock, and seeking an order requiring issuance of such shares and incidental
damages in an amount specified in the certificate of designations for the series
C preferred stock. To date, ARIAD has not converted any preferred shares due to
the alleged wrongful activities of Promethean and HFTP.
"We are extremely pleased by the agreement of the Brown Simpson funds to sell
their preferred shares back to ARIAD on terms which are fair to all parties
involved," said Harvey J. Berger, M.D., chairman and chief executive officer of
ARIAD. "Brown Simpson's willingness to agree to this repurchase before year end
will prevent conversion of these preferred shares and the resulting dilution to
ARIAD's common shareholders."
ARIAD Pharmaceuticals (www.ariad.com) is engaged in the discovery and
development of novel therapeutics based on signal transduction technology. ARIAD
is developing small-molecule drugs to block intracellular signaling pathways
that play a critical role in major diseases, including osteoporosis and various
immune-related disorders. ARIAD is also developing ARGENT(TM), a proprietary
gene regulation technology for orally active protein therapy and cellular
immunotherapy that utilizes small-molecule drugs to control intracellular
signaling pathways in engineered cells.
Some of the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties, which include, but are not
limited to, risks and uncertainties regarding the successful completion of the
purchase of the series C preferred stock under the terms described above, if at
all, the successful sale of ARIAD's interest in the Genomics Center or
ability to obtain other financing for the series C preferred stock repurchase,
the outcome of ARIAD's litigation with Promethean and HFTP or ability to settle
on reasonable terms, or at all, as well as risks and uncertainties relating to
economic conditions, markets, products, competition, intellectual property,
services and prices, key employees, future capital needs, dependence on our
collaborators and other factors under the heading "Cautionary Statement
Regarding Forward-Looking Statements" in ARIAD's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 filed with the Securities and Exchange
Commission.
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