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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
October 4, 1999
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Date of Report (Date of earliest event reported)
INHALE THERAPEUTIC SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 023556 94-3134940
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
150 Industrial Road
San Carlos, CA 94070
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(Address of principal executive offices)
(650) 631-3100
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(Registrant's telephone number, including area code)
1.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 4, 1999, Inhale Therapeutic Systems, Inc. announced that it
had entered into a definitive Asset Purchase Agreement with Alliance
Pharmaceutical Corp. to acquire Alliance's PulmoSpheres-Registered Trademark-
particle and particle processing technology and other related assets for use
in respiratory drug delivery. PulmoSpheres-Registered Trademark- technology
is a particle formation method designed to enhance the efficiency of and
reproducibility of drugs delivered in propellant-based metered dose and in
dry powder inhalers.
Under the terms of the agreement, Alliance will receive a minimum of
$15.0 million in cash payments from Inhale and $5.0 million of Inhale common
stock. In exchange, Inhale will receive the rights to the
PulmoSpheres-Registered Trademark- technology in the field of respiratory
delivery, other related assets and $5.0 million in Alliance common stock. On
closing of the transaction, Alliance will immediately receive $10.0 million
in cash and Inhale will receive $5.0 million in Alliance common stock. In
the event that Inhale has completed a financing prior to the close of the
transaction, Alliance will receive the additional $5.0 million in cash and
the $5.0 million in Inhale common stock at the closing. In the event a
financing has not occurred as of the closing date, these additional payments
will be made at the earlier of the closing of a subsequent financing or one
year following the closing of the Alliance acquisition. The price for the
common stock to be received by both Inhale and Alliance will be calculated as
an average of the closing price on the 15 trading days prior to issuance, and
will be restricted securities as defined in the rules promulgated under the
Securities Act of 1933, as amended.
Among the assets to be acquired pursuant to the agreement is Alliance's
intellectual property portfolio for PulmoSpheres-Registered Trademark-,
including several patent applications, and the exclusive right to use the
technology in the respiratory field. Alliance will retain the right to
develop up to two products yet to be specified which will be formulated by
Inhale using the PulmoSpheres-Registered Trademark- technology. In addition,
Inhale will acquire certain equipment from Alliance consisting primarily of
powder processing equipment. These assets have been utilized by Alliance in
the development of the PulmoSpheres-Registered Trademark- technology and
Inhale expects to continue their use in the further development and
application of the technology to Inhale's proprietary technology platform. In
addition to the consideration described above, Alliance will have the right
to additional substantial payments upon the achievement of certain milestones
and royalties on a defined number of products commercialized using the
technology.
The proposed source of consideration for the technology and other assets
to be acquired, as well as future payments to be made pursuant to the
agreement, is Inhale's current cash and cash equivalents, and to a certain
extent, the proceeds from proposed Inhale financings. On October 4, 1999,
Inhale filed a current report on Form 8-K relating to its announcement on
September 29, 1999, of its intention to issue $100 million aggregate
principal amount of convertible subordinated debentures ($120 million if the
over-allotment option is exercised in full).
The transaction has been approved by the Board of Directors of Inhale
and Alliance and is subject to the satisfaction of customary closing
conditions, including the requirements of the Hart-Scott-Rodino Act, which
the parties anticipate meeting in approximately 30 days.
This report contains forward-looking statements that reflect
management's current views as to Inhale's future products, product
developments, manufacturing scale-up, and other future events and operations.
These forward-looking statements involve uncertainties and other risks that
are detailed in Inhale's reports and other filings with the SEC, including
its Form 10-K for the year ending Dec. 31, 1998. Actual results could differ
materially from these forward-looking statements.
2.
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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 hereunto duly authorized.
INHALE THERAPEUTIC SYSTEMS, INC.
Dated: October 4, 1999 By: /s/ Brigid A. Makes
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Brigid A. Makes
Chief Financial Officer and Vice
President of Finance and Administration
3.
