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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 August 19, 1998
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(Date of earliest event reported)
NeXstar Pharmaceuticals, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-23012 84-1173453
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
2860 Wilderness Place Boulder, CO 80301
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (303) 444-5893
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NA
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Item 5. Other Events
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On August 19, 1998, the Registrant announced that its Board of Directors is
actively evaluating the spin out to its stockholders of its drug discovery
organization. If the spin out occurs, it would divide the Registrant into two
publicly traded companies. Related to the decision, the Registrant announced the
resignation of Patrick J. Mahaffy as president, chief executive officer and
director. Mr. Mahaffy will continue to act as a consultant to the Registrant.
A copy of the press release issued by the Company in connection with this
announcement is set forth as Exhibit 1 hereto and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
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Exhibit 1 -- Press Release dated August 19, 1998.
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SIGNATURE
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.
NeXstar Pharmaceuticals, Inc.
By: /s/ Michael E. Hart
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Michael E. Hart
Vice President and Chief Financial
Officer
Dated: August 19, 1998
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EXHIBIT INDEX
Exhibit No. Description Page
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1 Press Release dated August 19, 1998.
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NeXstar Pharmaceuticals, Inc.
2860 Wilderness Pl., Boulder, CO 80301 Phone 303.444.5893 Fax 303.544.6113
FOR IMMEDIATE RELEASE
Contacts at NeXstar Pharmaceuticals:
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Anna Sussman Katy Doherty
Manager, Investor Relations Manager, Media Relations
(303) 546-7875 (303) 664-0142
NEXSTAR TO EVALUATE SPIN OUT OF DISCOVERY ORGANIZATION
CEO PATRICK MAHAFFY RESIGNS
BOULDER, Colo., August 19, 1998 - NeXstar Pharmaceuticals, Inc.
(NASDAQ-NMS: NXTR) today announced that its Board of Directors is actively
evaluating the spin out to its stockholders of its drug discovery organization,
thereby dividing the existing company into two publicly traded companies. This
spin out would be designed to highlight the strong development pipeline and
fundamental profitability of the company's products group, as well as the
substantial technology value in its drug discovery organization.
Related to this decision, the company also announced the resignation of Patrick
J. Mahaffy as president, CEO and director. Mahaffy will continue to act as a
consultant to the company.
"While I believe that both independent companies would have substantial
opportunities, the creation of two separate companies is obviously different
from the strategy I have been pursuing and as a result it would be inappropriate
for me to remain," Mahaffy said.
Larry Gold, Ph.D., chairman of the board and chief scientific officer of NeXstar
Pharmaceuticals, provided additional comment on the potential spin out. "If we
were to establish an independent discovery and research company, NeXstar
Pharmaceuticals could realize savings of approximately $20 million per year and
become a sustainably profitable drug marketing and development organization,"
Gold said. "We believe that a restructured NeXstar Pharmaceuticals would be more
appropriately valued for its earnings and the strengths of its existing
development pipeline.
-more-
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NeXstar Evaluates Spin Out
Page Two
"In addition, we believe strongly that the separation of the discovery-based
company from the commercial organization would serve to highlight our tremendous
strengths," Gold added. "NeXstar Pharmaceuticals has recently entered into two
substantial discovery-based relationships that validate the power of research at
NeXstar Pharmaceuticals, one with Glaxo Wellcome related to SELEX technology,
and one with SKW related to nucleic acid chemistry and manufacturing
technologies.
"We believe that by creating a separate company related only to research and
discovery-based activities that these types of relationships would be more
visible," added Gold. "These two transactions along with a cash infusion from
NeXstar Pharmaceuticals would provide a strong foundation for the
discovery-based company."
The company expects to make further announcements related to this potential spin
out within the next 45 days. During this transition period, NeXstar
Pharmaceuticals will be managed by its existing management committee, which
includes: Dr. Crispin Eley, vice president, pharmaceutical operations; Larry
Gold; Mike Hart, vice president and CFO; Barry Herron, vice president, sales and
marketing; and Nicole Onetto, M.D., vice president, medical affairs. Mr. Hart
will chair the committee. A search has been initiated to find chief executives
for NeXstar Pharmaceuticals and the potential new discovery company.
This press release contains forward-looking statements that involve risks and
uncertainties and actual events or results may differ materially. While these
statements, which include predictions about cost savings to, and potential
profitability of, NeXstar Pharmaceuticals and a potential spin out of the
company's research and discovery group, reflect NeXstar Pharmaceuticals' best
current judgment, they are subject to risks and uncertainties that could cause
actual results to vary from current projections. These risk factors are
identified in NeXstar Pharmaceuticals' reports to the Securities and Exchange
Commission filed on forms 10-K and 10-Q, and in other SEC filings.
NeXstar Pharmaceuticals, Inc. is engaged in the discovery, development,
manufacture and commercialization of products to treat serious and life
threatening illnesses. The company currently markets two drugs in the United
States and around the world, AmBisome and DaunoXome. Based in Boulder, Colo.,
NeXstar Pharmaceuticals maintains additional research, development and
manufacturing facilities in San Dimas, Calif., and marketing subsidiaries
worldwide.
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