<PAGE> 1
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): June 5, 1997
DEPOTECH CORPORATION
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA
(State or Other Jurisdiction of Incorporation)
0-26862 33-0387911
(Commission File Number) (IRS Employer Identification No.)
10450 Science Center Drive, San Diego, California, 92121
(Address of Principal Executive Offices) (Zip Code)
(619) 625-2424
(Registrant's telephone number, including area code)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
On June 5, 1997, DepoTech Corporation, a California corporation
("DepoTech"), repurchased from Chiron Corporation, a Delaware Corporation
("Chiron"), exclusive marketing rights to DepoCyt in Canada and Europe. Chiron
will retain exclusive marketing rights to DepoCyt in the U.S. DepoCyt, an
injectable sustained-release formulation of the chemotherapeutic agent
cytarabine, is an anti-cancer agent for use in patients with neoplastic
meningitis. Chiron and DepoTech have been jointly developing DepoCyt in the
U.S., Canada and Europe since March 1994 and DepoTech filed a New Drug
Application ("NDA") with the U.S. Food and Drug Administration ("FDA") for
DepoCyt in April 1997.
The purchase price consisted of an aggregate of $13.7 million. A
partial cash payment is due not later than December 31, 1997. The remaining
amounts are payable as follows:
(i) If, prior to December 31, 1998, the FDA issues a letter or
other notification (the "FDA Notification") indicating that
the NDA with respect to DepoCyt in the U.S. is approvable or
approved, the entire remaining amounts shall be payable upon
the date of the FDA Notification. DepoTech shall, at its
option, pay the entire amount in cash on the date of the FDA
Notification, or deliver to Chiron on such date a promissory
note, for the principal amount of the unpaid balance due
not later than December 31, 1998.
(ii) If no FDA Notification is issued by the FDA prior to December
31, 1998, the entire remaining amounts shall be payable upon
the date of the earliest of the FDA Notification or the
issuance of any letter or other notification indicating that
an application to market and sell DepoCyt is approvable or
approved by the applicable regulatory authority of the
European Union or the United Kingdom, France, Germany, Italy
or Spain (collectively the "Major Market Countries") (such
earliest date referred to herein as the "Later Payment Date").
DepoTech shall, at its option, pay the entire amount in cash
on the Later Payment Date, or deliver to Chiron on such date a
short term promissory note for the principal amount of the
unpaid balance.
(iii) In the event that all applications for regulatory approval to
market and sell DepoCyt in the United States, the European
Union, and all Major Market Countries are permanently
withdrawn, or no such applications are filed, DepoTech shall
be relieved of the obligation to pay the remaining amounts and
Chiron shall have the right to cause the rights to DepoCyt in
Europe only to revert to it.
The purchase price was determined in an arm's length negotiation
between Chiron and DepoTech.
<PAGE> 3
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Not applicable
(b) Not applicable
<TABLE>
<CAPTION>
(c) Exhibits
--------
<S> <C>
Exhibit 2.1 Amendment #2 to Collaboration Agreement, dated June 5, 1997 between
DepoTech Corporation and Chiron Corporation ("Amendment #2"). The
exhibit referenced in Amendment #2 has not been included because it
contains information that is not material to an investment decision
and is otherwise discussed in the agreement; it will be provided
supplementally to the Commission upon request.
Exhibit 99.1 Press Release dated June 6, 1997
</TABLE>
<PAGE> 4
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.
DEPOTECH CORPORATION
Date: June 20, 1997 By: /s/ Edward L. Erickson ,
---------------------------
President and Chief Executive
Officer
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Document Page
------ -------- --------
<S> <C> <C>
2.1 Amendment #2 to Collaboration Agreement dated June 5, 1997 between II-1
DepoTech Corporation and Chiron Corporation ("Amendment #2"). The
exhibit referenced in Amendment #2 has not been included because it
contains information that is not material to an investment decision
and is otherwise discussed in the agreement; it will be provided
supplementally to the Commission upon request.
99.1 Press Release dated June 6, 1997 II-8
</TABLE>
<PAGE> 1
Exhibit 2.1
Amendment #2 to Collaboration Agreement dated June 5, 1997
AMENDMENT #2
TO COLLABORATION AGREEMENT
This Amendment #2 to Collaboration Agreement (this
"Amendment") is made and entered into as of June 5, 1997, by and
between DepoTech Corporation, a California corporation ("DepoTech") and
Chiron Corporation, a Delaware corporation ("Chiron").
WHEREAS, DepoTech and Chiron have entered into that
certain Collaboration Agreement dated as of March 31, 1994, as
previously amended pursuant to Amendment #1 to Collaboration Agreement,
dated as of April 1, 1997 (such amendment referred to as "Amendment
#1", and the Collaboration Agreement as so amended referred to as the
"Agreement"); and
WHEREAS, pursuant to the Agreement, the parties have
collaborated in the development of DTC 101, as defined in the
Agreement; and
WHEREAS, the Agreement grants to Chiron exclusive rights
to DTC 101 in the United States, Canada and Europe, all on the terms
set forth in the Agreement; and
WHEREAS, DepoTech wishes to purchase from Chiron, and
Chiron wishes to sell to DepoTech, the rights to DTC 101 in Canada and
Europe, and the right to use data and information developed under the
Agreement with respect to DTC 101 in connection with DepoTech's
development and commercialization of DTC 101 outside the U.S.; and
WHEREAS, Chiron's rights to develop and commercialize
Generic Products, as defined in the Agreement, other than DTC 101 have
lapsed; and
WHEREAS, the parties wish to amend the Agreement in order
to implement such purchase and sale of such rights to DTC 101 in Canada
and Europe, and to remove certain provisions with respect to Generic
Products other than DTC 101;
NOW THEREFORE, the parties hereby agree as follows:
1. Capitalized terms used in this Amendment shall have the meanings set
forth in the Agreement unless otherwise specified.
2. Chiron hereby agrees to transfer and sell to DepoTech, and DepoTech
hereby agrees to receive and purchase from Chiron, all of Chiron's
right, title and interest in the rights and licenses which are granted
to Chiron pursuant to the Agreement to make, have made, use and sell
DTC 101 in Canada and Europe, including without limitation all rights
to data, trademarks, tradenames and service marks applicable to DTC 101
in Canada and Europe.
3. In return for such rights, DepoTech agrees to pay to Chiron an
aggregate amount of $13,700,000, payable as follows:
A. $ *** shall be payable in cash not later than
December 31, 1997.
B. $ *** shall be payable as follows:
*** Certain confidential portions of this Exhibit were omitted by means
of blackout of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark
pursuant to the Company's Application Requesting Confidential Treatment
under Rule 406 under the Act.
<PAGE> 2
(i) If, prior to December 31, 1998, the FDA issues a
letter or other notification (the "FDA
Notification") indicating that the NDA with respect
to DTC 101 in the United States is approvable or
approved, the entire $ *** shall be payable
upon the date of the FDA Notification. DepoTech
shall, at its option, pay the entire amount in cash
on the date of the FDA Notification, or deliver to
Chiron on such date a promissory note in the form
attached hereto as Exhibit A, for the principal
amount of the unpaid balance. Such note shall be
payable in full not later than December 31, 1998,
and shall bear interest from the date of the FDA
Notification until paid in full at a rate
*** , not to exceed
the maximum rate permitted by applicable law.
(ii) If no FDA Notification is issued by the FDA prior to
December 31, 1998, the entire $ *** shall be
payable upon the date of the earliest of the FDA
Notification or the issuance of any letter or other
notification indicating that an application to
market and sell DTC 101 is approvable or approved by
the applicable regulatory authority of the European
Union or any Major Market Country (such earliest
date referred to herein as the "Later Payment
Date"). DepoTech shall, at its option, pay the
entire amount in cash on the Later Payment Date, or
deliver to Chiron on such date a promissory note in
the form attached hereto as Exhibit A, for the
principal amount of the unpaid balance. Such note
shall be payable in full not later than six months
following the Later Payment Date, and shall bear
interest from the Later Payment Date until paid in
full at a rate *** , not
to exceed the maximum rate permitted by applicable
law.
(iii) In the event that all applications for regulatory
approval to market and sell DTC 101 in the United
States, the European Union, and all Major Market
Countries are permanently withdrawn, or no such
applications are filed, DepoTech shall be relieved
of the obligation to pay the $ *** , and Chiron
shall have the right to cause the rights to DTC 101
in Europe only to revert to it in accordance with
Section 4.
4. Failure to Pay
A. In the event of any failure by DepoTech, or a third party
acceptable to DepoTech and Chiron, including without limitation
*** , to make any payment required
pursuant to Section 3.A., which failure is not cured within
thirty (30) days following notice thereof by Chiron, Chiron
shall have the right to cause all rights to DTC 101 in Canada
and Europe to revert to Chiron in accordance with the original
Agreement, and DepoTech shall take all steps necessary to enable
Chiron to resume the exercise of such rights. In such event,
all provisions of Sections 2, 5 and 6 of this Amendment shall
terminate.
B. In the event of any failure by DepoTech, or a third party
acceptable to DepoTech and Chiron, including without limitation
*** , to make any payment required
pursuant to Section 3.B., including without limitation any
payment required under any promissory note issued pursuant to
Section 3.B., which failure is not cured within thirty (30)
days following notice thereof by Chiron, Chiron shall have the
right to cause all rights to DTC 101 in Europe to revert to
Chiron in accordance with the original Agreement, and DepoTech
shall take all steps necessary to enable Chiron to resume the
exercise of such rights. In such event, all provisions of
Sections 2, 5 and 6 of this Amendment shall terminate with
respect to DTC 101 in Europe. The amendments to Section 2.2 of
the Agreement shall terminate with respect to all countries
other than Canada.
***Portions of this page have been omitted pursuant to
a request for Confidential Treatment and filed separately with
the commission. II-2
<PAGE> 3
C. The remedies set forth in this Section 4 shall be in
addition to such other remedies as Chiron may have under any promissory
note issued pursuant to Section 3.B. or otherwise by contract or at law
or equity.
5. The parties hereby amend the Agreement as follows:
Section 1.2 is hereby amended to read in full as follows:
1.2 "Alternate Formulations" means any formulations of
cytarabine prepared using DepoTech Technology other than
DTC 101.
Section 1.9 is hereby amended to read in full as follows:
1.9 "Compounds" means the Chiron Compounds, and
references to a "Compound" shall be to any one of them.
Section 1.16 is hereby deleted.
Section 1.17 is hereby amended to read in full as follows:
1.17 "Generic Products" means DTC 101; and all references
to DTC 101 and other Generic Products shall be deemed to
refer solely to DTC 101.
Section 1.36 is hereby amended to read in full as follows:
"1.36 "Territory" means the United States.
The second sentence of Section 2.2 is hereby amended to read in full as
follows:
Such access shall specifically, and without limitation,
include the right of each party and each party's
sublicensees and distributors to refer to, use, and
publish in any regulatory approval application or in
connection with any other activities required or useful in
connection with commercialization of DTC 101, all data and
information used or developed by either party or its
sublicensees or distributors in support of DTC 101
regulatory applications worldwide, together with any
additional data that may be developed relating to DTC 101
by either party. Except as provided in this Amendment, or
as provided in the Agreement with respect to DTC 101 in
the United States, Chiron shall not be entitled to receive
any compensation for its contribution to the development
of data with respect to DTC 101.
The fifth sentence of Section 3.2.1, as amended by Amendment #1, shall
be revised to read in full as follows:
"The cost of preparing and filing regulatory submissions
in Canada shall be borne by DepoTech."
Except as provided above, Sections 3.2.1 and 3.2.2 are hereby amended
to apply solely to DTC 101 in the United States, except that DepoTech
hereby agrees to keep Chiron promptly and regularly informed of the
status of regulatory approvals with respect to DTC 101 in Canada and
Europe, and of any issues which are raised by regulatory authorities in
Canada and Europe which could affect or require any notification,
modification, submission or other action with respect to DTC 101 in the
United States.
II-3
<PAGE> 4
Section 3.2.2(f), as amended by Amendment #1, is hereby deleted in its
entirety.
Sections 3.3 and 3.4 are hereby deleted in their entirety. The parties
agree that DepoTech shall be solely responsible, at its expense, for
the development and commercialization of DTC 101 in Europe from the
date of this Amendment.
Section 3.5 is hereby restated in full as follows:
3.5 Establishment of Minimum Annual Sales Targets and
Requirements.
3.5.1 Minimum Annual Sales Requirements. Following
receipt of all regulatory approvals necessary to
commence marketing DTC 101 in the United States,
Chiron shall submit to the CC annual marketing plans
for DTC 101 for the United States. Such plans shall
contain projected sales targets. The CC shall have
the right to review, modify and approve such
marketing plans, and in connection with such review
shall determine minimum annual sales requirements
(the "Minimum Annual Sales Requirements") for the
United States for each calendar year, together with
an estimate of sales for the following two calendar
years. The Minimum Annual Sales Requirements shall
be agreed to prior to January 1st of each year and
shall provide a breakout of the Minimum Annual Sales
Requirements for that year on a quarter-by-quarter
basis. Minimum Annual Sales Requirements may be
amended at any time on mutual agreement of the
parties and shall generally represent a percentage
of sales projected by Chiron for the relevant
period.
3.5.2 Failure to Attain Minimum Annual Sales
Requirements. If (i) Chiron shall fail to meet
Minimum Annual Sales Requirements in the United
States for any year (the "Deficit Year"), and (ii)
such failure is not due to circumstances beyond the
reasonable control of Chiron, and (iii) Chiron shall
not make up the shortfall between actual Net Sales
and the Minimum Annual Sales Requirement during the
Deficit Year by exceeding such Minimal Annual Sales
Requirement in the first two quarters of the
following year by an amount which, when added to the
Net Sales in the Deficit Year, equals or exceeds the
Minimum Annual Sales Requirement for the Deficit
Year in which the shortfall occurred, and (iv)
Chiron shall not, within *** days following the
giving of notice by DepoTech that the conditions set
forth in (i), (ii) and (iii) have occurred, pay to
DepoTech an amount equal to ***% of the difference
between (A) the sum of (x) the actual Net Sales for
DTC 101 in the United States for the Deficit Year
plus (y) the amount by which Net Sales during the
two calendar quarters of the year following the
Deficit Year exceed the Minimum Annual Sales
Requirement for such calendar quarters, and (B) the
Minimum Annual Sales Requirement for DTC 101 in the
United States for the Deficit Year, then DepoTech
shall have the right, exercisable by delivering
notice to Chiron and, as its sole remedy, to
co-promote DTC 101 in the United States with Chiron.
DepoTech shall have the right to conduct such
co-promotion directly or with a Third Party. In the
event DepoTech shall obtain co-promotion rights,
DepoTech shall be entitled to receive its reasonable
expenses of co-promotion (determined in accordance
with standards approved by the CC and on the same
basis as Chiron shall receive its sales, marketing
and distribution expenses pursuant to Section 6.5),
together with a reasonable co-promotion fee in an
amount to be determined by the CC. In connection
with the granting and exercise of such co-promotion
rights, each party shall provide the other with such
information concerning its marketing strategy and
the state of the market in the United States in its
possession as the other
***Portions of this page have been omitted pursuant to
a request for Confidential Treatment and filed separately with
the commission. II-4
<PAGE> 5
party may reasonably request, and take all
reasonable steps necessary to coordinate its sales
and marketing activities in the United States with
the other party's efforts. In the event the CC is
unable to agree upon the basis on which DepoTech is
to receive reimbursement of its promotional
expenses, or the amount of such co-promotion fees,
then the dispute shall be submitted to arbitration
pursuant to Article XIV.
Sections 3.6 and 3.7 are hereby deleted in their entirety.
The introduction to Section 3.8 is hereby amended as follows:
3.8 Additional Indications and Formulations. With
respect to their activities within the Territory:
Section 3.13.2 is hereby amended as follows:
(i) The heading is hereby restated in full as follows:
"Reasonable Compensation Upon Termination or Upon Breach
of Contract."
(ii) The references to Sections 3.4.2 and 3.7 are hereby
removed from the first sentence.
Section 3.13.3 is hereby amended by removing the reference to Section
3.7.2 from the first sentence.
Section 3.13.4 is hereby amended by removing the references to Sections
3.7.2 and 6.3.4 from the first sentence.
The first sentence of Section 4.1.2 is hereby restated in full as
follows:
The purposes of the PDC shall be to supervise and
coordinate the Phase III Trial and the process of
obtaining regulatory approval of DTC 101 in the United
States.
The first sentence of Section 4.2.2 is hereby restated in full as
follows:
The CC shall review and approve Chiron's strategic plans
for marketing and distributing DTC 101 in the United
States, on a periodic basis, including sales, marketing
and distribution budgets with respect to such Product
prepared by Chiron.
The following sentence shall be added at the end of Section 6.4.2:
This Section 6.4.2 shall be applicable in the United
States only.
The first sentence of Section 6.6 is hereby restated in full as
follows:
Net Pretax Profits from each Generic Product sold in the
Territory, if any, shall be allocated ***% to Chiron and
***% to DepoTech.
Sections 7.1.2, 7.1.3 and 7.1.4 are hereby deleted in their entirety.
Section 12.1 is hereby amended by inserting the following immediately
following the end of subpart (c):
or (d) the manufacture, use, marketing or sale of DTC 101
by DepoTech, its contractors or licensees or any Third
Party outside the Territory;
***Portions of this page have been omitted pursuant to
a request for Confidential Treatment and filed separately with
the commission. II-5
<PAGE> 6
Section 13.7 is hereby amended to read in full as follows:
13.7. Acquisitions by Chiron. In the event that Chiron
shall acquire control of any Third Party which is a
competitor of DepoTech in the development of alternative
drug delivery technologies, Chiron agrees not to cause
such Third Party to develop and commercialize in the
Territory Alternate Formulations of DTC 101 that are
commercially suitable for the treatment of human cancer,
indications for which regulatory approval is sought in the
Territory pursuant to Section 3.8.2, or such other
indications as may be the target of Alternate Formulations
which are being developed by the parties for
commercialization in the Territory pursuant to Section
3.8.4.
6. The parties hereby adopt the following additional provision:
Data Sharing and Adverse Drug Events. The parties recognize that the
holder of or applicant for regulatory approval with respect to DTC 101
may be required to submit information and file reports to various
governmental agencies in the applicable countries, including without
limitation filings in connection with the initial filing for
investigational use in humans, the filing of an application for
regulatory approval, and subsequent supplemental filings and adverse
event reports. The parties further recognize even though Chiron does
not hold the regulatory approval in the United States, as the marketing
party in the United States, Chiron must be informed of all such
information and filings. Consequently, without limiting the
obligations of the parties under Section 2.2, each party agrees to take
the following actions:
(a) Each party shall provide to the other, for submission
to applicable regulatory authorities and for use in connection with
carrying out its activities under this Agreement, all significant
information developed or received by the providing party with respect
to DTC 101, including without limitation preclinical laboratory, animal
toxicology and pharmacology studies, all clinical trial data, and
adverse events arising from clinical trials or commercial experience,
as described below.
(b) Each party shall report to the other immediately upon
becoming aware of any unexpected or serious adverse experience with DTC
101, and shall promptly provide the other with copies of all written
reports received with respect to adverse experiences with DTC 101,
regardless of the seriousness of the adverse event. The parties shall
develop mutually agreed upon detailed written operating procedures with
respect to adverse events and the investigation and reporting thereof.
(c) In the event that either party contracts with a Third
Party for research, development or marketing to be performed by such
Third Party with respect to DTC 101, such party agrees to require such
Third Party to provide the reports and information required to be
delivered to the other party pursuant to this Section 6.
7. The parties hereby agree to take such further actions, and execute such
further documents, as may be necessary to carry out the purposes of
this Amendment #2.
8. Except as specifically amended as set forth herein, the Agreement
remains in full force and effect.
9. This Amendment shall be governed by and construed under the laws under
the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
II-6
<PAGE> 7
10. This Amendment may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will
constitute one in the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
DEPOTECH CORPORATION CHIRON CORPORATION
By: /s/ Edward L. Erickson By: /s/ Magnus Lundberg
------------------------------------- -----------------------------
President and Chief Executive Officer President Chiron Therapeutics
II-7
<PAGE> 1
Exhibit 99.1
Press Release dated June 6, 1997
(BW) (DEPOTECH-CORP) (DEPO) Depotech repurchases marketing rights to
DepoCyt for Europe and Canada from Chiron
Business Editors
SAN DIEGO--(BUSINESS WIRE)--June 6, 1997--
Chiron to retain U.S. marketing rights
DepoTech Corp. (Nasdaq:DEPO) Friday announced that it has
repurchased marketing rights to DepoCyt for Europe and Canada from Chiron Corp.
(Nasdaq:CHIR).
Chiron will retain exclusive marketing rights to DepoCyt
in the United States and will continue to share in the funding of ongoing
clinical trials of DepoCyt in the United States. DepoTech will make an upfront
payment to Chiron in 1997 with the remaining amount payable by the end of 1998,
contingent on regulatory approval for DepoCyt in the United States or a major
European country.
Specific financial terms were not disclosed. DepoTech is
in discussions with potential marketing partners for DepoCyt for all
territories outside of the United States.
In April 1997, DepoTech completed a New Drug Application
submission to the U.S. Food and Drug Administration for DepoCyt, an anti-cancer
agent for use in patients with neoplastic meningitis arising from solid tumors.
DepoCyt is an injectable sustained-release formulation of the chemotherapeutic
agent cytarabine.
"Chiron is an excellent partner for DepoCyt," said Edward
L. Erickson, president and chief executive officer of DepoTech. "However,
Chiron made the strategic decision, and we agreed, that it would focus its
marketing efforts for DepoCyt within the U.S., and that a partner with a
broader global presence in oncology could optimize the opportunity for DepoCyt
in other markets."
DepoTech is a drug delivery company dedicated to the
development and manufacture of innovative sustained-release therapeutic
products based on DepoFoam, an injectable depot drug delivery technology.
Products are being developed to treat medical needs in fields such as cancer,
pain management, infectious diseases and rheumatologic diseases.
NOTE TO EDITORS: This news release may contain forward-looking statements
regarding programs for DepoCyt and other products. Actual results could differ
materially from those described in this news release as a result of a number of
factors, including, but not limited to the following: There can be no
assurance that any product in the DepoTech product pipeline will be
successfully developed or manufactured whether by DepoTech or one of its
collaborative partners, or that final results of human clinical trials will be
supportive of regulatory approvals required to market products, or that final
regulatory approval will be received in a timely manner, if at all, or that
patient and physician acceptance of these products will be achieved. Neither
DepoTech nor Chiron undertakes any obligation to revise or update any
statements in this news release to reflect events or circumstances after the
date of this release.
Additional written materials and recent releases regarding
DepoTech are available on the World Wide Web at http://www.depotech.com
II-8
<PAGE> 2
CONTACT: DepoTech Corp., San Diego
Edward L. Erickson, 619/625-2424
or
StratiPoint Group
Mike Jackman, 415/388-3216
II-9
