SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
NOVEMBER 5, 1997
Date of Report (Date of earliest event reported)
INTERCARDIA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
0-27410 56-1924222
(COMMISSION FILE NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
3200 EAST HIGHWAY 54,
CAPE FEAR BUILDING, SUITE 300
P. O. BOX 14287
RESEARCH TRIANGLE PARK, NORTH CAROLINA 27709
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(919) 558-8688
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 5. Other Events.
On November 5, 1997, the Registrant issued a press release stating as
follows:
"(Intercardia logo) Intercardia
Contact: P.O. Box 14287
Intercardia: 3200 East Highway 54
W. Bennett Love Cape Fear Building, Suite 300
919-558-1907 Research Triangle Park, NC 27709-4287
Interneuron: 919/558-8688
William B. Boni 919/558-8686 fax
617-402-3410
For Immediate Release:
Intercardia to Acquire Transcell Technologies
Research Triangle Park, N.C., and Lexington, MA November 5, 1997 -- Intercardia,
Inc. (Nasdaq:ITRC) and Interneuron Pharmaceuticals, Inc. (Nasdaq:IPIC) today
announced the signing of a letter of intent for the proposed acquisition by
Intercardia of Transcell Technologies, Inc. and related technology owned by
Interneuron in exchange for Intercardia common stock with an aggregate current
market value of approximately $15 million. In addition, Intercardia will issue
Intercardia stock options to Transcell employees and consultants with a current
market value of approximately $3-4 million. The transaction is subject to final
due diligence and approval by Transcell's and Intercardia's stockholders. Both
Intercardia and Transcell Technologies are majority-owned subsidiaries of
Interneuron.
Under the terms of the letter of intent, owners of Transcell stock will receive
Intercardia common stock in three installments with an aggregate current market
value of approximately $12 million. The first installment, representing
approximately $6 million at Intercardia's current stock price, will be made upon
closing the transaction, currently estimated to occur in the first calendar
quarter of 1998. The number of Intercardia shares to be received by Transcell
stockholders at closing will be determined by Intercardia's stock price during
the week prior to closing. The minimum Intercardia stock price to be used for
determining the number of shares received for the initial installment will be
$19 per share and the maximum will be $25 per share. The second and third
installments will each consist of approximately $3 million of Intercardia common
stock, as valued at each date, and will be issued 15 and 21 months after the
initial closing.
In exchange for certain license and technology rights owned by Interneuron, and
for Interneuron's continuing guarantee of certain of Transcell's lease
obligations, Intercardia will issue to Interneuron $3 million of Intercardia
common stock (subject to the price range described above) at the initial closing
and will pay Interneuron a
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royalty on certain products that may result from a research collaboration
originally entered into among Transcell, Interneuron and Merck.
At closing, Intercardia and Interneuron will incur charges to operations
currently estimated to be approximately $6-8 million as a result of the
transaction and will incur additional future charges relating to certain stock
options issued pursuant to the transaction.
Transcell's mission is to discover and develop drugs based on breakthroughs in
synthetic carbohydrate chemistry primarily made at Princeton University by
founding scientist Prof. Daniel Kahne. This platform technology enables
carbohydrate-based combinatorial libraries of compounds to be generated on a
solid support for uses in drug discovery. Transcell's platform technology for
the generation of carbohydrate-based libraries includes solid phase chemistry,
robotics systems for library generation, informatic technologies for data
storage and analysis and analytical technologies for solid phase chemistry and
library analysis.
In July 1997, Transcell and Interneuron announced an agreement with Merck to
discover and commercialize novel antibacterial agents. Transcell will utilize
its combinatorial technologies to prepare libraries of carbohydrate derivative
compounds of two distinct structural classes. Additionally, Merck has an option
to extend the field of the collaboration and license to include all
antibacterial pharmaceutical products. Merck made $2.5 million of payments upon
closing the agreement. Under the agreement, Transcell will also receive research
support for a minimum of two years.
For the nine months period ended June 30, 1997, Transcell had an unaudited net
loss of approximately $5 million. Transcell has 32 employees, all located at
Transcell's facilities outside Princeton, New Jersey.
"Intercardia is excited about the Transcell acquisition. We have been working to
establish a pipeline of drugs to follow Bextra(TM)(bucindolol HCl),
Intercardia's vasodilating beta-blocker currently under study in the pivotal
Phase III BEST Study for congestive heart failure," stated Clayton I. Duncan,
President and CEO of Intercardia. "As Vice Chairman of Transcell's Board of
Directors, I was directly involved in various corporate partnering discussions
between Transcell and third parties and have gained a great appreciation for the
value of their carbohydrate combinatorial chemistry program."
"The acquisition of Transcell by Intercardia embodies Interneuron's strategy for
technological synergy and growth among its subsidiaries," said Glenn L. Cooper,
M.D., President and CEO of Interneuron. "Combinatorial chemistry has become an
integral component of modern drug discovery, and the application of
Intercardia's drug development and partnering expertise will maximize the value
of Transcell's leading edge carbohydrate-based combinatorial chemistry."
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"An additional benefit of this acquisition is the preservation of both
Interneuron's majority ownership position in Intercardia and its continued
interest in Transcell," said Dr. Cooper.
Intercardia, a majority-owned subsidiary of Interneuron Pharmaceuticals, Inc.,
focuses on cardiovascular disease and drug discovery and development. The
Company's strategy is to develop and add value to in-licensed products and
sponsored research programs and to enter into collaborations and licensing
agreements with corporate partners for final product development, manufacturing
and marketing. Intercardia's most advanced product is Bextra(TM)(bucindolol
HCl), a drug currently in Phase III clinical trials for the treatment of
congestive heart failure.
Interneuron Pharmaceuticals is a diversified biopharmaceutical company engaged
in the development and commercialization of a portfolio of products and product
candidates primarily for neurological and behavioral disorders. Interneuron is
also developing products and technologies, generally outside the central nervous
system field, through two subsidiaries in addition to Intercardia and Transcell;
Progenitor, Inc. focused on developmental genomics, and InterNutria, Inc.
focused on dietary supplement products.
Except for the descriptions of historical facts contained herein, this press
release contains forward-looking statements that involve risks and uncertainties
as detailed from time from time in Interneuron's and Intercardia's filings under
the Securities Act of 1933 and the Securities Exchange Act of 1934, including in
particular risks relating to the uncertainties relating to clinical trials, and
other risks such as safety and regulatory risks, product liability, litigation,
contractual obligations, the early stage of products under development by
Transcell and funding requirements for such product development and with respect
to Interneuron, litigation risks and other risks relating to the withdrawal of
Redux."
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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.
INTERCARDIA, INC.
By: /s/ Richard W. Reichow
Richard W. Reichow
Senior Vice President and Chief Financial Officer
Date: November 6, 1997
