<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
Commission file number 0-6533
BOSTON LIFE SCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 87-0277826
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 TRAPELO ROAD 02154
WALTHAM, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (617) 890-8263
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
SERIES A CONVERTIBLE PREFERRED STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A or any amendment
to this Form 10-K/A. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant at March 27, 1996 was $ 120,913,700.
The number of shares outstanding of the registrant's Common Stock as of
March 27, 1996 was 85,679,256. The number of Series A Convertible Preferred
Stock as of March 27, 1996 was 239,910.
1
<PAGE>
PART I
ITEM 1. BUSINESS.
OVERVIEW
Boston Life Sciences, Inc. ("BLSI" or the "Company") is a development stage
biotechnology company engaged in the research and development of novel
therapeutic and diagnostic products to treat chronic debilitating diseases, such
as cancer, central nervous system (CNS) disorders and autoimmune diseases. The
Company's portfolio of technologies is the result of a merger (the "Merger")
between BLSI and Greenwich Pharmaceuticals Incorporated ("Greenwich"). The
Merger took place on June 15, 1995 and resulted in a publicly traded company
managed by the Board of Directors and management of the old Boston Life
Sciences, Inc., the company existing prior to the merger.
With the exception of the products based on synthetic carbohydrates to
treat autoimmune diseases, which originated with Greenwich, all of BLSI's five
other technologies currently under development were invented or discovered by
researchers working at Harvard University and/or its affiliated hospitals
("Harvard and its Affiliates") and licensed to BLSI. In connection with the
addition of Greenwich's carbohydrate technologies acquired in the Merger, BLSI
will also be formulating a strategy to address the potential future requirements
of THERAFECTIN(R) (amiprilose HCl) with the ultimate objective of obtaining
regulatory approval both domestically and abroad. As part of such strategy for
THERAFECTIN, BLSI is working with the United States Food and Drug Administration
("FDA") to finalize a new protocol for the initiation of Phase III human
clinical trials for THERAFECTIN, previously Greenwich's leading product
candidate. There can be no assurances, however, that the implementation of any
strategy would ultimately result in the approval of THERAFECTIN by FDA.
In general, BLSI's corporate strategy is to (i) fund the early development
of its compounds in preclinical development and (ii) enter into corporate
partnering arrangements with established pharmaceutical or biotechnology
companies to support the continued development of BLSI's compounds and potential
marketing of any products following government approvals. Additionally, since
BLSI does not currently own any laboratory or manufacturing facilities, the
Company intends to contract for such services.
BLSI currently has two products in clinical trials: Altropane(TM) and
THERAFECTIN. Altropane is a radioimaging agent being developed for the
diagnosis of Parkinson's Disease and is currently the subject of a Phase I/II
clinical study under a physician's sponsored Claimed Investigational Exemption
for a New Drug ("IND") application. See "Products in Clinical Trials and
Products Under Development." THERAFECTIN would be used for the treatment of
Rheumatoid Arthritis and is presently undergoing a Phase III clinical study.
THERAFECTIN is the subject of a currently pending new Drug Application ("NDA")
with FDA. See "Products in Clinical Trials and Products Under Development."
There can be no assurances, however, that these studies will be successful, or
if successful, that both or either of these products will be approved for
marketing by FDA.
In June 1995, BLSI entered into a research and development collaboration
agreement with Zeneca Pharmaceuticals, Ltd. ("Zeneca") for all indications, on a
worldwide basis, of BLSI's MHC Class II Inhibition technology. The
collaboration calls for Zeneca to fund approximately the first two years of
research and for BLSI to receive payments from Zeneca as lead compounds reach
traditional pre-clinical and clinical development milestones.
2
<PAGE>
BLSI is also a party to two collaborations for THERAFECTIN with different
pharmaceutical companies for various geographic regions in the world. Those
development and license agreements are with (i) Kissei Pharmaceutical Co., Ltd.
("Kissei") for all indications of amiprilose HCl in the Far East and Russia and
(ii) Irotec Laboratories of Cork, Ireland ("Irotec") to market amiprilose HCl in
the Republic of Ireland and the Netherlands. Unless BLSI obtains marketing
approval for THERAFECTIN in the United States and Kissei and Irotec obtain
marketing approval of amiprilose HCl in their respective regions, the future
milestone payments from Kissei and Irotec will not be received.
The Company was incorporated in Delaware in 1972 under the name Greenwich
Pharmaceuticals Incorporated and, effective June 15, 1995, changed its name to
Boston Life Sciences, Inc. The Company's principal executive offices are now
located at Reservoir Place, 1601 Trapelo Road, Waltham, Massachusetts, and its
telephone number is (617) 890-8263.
THE DEVELOPMENT OF A PHARMACEUTICAL PRODUCT
FDA imposes strict requirements that must be met before a pharmaceutical
product is approved for commercial distribution. FDA has established numerous
mandatory procedures and safety standards applicable to all pharmaceutical
products.
After basic pharmacology and preclinical safety studies have been
completed, the sponsor submits to FDA a notice of an IND, which contains
information with respect to the composition of the drug, its source, the
manufacturing and quality control used to produce the product, results of the
preclinical investigations in the laboratory with animals, animal toxicity
studies, a proposed Phase I protocol and a one-year clinical development
program. Thirty days after FDA assignment of an IND number, the sponsor may
begin testing the drug in human beings. These tests are usually divided into
three phases. Additionally, preclinical studies, such as chronic toxicology and
carcinogenicity tests and animal pharmacology studies, are conducted throughout
the drug development process.
Phase I of a clinical development program generally involves a small number
of patients or normal human volunteers (20 to 80), and is designed to determine
the metabolism and pharmacologic actions of the drug in humans, the side effects
associated with increasing doses, and, if possible, to gain early evidence on
effectiveness when used in patients. Phase II studies usually involve a greater
number of patients per study with the disease or condition under study. These
studies are intended to determine the common short-term side effects and risks
associated with the drug and are typically well-controlled and closely-monitored
studies. Phase II and Phase III studies are intended to determine efficacy in
long-term use, refine the dose-response assessment and evaluate long-term
toxicity. Phase III studies are conducted to enlarge the exposed patient
population by initiating open-label studies or by continuing patients from
controlled studies in open-label extensions. These studies can involve a few
hundred to several thousand patients, depending on the particular compound and
disease indication involved with the study.
Based upon substantial evidence of efficacy and safety demonstrated by the
results of these three phases of clinical testing and the results of completed
animal toxicology, pharmacology, dosage and chemical manufacturing and control
section studies, a sponsor submits an NDA with FDA. Within 60 days after
submission of an NDA, FDA determines whether the application is sufficiently
complete to permit a substantive review and, if satisfied, will file the NDA.
Upon review of the NDA and all additional information submitted during the
review process, FDA will decide whether or not, and under what labeling
conditions, it will permit the product to be marketed. FDA regulations will
also govern the manufacturing process and marketing activities. FDA may also
require the sponsor to conduct ongoing testing and a surveillance program to
monitor a drug's effect.
3
<PAGE>
Clinical trials of the Company's product candidates and sales of any of its
products in foreign countries are also subject to foreign regulatory
authorities. Whether or not FDA approval has been obtained, approval of a
product by the comparable regulatory authorities of foreign countries must be
obtained prior to the commencement of marketing of the product in those
countries. The approval process varies from country to country and the time
required may be longer or shorter than that required for FDA approval.
PRODUCTS IN CLINICAL TRIALS AND PRODUCTS UNDER DEVELOPMENT
Treatment for Rheumatoid Arthritis:
1. THERAFECTIN, a small molecule developed by Greenwich to treat
Rheumatoid Arthritis, has undergone extensive clinical testing, and is
the subject of an NDA with FDA. The Company currently plans to
initiate another Phase III human clinical trial for THERAFECTIN during
the second quarter of 1996.
2. Inhibition of MHC Class II molecules (which are important in the
development of Rheumatoid Arthritis) is the subject of a collaboration
with Zeneca. The Company has discovered a transcription factor that
appears to control the expression of MHC Class II molecules. Such an
inhibitor would be a potentially effective treatment for Rheumatoid
Arthritis and other autoimmune diseases.
Treatments for Cancer:
3. Cartilage-Derived Inhibitor (CDI) inhibits the growth of new blood
vessels into tumors (angiogenesis) and may be the most potent and
specific naturally-occurring anti-angiogenesis factor identified to
date. Since tumors require new blood vessels in order to grow, CDI may
thereby prevent the growth of solid tumors and their metastases.
4. A Tumor-targeting System is being developed to deliver radiotherapy to
solid tumors by intravenous injection. Presently, delivery of
radiotherapy is limited by the inability to deliver high enough doses
of radiotherapy to kill the tumor without harming normal tissues. The
Company's system has been designed to overcome this obstacle, and may
be applicable to the treatment of most solid tumors.
Treatment for Parkinson's Disease:
5. Altropane(TM), a diagnostic imaging agent, appears to be capable of
diagnosing Parkinson's Disease at an early stage, before the clinical
signs and symptoms are clear. In January 1996, human clinical trials
for Altropane were initiated under a physician's sponsored IND.
Altropane, when used in conjunction with SPECT scanning, may yield a
convenient, reliable, low-cost diagnosis, thus allowing for earlier
treatment and monitoring of Parkinson's Disease.
Treatment for Central Nervous System Injury:
6. Axogenesis Factor 1 (AF-1), is a recently discovered central nervous
system ("CNS") growth factor that appears to specifically stimulate
the growth of CNS nerve cell axons, which are the cellular projections
that communicate with other nerve cells. AF-1 appears to stimulate the
regrowth of these connections and therefore may be useful in the
treatment of stroke, spinal cord and other CNS injuries.
4
<PAGE>
1. THERAFECTIN(R) (AMIPRILOSE HCL)
Background
THERAFECTIN is a synthetic small molecule developed by Greenwich for the
treatment of Rheumatoid Arthritis. THERAFECTIN has undergone extensive
preclinical and clinical testing and demonstrated to be safe and extremely
well-tolerated. An NDA was filed with the FDA in 1993.
THERAFECTIN has been found to be active in animal models of chronic
inflammatory disease such as collagen-induced arthritis. It has no effect in
acute models of inflammation, nor does it have intrinsic analgesic effects.
Although the mechanism of action of THERAFECTIN has not been precisely defined,
it is felt that the anti-inflammatory effects demonstrated in chronic
inflammatory disease may be secondary to the immunomodulatory effects of the
drug. While the pathogeneses of autoimmune disease is unknown, it is clear that
a dysregulation of the immune system of an affected individual results in
localized inflammation and tissue destruction. Macrophages play an important
role in autoimmune disease, by virtue of their antigen-presenting function.
THERAFECTIN has been found to modulate macrophage antigen presentation. It does
not, however, directly alter T-lymphocyte activation or function as evidenced by
a lack of effect on delayed type hypersensitivity or T-lymphocyte mitogen
responsiveness. It has been proven clinically that THERAFECTIN does not cause
immunosuppression, which makes it unique among the currently known
immunomodulatory agents.
Preclinical investigations of the mode of action of THERAFECTIN have
attempted to target potential pathways of cellular activation and proliferation
thought to be involved in the pathogenesis of inflammatory rheumatic disease.
Studies have been performed with a broad range of in vitro and in vivo doses.
The human steady-state plasma levels at the proposed clinical dose is 23.5 ug/ml
with clinical studies being performed at doses ranging from approximately 50-192
mg/kg/day. Attempts have been made to correlate preclinical results with human
plasma levels and dosing regimens. However, the extrapolation of preclinical
data to clinical efficacy is limited by the complexities of the disease target.
In general, results of in vitro studies performed with THERAFECTIN indicate that
immunomodulatory effects (e.g. macrophage activation and function and lymphocyte
function) are evident at low concentrations of drug. Maximal anti-proliferative
effects have been uniformly observed at an in vitro concentration of 1 mg/ml.
Although this is much higher than the observed steady-state concentrations of
drug in man, it should be noted that local drug levels (e.g. human synovial
fluid levels) are not known and it is possible that local drug levels are higher
than those detected in plasma. Significant anti-inflammatory effects have been
demonstrated with doses of 100 mg/kg; well within the range of the proposed dose
in man.
Toxicology studies have demonstrated that THERAFECTIN has a highly
favorable safety profile. Pharmacokinetic data indicates that this drug is
absorbed quickly. The predominant half-life covering the area under the plasma
concentration-time curve was less than two hours in both animal species. This
indicates that by 10 hours after administration, the administered dose would
have been cleared from the circulation, and that tissue and/or organ
accumulation is unlikely to occur with repeated dosing. THERAFECTIN exhibited
dose-independent pharmacokinetics in dogs; thus, dose-proportional increase of
plasma levels appears to be well-defined and predictable. The relatively short
half-life and linear kinetics add two favorable features to the safety profile
of THERAFECTIN.
THERAFECTIN was studied in six double-blind placebo-controlled trials in
rheumatoid arthritis patients. Of these six studies, two provided statistically
significant evidence for efficacy and three provided support for efficacy, as
described below. One study showed no difference between THERAFECTIN and
placebo.
5
<PAGE>
RA4 was a relatively small study (23-24 patients per group) that compared
THERAFECTIN at 3 g/day and 6 g/day to placebo in patients allowed to continue
treatment with disease-modifying anti-rheumatic drugs ("DMARDS"), if being given
at entry. The results showed numerical superiority in favor of THERAFECTIN,
with statistical significance not attained. RA9 was carried out in 201 patients
receiving Non-Steroidal Anti-Inflammatory Drugs ("NSAIDs"), but not DMARDs, who
underwent NSAID withdrawal and were then placed on either THERAFECTIN at 6 g/day
or placebo. The results showed that THERAFECTIN was better than placebo with
statistical significance, starting at about week 6 and extending through the end
of the trial (week 12). RA10 also involved the removal of NSAIDs followed by
treatment with either THERAFECTIN at 6 g/day or placebo, this time in 311
patients.
As with RA4, all comparisons in this study exhibited trends in favor of
THERAFECTIN, but differences were not statistically significant. In RA11, 286
patients who had received THERAFECTIN for 1-3 years were either continued on the
drug or were changed to placebo. This withdrawal design, which was intended as
a test of a chronic therapy, showed a statistically significant increase in
degree of worsening (flare) among the patients in whom THERAFECTIN was removed,
an indicator of long-term effectiveness. RA12 tested the effect of THERAFECTIN
in 349 patient not receiving DMARDs in whom removal of NSAIDs was a desirable
goal of therapy. The ability of the drug to allow removal of NSAIDs was
measured in two ways; first, by comparing the THERAFECTIN versus placebo rates
of flare after NSAID removal, and second, by comparing THERAFECTIN versus
placebo rescue requirements in patients who flare after NSAID removal. While
this study showed essentially identical rates of NSAID-withdrawal flare in the
two treatment groups, the need for long-term NSAID and corticosteroid rescue
therapy was statistically significantly less in the THERAFECTIN group.
Since the Merger, the Company has actively been engaged in a review of the
THERAFECTIN preclinical and clinical data, including the IND and NDA filings,
correspondence between Greenwich and FDA, and the transcripts of the Arthritis
Advisory Committee meetings. The Company has sought input from outside
independent regulatory affairs consultants and reviewed the preclinical and
clinical data with certain of Greenwich's scientific and regulatory affairs
personnel. Based on its preliminary analysis, the Company concluded that there
was sufficient evidence of therapeutic efficacy and that further investigation
of the clinical strategy of THERAFECTIN was warranted. To this end, the Company
assembled a panel comprised of expert academic clinical rheumatologists (the
"Expert Panel") and enlisted the aid of medical, regulatory, and statistical
consultants to assist BLSI in formulating a clinical strategy for THERAFECTIN.
The Company held a consensus meeting with the entire panel and its consultants
to discuss such strategy (including potential protocols for any possible
additional clinical study) for THERAFECTIN.
Based on input from the Expert Panel as well as its own analysis, the
Company decided to structure and carry out an additional clinical trial in an
attempt to replicate the successful results of RA9. The Company has submitted
the protocol for such a trial to the FDA for its review and comments, and has
discussed its clinical plan with the FDA. The Company intends to start the
clinical trial during the second quarter of 1996, and hopes to have results of
the trial by the end of 1997. The Company believes that a successful clinical
trial will establish the efficacy of THERAFECTIN from FDA's perspective. If the
trial is successful, the Company intends to submit an amendment to the pending
NDA, with the goal of attaining marketing approval for THERAFECTIN from the FDA.
There can be no assurances however, that the FDA will approve THERAFECTIN based
on a successful clinical trial, or if THERAFECTIN is approved, that the Company
will be able to successfully manufacture, market, and distribute THERAFECTIN.
Market Overview
Rheumatoid Arthritis affects approximately 2.5 million individuals in the
U.S. Approximately 1.3 million Rheumatoid Arthritis patients make 4.2 million
visits to their physician per year. It is
6
<PAGE>
estimated that the total U.S. market for Rheumatoid Arthritis drug sales is
approximately $1 billion per year.
Competition
The leading drugs presently used to treat Rheumatoid Arthritis include the
NSAIDS, corticosteroids, methotrexate and other DMARDs, Plaquenil, and aspirin
and related compounds. The U.S. arthritis market is dominated by five major
companies: Syntex, Ciba-Geigy, Pfizer, Upjohn and Merck. These companies
control 69% of the market.
It is not uncommon for a new arthritis drug to capture a market share of
between 15% and 20% within one year of approval. Though crowded and
competitive, the arthritis market is amenable to rapid acceptance of new and
improved drugs that satisfy previously largely unsatisfied needs.
Proprietary Position
BLSI currently owns nine U.S. utility patents and various related
international patents, and several pending U.S. and international patent
applications. In general, the patents or applications cover derivatized
monosaccharides, synthetic intermediates, compositions containing the
derivatized monosaccharides, manufacturing processes and various therapeutic
uses of derivatized monosaccharides. The issued patents will expire between
April, 2001 and 2005. Three of the U.S. patents specifically cover the use of
amiprilose HCl for the treatment of rheumatoid arthritis and other autoimmune
diseases and/or the manufacturing process for the synthesis of amiprilose HCl.
One of the pending patent applications covers GW92527.HCl.
GW92527.HCL. GW92527.HCl is representative of the third generation of
monosaccharide compounds developed by the Company. Results of preclinical
studies of GW92527.HCl parallel the results of similar studies performed with
10-100 times higher doses of THERAFECTIN. In addition to demonstrating
immunomodulatory and anti-inflammatory effects in preclinical studies, this
compound also shows effect in a rat model of analgesia, a property not seen in
THERAFECTIN or other compounds developed by the Company. In 1993, Greenwich
initiated a Phase I study to evaluate GW92527.HCl as a potential therapy for the
treatment of the signs and symptoms of RA. In addition to a single, ascending-
dose study having been concluded, an approved protocol for a multiple-dose Phase
I study has been developed and an investigator site has been selected.
Otherwise, currently, BLSI is not pursuing any formal research or development of
GW92527.HCl.
2. INHIBITION OF MHC CLASS II EXPRESSION
Background
Autoimmune diseases are characterized by the production of antibodies
directed against the body's own tissues, and the consequent destruction of those
tissues by the body's immune cells. Central to the pathogenesis of these
diseases is the expression of MHC (Major Histocompatibility Complex) class II DR
molecules on the surface of antigen-presenting cells that are found within the
tissues that are attacked in autoimmune disease. The cause of this expression
of the MHC DR molecules is not known, but it is apparent that the expression of
these molecules plays a role in triggering the immune system to attack these
tissues. The Company is developing a means to specifically inhibit MHC DR
expression. Inhibition of DR expression might provide a specific treatment for
autoimmune diseases, because of its specificity, this treatment might be
relatively free of side effects.
7
<PAGE>
Approaches to manipulating the overactive immune response in auto-immunity
can utilize strategies which target the T cell receptor or MHC class II
proteins. One approach is to develop small peptides or peptidomimetics which
interfere with auto-antigen binding in the cleft of the MHC class II proteins,
or which antagonize T cell receptor activation. A second, complementary approach
is the one that BLSI is following that involves attempting to inhibit the
transcription of the MHC class II DR genes themselves. Since certain DR genes
are associated with RA in more than 95% of cases, and since DR is only a small
contributor to the overall immune responsiveness of an individual, inhibiting
the expression of DR could potentially ameliorate or cure RA without causing
generalized immunosuppression. The identification by BLSI's collaborating
scientists of unique transcription factors that specifically regulate DR
expression provide potentially specific targets for small molecule inhibitors
that could be developed and used therapeutically to treat RA and other
autoimmune diseases. In June of 1995, the Company entered into a Research and
Development collaboration with Zeneca Pharmaceuticals of the United Kingdom,
whereby Zeneca will screen its small molecule collection for an inhibitor of
these transcription factors. Once such an inhibitor is identified, Zeneca will
take the compound through its preclinical development program and into the
clinic, if warranted. Under the terms of the agreement, BLSI will receive
research funding for an initial two year period. Upon successful completion of
the research, BLSI will be entitled to receive milestone payments during the
development phase and royalties payable on the sale of any products originating
from the collaboration.
Market Overview
Currently, the treatment of autoimmune disease consists of administering
nonspecific anti-inflammatory drugs, or in the most severe cases, nonspecific
immunosuppressives. These drugs, particularly steroids and the
immunosuppressives, are dangerous medications. The side effects of steroids are
particularly severe, and consist of bloating, muscle wasting, osteoporosis,
cataract formation, and psychosis. There is therefore a great need for a
specific treatment that addresses the underlying pathology in autoimmune
diseases. The Company is attempting to develop such a treatment.
Autoimmune diseases affects approximately 3.62 million individuals in the
U.S. (see below). The most common autoimmune diseases are Rheumatoid Arthritis
(RA), Type I (insulin dependent) Diabetes, Multiple Sclerosis, and Lupus:
<TABLE>
<S> <C>
Rheumatoid Arthritis: 2,500,000
Type 1 Diabetes 500,000
Multiple Sclerosis (MS) 500,000
Lupus Erythematosus 125,000
---------
TOTAL 3,625,000
</TABLE>
It is estimated that the market for all autoimmune disease therapeutics is
approximately $10.6 billion worldwide.
Competition
The number of firms that are working in immunology obviously is very large.
Among the leaders working in this broad field are Applied Immune Sciences,
Biogen, Chiron, Genetic Therapy, Icos, Medimmune, and Nova Pharmaceuticals.
There are, to the best of the Company's knowledge, at least four potential
competitors that are attempting to control MHC class II expression for
therapeutic purposes. Mallinckrodt Medical, Inc. and BioTransplants, Inc. are
believed to be developing a gene therapy approach to inhibit MHC class II
expression. Another potential competitor is ImmunoLogic Pharmaceutical Corp.,
which is attempting to develop, in partnership with Merck & Co., Inc., peptides
that bind to the MHC molecule. Anergen Inc. is developing a soluble MHC complex
that presumably can be used to mask the T cell receptor in order to prevent T
cell activation.
8
<PAGE>
BLSI believes that its approach may be superior since, if successful,
expression of only autoimmune disease-associated MHC class II molecules will be
eliminated. BLSI is aware of at least one research institution that is working
to identify, or that may have identified or cloned, a transcription factor
associated with the expression of the MHC class II molecule, and whose research
is similar to that being conducted for BLSI.
Proprietary Position
BLSI has entered into a license agreement with Harvard and its Affiliates,
pursuant to which BLSI has been granted an exclusive worldwide license,
including the right to sublicense, to make, use or sell, products or processes
covered by claims contained in a patent application and related foreign patent
applications covering the use of an identified transcription factor to test for
potential therapeutic compounds. BLSI's license agreement provides for the
payment of a royalty to Harvard and its Affiliates based upon sales by BLSI or
BLSI's sublicensees of products and processes incorporating the licensed
technology. Pursuant to the terms of BLSI's sponsored research agreement with
Harvard and its Affiliates, BLSI also has a first option to negotiate an
exclusive worldwide license to certain additional technologies invented or
discovered during the course of the research program. There can be no assurance
that such research will lead to the discovery of new technologies or that BLSI
will be able to obtain a license with respect to such newly discovered
technologies on acceptable terms, if at all.
3. CARTILAGE-DERIVED INHIBITOR (CDI)
BLSI is developing a naturally occurring factor derived from cartilage
called Cartilage-Derived Inhibitor, which inhibits new blood vessel formation.
Angiogenesis (new blood vessel formation) plays a role in the growth and spread
of solid tumors throughout the body because cancerous tumors require new blood
vessels in order to grow and metastasize. BLSI plans to develop CDI for the
treatment of solid tumors and other diseases of neovascularization, including
rheumatoid arthritis and numerous eye diseases. BLSI's collaborating scientists
at The Children's Hospital Corporation of Boston ("Children's") have
successfully purified and cloned this protein, and are currently setting up a
cell system for the production of recombinant CDI, although there can be no
assurance that BLSI will be successful in this regard. BLSI has received an
exclusive world-wide license to patent applications filed by Children's
encompassing the use of both the purified and cloned CDI for the inhibition of
angiogenesis. There can be no assurances, however, that any of such patent
applications will result in the issuance of any patents or that if issued, such
patents will provide BLSI with any competitive advantage.
Background
Angiogenesis, the process of new capillary formation, plays an important
role in numerous physiological events, both normal and pathological.
Angiogenesis is a complex process characterized by infiltration of basement
membrane by capillary endothelial cells, the migration of cells through matrix
towards a stimulus, and subsequent cell proliferation, resulting in new
capillary tube formation. Mature blood vessels do not proliferate or divide, so
that normally there is no ongoing angiogenesis. Angiogenesis does occur under
limited circumstances, such as wound healing, corpus luteum formation and
embryonic development.
A number of serious diseases are dominated by abnormal neovascularization,
including solid tumor growth and metastases, some types of eye disorders, and
rheumatoid arthritis. Solid tumors and their metastasis are dependent on
ingrowth of new blood vessels in order to grow. These tumors secrete
"angiogenic factors" that promote the formation and ingrowth of these new
nutrient vessels.
9
<PAGE>
There are a number of eye diseases, many of which lead to blindness, in
which ocular neovascularization occurs in response to the diseased state.
Corneal ulcerations, pterygian, iritis, uveitis, trauma, and corneal burns are
all disorders of the anterior eye that result in substantial neovascularization.
In addition, there are a number of posterior ocular disorders include diabetic
retinopathy, neovascular glaucoma, inflammatory diseases and ocular tumors that
are associated with neovascularization.
In Rheumatoid Arthritis (RA), neovascularization of the synovium is a
prerequisite for pannus formation and its growth. The pannus, which behaves
like an invasive tissue, destroys the underlying cartilage and ultimately the
entire joint surface.
Thus, while angiogenesis is quite rare in normal physiology, it is
prevalent in a variety of pathological conditions. Specific inhibition of
angiogenesis would potentially be of great value in treating these conditions,
while at the same time being relatively free of unwanted effects.
In order for a compound to possess in vivo anti-angiogenic activity, it
must be an anti-collagenase and it must inhibit both endothelial cell
proliferation and endothelial cell migration. Though there are compounds that
possess one or the other of these activities, the Company's product, Cartilage-
Derived Inhibitor (CDI), is the only known naturally-occurring protein to
possess all three properties: anti-collagenase activity, anti-proliferative and
anti-migratory activity. In standard in vitro proliferation and migration
assays, CDI is the most potent naturally-occurring inhibitor known.
Several in vitro assays have been used to demonstrate the potent anti-
angiogenic properties of CDI. In an endothelial proliferation assay, purified
CDI inhibited aFGF-stimulated capillary endothelial cell proliferation with an
IC\\50\\ of 50-75 nM. Other collagenase inhibitors, which do not possess anti-
angiogenic activity in vivo, had no anti-proliferative effect. In addition, CDI
does not inhibit the growth of nonendothelial cell types, such as bovine aortic
smooth muscle cells and Balb/c 3T3 cells.
Another important component of the angiogenic process is the migration of
capillary endothelial cells in response to an angiogenic stimulus. Purified CDI
inhibited capillary endothelial cell migration with an IC\\50\\of 96 nM.
The anti-angiogenic potential of CDI has been demonstrated in numerous in
vivo models. The effect of CDI on growing embryonic blood vessels was studied
using chick embryos in which capillaries appear in the yolk sac at 48 hours and
grow rapidly over the next 6-8 days. On day 3 of development, fertilized embryos
were removed from their shells and placed in plastic petri dishes. Purified CDI
was mixed in methylcellulose disks and applied to the surfaces of the growing
chick membranes. After 48 hours of exposure to CDI, avascular zones, free of
capillaries and small vessels, were observed. This was confirmed using India
ink/liposyn injection of the blood vessels. In contrast, control membranes
showed rich vascularization over the membrane surface. The lowest effective dose
of CDI that inhibited vascularization was 4 ug. The lowest reported doses for
previously described angiogenesis inhibitors tested alone in this assay were 50
ug of protamine, and 10 ug of PF4. Other anti-angiogenic combinations were
effective at the 50 ug. dose. Thus, CDI was the most potent of all anti-
angiogenic compounds tested.
CDI has been tested in models of corneal vascularization. Angiogenic
stimuli (implanted tumor cells) applied to the rabbit cornea results in
neovascularization of the cornea with the growth of the blood vessels being
directed towards the tumor implants. Disks containing CDI that were
simultaneously implanted on the corneal surface completely inhibited this tumor
directed neovascularization.
10
<PAGE>
In an animal model of tumor growth, six rabbits were injected with a
transplantable melanoma cell line. Pure CDI was then injected intravenously
each day for one week, and the growth of the tumor was measured over a one
month period. In three animals, there was no further growth of the tumor during
the CDI infusion, while in three animals, the tumor actually regressed. In
contrast, the six animals that did not receive CDI had the tumor rapidly grow
until it occupied the entire orbit. These results strongly suggest that CDI has
the potential to be a clinically effective anti-tumor agent.
The Company's collaborating scientists have purified CDI and have obtained
its amino acid sequence. The Company's collaborating scientists are presently
setting up a cell system for the production of recombinant CDI. The Company
intends to commence animal testing of recombinant CDI for the treatment of tumor
metastases and eye diseases in 1996. If CDI proves to be effective in the
appropriate animal models, the Company intends to undertake the necessary
preclinical studies for the filing of an IND in order to commence human clinical
testing.
Market Overview
Oncology. In oncology, the Company believes that CDI could be used to
treat both benign and malignant (primary and metastatic) solid tumors, either
alone or in conjunction with conventional chemotherapy. Since BLSI's
collaborating scientists' in vitro studies suggest that CDI affects the blood
vessels feeding the tumor and not the tumor cells themselves, BLSI believes that
CDI could prove effective against all solid tumors. A greater response to CDI
could be expected in more highly vascular tumors. Benign tumors that are
inaccessible or otherwise inoperable could also be potentially treated.
There are approximately 800,000 new cases of solid tumors annually in the
U.S. and more than 6 million cases worldwide.
Rheumatoid Arthritis. In Rheumatoid Arthritis (RA), the pannus is a
vascular invasive tissue that destroys the underlying cartilage and ultimately
the entire joint surface. BLSI expects that since the pannus is a highly
vascularized tissue, inhibition of angiogenesis would be expected to inhibit
pannus growth. Based on the hardy nature of CDI as demonstrated in preclinical
research conducted by BLSI's collaborating scientists, BLSI expects that CDI
could be formulated for intraarticular injection (for treatment of inflamed
joints) or used systemically for widespread RA. The Company believes that there
is presently no treatment for RA based on such an anti-angiogenesis approach.
There are approximately 2.5 million individuals in the U.S. with RA.
Eye Diseases. There are a number of eye diseases, many of which lead to
blindness, in which ocular neovascularization occurs in response to the diseased
state. Corneal ulcerations, pterygian, iritis, uveitis, trauma, and corneal
burns are all disorders of the anterior eye that result in substantial
neovascularization. These conditions could be amenable to treatment with an
ophthalmic vehicle containing CDI. In addition, there are a number of posterior
ocular disorders including diabetic retinopathy, neovascular glaucoma,
inflammatory diseases and ocular tumors that are associated with
neovascularization. These conditions could be treated either systemically or by
vitreous injection. The incidence in the U.S. of the more serious forms of these
conditions is 500,000.
Competition
There are presently two potentially competing anti-angiogenic factors in
clinical testing. Platelet Factor 4 (PF4) has anti-collagenase and anti-
angiogenic properties. It is presently being tested in patients in Phase II
studies. Synthetic analogs of fumagillin, a fungal derivative, suppress the
growth of a wide variety of solid tumors. These compounds are also in Phase II
studies in patients with Kaposi's Sarcoma. CDI has been shown to be more potent
than either of these two compounds in in vivo assays, and therefore it is
anticipated that CDI will prove to be more effective clinically as well. There
can be no
11
<PAGE>
assurance however, that CDI will prove to be more potent in clinical trials. In
addition, PF4 has been shown to have effects on cells other than blood vessel
cells and therefore, BLSI believes that could be potentially more toxic than
CDI.
Additionally, there are other potentially competing anti-angiogenic
products in preclinical development, such as angiostatin and thalidomide. The
Company believes that, due to the complicated mechanism of angiogenesis, there
will be a place for a number of different anti-angiogenic products in the
market.
Proprietary Position
BLSI has entered into a license agreement with Children's, pursuant to
which BLSI has been granted an exclusive worldwide license, including the right
to sublicense, to make, use or sell, products or processes covered by claims
contained in a patent application and related foreign patent applications
covering CDI, its method of purification, and its use in the inhibition of
angiogenesis. BLSI's license agreement provides for the payment of a royalty to
Harvard based upon sales by BLSI or BLSI's sublicensees of products and
processes incorporating the licensed technology. There can be no assurance that
such patent application will result in the issuance of any patent or that if
issued, such patent will provide BLSI with any competitive advantage. Pursuant
to the terms of BLSI's sponsored research agreement with Children's, BLSI also
has a first option to negotiate an exclusive worldwide license to certain
additional technologies invented or discovered during the course of the research
program. There can be no assurance that such research will lead to the discovery
of new technologies or that BLSI will be able to obtain a license with respect
to such newly discovered technologies on acceptable terms, if at all.
4. TUMOR TARGETING
BLSI, through research efforts funded by BLSI at Harvard and its
Affiliates, is experimenting with a system to target radiotherapeutic agents to
cancerous tumors while minimizing their effects on normal tissues. The system
is intended to improve substantially the delivery of antibody-based therapies by
overcoming the problem of relative low levels of antibody binding. The proposed
system consists of a series of non-toxic amplification steps prior to the
administration of the radiotherapeutic agent. BLSI believes this system could
enhance the effectiveness and safety of current radiotherapy. The research work
related to this potential new system is presently being conducted by Amin
Kassis, Ph.D., Associate Professor of Radiology, at Harvard Medical School.
Background
Monoclonal antibodies (MAbs) have high specificity and high affinity and/or
avidity for their antigens. Because of this, MAbs have been considered
particularly attractive as selective carriers of diagnostic and therapeutic
products. MAbs have been labeled with /99m/Tc or /111/In for diagnostic
purposes, or with beta or alpha emitters for targeted radiotherapy.
Recently, problems such as low per cent maximum injected dose per gram of
target tissue and slow clearance and nonuniform distribution within tumors have
led many to question the future of MAbs in radioimmunodiagnosis and
radioimmunotherapy. There is thus a need for new methods for directing
therapeutic molecules to tumors that do not rely upon strict structural
integrity of all MAb molecules used, and could insure delivery of sufficient
doses of radiotherapy to tumors without harming normal tissues. BLSI is
presently developing such a system to target radiotherapy to solid tumors. This
system is comprised of sequential specific binding pairs of reagents that are
injected in such a manner that the binding between functional groups is specific
and the results are maximally amplified.
12
<PAGE>
The product is actually an amplification system comprising molecules that
interact in such a way as to markedly increase the number of radiotherapeutic
molecules that eventually bind to the tumor. The first molecule in the system
is a MAb to which three DNA-binding molecules, called DNA intercalators, are
attached. The MAb can be directed against any solid tumor antigen. After a
specified time interval, a DNA complex is injected. The DNA complex binds
tightly to the DNA intercalators on the MAb. Each DNA intercalator binds one
DNA molecule. Since each DNA molecule has approximately 30 additional sites for
further intercalation, a third molecule consisting of DNA intercalators tagged
with the radiotherapy is then injected. This leads to the binding of many
radiotherapeutic molecules for each MAb injected at the first step, and
theoretically results in the delivery of sufficient radiation to kill the tumor.
Since there is little or no binding of MAbs to normal tissues, very little
radiation is delivered to nontumor tissues, thus markedly reducing the danger of
radiation toxicity.
The Company's collaborating scientists have demonstrated proof of principal
for this system in an animal tumor model. Further preclinical testing will
include efficacy in tumor killing, survival studies, system configuration, and
dosing. If such preclinical tests are successful, the Company intends to file
an IND application with the FDA, seeking approval for the initiation of human
clinical trials.
Market Overview
Cancer therapy consists predominantly of either external radiotherapy or
chemotherapy. Though extreme care is taken to focus the Xray beam into the
tumor tissue, inevitably normal surrounding tissues are damaged by the
radiotherapy. The radiation effects on normal surrounding tissue are the cause
of the sometimes severe side-effects associated with radiotherapy. Chemotherapy
is based on the use of cytotoxic agents that effect rapidly dividing cells. The
therapeutic effects of chemotherapy are based on the damage done to the rapidly
dividing tumor relative to the more slowly dividing normal tissue. The
devastating side effects of chemotherapy are due to the relative lack of
specificity for the tumor, so that all tissues to some degree are affected by
the chemotherapy.
In order to overcome the relative nonspecificity of radiotherapy and
chemotherapy, monoclonal antibodies directed against tumor antigens are being
used as vehicles to deliver beta and alpha emitters for radiotherapy, or toxic
molecules for chemotherapy. Insofar as the delivery of radiotherapy is
concerned, the problem remains one of not being able to deliver sufficient
quantities of radiation to the tumor while at the same time limiting the
exposure of normal tissues. The Company's proprietary delivery system may
overcome this problem. The amplification results in a marked increase in the
number of receptors for the radiotherapy, thus assuring the delivery of tumor-
killing doses to the tumor.
There are about 800,000 new cases of solid tumors annually in the U.S. and
6 million worldwide.
Competition
Monoclonal antibody-based delivery systems are beginning to appear on the
market. These antibodies are not used by themselves, but are coupled to either
a gamma emitter for tumor detection, or to a beta or alpha emitter for
radiotherapy. In addition, cytotoxic agents are being coupled to monoclonal
antibodies for chemotherapy. Cytogen's Oncoscint is a radiolabled monoclonal
antibody directed against colon cancer. This product has just been approved by
the FDA for the use in the detection of recurrent primary and metastatic colon
cancer. NeoRx is developing imaging agents using radioisotopes linked to
monoclonal antibodies. These antibodies are directed against lung cancer, colon
cancer, and ovarian cancer. In addition to imaging agents, a number of companies
are developing therapeutic agents linked to monoclonal antibodies. Immunomedics
is developing a radioisotope linked to a monoclonal antibody in order to deliver
localized radiotherapy. Xoma is developing a toxic molecule (ricin A) linked to
a monoclonal antibody directed against colon cancer (for chemotherapy).
13
<PAGE>
All of the aforementioned products and technologies are more advanced than
BLSI's technology in their development. Although BLSI believes its proposed
system may be more advantageous because of its greater potential amplification
and specificity, there can be no assurance that BLSI will be able to
successfully develop a monoclonal antibody-based delivery system for the
delivery of radiotherapeutic agents, that any such system developed by BLSI will
prove more effective than competitive systems, gain sufficient market acceptance
or be commercially viable.
In addition, a number of companies are developing monoclonal antibody-based
diagnostic products. As a result of the experience gained by such companies
with respect to the development of monoclonal antibody-based delivery systems,
such companies could enter the therapeutic field as well.
Proprietary Position
BLSI has entered into a license agreement with Harvard and its Affiliates,
pursuant to which BLSI has been granted an exclusive worldwide license,
including the right to sublicense, to make, use or sell, products or processes
covered by claims contained in a patent application filed by Harvard on January
21, 1993. BLSI's license agreement provides for the payment of a royalty to
Harvard and its Affiliates based upon sales by BLSI or BLSI's sublicensees of
products based on the claims contained within the patent application. There can
be no assurance that such patent application will result in the issuance of any
patent or that if issued, such patent will provide BLSI with any competitive
advantage.
5. ALTROPANE(TM) TO DIAGNOSE PARKINSON'S DISEASE
BLSI, through sponsored research efforts funded by BLSI at Harvard and its
Affiliates, is developing a nuclear medicine imaging agent, Altropane, that it
believes will be useful in the diagnosis of Parkinson's Disease prior to the
onset of specific symptoms. Based on its research, BLSI is not currently aware
of any diagnostic test available on the market for use in the detection of
Parkinson's Disease. Since administration of currently available therapies in
the early stages of Parkinson's Disease may delay the progression of the
disease, early definitive diagnosis may be of substantial benefit. Based upon
certain preclinical tests conducted by BLSI's collaborating scientists, BLSI
believes that the use of Altropane will be effective in enabling early
Parkinson's Disease diagnosis.
Background
Parkinson's Disease ("PD") afflicts about 250-500,000 Americans and about 4
million individuals worldwide. The number of individuals having PD is expected
to grow substantially as life expectancy grows worldwide. PD is a chronic,
irreversible neurodegenerative disease generally afflicting those over 50. It
is caused by a marked decrease in the number of dopamine terminals in specific
areas of the brain. Inadequate production of dopamine causes the classic
parkinsonian symptoms of resting tremor, muscle retardation, and rigidity.
There are presently no objective means by which to diagnose PD. The
diagnosis of PD is based on clinical findings only. Moreover, clinical
diagnosis of PD is notoriously unreliable, since up to 75% of patients
considered to have PD turn out to have had other conditions when analyzed at
autopsy. In addition to the many individuals falsely diagnosed with PD, there
are many individuals who have PD in whom the diagnosis cannot be made on
clinical grounds and, thus, are not treated. Therefore, there are a substantial
number of patients receiving PD therapy who cannot be helped by such medication,
and conversely, there are many individuals who could benefit from therapy if
there were a reliable and objective way to make the diagnosis.
14
<PAGE>
The Company is developing a radioimaging agent called Altropane that can be
used with Single Photon Emission Tomography (SPECT) scanning to diagnose PD.
Positron Emission Tomography (PET) agents, such as /3/H-CFT, are useful for the
noninvasive quantification of the density of dopamine terminals, but the expense
and complexity of this approach limits its general applicability. SPECT
scanning machines on the other hand are relatively inexpensive and are widely
available in nuclear medicine facilities. Until now, there has not been a SPECT
agent available that is capable of specifically imaging the dopamine system at a
convenient time interval after injection. The Company believes that Altropane
is such an agent.
Altropane is currently undergoing clinical Phase I/II testing under a
physician's sponsored IND. The study is designed to a) test the ability of
Altropane to image the dopamine transporter system in normal volunteers; b)
establish the safety and minimum dose needed to obtain high quality images; and
c) to test the ability of Altropane to detect decreases in the dopamine
transporter system in patients with various stages of Parkinson's Disease.
Thus far, Altropane has been tested in ten normal volunteers. The images
obtained have been of excellent quality, and there has been no detectable
toxicity. Patients may be imaged within ninety minutes of injection, which
suggests that Altropane has clear advantages over other potentially competing
products. See "Competition." The Company believes that Altropane could be a
nearly ideal clinical imaging agent for the dopamine transporter system, capable
of detecting small decreases in the amount of dopamine transporters within the
region of the brain most affected by Parkinson's Disease.
Market Overview
Parkinson's Disease afflicts between 250,000 and 500,000 individuals in
the United States and about 4 million individuals worldwide.
Competition
The Company is aware of at least one significant competitor in the field of
dopamine transporter imaging. DOPASCAN(TM) , a product of Guilford
Pharmaceuticals, is an /125/I-labeled tropane derivative presently undergoing
Phase II clinical trials that can provide brain images after approximately 22
hours, which may limit the clinical applicability of the product. Furthermore,
DOPASCAN appears to be far less selective than Altropane in its binding to the
dopamine vs. serotonin transporter. Based on reported results and other
information available, the Company believes that Altropane has significant
advantages over DOPASCAN(TM) as a practical radioimaging agent for the early
diagnosis and monitoring of PD.
Proprietary Position
BLSI has entered into a license agreement with Harvard, pursuant to which
BLSI has been granted an exclusive worldwide license, including the right to
sublicense, to make, use or sell, products or processes covered by claims
contained in a United States Patent Number 5,493,026 and related foreign patent
applications covering Altropane and its use in the diagnosis of Parkinson's
Disease. BLSI's license agreement provides for the payment of a royalty to
Harvard based upon sales by BLSI or BLSI's sublicensees of products and
processes incorporating the licensed technology.
15
<PAGE>
Pursuant to the terms of BLSI's sponsored research agreement with Harvard,
BLSI also has a first option to negotiate an exclusive worldwide license to
certain additional technologies invented or discovered during the course of the
research program. There can be no assurance that such research will lead to the
discovery of new technologies or that BLSI will be able to obtain a license with
respect to such newly discovered technologies on acceptable terms, if at all.
6. AXOGENESIS FACTOR 1 (AF-1)
Background
Axogenesis Factor 1 (AF-1) is a recently discovered nerve growth factor
that appears to be the only peptide identified to date that promotes axon
outgrowth from central nervous system (CNS) cells. This property is
significant, since the zone of partial injury surrounding the central necrotic
zone of a stroke contains live but damaged nerve cells that have lost their
axons. AF-1 would therefore potentially salvage these partially injured cells,
resulting in some recovery of function. The same phenomena occurs in brain
injury and in spinal cord trauma. The Company hopes that AF-1 could provide the
first truly "regenerative" treatment for these conditions.
Within approximately the last five years, a number of neurotrophic factors
have been identified that with respect to in vitro are able to enhance the
survival of CNS nerve cells, and in some cases, cause an increase in the number
and length of axonal projections from these cells. Of the ten or so factors
that have been identified to date, none are specific for axonal growth of CNS
cells in culture; that is, they each have a variety of effects, such as
increasing cell survival, stimulating axonal budding, and most importantly,
having trophic action on cells of the peripheral nervous system (PNS). Using an
in vitro model of CNS nerve growth, the Company's collaborating scientists found
that conditioned medium from sheath cells (glial cells) markedly increased the
length of retinal ganglion cell axons. None of the other known neurotrophic
factors had any activity in this model. Interestingly, the purified peptide
from the conditioned media did not have any activity on cells of the PNS. The
Company's collaborating scientists have concluded that AF-1 is a heretofore
unrecognized unique and potent CNS nerve growth factor. AF-1 has the potential
to treat CNS injury such as stroke, traumatic brain injury, and spinal cord
trauma.
Since the discovery of AF-1, the Company's collaborating scientists believe
that they have purified AF-1, and are in the process of sequencing the molecule.
AF-1 is a peptide made up of five amino acids, which should make it relatively
simple to manufacture using conventional peptide production techniques.
Following amino acid sequencing of AF-1, the Company believes that quantities
sufficient for in vitro and in vivo testing could be made without difficulty and
at a reasonable price. This material will then be tested in an animal model of
spinal cord injury and stroke. If the animal models are successful, then
reformulation to maximize crossing of the blood-brain barrier would have to be
done prior to filing of an IND. The Company believes that an IND could be filed
within three years, although there can be no assurance to that effect.
Market Overview
The Company believes that AF-1 could prove effective for the treatment of
acute CNS injury, such as that occurring after stroke, brain trauma, and spinal
cord injury. The rationale for pursuing these indications is that AF-1 acts by
promoting growth of nerve cell projections. These projections are the most
sensitive to injury, and they regress if the nerve cell is stressed but still
alive. Thus the cells on the periphery of the injury may still be alive but
their axons have regressed. AF-1 is expected to promote the regrowth of these
axons and presumably allow them to reestablish physiologic connections with
neighboring cells, although there can be no assurance that it will do so.
16
<PAGE>
AF-1 is anticipated to be developed for the treatment of stroke, traumatic
brain injury, and spinal cord trauma. The annual incidence of stroke in the
U.S. is approx. 500,000, with more than 3,000,000 stroke survivors currently
alive in the U.S. The incidence of traumatic brain injury is approximately
50,000. The incidence of spinal cord injury is approximately 10,000 cases.
Treatment for these conditions is presently limited to hemodynamic support,
steroids to reduce inflammation, and, in the case of stroke, the correction of
predisposing hematological abnormalities.
Competition
There are a number of potential therapeutic agents under development for
the treatment of stroke, traumatic brain injury, and spinal cord injury. The
most developed of these, Cerestat (Cambridge Neuroscience), is an NMDA channel
antagonist in phase II clinical testing. Other NMDA and glutamate blockers are
also being developed by Cambridge Neuroscience, but they are in early
preclinical development. These agents are cytoprotective rather than trophic or
regenerative, and are therefore not in direct competition with AF-1. Cambridge
Neuroscience is also developing GDNF for CNS injury, but this factor appears to
be a survival factor rather than an axonal growth factor. F-Spondin, licensed
by Cambridge Neuroscience from Columbia University, directs axonal growth in
spinal cord neurons, and is being developed for spinal cord injury. This
potentially important molecule appears to be successful only on sensory, not
motor neurons.
Both Cortex and Centaur Pharmaceuticals are developing enzyme inhibitors of
calpain as neuroprotective agents. These agents have shown efficacy in animal
models of stroke. Cortex is collaborating with Alkermes on these products.
Layton Bioscience is developing nerve cell implants for treatment of
stroke. There are no details available regarding its stage of development.
The Company believes that AF-1 is the only factor that stimulates growth of
axons in CNS cells, which gives AF-1 an advantage over the other products in
development. Since the mode of action is different, eventual treatment may
consist of a neuroprotective agent such as an NMDA antagonist, a calpain
inhibitor, and a growth factor such as AF-1 to permit regeneration of injured
nerves. Since AF-1 is the smallest peptide growth factor yet identified, the
delivery problems are expected to be somewhat mitigated by the ease by which AF-
1 could be conjugated to a hydrophobic group or molecule to carry it across the
blood brain barrier. There is, however, no precedent for the use of growth
factors to treat acute CNS injuries. Though there has been some success in the
use of growth factors to treat chronic CNS and particularly peripheral neuron
diseases, it is as yet not known whether acute conditions will respond to
treatment with AF-1.
Proprietary Position
BLSI has entered into a license agreement with Harvard and its Affiliates,
pursuant to which BLSI has been granted an exclusive worldwide license,
including the right to sublicense, to make, use or sell, products or processes
covered by claims contained in a patent application filed by Harvard and its
Affiliates. BLSI's license agreement provides for the payment of a royalty to
Harvard and its Affiliates based upon sales by BLSI or BLSI's sublicensees of
AF-1. There can be no assurance that such patent application will result in the
issuance of any patent or that if issued, that such patent will provide BLSI
with any competitive advantage. Pursuant to the terms of BLSI's sponsored
research agreement with Harvard and its Affiliates, BLSI also has a first option
to license additional technologies invented or discovered during the course of
the research program being funded by BLSI. There can be no assurance that such
research will lead to the discovery of new technologies or that BLSI will be
able to obtain a license with respect to such newly discovered technologies on
acceptable terms, if at all.
17
<PAGE>
FORWARD-LOOKING STATEMENTS
The discussion in this Form 10-K includes forward-looking statements based
on current management expectations. Factors which could cause future results to
differ materially from such expectations include, without limitation, the
following: (i) scientific data collected from the proposed Phase III clinical
trial for THERAFECTIN and from the current Phase I/II clinical trial for
Altropane, (ii) scientific data collected on the Company's technologies
currently in preclinical research and development, (iii) decisions made by FDA
or other regulatory bodies with respect to the initiation of human clinical
trials, (iv) decisions made by FDA or other regulatory bodies with respect to
the commercial sale of any of the Company's proposed products, (v) the
commercial acceptance of any products approved for sale and the ability of the
Company to manufacture, distribute and sell for a profit any products approved
for sale, (vi) the Company's ability to obtain the necessary patents and
proprietary rights to protect effectively its proposed products and
technologies, and (vii) the beneficial outcome of any collaborations or
alliances currently entered into by the Company or to be entered into by the
Company in the future with pharmaceutical or other biotechnology companies.
Specific reference is made to the risks and uncertainties described in
Greenwich's Registration Statement filed on Form S-4, Registration No. 33-91106,
and the Company's Registration Statement filed on Form S-3, Registration No.
333-02730.
PATENTS
The Company's patent strategy has been to aggressively pursue patent
protection for compounds and technologies in the development pipeline. The
ultimate goal has been to obtain broad patent protection for the compounds and
technologies under development and the relating medical indications of those
technologies. BLSI has also aggressively pursued similar international patent
protection to the extent available for certain compounds and technologies and
has filed patent applications covering these compounds and technologies in most
major industrialized countries.
The Company has entered into a number of exclusive worldwide licenses to
patent applications covering certain technologies developed by BLSI's
collaborating scientist and its applications for diagnosis and/or therapy. A
description of the specific patent protection or proprietary position associated
with each of the Company's technologies can be found in the discussion of each
of BLSI's products in the section titled "Products in Clinical Trials and
Products Under Development."
There can be no assurance that patent applications owned by, or licensed
to, the Company will issue or that, if issued, the Company's patents will be
valid or that they will provide the Company with meaningful protection against
competitors or with a competitive advantage. There can be no assurance that the
Company will not need to acquire licenses under patents belonging to others for
technology potentially useful or necessary to the Company and there can be no
assurance that such licenses will be available to the Company, if at all, on
terms acceptable to the Company. Moreover, there can be no assurance that any
patent issued to or licensed by the Company will not be infringed upon or
circumvented by others. In particular, if the Company is unable to obtain
issuance of a patent with broad claims, a competitor may be able to design a
treatment based on a treatment that is covered by valid patent claims.
Much of the Company's know-how and technology may not be patentable. To
protect its rights, the Company requires employees, consultants, advisors and
collaborators to enter into confidentiality agreements. There can be no
assurance, however, that these agreements will provide meaningful protection for
the Company's trade secrets, know-how or other proprietary information in the
event of any unauthorized use or disclosure. In addition, the Company's
business may be adversely affected by
18
<PAGE>
competitors who independently develop competing technologies, especially if the
Company obtains no, or only narrow, patent protection.
CORPORATE ALLIANCES
In June 1995, BLSI entered into a research and development collaboration
agreement with Zeneca for all indications, on a worldwide basis, of BLSI's MHC
Class II Inhibition technology. The collaboration calls for Zeneca to provide
funding during the first two years of research and for BLSI to receive payments
from Zeneca as lead compounds reach traditional clinical development milestones.
In addition, the Company will receive royalties payable on the sale of any
products originating from the collaboration.
In June 1990, the Company announced that it had entered into a development
and license agreement for amiprilose HCl with Kissei Pharmaceutical Co., Ltd.
("Kissei"). Under the terms of this agreement, the Company granted to Kissei
the exclusive right to develop and commercialize amiprilose HCl in all dosage
forms and for all indications in Japan, The Republic of the Philippines, Korea
(both North and South), Malaysia, Singapore, Hong Kong, Indonesia, Burma,
Thailand, Kampuchea, Laos, Vietnam, Papua New Guinea, Mongolia, Shutan and
Maldives. Subsequently, this agreement was extended to include Russia. In
exchange for these rights, Kissei agreed to make royalty payments to the Company
on all sales of amiprilose HCl. The agreement also provided for a technology
transfer fee of approximately $6 million consisting of an initial payment of
approximately $3.3 million which was received by Greenwich and two additional
payments of approximately (Yen)250 million each upon receipt of FDA approval to
market in the United States and receipt by Kissei of approval to market in
Japan. On February 22, 1995, Kissei informed the Company that based upon the
results of its Phase II clinical trial of amiprilose HCl, it had elected to
discontinue development of the compound. Unless BLSI obtains marketing approval
for THERAFECTIN in the United States and Kissei obtains marketing approval of
amiprilose HCl in Japan, the future milestone payments from Kissei will not be
received.
In April 1994, Greenwich entered into a Development and License Agreement
with Irotec Laboratories of Cork, Ireland, pursuant to which the Company granted
to Irotec the exclusive right to develop amiprilose HCl in all dosage forms and
for all indications and to use the trademark, THERAFECTIN, in the Republic of
Ireland and the Netherlands. Under this agreement, the Company will receive
from Irotec royalty payments based upon the net sales of THERAFECTIN in the
subject territories. In July 1994, Irotec withdrew the THERAFECTIN PLA in the
Netherlands after receiving notification of deficiencies in the application
which it was unable to address at that time. See "Government Regulation."
COLLABORATIVE RESEARCH AGREEMENTS
With the exception of the products based on synthetic carbohydrates to
treat autoimmune diseases, all of the Company's five other technologies
currently under development were invented or discovered by researchers working
at Harvard and its Affiliates. With respect to these technologies originating
at Harvard and its Affiliates, the Company has funded the research and
development of these technologies through a variety of sponsored research and
licensing agreements with Harvard and its Affiliates.
The Company anticipates that it will continue to fund its research and
development work in this manner by entering into sponsored research agreements,
licensing agreements, and contracts with certain contract research
organizations. A description of the sponsored research agreements and licensing
agreements associated with each of the Company's technologies can be found in
the discussion of each of BLSI's products in the section titled "Products in
Clinical Trials and Products Under Development."
19
<PAGE>
COMPETITION
The pharmaceutical industry is highly competitive, and research on the
causes of and possible treatments for cancer, Parkinson's Disease, central
nervous system disorders and autoimmune diseases are developing rapidly. The
Company competes with a number of pharmaceutical and biotechnology companies
which have financial, technical and marketing resources significantly greater
than those of the Company. Some companies with established position in the
pharmaceutical industry may be better equipped than the Company to develop and
market products based on the application of new technologies for the treatment
of these diseases. A significant amount of research in the field is also being
carried out at universities and other not-for-profit research organizations.
These institutions are becoming increasingly aware of the commercial value of
their findings and are becoming more active in seeking patent protection and
licensing arrangements to collect royalties for use of technology that they have
developed. These institutions may also market competitive commercial products
on their own or through joint ventures and will compete with the Company in
recruiting highly qualified scientific personnel.
The Company is pursuing areas of product development in which there is a
potential for extensive technological innovation in relatively short periods of
time. The Company's competitors may succeed in developing products that are
more effective than those of the Company. Rapid technological change of
developments by others may result in the Company's potential products becoming
obsolete or non-competitive.
SCIENTIFIC ADVISORY BOARD
BLSI has organized a Scientific Advisory Board, which currently consists of
19 members (the "Scientific Advisors"). The Scientific Advisors have extensive
experience in fields related to BLSI's fields of research. The Scientific
Advisors may be asked to review and evaluate the research programs of BLSI, to
advise it with respect to technical matters in fields in which it is involved
and to recommend personnel to BLSI.
The Scientific Advisors are employed by or have consulting agreements with
other entities, some of which may conflict or compete with BLSI, and they are
expected to devote only a portion of their time to BLSI. With the exception of
the members of the Scientific Advisory Board who are also consultants to BLSI or
its subsidiaries, the Scientific Advisors are not expected to participate
actively in BLSI's activities or in the development of BLSI's technologies.
Certain of the institutions with which the Scientific Advisors are affiliated
may have regulations or policies which limit the ability of such personnel to
act as part-time consultants or in other capacities for a commercial enterprise.
Regulations or policies not in effect and adopted in the future might limit the
ability of the Scientific Advisors to consult with BLSI or its subsidiaries.
The loss of the services of certain of the Scientific Advisors could have a
material adverse effect on BLSI.
Furthermore, no inventions or processes discovered by the Scientific
Advisors will become the property of BLSI or its subsidiaries but will remain
the property of such persons' full-time employers, other than those inventions
or processes that may be covered by consulting agreements between BLSI and such
advisors. In addition, the institutions with which the Scientific Advisors are
affiliated may make available the research services of their scientific and
other skilled personnel, including the Scientific Advisors, to entities other
than BLSI pursuant to sponsored research agreements with others. Under such
sponsored research agreements, such institutions may be obligated to assign or
license patents and other proprietary information which may result from research
sponsored by an entity other than BLSI, including research performed by a
Scientific Advisor for a competitor of BLSI.
20
<PAGE>
BLSI's Scientific Advisory Board is divided into areas representing the
unique research being conducted by each of BLSI's currently operating
subsidiaries. Due to (i) the anticipated initiation of a Phase III clinical
trial for THERAFECTIN, (ii) the corporate collaboration with Zeneca for research
on MHC Class II Expression and (iii) the early nature of research involving
Axogenesis Factor 1, no formal Scientific Advisory Board subcommittee for such
programs have been established to date. The Scientific Advisory Board consists
of:
Chairman of the Scientific Advisory Board
ROBERT S. LANGER, SC.D. Dr. Langer is the Germeshausen Professor of Chemical and
Biomedical Engineering, Massachusetts Institute of Technology ("MIT"). He is a
member of the National Academy of Sciences, the National Academy of Engineering
and the Institute of Medicine. Dr. Langer serves on the editorial boards of more
than 10 peer-review journals, and is the current Editor of Biomaterials. He is a
Director of Alkermes, Inc., a biopharmaceutical company. He is a member of the
scientific advisory boards of a number of companies, including Genentech and
Cygnus Corp. He has authored over 400 journal articles. Dr. Langer received his
Sc.D. in Chemical Engineering from MIT.
Sub-Committee for Cartilage-Derived Inhibitor
HENRY BREM, M.D. Dr. Brem is Professor of Neurosurgery, Ophthalmology, and
Oncology at Johns Hopkins University, and Director of Neurosurgical Oncology at
Johns Hopkins Hospital. Dr. Brem is on the editorial boards of the Journal of
Neuro-Oncology and The International Journal of Drug Targeting, and has been an
ad hoc reviewer for approximately 10 peer review journals in the fields of
oncology, neurosurgery and drug delivery. He is the principal author of more
than 75 articles in peer-reviewed publications. Dr. Brem received his M.D. from
Harvard Medical School.
LAURIE H. GLIMCHER, M.D. Dr. Glimcher is the Irene Heinz Given Professor of
Immunology, Harvard School of Public Health. Dr. Glimcher has been the recipient
of numerous honors and awards in recognition for her work in immunology. She has
been Chair of the Rheumatology and Immunology Sections of the American Society
of Clinical Investigation. She is past Associate Editor, The Journal of
Immunology, and is on the editorial boards of the Journal of Molecular and
Cellular Immunology, Arthritis and Rheumatism, Tissue Antigens, The New
Biologist, and the Annual Review of Immunology. She is the author of more than
100 papers in peer-reviewed publications. Dr. Glimcher received her M.D. from
Harvard Medical School.
ALEXANDER M. KLIBANOV, PH.D. Dr. Klibanov is Professor of Chemistry at MIT. He
is a member of the National Academy of Engineering. He has received numerous
international honors and awards in the fields of enzymes and proteins. Dr.
Klibanov is on the editorial boards of a number of biochemical and chemical
engineering publications, including Advances in Biochemical
Engineering/Biotechnology, Biocatalysis and Biotechnology Progress. He is the
author of more than 150 articles in scientific journals. Dr. Klibanov received
his Ph.D. from Moscow University.
MARSHA A. MOSES, PH.D. Dr. Moses is an Assistant Professor of Surgery at the
Harvard Medical School. Dr. Moses was the first to purify CDI and is the author
of numerous papers related to the structure and function of CDI. Dr. Moses
received her Ph.D. from Boston University.
ARTHUR J. SYTKOWSKI, M.D. Dr. Sytkowski is an Associate Professor of Medicine,
Harvard Medical School, and Director of the Laboratory for Cell and Molecular
Biology, New England Deaconess Hospital. He is an expert on the physical and
chemical properties of erythropoietin and molecular basis of erythroid
differentiation. Dr. Sytkowski has published more than 50 papers in these fields
and is a past recipient of an NIH Career Development Award. Dr. Sytkowski
received his M.D. from the Medical College of Wisconsin.
21
<PAGE>
DAVID TAPPER, M.D. Dr. Tapper is Surgeon-in-Chief and Director, Department of
Surgery, Children's Hospital & Medical Center, and Professor of Surgery,
University of Washington Medical School. He is a member of 20 professional
societies, and is author of more than 55 publications. Dr. Tapper is on the
editorial board of Journal of Surgical Research. Dr. Tapper received his M.D.
from the University of Maryland Medical School.
JOSEPH P. VACANTI, M.D. Dr. Vacanti is Associate Professor of Surgery, Harvard
Medical School, and Director of the Laboratory for Transplantation and Tissue
Engineering at The Children's Hospital Corporation of Boston. He is a member of
a number of professional societies and is the author of more than 60
publications in the areas of transplantation, tissue engineering and pediatric
surgery. Dr. Vacanti received his M.D. from the University of Nebraska College
of Medicine.
Sub-Committee for Tumor-Targeting
ROBERT W. ATCHER, PH.D. Dr. Atcher is Assistant Professor of Radiation
Oncology, University of Chicago, Group Leader, Chemistry Division, Argonne
National Laboratory, Argonne, Illinois. Dr. Atcher was President of the
Radiopharmaceutical Science Council of the Society of Nuclear Medicine. He is
the Chairman of a number of University of Chicago committees dealing with the
use of radioisotopes in clinical practice. Dr. Atcher has been or is a
consultant for a number of companies developing clinical radiopharmaceutical
products. He has authored more than 60 publications in peer-reviewed journals.
Dr. Atcher received his Ph.D. from the University of Rochester.
WILLIAM D. BLOOMER, M.D. Dr. Bloomer is Professor of Radiology, Northwestern
University Medical School and Chairman of the Department of Radiation Medicine.
He is Associate Editor of each of Radiation Research, International Journal of
Radiation Oncology, Biology and Physics and Antibody Immunoconjugates and
Radiopharmaceuticals. He is a member of a number of professional societies and
is the author of more than 125 articles in the fields of oncology and radiation
biology. He received his M.D. from Jefferson Medical College.
ALAN L. EPSTEIN, M.D., PH.D. Dr. Epstein is Professor, Department of Pathology,
University of Southern California. He is a member of a number of professional
societies and is the author of more than 80 peer-reviewed publications in the
fields of tumor biology, pathology, and radiation oncology. Dr. Epstein received
his M.D. and Ph.D. from Stanford University.
AMIN I. KASSIS, PH.D. Dr. Kassis is an Associate Professor of Radiology at
Harvard Medical School and Director of Radiation Biology at Brigham and Women's
Hospital. Dr. Kassis is an authority on the clinical use of therapeutic and
diagnostic radionuclides in cancer, and has authored more than 50 papers in this
field. Dr. Kassis is the holder of nine patents pertaining to radionuclides and
their uses. Dr. Kassis received his Ph.D. from McGill University of Montreal.
SCOTT F. ROSEBROUGH, PH.D. Dr. Rosebrough is Assistant Professor of Surgery and
Radiology, University of Rochester. He is a member of numerous scientific
societies, including the Society of Nuclear Medicine and the American
Association for the Advancement of Science. Dr. Rosebrough has been the
Principal Investigator on a number of NIH and other grants since 1986. He is
the author of more than 10 peer-reviewed publications dealing with radio-
imaging. Dr. Rosebrough received his Ph.D. from the State University of New
York at Syracuse.
22
<PAGE>
Sub-Committee for Parkinson's Disease
JOSEPH V. BRADY, PH.D. Dr. Brady is Professor of Neuroscience and Behavioral
Biology, Johns Hopkins University School of Medicine. Dr. Brady is also the
Director of the Behavioral Biology Research Center at Johns Hopkins University
and President, Institutes for Behavior Resources, Inc., Washington, D.C. He is
Past-President, Behavioral Pharmacology Society, Society of Behavioral Medicine,
and the Eastern Psychological Association. Dr. Brady is the author of over 200
publications in the fields of Behavioral Physiology and Behavioral Pharmacology.
He received his Ph.D. from the University of Chicago.
BRUCE M. COHEN, M.D., PH.D. Dr. Cohen is Professor of Psychiatry, Harvard
Medical School, and attending Psychiatrist, McLean Hospital, Belmont, MA. Dr.
Cohen is presently Chairperson, Biological Psychopathology Review Committee,
Neuroscience Review Branch, NIMH. He is on the Editorial Board of the Harvard
Review of Psychiatry and has authorized more than 180 articles in the fields of
neurobiology and the mechanisms of action of antipsychotic drugs.
BERTHA K. MADRAS, PH.D. Dr. Madras is an Associate Professor of Psychobiology in
the Department of Psychiatry at Harvard Medical School's New England Regional
Primate Research Center. Dr. Madras is an international expert on the
pharmacology of the dopamine and cocaine receptors in primate and human brains.
Dr. Madras is on the Editorial Board of the journal, Synapse. She is the author
of more than 50 papers in peer-review journals pertaining to the mechanisms of
Parkinson's Disease and Alzheimer's Disease. Dr. Madras received her Ph.D. from
McGill University of Montreal.
JEANNETTE C. MILLER, PH.D. Dr. Miller is Associate Professor of Psychiatry, New
York University, School of Medicine. She is on the Editorial Advisory Board of
the Journal of Biological Psychiatry. Dr. Miller is the author of more than 25
articles in the area of neuropharmacology. She received her Ph.D. from New York
University.
MICHAEL A. MOSKOWITZ, M.D. Dr. Moskowitz is Professor of Neurology, Harvard
Medical School, and Associate Neurologist, Massachusetts General Hospital. He is
on the editorial boards of more than 10 neurological, medical and physiological
journals, including Stroke, American Journal of Physiology, and Clinical
Neuropharmacology. Dr. Moskowitz is the author of more than 100 articles in
peer-reviewed journals. He received his M.D. from Tufts University School of
Medicine.
HYMAN B. NIZNIK, PH.D. Dr. Niznik is Assistant Professor of Psychiatry,
University of Toronto, and Section Head, Laboratory of Molecular Neurobiology,
Clarke Institute of Psychiatry. Dr. Niznik is a member of a number of
neuroscientific societies and has been an ad hoc reviewer for more than 10
neuroscientific journals. He is author of more than 70 papers in peer-reviewed
neuroscience journals. Dr. Niznik received his Ph.D. from the University of
Toronto.
PHILIP S. PORTOGHESE, PH.D. Dr. Portoghese is Professor of Medicinal Chemistry
and Pharmacology, University of Minnesota. Dr. Portoghese has been Editor-In-
Chief of the Journal of Medicinal Chemistry since 1972. He has served on
numerous national and international panels in the field of medicinal chemistry,
particularly the chemistry of opioids and opioid antagonists. He has authored
more than 220 peer-reviewed publications. Dr. Portoghese received his Ph.D. from
the University of Wisconsin.
MANUFACTURING
The Company currently has no manufacturing facilities for either clinical
trial or commercial quantities of any of its products. To date, the Company has
obtained the limited amount of products required for clinical trials from
contract manufacturing companies. The Company intends to establish
23
<PAGE>
contract manufacturing arrangements with experienced firms for the supply of
material for both clinical trials and commercial sale. As a result of these
contract manufacturing arrangements, the Company will depend upon third parties
to produce and deliver products in accordance with all applicable regulations.
There can be no assurance that such parties will perform their obligations in a
timely fashion and that any failures by such third parties would not cause a
delay in clinical trials, commercialization of products, or ability to supply
the market.
GOVERNMENT REGULATION
Before a new drug may be commercially sold in the United States and other
countries, clinical trials and other tests on the product must be conducted and
results submitted to the appropriate regulatory agencies as part of the approval
process. The steps required before a new drug product may be marketed in the
United States include (i) preclinical laboratory and animal tests conducted in
accordance with FDA's Good Laboratory Practices ("GLP") requirements, (ii)
submission to FDA of a Notice of Claimed Investigational Exemption for New Drug
("IND"), which must become effective before human clinical trials may commence,
(iii) well-controlled human clinical trials to establish the safety and efficacy
of the new drug product, (iv) submission of an NDA to FDA and (v) FDA approval
of the NDA prior to any commercial sale or shipment of the drug. FDA approval
must be obtained for each product and for each indication to be treated with
each product.
Preclinical tests include formulation development, laboratory evaluation of
product chemistry and animal studies to assess the potential safety and efficacy
of a product formulation. Drug products must be manufactured in accordance with
FDA's current Good Manufacturing Practices ("cGMP") requirements, preclinical
tests must be conducted in accordance with GLP regulations and clinical trials
must be conducted in accordance with FDA's Good Clinical Practice ("GCP")
requirements. The results of preclinical tests are submitted to FDA as part of
the IND along with information on the manufacture of the drug substance and
product and are reviewed by FDA prior to authorizing the sponsor to conduct
clinical trials in human subjects. Unless FDA objects to an IND, the IND will
become effective 30 days following its receipt by FDA. There is no certainty
that submission of an IND will result in FDA authorization to commence clinical
trials or that authorization of one phase of a clinical trial will result in
authorization of other phases or that clinical trials will result in FDA
approval. Clinical trials may be placed on hold by FDA at any time for a variety
of reasons, particularly if safety concerns exist.
Clinical trials for investigational drug products are typically conducted
in three phases and are subject to specific protocols that are particularly
detailed in Phase II and Phase III. Each protocol indicating how the clinical
trial will be conducted must be submitted for review to FDA as part of the IND.
The FDA's review of a study protocol does not necessarily mean that if the study
is successful it will constitute proof of efficacy or safety. Further, each
clinical study must be conducted under the auspices of an Investigational Review
Board ("IRB"). The IRB considers, among other factors, ethical concerns,
patients informed consent requirements and the possible liability of the
institution. The IRB or FDA may require changes in a protocol both prior to and
after the commencement of a trial. There is no assurance that the IRB or FDA
will permit a study to go forward or, once started, to be completed.
The three phases of clinical trials are generally conducted sequentially,
but they may overlap. Phase I testing generally takes one year to complete and
involves the initial introduction of the drug into humans for testing the
safety, side effects, dosage tolerance, metabolism and clinical pharmacology of
the drug. Initial human testing is generally done in healthy volunteers, but in
the case of drugs for life-threatening diseases, Phase I may use patients
afflicted with the target disease. Phase II testing generally takes one and
one-half to two and one-half years and involves well-controlled tests in larger
but still limited patient populations to determine the efficacy of the drug for
specific indications, to determine optimal dosage and to identify possible side
effects and safety risks. If a drug is found to be effective in Phase II
evaluations, expanded Phase III trials are undertaken to evaluate the overall
risk and benefits of
24
<PAGE>
the drug in relation to the treated disease in light of other available
therapies. Phase III studies for an indication generally take two and one-half
to five years to complete. Phase III clinical studies may be avoided under
certain circumstances. For example, under the FDA's expedited approval
regulations, FDA may determine that the study is not necessary, especially where
no adequate alternative therapy exists, and/or if the disease under examination
is life-threatening or seriously debilitating. FDA may suspend clinical trials
at any time if the patients are believed to be exposed to a significant health
risk.
Reports of results of the preclinical studies and clinical trials for drug
products are submitted to FDA in the form of an NDA for approval of marketing
and commercial shipment. The NDA also includes information pertaining to the
preparation of the drug substance, analytical methods, drug product formulation,
details on the manufacture of finished product and proposed product packaging
and labeling. Submission of an NDA does not assure FDA approval for marketing.
The application review process is 180 days, but generally takes two to three
years, or more, to complete, due to questions or concerns by FDA about the
safety and/or efficacy of the product.
In general, FDA requires at least two adequate and well-controlled studies
demonstrating efficacy with sufficient levels of statistical assurance.
However, additional information may be required. Notwithstanding the submission
of additional information, FDA ultimately may decide that the application does
not satisfy its regulatory criteria for approval. Finally, FDA may require
additional clinical tests following NDA approval to confirm product safety and
efficacy (Phase IV clinical tests).
If FDA decides that the application does not satisfy its regulatory
criteria for approval, the sponsor must do one of the following: (1) amend, or
notify FDA of an intent to amend, the NDA, (2) withdraw the application, (3) for
new drugs, not including antibiotics, ask FDA to provide the applicant an
opportunity for a hearing on whether grounds exist for denying approval, (4) for
an antibiotic, file a petition or notify FDA of an intent to file a petition
proposing the issuance, amendment, or repeal of a regulation, or (5) notify FDA
that the applicant agrees to a review period extension to give further
consideration to which of the previous four options the company will pursue.
In the case of the THERAFECTIN NDA review, the Company has notified FDA of
its intent to conduct another Phase III clinical trial and amend the NDA
currently on file with FDA (option 1). There can be no assurance, however, that
even if FDA allows the Company to amend the THERAFECTIN NDA that FDA will
approve THERAFECTIN.
Among the requirements for marketing all drugs is the requirement that
prospective manufacturers, whether domestic or foreign, also conform to FDA's
current cGMP requirements. In complying with cGMP standards, manufacturers must
continue to expend time, money and effort in production, record keeping and
quality control to ensure that the product meets applicable specifications and
other requirements. Failure to comply subjects the manufacturer to possible FDA
action, such as the suspension of manufacturing, seizure of the product, or
voluntary recall of a product. Manufacturers, whether domestic or foreign, are
subject to periodic inspection by FDA or local authorities under agreement with
FDA.
The product testing and approval process is likely to take a substantial
number of years and involves expenditure of substantial resources. FDA also may
require postmarketing testing and surveillance to monitor the use of the product
and continued compliance with regulatory requirements. Upon approval, a drug may
be marketed only for the approved indication in the approved dosage form at the
approved dosage. Adverse experiences with the product must be reported to FDA.
FDA also may require the submission of any lot of the product for inspection and
may restrict the release of any lot that does not comply with FDA standards, or
may otherwise order the suspension of manufacture, recall or seizure. Product
approvals may be withdrawn if compliance with regulatory standards is not
maintained or if problems concerning safety or efficacy of the product occur
following approval.
25
<PAGE>
Clinical trials of the Company's product candidates and sales of any of
its products in foreign countries are also subject to foreign regulatory
authorities. Whether or not FDA approval has been obtained, approval of a
product by the comparable regulatory authorities of foreign countries must be
obtained prior to the commencement of marketing of the product in those
countries. The approval process varies from country to country and the time
required may be longer or shorter than that required for FDA approval.
Prior to the Merger, Greenwich filed Product License Applications
("PLAs") for THERAFECTIN in the United Kingdom, the Republic of Ireland, the
Netherlands, France and Switzerland during 1993. Regulatory authorities in the
United Kingdom and France have sent notification of deficiencies in the
THERAFECTIN PLAs which remain on file pending a response. Preparation of such
responses may require substantial resources and, accordingly, has been
postponed. In July 1994, Irotec Laboratories received verbal communication of a
deficiency notification from regulatory authorities in the Netherlands and,
following consultation with the Company, withdrew that PLA. See "Corporate
Alliances." In October 1994, in response to a request from the appropriate
regulatory agency, the Company withdrew its application to market THERAFECTIN in
Switzerland. The PLA in Ireland continues to be reviewed by regulatory
authorities, but the Company does not believe that such PLA will be approved
without substantial additional work and additional capital investment.
EMPLOYEES
As of March 15, 1996, the Company employed two individuals part-time and
four individuals full-time, of whom two hold Ph.D. or M.D. degrees. None of the
Company's employees is covered by collective bargaining agreements.
ITEM 2.PROPERTIES.
The Company's administrative offices are presently located in Waltham,
Massachusetts. The Company leases, in the aggregate, approximately 2,800 square
feet of which a lease for approximately 1,800 square feet expires in April 1996
and approximately 1,000 square feet of space is leased month-to-month. The
Company is currently exploring its options for new space or renegotiating its
current lease, but believes that its facilities are adequate for its present and
anticipated purposes, except that additional facilities will be needed if the
Company builds its own laboratory space or undertakes manufacturing operations.
The Company, however, has no present intention to develop such capabilities for
its technologies at this time.
ITEM 3.LEGAL PROCEEDINGS.
For a discussion of legal proceedings of the Company, reference is made
to Note 13 to the Company's Consolidated Financial Statements.
There are no other pending legal proceedings of a material nature to
which the Company is party or of which any of its property is the subject.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
26
<PAGE>
The following is a list of the executive officers of the Company and their
principal positions with the Company. Except for S. David Hillson, Esq. and
Marc E. Lanser, M.D. who are employed pursuant to employment agreements, each
individual officer serves at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Edson D. de Castro 58 Chairman of the Board of Directors
S. David Hillson, Esq. 55 President and Chief Executive Officer
Marc E. Lanser, M.D. 47 Executive Vice President and Chief Scientific Officer
George A. Eldridge 32 Vice President, Corporate Development & Finance, Treasurer
Steve H. Kanzer, Esq. 32 Secretary
</TABLE>
EDSON D. DE CASTRO. Mr. de Castro became Chairman of the Board of Directors of
the Company on June 15, 1995. Prior to the Merger of BLSI and Greenwich, Mr. de
Castro held the same position with Boston Life Sciences, Inc., the privately-
held company existing prior to the Merger, since August 1993. Mr. de Castro was
one of five founders of Data General Corporation and was responsible for the
designs of the original NOVA computers. He served as its President and Chief
Executive Officer until 1989 and as its Chairman of the Board of Directors from
1989 to 1990. Mr. de Castro is Chairman of the Board of Directors and Chief
Executive Officer of Xenometrix, Inc., a biotechnology testing company in
Boulder, Colorado. He is founder and Executive Committee member of the
Massachusetts High Tech Council. Mr. de Castro is a Trustee of Boston
University. Mr. de Castro received his B.S. in Electrical Engineering from the
University of Lowell, MA.
S. DAVID HILLSON, ESQ. Mr. Hillson became President and Chief Executive Officer
of the Company on June 15, 1995. Prior to the Merger of BLSI and Greenwich, Mr.
Hillson held the same position with Boston Life Sciences, Inc., the privately-
held company existing prior to the Merger, since November 1994. Prior to his
responsibilities at BLSI, Mr. Hillson was Senior Vice President of Josephthal,
Lyon & Ross Incorporated in the research and investment banking divisions and
from November 1992 to January 1994, Mr. Hillson was the Senior Managing
Director, investment banking, at The Stamford Company in New York City. From
September 1990 until October 1992, Mr. Hillson was an Executive Vice President
of the asset management division of Mabon Securities. Prior to his involvement
with Mabon Securities, Mr. Hillson was a Senior Vice President with Shearson,
Lehman, Hutton where he managed three mutual funds primarily in the emerging
growth area for the SLH Asset Management division from 1983 to 1990. He started
his career as an attorney in New York City, having received his Juris Doctorate
from New York University School of Law. He also attended the Columbia
University School of Business Administration and received a Bachelor of Arts
degree from Columbia College.
STEVE H. KANZER, C.P.A., ESQ. Mr. Kanzer became Secretary of the Company on June
15, 1995. Prior to the Merger of BLSI and Greenwich, Mr. Kanzer held the same
position with Boston Life Sciences, Inc., the privately-held company existing
prior to the Merger, since October 1992. Mr. Kanzer is a Managing Director of
The Castle Group Ltd., a firm specializing in organizing and raising capital for
biotechnology acquisitions and start-ups, and a Managing Director of Paramount
Capital, Inc., a New York based investment banking firm. Mr. Kanzer is also a
member of the board of directors of Atlantic Pharmaceuticals, Inc., a publicly
traded biopharmaceutical company, and several privately held biopharmaceutical
companies. Prior to joining The Castle Group Ltd. and Paramount Capital, Inc. in
1991, Mr. Kanzer was an associate at Skadden, Arps, Slate, Meagher & Flom in New
York City from 1988 to 1991. Mr. Kanzer received his J.D. from New York
University School of Law and a B.B.A. from Baruch College.
27
<PAGE>
MARC E. LANSER, M.D. Dr. Lanser became Executive Vice President and Chief
Scientific Officer of the Company on June 15, 1995. Prior to the Merger of BLSI
and Greenwich, Dr. Lanser held the same position with Boston Life Sciences,
Inc., the privately-held company existing prior to the Merger, since November
1994. From October 1992 until November 1994, Dr. Lanser was President and Chief
Executive Officer of Boston Life Sciences, Inc., the privately-held company
existing prior to the Merger. Prior to assuming the position of President and
Chief Executive Officer, Dr. Lanser was an Assistant Professor of Surgery at
Harvard Medical School and member of the full-time academic faculty, where he
directed a NIH-funded research project in immunology and received a NIH Research
Career Development Award. Dr. Lanser has published more than 30 scientific
articles in his field in peer-reviewed journals. Dr. Lanser received his M.D.
from Albany Medical College.
GEORGE A. ELDRIDGE. Mr. Eldridge became Vice President, Corporate Development &
Finance of the Company on June 15, 1995. Prior to the Merger of BLSI and
Greenwich, Mr. Eldridge held the same position with Boston Life Sciences, Inc.,
the privately-held company existing prior to the Merger, since April 1993.
Before then, Mr. Eldridge was employed in the investment banking department of
Kidder, Peabody & Co. Incorporated. Mr. Eldridge began his career with Kidder,
Peabody & Co. Incorporated in 1986 in their New York corporate finance
department. During his tenure in New York, Mr. Eldridge worked on a variety of
acquisitions and public and private financings. Most recently, Mr. Eldridge was
a member of Kidder, Peabody & Co. Incorporated's New England Investment Banking
Group, where he focused on raising capital for emerging growth companies in New
England. Mr. Eldridge received his M.B.A. from the University of Chicago's
Graduate School of Business and his A.B. from Dartmouth College.
PART II
ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded on The Nasdaq SmallCap Market under
the symbol BLSI. Prior to the Merger completed in June 1995 and since October
28, 1994, the Company's Common Stock was traded under the symbol GRPI. Prior to
October 28, 1994, the Company's Common Stock was traded on The Nasdaq National
Market under the symbol GRPI.
The following table sets forth the high and low sale prices for the
Registrant's Common Stock by quarter for 1994 and 1995, as reported by Nasdaq.
These prices reflect inter-dealer quotation, without retail mark-up, mark-downs
or other fees of commissions, and may not necessarily represent actual
transactions.
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C> <C>
1994
First Quarter $ 4 1/8 $ 7/8
Second Quarter 1 9/16 7/16
Third Quarter 15/16 1/4
Fourth Quarter 9/16 3/32
1995
First Quarter $ 11/32 $ 1/8
Second Quarter 1 9/32 1/4
</TABLE>
28
<PAGE>
<TABLE>
<S> <C> <C>
Third Quarter 1 1/8 9/16
Four Quarter 1 11/32
</TABLE>
On March 27, 1996, the closing sales price for the Common Stock was $
31/32 per share. The number of stockholders of record of BLSI Common Stock on
March 27, 1996 was approximately 8,048. BLSI has not paid any dividends and does
not expect to pay dividends in the foreseeable future.
ITEM 6.SELECTED FINANCIAL DATA.
The selected consolidated financial information presented below has been
derived from the audited consolidated financial statements of the Company. This
data is qualified in its entirety by reference to, and should be read in
conjunction with the Company's Consolidated Financial Statements and notes
thereto and Management's Discussion and Analysis of Financial Condition and
Results of Operations, included elsewhere herein.
<TABLE>
<CAPTION>
Period from Period from
Inception Inception
(October 16, 1992) Year Ended (October 16, 1992)
Through Through
--------------------------------------------------------------
December 31, 1992 December 31, 1993 December 31, 1994 December 31, 1995 December 31, 1995
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data
Revenues $ 0 $ 0 $ 0 $ 416,940 $ 416,940
Operating expenses 294,805 2,260,874 2,609,068 13,462,322 18,627,069
Net loss (295,388) (2,254,898) (2,596,872) (14,149,151) (19,296,309)
Net loss per share (0.02) (0.08) (0.07) (0.22)
Weighted average number
of shares outstanding 15,200,442 28,939,403 39,339,212 63,479,928
December 31, Pro Forma
------------------------------------------------------------------------------
1992 1993 1994 1995 December 31, 1995
---- ---- ---- ---- -----------------
Balance Sheet Data
Total assets $ 314,136 $ 483,835 $ 806,502 $ 6,585,101 $ 27,371,101
Working capital (262,725) (145,178) (1,518,571) (297,303) 20,553,420
Long-term debt 0 0 0 658,735 658,735
Stockholders' equity (246,663) 42,374 (906,100) 1,185,802 21,971,802
(deficit)
</TABLE>
The Company has paid no cash dividends since its inception.
ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
Overview
On June 15, 1995, Greenwich Pharmaceuticals Incorporated ("Greenwich")
acquired all of the outstanding common stock of Boston Life Sciences, Inc. ("Old
BLSI"). Effective June 15, 1995, the merged company was renamed "Boston Life
Sciences, Inc." (the "Company") and the management and Board of Directors of Old
BLSI assumed the management of the Company. The acquisition of Old BLSI by
Greenwich has been treated as recapitalization of Old BLSI with Old BLSI as the
acquiror (reverse acquisition). The historical financial statements prior to
June 15, 1995 are those of Old BLSI.
The Company is a biotechnology company engaged in the research and
development of novel therapeutic and diagnostic products to treat chronic
debilitating diseases, such as cancer, central nervous system disorders and
autoimmune diseases. The Company anticipates that its (i) research and
development and (ii) general and administrative costs will continue to increase
as the Company attempts to gain regulatory approval for commercial introduction
of its proposed products. At December 31,
29
<PAGE>
1995, the Company is considered a development stage enterprise as defined in
Statement of Financial Accounting Standards No. 7.
Year Ended December 31, 1995 and 1994
The Company's operating loss was $14,149,151 during 1995 as compared
with $2,596,872 during 1994. Purchased research and development in-process
represented $10,421,544 of the total loss incurred by the Company during the
year ended December 31, 1995. Net loss per common share also increased to $.22
per share during 1995 as compared with $.07 per share during 1994. The increase
in the Company's cumulative operating loss, as well as on a per share basis, was
primarily due to the completion of the Merger, effective June 15, 1995, of Old
BLSI with and into Greenwich. In connection with the merger, $3.5 million was
ascribed to acquired technology, representing the approximate value of
THERAFECTIN. In addition, approximately $10.4 million of the purchase price was
ascribed to acquired research and development in-process, whereby appropriate
efficacy had not been demonstrated and no alternative future use existed. Based
on the lack of available evidence supporting clinical efficacy or safety of all
of the compounds acquired from Greenwich, exclusive of THERAFECTIN, and the
excessive costs and time estimated to develop these compounds, management does
not expect to continue to pursue the research or development of these compounds.
Revenue was $416,940 during 1995 as compared with zero during 1994.
This increase was due to (i) the recognition of $250,000 of previously deferred
revenue upon resolution of certain unresolved issues with a potential corporate
partner and (ii) the recognition of revenue attributable to the research and
development agreement entered into by the Company and Zeneca Pharmaceuticals.
Research and development expenses were $1,446,298 during 1995 as
compared with $1,711,759 in 1994. This decrease was primarily due to the
Company decreasing research funding on one of its programs in 1995 while
increasing funding for another and incurring pre-clinical development expenses
in 1994 for a completed project which did not recur in 1995. The majority of
the Company's research and development expenses were sponsored research
obligations paid to Harvard University and its affiliated hospitals. The
Company expects to incur increased research and development costs in excess of
$1.5 million during 1996 as the Company's technologies continue to advance.
Licensing fees were $71,250 during 1995 as compared with zero during
1994. This increase was due to the Company executing certain licensing
agreements during 1995 as compared with not executing any licensing agreement
during 1994. Additionally, under its licensing agreements, the Company is
obligated to remit certain amounts to its licensors in connection with the
recognition of technology specific revenue.
General and administrative expenses were $1,523,230 during 1995 as
compared with $897,309 during 1994. This increase was primarily due to the
Company expanding its operations, including its headcount, and incurring higher
costs associated with being a publicly traded company during 1995 as compared to
1994. In order to develop a commercially viable product, whereby revenues may
be expected to be generated with the technology acquired from Greenwich, the
Company anticipates that approximately two million dollars of additional future
expense will be necessary. There can be no assurance, however, that the
expenditure of an additional two million dollars will result in the approval of
any compounds or that approval will ever be able to be obtained by the Company.
In addition, the Company anticipates higher general and administrative expenses
over the next twelve months due primarily to increases in insurance costs,
professional fees, and other ongoing costs associated with the Company operating
as a public company for an entire twelve months.
30
<PAGE>
Net interest income (expense) was $(1,103,769) during 1995 as compared
with net interest income of $12,196 during 1994. This increase in interest
expense was due to the issuance of (i) $2,175,000 of notes payable in the first
quarter of 1995 and (ii) $1,000,000 of convertible subordinated debentures in
the fourth quarter of 1995, neither of which were outstanding in 1994. Net
interest income (expense) also includes the amortization of debt issuance costs
during the period the notes are outstanding. The Company anticipates that it
will incur interest expense during the period the $2,175,000 of notes payable
and $1,000,000 of convertible debentures remain outstanding but that the Company
will also receive interest income due to anticipated higher cash balances
associated with the Company raising approximately $24 million in gross proceeds
in January and February of 1996.
At December 31, 1995, the Company has approximately $12.8 million of
net deferred tax assets for which a full valuation allowance has been
established. As a result of its concentrated efforts on research and
development, the Company has a history of incurring net operating losses and
anticipates incurring additional net operating losses for the foreseeable
future. Accordingly, management believes that it is more likely than not that
the future benefits related to the deferred tax assets will not be realized and,
therefore, has provided a full valuation allowance for these assets.
Year Ended December 31, 1994 and 1993
No revenue was recorded by the Company during the years ended December
31, 1994 and 1993.
Research and development expenses were $1,711,759 during 1994 as
compared with $1,350,908 during 1993. This increase was primarily due to the
Company initiating pre-clinical development expenses not incurred in the
comparable period during 1993. Approximately half of the Company's research and
development expenses were sponsored research obligations paid to Harvard
University and its affiliated hospitals.
Licensing fees were zero during 1994 as compared with $102,433 during
1993. This decrease was due to the Company not entering into any licensing
agreements during 1994 as compared with the comparable period during 1993 when
the Company entered into three licensing agreements.
General and administrative expenses were $897,309 during 1994 as
compared with $807,533 during 1993. This increase was primarily due to the
Company operating with higher staffing levels and professional fees for the
twelve month period ended 1994.
Net interest income was $12,196 during 1994 as compared with net
interest income of $5,976 during 1993. This increase in net interest income was
due to an increase in the Company's average outstanding cash balance, resulting
from the issuance of Series B Preferred Stock early in 1994, on which interest
was earned.
31
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has satisfied its working capital
requirements from the sale of the Company's securities through private
placements. In addition, in March 1995, Old BLSI issued $2,175,000 of units
consisting of notes payable, common stock and warrants to purchase shares of Old
BLSI's Series B Preferred Stock. The $2,175,000 of notes payable became
obligations of the Company and the warrants exercisable for shares of Old BLSI
Series B Preferred Stock were exchanged for warrants exercisable for shares of
the Company's common stock. In the second fiscal quarter of 1996, the Company
anticipates repaying all accrued interest plus the remaining principal of
$1,525,000 of notes payable. In December 1995, the Company also issued
$1,000,000 of convertible subordinated debentures. During the first three
months of 1996, the entire $1,000,000 of convertible subordinated debentures
were converted into 1,566,047 shares of common stock. In the future, the
Company's working capital and capital requirements will depend on numerous
factors, including the progress of the Company's research and development
activities, the level of resources that the Company devotes to the
developmental, clinical, and regulatory aspects of its products, and the extent
to which the Company enters into collaborative relationships with pharmaceutical
and biotechnology companies.
At December 31, 1995, the Company had available cash of $2,374,158 and
a working capital deficit of $297,303. In January and February 1996, the
Company raised approximately $24 million of gross proceeds by completing a
private placement of units consisting of (i) shares of its Series A Convertible
Preferred Stock and (ii) warrants to purchase shares of the Company's common
stock (See Note 15 of Notes to the Consolidated Financial Statements). The
Company believes that with the level of financial resources available to it at
December 31, 1995 and the additional $24 million of gross proceeds, it will have
sufficient working capital to meet its anticipated expenditures for more than
twelve months. The Company may raise additional capital in the future through
collaboration agreements with other pharmaceutical or biotechnology companies,
debt financing and equity offerings. There can be no assurance, however, that
the Company will be successful or that additional funds will be available on
acceptable terms, if at all.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The audited financial statements of the Registrant are incorporated by
reference to BLSI's Annual Report on Form 10-K for the year ended December 31,
1995.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
Incorporated by reference from the Company's Current Report on Form 8-K
dated July 28, 1995, as amended by the Company's Current Report on Form 8-K/A
dated September 1, 1995.
PART III
ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The table below sets forth the name of each of the Directors and
Executive Officers of the Company. Each of the persons listed below has been
nominated by the Board of Directors to serve as a Director for the ensuing
year.
32
<PAGE>
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Colin B. Bier, Ph.D. 50 Member of the Board of Directors
Edson D. de Castro (2) 57 Chairman of the Board of Directors
S. David Hillson, Esq. 56 President, Chief Executive Officer,
Director
Marc E. Lanser, M.D. 47 Executive Vice President, Chief
Scientific Officer, Director
Steve H. Kanzer, CPA, Esq. 33 Secretary
Ira W. Lieberman, Ph.D. 53 Member of the Board of Directors
E. Christopher Palmer, CPA 55 Member of the Board of Directors
</TABLE>
Colin B. Bier, Ph.D. Dr. Bier has been a member of the Board of Directors of the
Company since April 1996. since 1990, Dr. Bier has been the managing director of
ABA BioResearch, Inc., a clinical research organization (CRO), located in
Montreal, Canada and a special advisor to the clinical laboratories and research
area at Mount Sinai Hospital in Montreal, Canada. prior to his association with
ABA BioResearch, Inc., Dr. Bier was founder, President and Chief Executive
Officer of ITR Laboratories, Inc. Before Founding ITR Laboratories, Inc., Dr.
Bier Spent Over Ten Years With Bio-Research Laboratories, A CRO, holding several
senior level positions. Dr. Bier has published more than twenty-five scientific
articles in his field in peer-reviewed journals and received his Ph.D. from
Colorado State University and his B.A. from Sir George Williams University.
Edson D. de Castro. Mr. de Castro became Chairman of the Board of Directors of
the Company on June 15, 1995. Prior to the merger of the Company and Greenwich
Pharmaceuticals, Inc. (the "Merger"), Mr. de Castro held the same position with
Boston Life Sciences, Inc., the privately-held company existing prior to the
Merger, since August 1993. Mr. de Castro was one of five founders of data
general corporation ("DGC") and was responsible for the designs of the original
NOVA Computers. he served as DGC's President and Chief Executive Officer until
1989 and as its Chairman of the Board of Directors from 1989 to 1990. Mr. de
Castro is Chairman of the Board of Directors and Chief Executive Officer of
Xenometrix, Inc., a biotechnology testing company in Boulder, Colorado. He is
founder and Executive Committee member of the Massachusetts High Tech Council
and a Trustee of Boston University. Mr. de Castro received his B.S. in
Electrical Engineering from the University of Lowell, MA.
S. David Hillson, Esq. Mr. Hillson became President And Chief Executive Officer
of the Company on June 15, 1995. Prior to the Merger, Mr. Hillson held the same
position with Boston Life Sciences, Inc., the privately-held Company existing
prior to the Merger, since November 1994. Prior to his responsibilities at the
former Boston Life Sciences, Inc. from January to November 1994, Mr. Hillson was
Senior Vice President Of Josephthal, Lyon & Ross, Incorporated in the research
and investment banking divisions and from November 1992 to January 1994, Mr.
Hillson was the Senior Managing Director, investment banking, at The Stamford
Company in New York City. From September 1990 until October 1992, Mr. Hillson
was an Executive Vice President of the asset management division of Mabon
Securities. Prior to his involvement with Mabon Securities, from 1983 to 1990,
Mr. Hillson was a Senior Vice President with Shearson, Lehman, Hutton where he
managed three mutual funds, primarily in the emerging growth area, for the SLH
Asset Management division. He started his business career as an attorney in New
York City, having received his Juris Doctorate from New York University School
of Law. He also attended the Columbia University School of Business
Administration and received a Bachelor of Arts degree from Columbia College.
33
<PAGE>
Steve H. Kanzer, CPA, Esq. Mr. Kanzer became Secretary of the Company on June
15, 1995. Prior to the Merger, Mr. Kanzer held the same position with Boston
Life Sciences, Inc., the privately-held company existing prior to the Merger,
since October 1992. Mr. Kanzer is a Managing Director of The Castle Group Ltd.,
a firm specializing in organizing and raising capital for biotechnology
acquisitions and start-ups, and a Managing Director of Paramount Capital, Inc.,
a New York-based investment banking firm. Mr. Kanzer is also a member of the
board of directors of Atlantic Pharmaceuticals, Inc., a publicly traded
biopharmaceutical company, and several privately held biopharmaceutical
companies. Prior to joining The Castle Group Ltd. and Paramount Capital, Inc. in
1991, Mr. Kanzer was an associate at Skadden, Arps, Slate, Meagher & Flom in New
York City from 1988 to 1991. Mr. Kanzer received his J.D. from New York
University School of Law and a B.B.A. from Baruch College.
Marc E. Lanser, M.D. Dr. Lanser became Executive Vice President and Chief
Scientific Officer of the Company on June 15, 1995. Prior to the Merger, Dr.
Lanser held the same position with Boston Life Sciences, Inc., the privately-
held company existing prior to the Merger, since November 1994. From October
1992 until November 1994, Dr. Lanser was President and Chief Executive Officer
of Boston Life Sciences, Inc., the privately-held company existing prior to the
Merger. Prior to assuming the position of President and Chief Executive Officer,
Dr. Lanser was an Assistant Professor of Surgery at Harvard Medical School and
member of the full-time academic faculty, where he directed a NIH funded
research project in immunology and received a NIH Research Career Development
Award. Dr. Lanser has published more than 30 scientific articles in his field in
peer-reviewed journals. Dr. Lanser received his M.D. from Albany Medical
College.
Ira W. Lieberman, Ph.D. Dr. Lieberman has been a member of the Board of
Directors of the Company since its inception. Dr. Lieberman is currently on the
staff of the World Bank and is involved in advising foreign governments on their
privatization programs. From 1987 to 1992, Dr. Lieberman was President of LIPAM
International, Inc. an international consulting and investment firm. From 1985
to 1987, Dr. Lieberman was on the staff of the World Bank and from 1975 to 1982
he was a senior executive with ICC Industries, Inc., where he served as Chief
Financial Officer, Executive Vice President and Chief Executive Officer of
Primex Plastics Corp., a subsidiary of ICC Industries, Inc. Dr. Lieberman
received his M.B.A. from Columbia University and his Ph.D. from Oxford
University.
E. Christopher Palmer, C.P.A. Mr. Palmer has been a member of the Company's
Board of Directors since its inception in 1992. Mr. Palmer is a certified public
accountant and founder of his own firm, providing tax and financial advisory
services to high-net-worth family groups. Prior to 1977, Mr. Palmer was a
partner in the accounting firm of Peat Marwick Mitchell & Co. Mr. Palmer is a
Director and Chairman of the Trust and Investment Committees of Boston Private
Bankcorp, Inc. and Boston Private Bank & Trust Corp., a Director of Coastal
International Inc. and a trustee of two private foundations. Mr. Palmer received
his M.B.A. from Rutgers University and his A.B. from Dartmouth College.
34
<PAGE>
Item 11. Executive Compensation.
The following table sets forth the aggregate cash compensation paid by the
Company for the year ended December 31, 1995 for services rendered in all
capacities to each of the five most highly compensated executive officers whose
aggregate cash compensation for that period exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation(3) Awards
Name and All Other
Principal Position Year Salary(1) Bonus(1) Options Compensation (2)
<S> <C> <C> <C> <C> <C>
S. David Hillson 1995 $170,000 $150,000(4) 932,300 None
President and Chief 1994 21,250(4) None 1,824,053(6) None
Executive Officer 1993 None None None None
Marc E. Lanser, M.D. 1995 158,208 35,000 780,700 $10,366
Executive Vice 1994 157,000 None 76,002(6) 7,712
President and Chief 1993 150,000 None None 7,505
Scientific Officer
George A. Eldridge 1995 93,542 20,000(5) 342,200 1,606
Vice President, Corporate 1994 80,000 None 60,802(6) None
Development and Finance 1993 75,000 None 608,017 None
</TABLE>
_____________________
(1) Amounts shown represent cash compensation earned by the named
Executive Officers in the fiscal years presented.
(2) All Other Compensation for Dr. Lanser and Mr. Eldridge includes the
dollar value of matching contributions made in shares of the Company's
Common Stock during the fiscal year under the Company's 401(k) plan,
in the amount of $2,449 and $1,606, respectively. All Other
Compensation for Dr. Lanser also includes the dollar value of premiums
paid by the Company during the last fiscal year with respect to life
insurance and disability insurance for the benefit of Dr. Lanser in
the amount of $7,917, $7,712 and $7,505 in 1995, 1994 and 1993,
respectively.
(3) Includes compensation only for the period of the year during which the
individual was employed by the Company.
35
<PAGE>
(4) Mr. Hillson received a non-discretionary bonus from the Company based
upon the Board's determination that he had met certain performance
targets specified in his agreement of employment, dated November 14,
1994, which by its terms expires in November, 1997.
(5) Such amount was earned by Mr. Eldridge in 1995, but paid by the
Company in 1996.
(6) Represents the number of replacement options issued in conjunction
with the Merger.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total Potential Realizable Value
Options Exercise at Assumed Annual Rates of
Granted to or Stock Appreciation for
Options Employees in Base Price Expiration Option Term (3)
Name Granted (#)(1) Fiscal Year ($/sh)(2) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
S. David Hillson, Esq. 932,300 42.5% 0.78125 12/28/05 458,061 1,160,817
Marc B. Lanser 780,700 35.6% 0.78125 12/28/05 383,577 972,058
George A. Eldridge 342,200 15.6% 0.78125 12/28/05 168,131 426,077
All employees in 1995 2,193,200
</TABLE>
____________________
(1) This table does not include options issued in connection with the
Merger in exchange for previously outstanding options to purchase
Common Stock of Old BLSI. Options granted to Messrs. Hillson and
Eldridge and to Dr. Lanser to purchase 457,300, 167,200 and 505,700
shares of Common Stock, respectively, are exercisable as of January 1,
1996. Options granted to Messrs. Hillson and Eldridge and to Dr. Lanser
to purchase 475,000, 175,000 and 275,000 shares of Common Stock,
respectively, are 33% exercisable on or after December 30, 1996 and
100% exercisable on or after December 31, 1997.
(2) The exercise price for each option is equal to the fair market value of
the Company's Common Stock on the date of grant.
(3) Potential realizable value is based on the assumed annual growth rates
listed, compounded annually for the ten-year option term. The dollar
amounts set forth under this heading are the results of calculations
required by the Securities and Exchange Commission and are not intended
to forecast possible future appreciation, if any, of the value of the
Common Stock.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired Value Number of Unexercised In-the-Money Options at
Name on Exercise Realized Options at Fiscal Year-End Fiscal Year-End(1)
(#)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
S. David Hillson, Esq. None None 912,028 1,844,325 $609,021 $609,021
Marc E. Lanser None None 38,001 818,701 25,376 25,376
George A. Eldridge None None 486,414 524,605 324,811 121,804
</TABLE>
____________________
(1) The fair market value of "in-the-money" options was calculated on the basis
of the difference between the exercise price of the options held and the
closing price per share for Common Stock on the Nasdaq SmallCap Market of
$.75 on December 29, 1995, multiplied by the number of options held.
36
<PAGE>
Compensation of Directors.
Annual Retainers
Independent Directors, that is, those Directors who are not employees of
the Company and who have not been employees of the Company for a period of one
year previously ("Independent Directors"), receive cash compensation in the
amount of $500 per meeting attended in person and $250 per meeting attended
telephonically, although all Directors are reimbursed for ordinary and
reasonable expenses of attending any board or committee meetings. In addition,
Independent Directors were compensated in 1995 with an annual retainer of $5,000
and will be compensated the same amount in 1996. The annual retainer is not paid
in cash but is paid to the Independent Directors with options to purchase shares
of the Company's Common Stock pursuant to an Amended and Restated 1990 Non-
Employee Directors' Non-Qualified Stock Option Plan (the "Directors' Plan").
Beginning at the Annual Meeting, each Independent Director elected at an annual
meeting of stockholders of the Company will automatically be granted options on
the thirteenth trading day after the date of such annual meeting (the "Retainer
Grant Date") to purchase a number of shares of the Company equal to the lesser
of (a) 25,000 shares and (b) the quotient of the annual retainer for service as
an Independent Director of the Company and 80% of the average of the fair market
value of a share of the Company's Common Stock on the ten trading days following
the third trading day after the date of such annual meeting of stockholders. If
the number of shares of the Company's Common Stock calculated pursuant to clause
(b) above exceeds 25,000 shares, each Independent Director will automatically
receive on the Retainer Grant Date, in addition to options to purchase 25,000
shares of the Company's common stock, a cash payment equal to the remaining
portion of the annual retainer not provided for by the grant of such
options.
Exercise and Vesting
The options granted to the Independent Directors pursuant to the foregoing
terms shall be exercisable at a per share price of 20% of the average fair
market value per share of the Company's Common Stock used to calculate such
grant. Subject to provisions regarding expiration and termination of options,
the options will become exercisable as to 75% of the shares of Common Stock of
the Company issuable upon exercise of such options six months after the date of
grant and as to 100% of such shares on the later of six months after the date of
grant and December 31 of the year in which the grant is made.
New Director Options
Each person who is elected or appointed an Independent Director for the
first time will automatically upon such election or appointment (the "Automatic
Grant Date") be granted an option to purchase 75,000 shares of the Company's
Common Stock ("New Director Options"). The exercise price of any New Director
Options granted under the Plan may not be less than 100% of the fair market
value of shares of the Company's Common Stock subject thereto on the Automatic
Grant Date. Subject to provisions regarding expiration and termination of
options, any New Director Options will become exercisable as to 20% of the
shares of the Company's Common Stock subject thereto on the Automatic Grant Date
and shall become exercisable as to an additional 20% of the shares of the
Company's Common Stock issuable upon exercise thereof on each of the first,
second, third and fourth anniversaries of such Automatic Grant Date. Colin B.
Bier, Ph.D. was elected a Director of the Company in April 1996 and received New
Director Options as described above.
37
<PAGE>
Compensation Committee Interlocks and Insider Participation
The compensation committee of the Company's Board of Directors during the
last completed fiscal year was composed of Steve Kanzer, Ira Lieberman, and E.
Christopher Palmer. Mr. Kanzer was also the Secretary of the Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
As of May 9, 1996, the following members of the Company's management
were known to the Company to be beneficial owners of the Company's outstanding
Common Stock and/or Preferred Stock (on an as converted basis).
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Owner Beneficial Ownership (1)(2) Percent
<S> <C> <C>
Colin B. Bier, Ph.D. 15,000 (3) *
Director
Edson D. de Castro 456,014 (3) *
Director
S. David Hillson, Esq. 1,384,528 (4) 1.0%
Director, President and Chief Executive
Officer
Steve H. Kanzer, CPA, Esq. 366,759 (5) *
Director and Secretary
Marc E. Lanser, M.D. 2,454,421 (6) 1.9%
Director, Executive Vice President and
Chief Scientific Officer
Ira W. Lieberman, Ph.D. 118,308 (5) *
Director
E. Christopher Palmer, CPA 118,308 (5) *
Director
All current directors and executive 4,968,338 3.6%
officers as a group
</TABLE>
____________________
* Represents Less than 1% of the outstanding shares.
(1) Except as indicated in footnotes to this table, the persons named in
this table have sole voting and investment power with respect to all
shares of Common Stock or Preferred Stock owned.
(2) Assumes that all Warrants outstanding prior to the Merger with Greenwich
Pharmaceuticals, Inc. are not converted into shares of the Common
Stock.
38
<PAGE>
(3) Consists of shares of Common Stock issuable upon exercise of options
which are exercisable or which will become exercisable within 60 days of
April 20, 1996.
(4) Includes 1,369,328 shares of Common Stock issuable upon exercise of
options which will become exercisable within 60 days of April 20,
1996.
(5) Includes 42,306 shares of Common Stock issuable upon exercise of options
which will become exercisable within 60 days of April 20, 1996.
(6) Includes 562,702 shares of Common Stock issuable upon exercise of
options which will become exercisable within 60 days of April 20,
1996.
As of April 20, 1996 the following persons were known to the Company to be
beneficial owners of more than five percent of the Company's outstanding Common
Stock and/or Preferred Stock (on an as converted basis).
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Owner Beneficial Percent
Ownership (1)(2)
<S> <C> <C>
Lindsay A. Rosenwald, M.D. 7,107,918 (3) 5.4%
c/o Paramount Capital, Inc.
375 Park Avenue
Suite 1501
New York, NY 10152
</TABLE>
____________________
(1) Except as indicated in footnotes to this table, Dr. Rosenwald has sole
voting and investment power with respect to all shares of Common Stock
or Preferred Stock owned.
(2) Assumes that all Warrants outstanding prior to the merger with
Greenwich Pharmaceuticals, Inc. are not converted into shares of the
Common Stock.
(3) Includes 3,981,181 shares of Common Stock issuable upon exercise of
warrants and options which will become exercisable within 60 days of
April 20, 1996. Such figure does not include 2,655,268 shares of Common
Stock beneficially owned by Dr. Rosenwald's spouse and by trusts for
the benefit of his minor children, of which his spouse is the sole
trustee.
Item 13. Certain Relationships and Related Matters.
Placement Agent Fees
39
<PAGE>
In connection with the issuance of Senior Bridge Notes, Old BLSI issued
warrants to purchase 65,250 shares of Old BLSI common stock at $.04 per share
and warrants to purchase 130,500 shares of Old BLSI Series B Preferred Stock at
prices ranging from $.99 to $6.60 per share to the placement agent for such
placement, who is a related party to BLSI. Lindsay A. Rosenwald, M.D., the
Chairman of the Board of Directors, Chief Executive Officer and sole stockholder
of the placement agent, is currently the sole holder of more than 5% of the
outstanding Common Stock of the Company. Total issuance costs paid to the
placement agent for such issuance was approximately $322,000. In addition,
warrants to purchase 982,122 shares of Common Stock were issued to designees of
the Company's placement agent.
Costs paid to the placement agent for commissions and expenses related to
the Old BLSI Series A Preferred Stock issuance in 1993 and the Old BLSI Series B
Preferred Stock issuance in 1994 were approximately $403,000 and $259,000
respectively. In addition, warrants to purchase 1,536,593 shares of Common
Stock at an exercise price of $.2110 and warrants to purchase 987,355 shares of
Common Stock at an exercise price of $.229 were issued to designees of the
Company's placement agent in connection with these offerings. Of these
warrants, 138,592 were exchanged for shares of the Company's Common Stock in
connection with the Merger.
Service Agreements with Placement Agent
In August 1995, the Company entered into a two-year financial advisory
services agreement with the placement agent involved with certain senior bridge
note issuances of Old BLSI and certain of the Company's offerings. In
connection with this agreement, the Company issued warrants to the placement
agent for the purchase of 250,000 share of the Company's Common Stock.
In addition, in connection with the Company's January and February 1996
equity offerings, the Company is committed to execute an agreement which will
provide that the same placement agent receive a retainer fee of approximately
$2,500 per month for a minimum of twenty four months and an as yet to be agreed-
upon success fee on corporate partners first introduced to the Company by the
placement agent.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A)(1) The response to this portion of Item 14 is incorporated by reference
to BLSI's Annual Report on Form 10-K for the year ended December 31,
1995
(A)(2) FINANCIAL STATEMENT SCHEDULES
Schedules are omitted since the required information is not applicable
or is not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the
Consolidated Financial Statements or Notes thereto.
40
<PAGE>
(A)(3) EXHIBITS. The Exhibits are listed in the Exhibit Index appearing below.
(B) REPORTS ON FORM 8-K: The Registrant filed the following Reports on
Form 8-K during the fourth quarter of 1995 and through March 27, 1996:
<TABLE>
<CAPTION>
Date of Report Item Reported
-------------- -------------
<S> <C>
September 22, 1995 5,7
November 8, 1995 5,7
December 29, 1995 5,7
February 23, 1996 5
March 7, 1996 5
</TABLE>
(C) EXHIBITS (numbered in accordance with Item 601 of Regulation S-K).
<TABLE>
<CAPTION>
Exhibit # Description and Method of Filing
- --------- --------------------------------
<S> <C>
2.1 Amended and Restated Agreement of Merger, dated as of December
29, 1994, by and between the Company and Greenwich
Pharmaceuticals Incorporated (1)
2.2 Amendment No. 1 to Amended and Restated Agreement of Merger,
dated as of April 6, 1995, by and between the Company and
Greenwich Pharmaceuticals Incorporated (10)
3.1 Amended and Restated Certificate of Incorporation dated March 29,
1996 (12)
3.2 Amended and Restated By-Laws, effective as of June 26, 1995 (12)
4.1 Rights Agreement between the Company and Chemical Trust Group
(formerly Manufacturers Hanover Trust Company) as Rights Agent
dated September 26, 1991 (3)
10.1 Research Contract, dated as of January 1, 1983, between the
Company and Greenwich Research Company (4)
10.2 Consulting Agreement, dated as of July 1, 1978, between the
Company and Dr. Paul Gordon (5)
10.3 Consulting Agreement, dated as of August 23, 1979, between the
Company and Dr. Paul Gordon (6)
10.4 Assignment of Consulting Agreement and Guarantee, dated as of
August 23, 1979, between the Company and Dr. Paul Gordon (6)
</TABLE>
41
<PAGE>
10.5 Second Amendment, dated as of February 25, 1980, to the
Consulting Agreement between the Company and Dr. Paul Gordon (6)
10.6 Third Amendment, dated as of June 30, 1983, to the Consulting
Agreement between the Company and Dr. Paul Gordon (4)
10.7 Reassignment, Termination, Cancellation and Release of Assignment
of Consulting Agreement and Guarantee, dated as of June 29, 1983,
between the Company and Dr. Paul Gordon (5)
10.8 Form of Indemnity Agreement to be entered into by the Company
and its directors and officers (7)
10.9 Development and License Agreement for Amiprilose HCl dated
February 25, 1989 between the Company and Syntex Corporation (8)
10.10 Development and License Agreement, dated as of June 1, 1990, by
and between Kissei Pharmaceutical Co., Ltd. and Greenwich
Pharmaceuticals International Incorporated (9)
10.11 Boston Life Sciences, Inc. Amended and Restated Omnibus Stock
Option Plan (10)
10.12 Boston Life Sciences, Inc. Amended and Restated 1990 Non-Employee
Directors' Non-Qualified Stock Option Plan (10)
10.14 Agreement dated as of April 1, 1992 between the Company and
Pickwick Plaza Associates (11)
21 Subsidiary of the Registrant (12)
23 Consent of Independent Accountants (13)
99 Report of Independent Accountants (13)
___________________
(1) Incorporated by reference to Greenwich's Annual Report on Form 10-K
for the year ended December 31, 1994
(2) Incorporated by reference to Greenwich's Amendment No. 1 to
Registration Statement on S-3, Reg. No. 33-56120
(3) Incorporated by reference to Greenwich's Current Report on Form 8-K
dated September 26, 1991
(4) Incorporated by reference to Greenwich's Annual Report on Form 10-K
for the year ended December 31, 1983
(5) Incorporated by reference to Greenwich's Annual Report on Form 10-K
for the year ended December 31, 1984
(6) Incorporated by reference to Greenwich's Annual Report on Form 10-K
for the year ended December 31, 1980
42
<PAGE>
(7) Incorporated by reference to Greenwich's proxy statement in
connection with its 1987 Annual Meeting of Stockholders
(8) Incorporated by reference to Greenwich's Annual Report on Form 10-K
for the year ended December 31, 1988
(9) Incorporated by reference to Greenwich's Quarterly Report on Form
10-Q for the quarter ended June 30, 1990
(10) Incorporated by reference to the Registration Statement of
Greenwich Pharmaceuticals Incorporated on Form S-4, Registration
No. 33-91106
(11) Incorporated by reference to Greenwich's Registration Statement on
Form S-8, Reg. No. 33-38283
(12) Incorporated by reference to BLSI's Annual Report on Form 10-K for
the year ended December 31, 1995
(13) Filed herewith
43
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12(B)(15) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.
Boston Life Sciences, Inc.
(Registrant)
Date: May 28, 1996 BY: /S/ Marc E. Lanser, M.D.
---------------- ------------------------------
Marc E. Lanser, M.D.
Executive Vice President and
Chief Scientific Officer
44
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential Sequential
Number Description and Method of Filing Page Number
------ --------------------------------
<S> <C> <C>
2.1 Amended and Restated Agreement of Merger, dated as of December --
29, 1994, by and between the Company and Greenwich
Pharmaceuticals Incorporated (Incorporated by reference to
Greenwich's Annual Report on Form 10-K for the year ended
December 31, 1994)
2.2 Amendment No. 1 to Amended and Restated Agreement of Merger, --
dated as of April 6, 1995, by and between the Company and
Greenwich Pharmaceuticals Incorporated (Incorporated by
reference to the Registration Statement of Greenwich
Pharmaceuticals Incorporated on Form S-4, Registration No.
33-91106)
--
3.1 Amended and Restated Certificate of Incorporation dated March 28,
1996 (Incorporated by Reference to BLSI's
Annual Report on Form 10-K for the year ended December 31,
1995)
--
3.2 Amended and Restated By-Laws, effective as of June 26, 1995
(Incorporated by reference to BLSI's Annual Report on Form 10-K
for the year ended December 31, 1995)
4.1 Rights Agreement between the Company and Chemical Trust Group --
(formerly Manufacturers Hanover Trust Company) as Rights Agent
dated September 26, 1991 (Incorporated by reference to
Greenwich's Current Report on Form 8-K dated September
26, 1991)
10.1 Research Contract, dated as of January 1, 1983, between the --
Company and Greenwich Research Company (Incorporated by
reference to Greenwich's Annual Report on Form 10-K for the
year ended December 31, 1983)
10.2 Consulting Agreement, dated as of July 1, 1978, between the --
Company and Dr. Paul Gordon (Incorporated by reference to
Greenwich's Annual Report on Form 10-K for the year ended
December 31, 1984)
10.3 Consulting Agreement, dated as of August 23, 1979, between the --
Company and Dr. Paul Gordon (Incorporated by reference to
Greenwich's Annual Report on Form 10-K for the year ended
December 31, 1980)
10.4 Assignment of Consulting Agreement and Guarantee, dated as of --
August 23, 1979, between the Company and Dr. Paul Gordon
(Incorporated by reference to Greenwich's Annual Report on
Form 10-K for the year ended December 31, 1980)
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description and Method of Filing Sequential
33-38283) Page Number
<S> <C> <C>
10.5 Second Amendment, dated as of February 25, 1980, to the --
Consulting Agreement between the Company and Dr. Paul
Gordon (Incorporated by reference to Greenwich's Annual Report
on Form 10-K for the year ended December 31, 1980)
10.6 Third Amendment, dated as of June 30, 1983, to the Consulting --
Agreement between the Company and Dr. Paul Gordon
(Incorporated by reference to Greenwich's Annual Report on
Form 10-K for the year ended December 31, 1983)
10.7 Reassignment, Termination, Cancellation and Release of Assignment --
of Consulting Agreement and Guarantee, dated as of June 29, 1983,
between the Company and Dr. Paul Gordon (Incorporated by
reference to Greenwich's Annual Report on Form 10-K for the
year ended December 31, 1984)
10.8 Form of Indemnity Agreement to be entered into by the Company --
and its directors and officers (Incorporated by reference to
Greenwich's proxy statement in connection with its 1987 Annual
Meeting of Stockholders)
10.9 Development and License Agreement for Amiprilose HCl dated --
February 25, 1989 between the Company and Syntex Corporation
(Incorporated by reference to Greenwich's Annual Report on Form
10-K for the year ended December 31, 1988)
10.10 Development and License Agreement, dated as of June 1, 1990, by --
and between Kissei Pharmaceutical Co., Ltd. and Greenwich
Pharmaceuticals International Incorporated (Incorporated by
reference to Greenwich's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990)
10.11 Boston Life Sciences, Inc. Amended and Restated Omnibus Stock --
Option Plan (Incorporated by reference to the Registration
Statement of Greenwich Pharmaceuticals Incorporated on
Form S-4, Registration No. 33-91106)
10.12 Boston Life Sciences, Inc. Amended and Restated 1990 --
Non-Employee Directors' Non-Qualified Stock Option Plan
(Incorporated by reference to the Registration Statement of
Greenwich Pharmaceuticals Incorporated on Form S-4,
Registration No. 33-91106)
10.14 Agreement dated as of April 1, 1992 between the Company and --
Pickwick Plaza Associates (Incorporated by reference to
Greenwich's Registration Statement on Form S-8, Reg. No.
33-38283)
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description and Method of Filing
33-38283) Sequential
Page Number
<S> <C> <C>
21 Subsidiary of the Registrant (Incorporated --
by reference to BLSI's Annual Report
on Form 10-K for the year ended December 31, 1995)
23 Consent of Independent Accountants (Filed herewith) 48
99 Report of Independent Accountants (Filed herewith) 49
</TABLE>
47
<PAGE>
EXHIBIT 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Forms S-8 (No. 33-98104 and No. 33-98138) and in the Prospectus
constituting part of the Registration Statement on form S-3 (No. 333-02730) of
Boston Life Sciences, Inc. and its subsidiaries (the "Company") of our report
dated March 4, 1996 appearing on page FS-2 of the Company's Annual Report on
Form 10-K, as amended by Form 10-K/A, for the year ended December 31, 1995.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Boston, Massachusetts
May 24, 1996
<PAGE>
EXHIBIT 99
Report of Independent Accountants
To the Board of Directors and Stockholders of
Boston Life Sciences, Inc.
In our opinion, the consolidated financial statements listed in the index on
page FS-1 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 present fairly, in all material respects, the financial
position of Boston Life Sciences, Inc. (a development stage enterprise) and its
subsidiaries at December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995 and for the period from inception (October 16, 1992) through December
31, 1995, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Boston, Massachusetts
March 4, 1996
