8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to

Section 13 or 15(d) of

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 21, 2006

OSCIENT PHARMACEUTICALS CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	0-10824	04-2297484
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1000 Winter Street, Suite 2200

Waltham, Massachusetts 02451

(Address of principal executive offices, including zip code)

(781) 398-2300

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Oscient Pharmaceuticals Corporation (“Oscient” or the “Company”) and its wholly-owned subsidiary Guardian II Acquisition Corporation (“Guardian II”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) dated July 21, 2006 with Reliant Pharmaceuticals, Inc. (“Reliant”) to acquire exclusive rights in the United States and its territories (the “Territory”) to the cardiovascular products ANTARA® 130mg and ANTARA® 43mg (fenofibrate) capsules. ANTARA is approved by the U.S. Food and Drug Administration to treat hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high trigelycerides) in combination with a healthy diet.

Upon closing, which is subject to certain conditions described below, Oscient will acquire Reliant’s rights and will assume Reliant’s obligations under Reliant’s agreement with Ethypharm S.A. related to the development, manufacturing, marketing and sale of the ANTARA products in the Territory. Pursuant to the terms of the Asset Purchase Agreement, Oscient will also acquire the NDA and the IND covering the ANTARA products, clinical data, inventory, the ANTARA® trademark and certain related contracts and licenses covering intellectual property rights related to the ANTARA products. Oscient will also assume certain of Reliant’s liabilities related to the ANTARA products, including those under the related assigned contracts which will include minimum sales obligations and obligations to make certain royalty and milestone payments on sales of the ANTARA products. Reliant will retain its rights to the ANTARA products outside the Territory and its worldwide rights to develop and commercialize fenofibrate in combination with an Omega-3 compound. At closing, Oscient will pay Reliant $78 million for the rights to ANTARA in the Territory, plus an approximate $4 million payment for remaining inventory. Oscient will not be required to pay a royalty on the sale of the ANTARA products, however, it will be required to pay a low single digit royalty to Reliant for a specified time period on net sales of any line extensions and improvements to the ANTARA products developed by Oscient, which include all combination products of fenofibrate with another pharmaceutical ingredient. The Asset Purchase Agreement contains certain customary representations, warranties, indemnities and closing conditions.

In addition to certain customary closing conditions, the closing of this transaction is contingent upon securing consents of certain third parties, including a consent from a pharmaceutical company and the expiration or termination of the Hart-Scott-Rodino waiting period. Subject to the satisfaction of these closing conditions, the transaction is expected to close in late August 2006. There is no assurance that the conditions to the closing of the ANTARA acquisition will be satisfied or that Oscient will be able to close the acquisition. The Asset Purchase Agreement may be terminated by either party if the closing of the transaction does not take place on or prior to a specified outside date.

The Asset Purchase Agreement contains a non-compete provision by the terms of which Oscient agrees that neither Oscient nor any of its affiliates will at any time prior to the tenth anniversary of the closing date develop or sell any product within the Territory that is a combination of fenofibrate and an Omega-3 compound without the prior written consent of Reliant.

To finance the acquisition, Oscient and Guardian II have entered into several financing agreements with Paul Royalty Fund Holdings II, LP, an affiliate of Paul Capital Partners (“PRF”), including the Revenue Interests Assignment Agreement, the Note Purchase Agreement and the Common Stock and Warrant Purchase Agreement, in consideration for an aggregate amount of $70 million. Oscient and Guardian II entered into the Revenue Interests Assignment Agreement (the “Revenue Agreement”), pursuant to which Oscient and Guardian II will sell to PRF until December 31, 2016 the right to receive specified royalties on Guardian II’s and Oscient’s net sales (and the net sales of their respective affiliates and licensees) of the ANTARA products and FACTIVE® (gemifloxacin mesylate)

tablets. For purposes of the agreement with PRF, the ANTARA products include any product line improvements, line extensions and any fenofibrate combination products and FACTIVE products include any oral product line improvements, line extensions and any combination products. The royalty payable to PRF on net sales of ANTARA and FACTIVE starts each fiscal year as a high single digit royalty rate and declines to a low single digit royalty rate based on achievement of annual specified sales thresholds in each fiscal year. Once the cumulative royalty payments to PRF exceed $100 million, the royalties become nominal.

In the event of (i) a change of control of Oscient or Guardian II, (ii) a bankruptcy of Oscient or Guardian II, (iii) a transfer by Oscient or any of its subsidiaries of substantially all of either ANTARA or FACTIVE and (iv) subject to a cure period, breach of certain material covenants and representations in the Revenue Agreement (each a “Put Event”), PRF shall have the right to require Oscient and Guardian II to repurchase from PRF its royalty interest at a price in cash which equals the greater of (a) a specified multiple of cumulative payments made by PRF under the Revenue Agreement less the cumulative royalties previously to PRF; or (b) the amount which will provide PRF, when taken together with the royalties previously paid, a specified rate of return (the “Put/Call Price”). Upon a bankruptcy event, Oscient and Guardian II shall automatically be required to repurchase the PRF royalty interest at the Put/Call Price. In the event of a change of control of Oscient, Oscient and Guardian II shall have the right to repurchase the PRF royalty interest for an amount equal to the Put/Call Price.

During the first two fiscal years immediately following the fiscal year in which combined annual net sales of ANTARA and FACTIVE are equal to or greater than $125 million, Oscient and Guardian II shall have the right, but not the obligation, to reduce the royalty percentages due under the Revenue Agreement to PRF by fifty percent (50%) by paying PRF a price in cash which will provide PRF, when taken together with the royalties previously paid, a specified rate of return. During the first two fiscal years immediately following the fiscal year in which combined annual net sales of ANTARA and FACTIVE are equal to or greater than $250 million, Oscient and Guardian II shall have the right, but not the obligation, to repurchase the PRF royalty interest at a price in cash which will provide PRF, when taken together with the royalties previously paid, a specified rate of return.

Guardian II entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with PRF pursuant to which Guardian II issued and sold a $20,000,000 aggregate principal amount of 12% senior secured note (the “Note”), due on the fourth anniversary of the closing date, subject to Guardian II’s option to extend the maturity to the sixth anniversary of the closing date, provided (i) there are no defaults under the note at the time and (ii) Oscient issues to PRF at the time of the exercise of such option a warrant exercisable for 2,304,147 shares of Oscient’s common stock, par value $0.10 per share (the “Common Stock”) at a price of $0.8680 per share.

Interest is payable semi-annually in arrears on the last day of each March and September. Guardian II has the option to pay interest in cash or to have 50% of the interest paid in cash and 50% of the interest added to principal. In the event of a change of control of Oscient or on or after second anniversary of the closing, Oscient may at its option prepay all or any part of the Note at a premium which declines over time. In the event of an event of default, with “event of default” defined as a continuing Put Event under the Revenue Agreement as described in more detail above, the outstanding principal and interest in the Note shall become immediately due and payable.

Subject to the Revenue Agreement and the Note Purchase Agreement, without the prior written consent of PRF, Oscient has agreed not to (i) amend, waive any rights under, or terminate any material license agreements, including the agreements relating to the ANTARA products and FACTIVE, (ii) enter into any new agreement or amend or fail to exercise any of its material rights under existing agreements that would adversely affect PRF’s royalty interest and (iii) sell any material assets related to ANTARA or FACTIVE.

Pursuant to the terms of the Revenue Agreement and the Note Purchase Agreement, Guardian II and PRF entered into a Security Agreement (the “Security Agreement”) under which Guardian II will grant to PRF a security interest in and to substantially all assets owned by Guardian II (including rights to the ANTARA products) in order to secure its performance under each of the Revenue Agreement, the Note Purchase Agreement and the Note. Oscient has agreed to use commercially reasonable efforts, which shall not require Oscient to make any payments, to obtain consents from certain pre-existing Oscient noteholders to permit Oscient to grant PRF a security interest in all of Oscient’s assets to secure the obligations under the Revenue Agreement and Guardian II’s obligations under the Note Purchase Agreement.

As part of the financing, Oscient and PRF also entered into a Common Stock and Warrant Purchase Agreement (the “Stock and Warrant Purchase Agreement”), pursuant to which, in exchange for $10 million, Oscient will sell to PRF 11,111,111 shares (the “Shares”) of the Common Stock, at a price of $0.90 per share (the “Private Placement”) and issue PRF a warrant (the “Warrant”) to purchase 2,304,147 shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.8680 per share. The Warrant is exercisable for seven years from the date of closing. The Warrant contains a cashless exercise option and penalties if Oscient does not deliver the applicable amount of Warrant Shares within three trading days of exercise of a Warrant by PRF. The Warrant also contains provisions providing that, at PRF’s election, Oscient must re-purchase the Warrant from PRF upon a sale of the Company in which the consideration for such sale is solely cash.

The Company has agreed pursuant to the Stock and Warrant Purchase Agreement to elect one person designated by PRF to the Board of Directors following the closing and to continue to nominate one person designated by PRF for election to the Board of Directors by the Company’s shareholders. The director designated by PRF shall resign and the Company shall no longer be required to nominate a director designated by PRF upon the later of the following events: (1) if PRF ceases to own at least five (5%) percent of the Company’s Common Stock or securities convertible into the Company’s Common Stock; (2) if the Company owes PRF less than five million dollars ($5,000,000) under the Note pursuant to the Note Purchase Agreement; (3) the cumulative payments to PRF made by Oscient and Guardian II under the terms of the Revenue Agreement first exceed 250% of the consideration paid to Oscient and Guardian II by PRF; or (4) if the amounts due by the Company pursuant to the Revenue Agreement cease to be due. If at any time PRF’s designee is not elected to the Board of Directors, PRF’s designee will have a right to participate in all meetings of the Board of Directors in a nonvoting observer capacity.

Pursuant to the Stock and Warrant Purchase Agreement, Oscient and PRF entered into a Registration Rights Agreement (the “Registration Rights Agreement”), under the terms of which PRF will have rights to require the Company to file a registration statement with the Securities Exchange Commission to register the resale of the Shares and the Warrant Shares. Further, following the fourth anniversary of the date of the Registration Rights Agreement, Oscient has agreed to give PRF notice of any proposal to register any of its securities under the Securities Act, and to include, subject to certain limitations, in such registration such Shares and Warrant Shares as have been requested for inclusion by PRF.

A copy of the press release related to Oscient’s announcement of the acquisition and the financing transactions is attached to this Current Report on Form 8-K as Exhibit 99.1.

ITEM 8.01. OTHER EVENTS.

On July 24, 2006, Oscient issued a press release announcing it had entered into the agreements discussed above in Item 1.01. The full text of the Oscient’s press release regarding the announcement is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

99.1    Press Release issued by Oscient Pharmaceuticals Corporation on July 24, 2006.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OSCIENT PHARMACEUTICALS CORPORATION
By:	/s/ Philippe M. Maitre
Name:	Philippe M. Maitre
Title:	Senior Vice President and Chief
	Financial Officer

Date: July 25, 2006

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release issued by Oscient Pharmaceuticals Corporation on July 24, 2006.

EX-99.1

Exhibit 99.1

For Oscient Pharmaceuticals	For Reliant Pharmaceuticals
Investor Contact:	Investor and Media Contact:
Christopher Taylor	Marylou Rowe
781-398-2466	908-860-4646
	investorrelations@reliantrx.com
Media Contact:
Sarah Emond
781-398-2544

For Immediate Release

Oscient Pharmaceuticals Agrees to Acquire Cardiovascular Therapy ANTARA^® 130 mg

(fenofibrate) capsules from Reliant Pharmaceuticals

— Product indicated for treatment of high cholesterol and high triglycerides part of growing fenofibrate market —

— Conference call with Oscient management scheduled for 5:30 PM ET today —

Waltham, MA and Liberty Corner, NJ, July 24, 2006 – Oscient Pharmaceuticals (Nasdaq: OSCI) has agreed to acquire U.S. rights to the cardiovascular product ANTARA^® 130 mg (fenofibrate) capsules from Reliant Pharmaceuticals. ANTARA is part of the $1 billion fenofibrate market and will be commercialized by Oscient’s national sales force, which currently is marketing FACTIVE^® (gemifloxacin mesylate) tablets and TESTIM^® 1% testosterone gel, upon closing. Under the terms of the agreement, Oscient will make a payment of $78 million to Reliant for U.S. rights to ANTARA, plus a purchase of approximately $4 million in existing inventory.

ANTARA is indicated as an adjunct treatment for hypercholesterolemia (high blood cholesterol) and hypertriglyceridemia (high triglycerides) in combination with diet. Clinical studies have shown that ANTARA along with a healthy diet is effective in reducing triglycerides and increasing HDL-C (high density lipoprotein-cholesterol) levels.

“Acquiring ANTARA, a product that achieved approximately $35 million in revenues during the past 12 months, will dramatically expand our revenue base, accelerate our path to profitability and allow us to leverage the investment in our sales infrastructure, a goal we had set for this year,” stated Steven M. Rauscher, President and CEO of Oscient Pharmaceuticals. “ANTARA, which was launched in February 2005, fits extremely well with the physician and patient base we are targeting for FACTIVE and TESTIM. The fenofibrate market grew nearly 20% in 2005, as the incidence of serious cardiovascular risk factors such as diabetes and hypertension continue to rise. According to the American Heart Association, approximately 35 million Americans have total cholesterol levels over the recommended level. We look forward to building on Reliant’s successful launch of the brand.”

The transaction is subject to a number of closing conditions, including the expiration or termination of the Hart-Scott-Rodino waiting period and securing consents from certain third parties. Assuming the closing conditions are satisfied, Oscient expects the transaction to close in late August 2006 and expects its sales force to begin commercializing ANTARA shortly thereafter.

ANTARA Acquisition

July 24, 2006

Page 2 of 4

Oscient Pharmaceuticals also has entered into an agreement with Paul Capital Partners’ Paul Royalty Fund II, LP (Paul Royalty) a leading, international healthcare investment fund, to provide $70 million of financing for this product acquisition: $40 million in a revenue interest that will entitle Paul Royalty to receive a royalty on the net sales of both ANTARA and FACTIVE; $20 million in debt due in 2010; and a $10 million equity investment at $0.90 per share. Paul Royalty will also receive a warrant to purchase 2.3 million shares of Oscient common stock at $0.868 per share. The Paul Royalty financing is also subject to a number of closing conditions. Oscient will finance the remainder of the transaction utilizing its own resources. Following the closing of the transaction, Gregory B. Brown, MD, Partner at Paul Capital Partners, will join Oscient’s Board of Directors.

“We were pleased to be able to structure a flexible, customized financial agreement that provides Oscient the capital it needs to finance this transformational acquisition,” stated Dr. Brown.

J.P. Morgan Securities Inc. acted as financial advisor to Oscient Pharmaceuticals on this transaction.

Conference Call & Webcast Information

Slides accompanying today’s call are available in the Investor Relations section of the Company’s website.

A conference call will be held today at 5:30 PM ET with Steven Rauscher, President and CEO and other members of the management team. Participants can access the call by dialing 1-888-634-4009. International participants are asked to dial 1-706-634-2285. The call will also be available via webcast on the Company’s website at www.oscient.com. A replay will be available two hours after the conclusion of the call until August 31, 2006. Domestic participants can access the replay by dialing 1-800-642-1687, while international participants are asked to dial 1-706-645-9291. The conference ID number for the replay is 3534789. A replay of the webcast will also be available on the Company’s website.

Important Safety Information about ANTARA

ANTARA is indicated as adjunctive therapy to diet to reduce elevated LDL-C, total-C, triglycerides, and apo B, and to increase HDL-C in adult patients with primary hypercholesterolemia or mixed dyslipidemia (Fredrickson Types IIa and IIb). ANTARA is also indicated as adjunctive therapy to diet for treatment of adult patients with hypertriglyceridemia (Fredrickson Types IV and V hyperlipidemia). Lipid-altering agents should be used in addition to a diet restricted in saturated fat and cholesterol when response to diet and nonpharmacologic intervention alone has been inadequate.

Improving glycemic control in diabetic patients showing fasting chylomicronemia will usually reduce fasting triglycerides and eliminate chylomicronemia thereby obviating the need for pharmacologic intervention. Markedly elevated levels of serum triglycerides (e.g., >2,000 mg/dL) may increase the risk of developing pancreatitis. The effect of ANTARA therapy on reducing this risk has not been adequately studied.

ANTARA is contraindicated in patients with hypersensitivity to fenofibrate, in patients with hepatic or severe renal dysfunction including primary biliary cirrhosis, in patients with unexplained persistent liver function abnormality, and in patients with preexisting gallbladder disease. Fenofibrate has been associated with increases in serum transaminases. Regular periodic monitoring of liver function should be performed for duration of therapy, and therapy discontinued if enzyme levels persist above 3 times the normal limit. Fenofibrate may increase cholesterol excretion into the bile, leading to cholelithiasis. If cholelithiasis is suspected, ANTARA therapy should be discontinued. ANTARA may increase the effects of coumarin-type anticoagulants. Dosage adjustment based on frequent prothrombin time/INR determinations is advisable.

ANTARA Acquisition

July 24, 2006

Page 3 of 4

Adverse events most frequently observed in clinical trials: abnormal liver function tests; respiratory disorder; abdominal pain; back pain; and headache.

ANTARA may occasionally be associated with pancreatitis, hypersensitivity reactions, and hematologic or skeletal muscle changes. Please see Full Prescribing Information available at www.antararx.com.

About Oscient Pharmaceuticals

Oscient Pharmaceuticals Corporation is a biopharmaceutical company committed to the clinical development and commercialization of novel therapeutics to address unmet medical needs. The Company is marketing FACTIVE^® (gemifloxacin mesylate) tablets, approved by the FDA for the treatment of acute bacterial exacerbations of chronic bronchitis and community-acquired pneumonia of mild to moderate severity. In addition to the oral tablet form, Oscient is developing an investigational FACTIVE intravenous formulation for use in hospitalized patients. The Company is also promoting Auxilium Pharmaceuticals’ TESTIM^® 1% testosterone gel to primary care physicians in the U.S. Oscient has a novel antibiotic candidate, Ramoplanin, in advanced clinical development for the treatment of Clostridium difficile-associated disease (CDAD).

About Reliant Pharmaceuticals, Inc.

Reliant Pharmaceuticals is a pharmaceutical company with integrated sales, marketing and development expertise that markets a portfolio of branded cardiovascular pharmaceutical products. Reliant focuses on marketing promotionally sensitive pharmaceutical products to the high prescribing primary care, cardiovascular and specialist physician markets in the United States. Reliant also acquires rights to and develops product candidates in mid- to late-stage clinical development. Reliant’s sales force infrastructure is comprised of approximately 850 sales professionals nationwide.

About Paul Capital Partners and Paul Royalty Fund

Paul Capital Partners manages nearly $5 billion in equity capital commitments for its three investment platforms that include Healthcare Royalty and Revenue Interests, Private Equity Secondaries and Top Tier Fund-of-Funds. The firm has offices in New York, San Francisco, Paris, London and Toronto. The Paul Royalty Fund is one of the largest dedicated healthcare funds globally, with approximately $1 billion in equity capital commitments. The Paul Royalty Fund has made investments in the pharmaceutical, biotechnology, and medical device sectors valued at more than $625 million. These investments are focused on commercial stage companies and products, and consist of investments in the form of royalties, revenue interests and equity. For more information on Paul Capital Partners and the Paul Royalty Fund visit www.paulcapital.com.

Forward-Looking Statement for Oscient Pharmaceuticals

This news release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated closing of the ANTARA acquisition and the associated Paul Royalty financing, expected commercialization of ANTARA by the Company’s sales force and the continued growth of the brand, as well as the expansion of our revenue base and acceleration of profitability as a result of the acquisition. Forward-looking statements represent our management’s judgment regarding future events. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,” “intend,” “anticipate,” “estimate,” and similar words, although some forward-looking statements are expressed differently. We do not plan to update these forward-looking statements. You should be aware that our actual results could differ materially from those contained in the forward-looking statements due to a number of risks affecting our business. For example, there is no assurance that the conditions to the closing of the ANTARA acquisition or the Paul Royalty financing will be satisfied or that we will be able to close either the acquisition or the associated financing. In particular, the conditions to closing the ANTARA acquisition include receipt by Reliant of consents of certain third parties, one of which is a pharmaceutical company. In addition, the closing of the Paul Royalty financing is not a condition to our obligations to close under our agreement with Reliant. As a result, although we have entered into a definitive agreement with Paul Royalty regarding the funding, if for some reason we do not close the Paul

ANTARA Acquisition

July 24, 2006

Page 4 of 4

Royalty financing, we may not have sufficient resources to fund the ANTARA acquisition. Our ability to increase our revenue and accelerate the time of our profitability following the ANTARA acquisition may be limited by: (i) our ability to successfully commercialize and market ANTARA or FACTIVE or to promote TESTIM due to: the limitations on our resources and experience in the commercialization of products; lack of acceptance by physicians, patients and third party payors; unanticipated safety, product liability, efficacy, or other regulatory issues; delays in recruiting and training sales personnel; problems relating to manufacturing or supply; inadequate distribution of the products by wholesalers, pharmacies, hospitals and other customers; and competition from other products; (ii) by our ability to integrate ANTARA into our business; (iii) whether we will be able to expand the indications for which FACTIVE is approved; (iv) the delay or inability to find sublicensing partners for FACTIVE or to negotiate favorable licensing terms; (v) the delay in or inability to obtain additional regulatory approvals of our products and product candidates due to negative, inconclusive or insufficient results in ongoing or future clinical trials, the FDA requiring additional information or data, delays in the progress of ongoing clinical trials, safety concerns arising with respect to our products or product candidates and disputes with the third parties from whom we license our products or product candidate; and (vi) delays by the FDA. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are described under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2006 and in other filings that we may make with the Securities and Exchange Commission from time to time.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 for Reliant Pharmaceuticals

To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission.