-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CIeWXQ0AZrmeDABZrwnm6yek/qOFy4vhTsbK7EJuVAMn09CrfQL5Of+5h3hhCnvs sMNApkjVUMk34dZFVTtn2w== /in/edgar/work/20000814/0000912057-00-037294/0000912057-00-037294.txt : 20000921 0000912057-00-037294.hdr.sgml : 20000921 ACCESSION NUMBER: 0000912057-00-037294 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIO TECHNOLOGY GENERAL CORP CENTRAL INDEX KEY: 0000722104 STANDARD INDUSTRIAL CLASSIFICATION: [2833 ] IRS NUMBER: 133033811 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15313 FILM NUMBER: 699019 BUSINESS ADDRESS: STREET 1: 70 WOOD AVE S CITY: ISELIN STATE: NJ ZIP: 08830 BUSINESS PHONE: 9086328800 MAIL ADDRESS: STREET 1: 70 WOOD AVENUE SOUTH CITY: ISELIN STATE: NJ ZIP: 08830 10-Q 1 a10-q.txt 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2000 Commission File Number 0-15313 BIO-TECHNOLOGY GENERAL CORP. (Exact name of registrant as specified in its charter) Delaware 13-3033811 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
70 Wood Avenue South, Iselin, New Jersey 08830 (Address of principal executive offices) (732) 632-8800 (Registrant's telephone number, including area code) Former address: Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Common Stock, par value $.01 per share, outstanding as of August 8, 2000: 54,574,695 INDEX PAGE ---- Part I. Financial Information Item 1. Financial Statements: Consolidated Balance Sheets at June 30, 2000 and December 31, 1999......................................................3 Consolidated Statements of Operations for the three and six months ended June 30, 2000 and 1999....................................................................4 Consolidated Statement of Changes in Stockholders' Equity for the six months ended June 30, 2000................................................................5 Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999....................................................................6 Notes to Consolidated Financial Statements...................................................7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................................................8 Part II. Other Information Item 5. Other Information...........................................................................16 Item 6. Exhibits and Reports on Form 8-K............................................................16
2 PART I. FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS (In thousands)
June 30, 2000 December 31, 1999 (Unaudited) - ------------------------------------------------------------------------------------------- ASSETS Current Assets: Cash and cash equivalents ........................... $ 16,594 $ 18,703 Short-term investments .............................. 85,196 68,547 Accounts receivable ................................. 36,095 37,504 Inventories ......................................... 9,882 8,624 Deferred income taxes ............................... 4,218 4,286 Prepaid expenses and other current assets ........... 249 220 --------- --------- Total current assets ............................. 152,234 137,884 Account receivable ...................................... 2,443 2,443 Severance pay funded .................................... 2,434 2,369 Property and equipment, net ............................. 22,242 18,938 Other assets ............................................ 3,287 3,011 --------- --------- Total assets ........................................ $ 182,640 $ 164,645 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable .................................... $ 8,276 $ 7,257 Other current liabilities ........................... 13,978 11,171 --------- --------- Total current liabilities ....................... 22,254 18,428 --------- --------- Long-term liabilities ................................... 4,481 4,333 --------- --------- Stockholders' equity: Preferred stock - $.01 par value; 4,000,000 shares authorized; no shares issued ................... -- -- Common stock - $.01 par value; 150,000,000 shares authorized; issued: 54,450,000 (53,280,000 at December 31, 1999) .................................... 544 533 Capital in excess of par value .......................... 175,953 168,743 Deficit ................................................. (15,586) (22,534) Less - treasury stock at cost, 83,000 shares ............ (340) (340) Accumulated other comprehensive income .................. (4,666) (4,518) --------- --------- Total stockholders' equity ............................ 155,905 141,884 --------- --------- Total liabilities and stockholders' equity ........ $ 182,640 $ 164,645 ========= =========
The accompanying notes are an integral part of these consolidated balance sheets. 3 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands except per share data)
Six Months Ended Three Months Ended June 30, June 30, - -------------------------------------------------------------------------------------------------------- 2000 1999 2000 1999 - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- Revenues: Product sales ................................................ $26,589 $35,248 $14,082 $19,381 Contract fees ................................................ 9,976 4,633 7,500 1,727 Royalties .................................................... 1,380 226 745 190 Other revenues ............................................... 893 990 462 529 Interest income .............................................. 3,192 2,011 1,841 1,053 ------- ------- ------- ------- 42,030 43,108 24,630 22,880 ------- ------- ------- ------- Expenses: Research and development ..................................... 11,032 8,977 5,635 4,359 Cost of product sales ........................................ 4,247 6,122 1,911 3,868 General and administrative ................................... 6,628 5,895 3,182 3,231 Marketing and sales .......................................... 8,571 8,324 5,315 3,765 Royalties .................................................... 918 717 264 396 Interest and finance ......................................... 47 60 17 57 ------- ------- ------- ------- 31,443 30,095 16,324 15,676 ------- ------- ------- ------- Income before income taxes .................................... 10,587 13,013 8,306 7,204 Income taxes .................................................. 3,639 3,907 2,843 2,104 ------- ------- ------- ------- Net income .................................................... $ 6,948 $ 9,106 $ 5,463 $ 5,100 ------- ------- ------- ------- ------- ------- ------- ------- Earnings per common share: Basic ........................................................ $ 0.13 $ 0.18 $ 0.10 $ 0.10 ======= ======= ======= ======= Diluted ...................................................... $ 0.12 $ 0.17 $ 0.10 $ 0.10 ======= ======= ======= ======= Weighted average number of common and common equivalent shares: Basic ........................................................ 54,026 52,014 54,303 52,086 ======= ======= ======= ======= Diluted ...................................................... 57,188 53,217 57,015 53,358 ======= ======= ======= =======
The accompanying notes are an integral part of these consolidated statements. 4 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands)
Common Stock Accumulated ------------ Capital in Other Total Par Excess of Treasury Comprehensive Stockholders' Shares Value Par Value Deficit Stock Income Equity (Loss) - ---------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1999 ..... 53,280 $ 533 $168,743 $(22,534) $ (340) $ (4,518) $141,884 Comprehensive income: Net income for six months ended June 30, 2000 ....... 6,948 6,948 Unrealized loss on marketable securities, net ........... (148) (148) -------- Total comprehensive income: .... 6,800 -------- Issuance of common stock ....... 154 1 851 852 Exercise of stock options ...... 1,016 10 6,359 6,369 ------ -------- -------- -------- -------- -------- -------- Balance, June 30, 2000 ......... 54,450 $ 544 $175,953 $(15,586) $ (340) $ (4,666) $155,905 ====== ======== ======== ======== ======== ======== ========
The accompanying notes are an integral part of this consolidated statement. 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, ------------------- 2000 1999 - -------------------------------------------------------------------------------------- Cash flows from operating activities: Net income ................................................ $ 6,948 $ 9,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ........................... 1,467 1,692 Provision for severance pay ............................. 148 106 Loss on sales of short-term investments ................. 304 174 Gain on sales of fixed assets ........................... (16) (5) Deferred income taxes ................................... 68 2,770 Common stock as payment for services .................... 30 30 Changes in: receivables ................................. 1,409 22,177 inventories .................................. (1,258) (724) prepaid expenses and other current assets .... (29) (154) accounts payable ............................. 1,019 (193) other current liabilities .................... 2,807 681 -------- -------- Net cash provided by operating activities .................... 12,897 35,660 -------- -------- Cash flows from investing activities: Short-term investments .................................... (26,152) (39,597) Capital expenditures ...................................... (4,393) (8,629) Changes in other assets ................................... (682) (293) Severance pay funded ...................................... (65) (33) Proceeds from sales of fixed assets ....................... 44 44 Proceeds from sales of short-term investments ............. 9,051 10,579 -------- -------- Net cash used in investing activities ....................... (22,197) (37,929) -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock .................... 7,191 1,248 -------- -------- Net (decrease) increase in cash and cash equivalents ......... (2,109) (1,021) Cash and cash equivalents at beginning of year ............... 18,703 9,431 -------- -------- Cash and cash equivalents at end of period ................... $ 16,594 $ 8,410 ======== ======== SUPPLEMENTARY INFORMATION Other information: Income tax paid ........................................... $ -- $ 789 Income tax received ...................................... $ 1,410 $ --
The accompanying notes are an integral part of these consolidated statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: STATEMENT ON ADJUSTMENTS In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of only normal recurring accruals, considered necessary for a fair presentation. Due to fluctuations in quarterly revenues earned, operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The accounting policies continue unchanged from December 31, 1999. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. Note 2: CREDIT AGREEMENT In June 2000 Bio-Technology General (Israel) Ltd., the Company's wholly-owned subsidiary ("BTG-Israel"), entered into a $20,000,000 revolving credit facility with Bank Hapoalim B.M. to finance a portion of the cost of completing its new production facility. Short-term borrowing under the facility are due 12 months from the date of borrowing and long-term borrowings are due five years from the date of borrowing. Loans under the facility bear interest at the rate of LIBOR plus 0.5% in the case of short-term borrowings and LIBOR plus 1% in the case of long-term borrowings. Amounts repaid under the facility can be reborrowed. The credit facility is secured by the assets of BTG-Israel and has been guaranteed by the Company. At June 30, 2000 the Company had no borrowings outstanding under the facility. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three and six months ended June 30, 2000 compared with three and six months ended June 30, 1999 STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q CONCERNING THE COMPANY'S BUSINESS OUTLOOK OR FUTURE ECONOMIC PERFORMANCE; ANTICIPATED PROFITABILITY, REVENUES, EXPENSES OR OTHER FINANCIAL ITEMS; INTRODUCTIONS AND ADVANCEMENTS IN DEVELOPMENT OF PRODUCTS, AND PLANS AND OBJECTIVES RELATED THERETO; AND STATEMENTS CONCERNING ASSUMPTIONS MADE OR EXPECTATIONS AS TO ANY FUTURE EVENTS, CONDITIONS, PERFORMANCE OR OTHER MATTERS, ARE "FORWARD-LOOKING STATEMENTS" AS THAT TERM IS DEFINED UNDER THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN SUCH STATEMENTS. SUCH RISKS, UNCERTAINTIES AND FACTORS INCLUDE, BUT ARE NOT LIMITED TO, CHANGES AND DELAYS IN PRODUCT DEVELOPMENT PLANS AND SCHEDULES, CHANGES AND DELAYS IN PRODUCT APPROVAL AND INTRODUCTION, CUSTOMER ACCEPTANCE OF NEW PRODUCTS, CHANGES IN PRICING OR OTHER ACTIONS BY COMPETITORS, PATENTS OWNED BY THE COMPANY AND ITS COMPETITORS, CHANGES IN HEALTHCARE REIMBURSEMENT, RISK OF OPERATIONS IN ISRAEL, RISK OF PRODUCT LIABILITY, GOVERNMENTAL REGULATION, DEPENDENCE ON THIRD PARTIES TO MANUFACTURE PRODUCTS AND COMMERCIALIZE PRODUCTS, GENERAL ECONOMIC CONDITIONS, AS WELL AS OTHER RISKS DETAILED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999. OVERVIEW The Company is engaged in the research, development, manufacture and marketing of biopharmaceutical products. Through a combination of internal research and development, acquisitions, collaborative relationships and licensing arrangements, BTG has developed a portfolio of therapeutic products, including seven products that have received regulatory approval for sale, of which five are currently being marketed. The Company seeks both broad markets for its products as well as specialized markets where it can seek Orphan Drug status and potential marketing exclusivity. The Company was founded in 1980 to develop, manufacture and market novel therapeutic products. The Company's overall administration, licensing, human clinical studies, marketing activities, quality assurance and regulatory affairs are primarily coordinated at the Company's headquarters in Iselin, New Jersey. Pre-clinical studies, research and development activities and manufacturing of the Company's genetically engineered and fermentation products are primarily carried out through its wholly owned subsidiary in Rehovot, Israel. RESULTS OF OPERATIONS The following tables set forth for the fiscal periods indicated the percentage of revenues represented by certain items reflected on the Company's statements of operations. 8
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30 JUNE 30 ---------------- ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Revenues: Product sales ............ 63.3% 81.8% 57.2% 84.7% Contract fees ............ 23.7 10.7 30.4 7.6 Royalties ................ 3.3 0.5 3.0 0.8 Other revenues ........... 2.1 2.3 1.9 2.3 Interest income .......... 7.6 4.7 7.5 4.6 ----- ----- ----- ----- Total ............... 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== Expenses: Research and development . 26.2% 20.8% 22.9% 19.1% Cost of product sales .... 10.1 14.2 7.7 16.9 General and administrative 15.8 13.7 12.9 14.1 Marketing and sales ...... 20.4 19.3 21.6 16.5 Royalties ................ 2.2 1.7 1.1 1.7 Interest and finance ..... 0.1 0.1 0.1 0.2 ----- ----- ----- ----- Total ................ 74.8 69.8 66.3 68.5 ----- ----- ----- ----- Income before taxes ........ 25.2 30.2 33.7 31.5 Income taxes ............... 8.7 9.1 11.5 9.2 ----- ----- ----- ----- Net income ................. 16.5% 21.1% 22.2% 22.3% ===== ===== ===== =====
The Company has historically derived its revenues from product sales as well as from collaborative arrangements with third parties, under which the Company may earn up-front contract fees, may receive funding for additional research (including funding from the Chief Scientist of the State of Israel), is reimbursed for producing certain experimental materials, may be entitled to certain milestone payments, may sell product at specified prices, and may receive royalties on sales of product. The Company anticipates that product sales will constitute the majority of its revenues in the future. Revenues have in the past displayed and will in the immediate future continue to display significant variations due to changes in demand for its products, the operational needs of its customers, new product introductions by the Company and its competitors, the obtaining of new research and development contracts and licensing arrangements, the completion or termination of such contracts and arrangements, the timing and amounts of milestone payments, and the timing of regulatory approvals of products. 9 The following table summarizes the Company's sales of its commercialized products as a percentage of total product sales for the periods indicated:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, ---------------- ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Oxandrin-Registered Trademark-.... 42.9 38.5% 45.4% 35.3% Bio-Tropin-TM-.................... 36.9 37.7 41.6 42.6 BioLon-TM- ....................... 13.2 11.5 12.0 9.1 Delatestryl-Registered Trademark-. 5.7 11.0 0.0 12.0 Other ............................ 1.3 1.3 1.0 1.0 ---- ---- ---- ---- Total...................... 100.0% 100.0% 100.0% 100.0% ---- ---- ---- ---- ---- ---- ---- ----
The Company believes that its product mix will change significantly as it continues to focus on: (i) increasing market penetration of its existing products; (ii) expanding into new markets; and (iii) commercializing additional products. As previously announced, in April 1999 Gentiva Health Services, Inc. ("Gentiva"), BTG's distributor for Oxandrin, began to reduce its purchases of Oxandrin in order to reduce the amount of Oxandrin inventory it carried as a result of a slowing in the rate of increase of Oxandrin prescriptions. Gentiva finished this inventory reduction in May 2000, and is now purchasing, on a monthly basis, an amount of Oxandrin equal to the average end-user (I.E., wholesaler) sales during the preceeding three months. Oxandrin prescriptions in the first five months of 2000 increased by 7% over the comparable 1999 period, reflecting a somewhat slower growth rate than in prior periods in the market for all involuntary weight loss products for individuals with HIV/AIDS. The Company believes that its co-promotion agreement for Oxandrin with the Ross Products division of Abbott Laboratories could lead to a more rapid rate of Oxandrin prescription growth. The following table summarizes the Company's U.S. and international product sales as a percentage of total product sales for the period indicated:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, ----------------------- ----------------------- 2000 1999 2000 1999 ---- ---- ---- ---- United States............................. 48.4% 45.3% 44.2% 37.2% International............................. 51.6 54.7 55.8 62.8 ---- ---- ---- ---- Total.............................. 100.0% 100.0% 100.0% 100.0% ===== ===== ===== =====
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999 REVENUES. Total revenues decreased 2.5% in the first half of 2000 to $42,030,000 from $43,108,000 in the first half of 1999. Product sales decreased by $8,659,000, or 24.6%, in the first half of 2000 from the comparable prior period. Oxandrin sales to Gentiva Health Services, Inc. ("Gentiva"), the Company's wholesale and retail distributor of Oxandrin in the United States, decreased $178,000, or 1.6%, in the first half of 2000 compared to the first half of 1999. The decrease in sales to Gentiva was due to Gentiva's decision, 10 implemented in April 1999 and completed in May 2000, to reduce the amount of Oxandrin inventory it carries; however, end-user sales of Oxandrin by Gentiva increased in the first half of 2000 compared to the first half of 1999, due in part to increased purchases by end-users in advance of a price increase instituted effective June 1, 2000. Product sales of human growth hormone ("hGH"), BioLon and Delatestryl decreased $3,478,000, $554,000 and $2,377,000, or 26.2%, 13.6% and 61.2%, respectively, compared to the first half of 1999. These decreases in sales reflect quarterly variations in purchasing based on the operational needs of the Company's customers. In addition, the Company had no sales of Delatestryl in the second quarter of 2000 as compared to $2,317,000 in the same period last year, as Gentiva, the Company's wholesale and retail distributor of Delatestryl in the United States, elected to reduce its Delatestryl inventory in response to its customers reduction of their inventory and therefore made no purchases. Contract fees are primarily generated from licensing and distribution arrangements. Contract fees represented 23.7% of total revenues in the first half of 2000 compared to 10.7% in the first half of 1999. Of the contract fees earned in the first half of 2000, $5,000,000, or 50.1% of total contract fees, was earned in respect of the license of distribution rights of BioHyJ to DePuy Orthopaedics, a Johnson & Johnson company, on a substantially worldwide basis, $2,500,000, or 25.1% of total contract fees, was earned as a milestone payment under its strategic alliance with Teva Pharmaceutical Industries Ltd. focusing on the development and global commercialization of several generic recombinant therapeutic products and the license of distribution rights in the United States for the Company's hGH and $1,475,000, or 14.8% of total contract fees, was earned as milestone payments under its license and development and distribution agreements with Swiss Serum relating to the Company's Hepatitis-B vaccine. Of the contract fees earned in the first half of 1999, $4,197,000, or 90.6% of total contract fees, was earned in respect of the license of distribution rights for Insulin on a substantially worldwide basis. Royalties were $1,380,000 in the first half of 2000, as compared to $226,000 in the same period last year. These revenues consist of royalties from the licensee of the Company's MircetteJ product. Other revenues are primarily generated from partial research and development funding by the Chief Scientist of the State of Israel. Interest income increased $1,181,000, or 58.7%, over the comparable prior period, primarily as a result of increased cash balances (including short-term investments) resulting mainly from cash flow from operations and exercise of options subsequent to June 30, 1999. RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense increased 22.9% in the first half of 2000 to $11,032,000 from $8,977,000 in the first half of 1999 The increase in research and development expenses resulted mainly from the increase in research and development personnel and other expenses associated with these additional personnel. COST OF PRODUCT SALES. Cost of product sales decreased $1,875,000, or 30.6%, in the first half of 2000 to $4,247,000 from $6,122,000 in the first half of 1999. Cost of product sales as a percentage of product sales decreased to 16.0% as compared to 17.4% in the comparable period last year. Cost of product sales decreased in absolute terms due to decreased product sales and a more favorable mix of products and as a percentage of revenues primarily as a result of manufacturing efficiencies and the more favorable mix of products. Oxandrin and human growth hormone have a relatively low cost of manufacture as a percentage of product sales, while BioLon has the highest cost to manufacture as a percentage of product sales. The decrease in cost of product sales as a percentage of product sales due to manufacturing efficiencies and the more favorable product mix was partially offset by the fact that fixed production costs, primarily overhead, were spread over a smaller amount of product sales. Cost of product sales as a percentage of product sales varies from year to year and quarter to quarter depending on the quantity and mix of products sold. GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense increased 12.4% in the first half of 2000 to $6,628,000 from $5,895,000 in the comparable prior period. As a percentage of revenues, general and administrative expense increased to approximately15.8% of revenues in the first half of 2000 as compared to 13.7% of revenues in the comparable prior year period. The increase in general and administrative expense derived mainly from legal fees resulting from the reactivation in the fourth quarter of 1998 of the Company's declaratory judgment action against Genentech in respect of the Company's hGH in 11 the United States and additional personnel and other expenses associated with these personnel as a result of the Company's growth. MARKETING AND SALES EXPENSE. Marketing and sales expense increased 3.0% in the first half of 2000 to $8,571,000 from $8,324,000 for the prior year period. As a percentage of revenues, marketing and sales expense increased to approximately 20.4% from 19.3% for the first half of 1999. These expenses primarily related to the sales and marketing force in the United States that the Company established to promote distribution of Oxandrin in the United States. The increase was primarily due to increased personnel and other expenses associated with these personnel and increased advertising, promotional and market research activities, particularly in the second quarter. ROYALTIES. Royalties were $918,000 in the first half of 2000, as compared to $717,000 in the first half of 1999. These expenses consist primarily of royalties to entities from which the Company licensed certain of its products and to the Chief Scientist. INCOME TAXES. Provision for income taxes for the six months ended June 30, 2000 was $3,639,000, representing approximately 34.4% of income before income taxes as compared to $3,907,000, or 30.0% of income before income taxes, in the first half of 1999. The increase in the effective tax rate in the first half of 2000 compared to the first half of 1999 was primarily due to the substantial reduction of certain research and experimental tax credits available in prior years. The Company's consolidated tax rate differs from the statutory rate because of Israeli tax benefits, tax credits and similar items which reduce the tax rate. EARNINGS PER COMMON SHARE. The Company had approximately 2.0 million and 4.0 million additional basic and diluted weighted average shares outstanding, respectively, for the six month period ended June 30, 2000, as compared to the same period in 1999. The increased number of basic shares was primarily the result of the issuance, subsequent to June 30, 1999, of shares upon the exercise of options. The increase in the number of diluted shares was the result of the increased number of shares outstanding, as well as more outstanding options being considered common equivalent shares because their exercise price was below the average fair market value of the Common Stock for the first half of 2000, which average fair market value was higher than in the first half of 1999. COMPARISON OF THREE MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999 REVENUES. Total revenues increased 7.6% in the second quarter of 2000 to $24,630,000 from $22,880,000 in the second quarter of 1999. Product sales decreased by $5,299,000, or 27.3%, in the three months ended June 30, 2000 from the comparable prior period. Oxandrin sales to Gentiva, the Company's wholesale and retail distributor of Oxandrin in the United States, increased $1,542,000, or 32.4%, in the three months ended June 30, 2000 compared to the three months ended June 30, 1999. The increase in sales to Gentiva was due to the completion, in May 2000, of Gentiva's reduction in the amount of Oxandrin inventory it carries, which reduction began in April 1999, and increased purchases by end-users in advance of a price increase instituted effective June 1, 2000. End-user sales of Oxandrin by Gentiva increased in the three months ended June 30, 2000 compared to the same period last year. Product sales of hGH and BioLon decreased $2,406,000 and $74,000, or 51% and 33%, respectively, compared to the second quarter of 1999, due to quarterly variations in purchasing based on the operational needs of the Company's customers. There were no sales of Delatestryl in the second quarter of 2000 as compared to $2,317,000 in the same period last year, as Gentiva, the Company's wholesale and retail distributor of Delatestryl in the United States, elected to reduce its Delatestryl inventory and therefore made no purchases. Contract fees are primarily generated from licensing and distribution arrangements. Contract fees represented 30.4% of total revenues in the three months ended June 30, 2000 compared to 7.6% in the three months ended June 30, 1999. Of the contract fees earned in the second quarter of 2000, $5,000,000, or 66.7% of total contract fees, was earned in respect of the licence of distribution rights of BioHy to DePuy Orthopaedics on a substantially worldwide basis and $2,500,000, or 33.3% of total contract fees, was earned as a milestone payment under its strategic alliance with Teva Pharmaceutical Industries Ltd. focusing on the development and global commercialization of several generic recombinant therapeutic products and the license of distribution rights in the United States for the Company's hGH. Of the contract fees earned in the second quarter of 1999, $1,600,000, or 93% of total contract fees, was earned in respect of the license of distribution rights for Insulin on a substantially worldwide basis. 12 Royalties were $745,000 in the second quarter of 2000, as compared to $190,000 in the same period last year. These revenues consist of royalties from the licensee of the Company's Mircette product. Other revenues are primarily generated from partial research and development funding by the Chief Scientist of the State of Israel. Interest income increased $788,000, or 74.8%, over the comparable prior period, primarily as a result of increased cash balances (including short-term investments) resulting mainly from cash flow from operations and exercise of options subsequent to June 30, 1999. RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense increased 29.3% in the second quarter of 2000 to $5,635,000 from $4,359,000 in the second quarter of 1999. The increase in research and development expenses resulted mainly from the increase in research and development personnel and other expenses associated with these additional personnel. COST OF PRODUCT SALES. Cost of product sales decreased $1,957,000, or 50.6%, in the three months ended June 30, 2000 to $1,911,000 from $3,868,000 in the three months ended June 30, 1999. Cost of product sales as a percentage of product sales decreased to 13.6% as compared to 20.0% in the comparable period last year. Cost of product sales decreased in absolute terms due to decreased product sales and a more favorable mix of products and as a percentage of revenues primarily as a result of manufacturing efficiencies and the more favorable mix of products. Oxandrin and human growth hormone have a relatively low cost of manufacture as a percentage of product sales, while BioLon has the highest cost to manufacture as a percentage of product sales. The decrease in cost of product sales as a percentage of product sales due to manufacturing efficiencies and the more favorable product mix was partially offset by the fact that fixed production costs, primarily overhead, were spread over a smaller amount of product sales. Cost of product sales as a percentage of product sales varies from year to year and quarter to quarter depending on the quantity and mix of products sold. GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense decreased slightly by 1.5% in the three months ended June 30, 2000 to $3,182,000 from $3,231,000 in the comparable prior period. As a percentage of revenues, general and administrative expense decreased to approximately 12.9% of revenues in the second quarter of 2000 versus 14.1% of revenues in the comparable prior year period. MARKETING AND SALES EXPENSE. Marketing and sales expense increased 41.2% in the second quarter of 2000 to $5,316,000 from $3,765,000 for the prior year period. As a percentage of revenues, marketing and sales expense increased to approximately 21.6% from 16.5% for the second quarter of 1999. These expenses primarily related to the sales and marketing force in the United States that the Company established to promote distribution of Oxandrin in the United States. The increase was primarily due to the timing of marketing, advertising, promotional and market research activities, which had resulted in a $1,303,000, or 28.6%, decrease in the first quarter of 2000 compared to the first quarter of 1999. As discussed above, marketing and sales expenses for the first half of 2000 increased only $247,000, or 3%, over the first half of 1999. ROYALTIES. Royalties were $264,000 in the three months ended June 30, 2000, as compared to $396,000 in the three months ended June 30, 1999. These expenses consist primarily of royalties to entities from which the Company licensed certain of its products and to the Chief Scientist. The decrease was primarily the result of the Company not making sales of Delatestryl to Gentiva in the quarter, which resulted in no royalties being due to the licensor of the product. INCOME TAXES. Provision for income taxes for the three months ended June 30, 2000 was $2,843,000, representing approximately 34.2% of income before income taxes as compared to $2,104,000, or 29.2% of income before income taxes, in the comparable quarter last year. The increase in the effective tax rate in the second quarter of 2000 compared to the second quarter of 1999 was primarily due to the substantial reduction of certain research and experimental tax credits available in prior years. The Company's consolidated tax rate differs from the statutory rate because of Israeli tax benefits, tax credits and similar items which reduce the tax rate. 13 EARNINGS PER COMMON SHARE. The Company had approximately 2.2 million and 3.7 million additional basic and diluted weighted average shares outstanding, respectively, for the three month period ended June 30, 2000, as compared to the same period in 1999. The increased number of basic shares was primarily the result of the issuance, subsequent to June 30, 1999, of shares upon the exercise of options. The increase in the number of diluted shares was the result of the increased number of shares outstanding, as well as more outstanding options being considered common equivalent shares because their exercise price was below the average fair market value of the Common Stock for the second quarter of 2000, which average fair market value was higher than in the second quarter of 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital at June 30, 2000 was $129,980,000 as compared to $119,456,000 at December 31, 1999. The cash flows of the Company have fluctuated significantly due to the impact of net income, capital spending, working capital requirements, the issuance of Common Stock and other financing activities. The Company expects that cash flow in the near future will be primarily determined by the levels of net income and financings, if any, undertaken by the Company. Net cash decreased by $2,109,000 and $1,021,000 in the six months ended June 30, 2000 and 1999, respectively. Net cash provided by operating activities was $12,897,000 and $35,660,000 in the six months ended June 30, 2000 and 1999, respectively. Net income was $6,948,000 and $9,106,000 in the same periods, respectively. In the six months ended June 30, 2000 net cash provided by operating activities was greater than net income mainly due to an increase in other current liabilities of $2,807,000, a decrease in receivables of $1,409,000, depreciation and amortization of $1,467,000 and an increase in accounts payable of $1,019,000 partially offset by an increase in inventory of $1,258,000. In the six months ended June 30, 1999 net cash provided by operating activities was greater than net income primarily because of a decrease in receivables of $22,177,000, deferred income taxes at $2,770,000 and depreciation and amortization at $1,692,000. Net cash used in investing activities was $22,197,000 and $37,929,000 in the six months ended June 30, 2000 and 1999, respectively. Net cash used in investing activities included capital expenditures of $4,393,000 and $8,629,000 in these periods, respectively, primarily for the new manufacturing facility. The remainder of the net cash used in investing activities was primarily for purchases and sales of short-term investments. Net cash provided by financing activities was $7,191,000 and $1,248,000 in the six months ended June 30, 2000 and 1999, respectively, which are net proceeds from issuances of Common Stock as a result of exercise of stock options. In April 1999, the Company purchased a manufacturing facility in Israel for approximately $6,250,000. The Company will initially locate its production activities for FIBRIMAGEJ at this new facility, and will thereafter move the remainder of its production activities to this facility. The Company expects the initial production facility will be ready in the first half of 2001. The Company expects it will cost approximately $40,000,000 to complete the production facility (excluding the cost of purchasing the facility), of which approximately $13,000,000 had been expended through June 30, 2000. The Company had commitments of $20,156,000 outstanding at June 30, 2000 related to completion of this facility. The Company maintains its funds in money market funds, commercial paper and other liquid debt instruments. The Company manages its Israeli operations with the objective of protecting against any material net financial loss in U.S. dollars from the impact of Israeli inflation and currency devaluations on its non-U.S. dollar assets and liabilities. The cost of the Company's operations in Israel, as expressed in dollars, is influenced by the extent to which any increase in the rate of inflation in Israel is not offset (or is offset on a lagging basis) by a devaluation of the Israeli Shekel in relation to the U.S. dollar. The rate of inflation (as measured by the consumer price index) was approximately 9% in 1998 and 1% in 1999, while the Shekel was devalued by 14 approximately 18% and less than 1%, respectively, in these periods. In the six months ended June 30, 2000 the consumer price index increased at the rate of approximately 0.4% while the Shekel's value in relation to the U.S. dollar increased by approximately 1.7%. As a result, for those expenses linked to the Israeli Shekel, such as salaries and rent, this resulted in corresponding decreases in these costs in U.S. dollars in 1998, but an increase in these costs in U.S. dollar terms in 1999 and in the first half of 2000. To the extent that expenses in Shekels exceed BTG's revenues in Shekels (which to date have consisted primarily of research funding from the Chief Scientist and product sales in Israel), the devaluations of Israeli currency have been and will continue to be a benefit to BTG's financial condition. However, should BTG's revenues in Shekels exceed its expenses in Shekels in any material respect, the devaluation of the Shekel will adversely affect BTG's financial condition. Further, to the extent the devaluation of the Shekel with respect to the U.S. dollar does not substantially offset the increase in the costs of local goods and services in Israel, BTG's financial results will be adversely affected as local expenses measured in U.S. dollars will increase. In June 2000 Bio-Technology General (Israel) Ltd., the Company's wholly-owned subsidiary ("BTG-Israel"), entered into a $20,000,000 revolving credit facility with Bank Hapoalim B.M. to finance a portion of the cost of completing its new production facility. Short-term borrowing under the facility are due 12 months from the date of borrowing and long-term borrowings are due five years from the date of borrowing. Loans under the facility bear interest at the rate of LIBOR plus 0.5% in the case of short-term borrowings and LIBOR plus 1% in the case of long-term borrowings. Amounts repaid under the facility can be reborrowed. The credit facility is secured by the assets of BTG-Israel and has been guaranteed by the Company. At June 30, 2000 the Company had no borrowings outstanding under the facility. The Company believes that its remaining cash resources as of June 30, 2000, together with anticipated product sales, scheduled payments to be made to BTG under its current agreements with pharmaceutical partners, the proceeds from sales of equity and continued funding from the Chief Scientist at current levels, will be sufficient to fund the Company's current operations for the foreseeable future. There can, however, be no assurance that product sales will occur as anticipated, that scheduled payments will be made by third parties, that current agreements will not be canceled, that the Chief Scientist will continue to provide funding at current levels, or that unanticipated events requiring the expenditure of funds will not occur. The satisfaction of the Company's future cash requirements will depend in large part on the status of commercialization of the Company's products, the Company's ability to enter into additional research and development and licensing arrangements, and the Company's ability to obtain additional equity investments, if necessary. There can be no assurance that the Company will be able to obtain additional funds or, if such funds are available, that such funding will be on favorable terms. NEW ACCOUNTING STANDARDS Historically, the Company has immediately recognized as contract fees all nonrefundable fees received in connection with license and distribution agreements. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB 101"), which provides guidance related to revenue recognition issues. The effective date for SAB 101, which was originally scheduled for the first quarter of 2000 and then postponed to the second quarter of 2000, has recently been postponed to the fourth quarter of 2000. If SAB 101 becomes effective as currently proposed, the Company expects that it will be required to defer non-refundable license fees recorded in prior years and recognize the related revenue over future periods. As a result, the Company expects to report a change in accounting policy with respect to revenue recognition in connection with the implementation of SAB 101 during the fourth quarter of 2000. The change in accounting policy will be reflected as of January 1, 2000 to give effect to the cumulative impact from all prior periods. Further, the quarter of the year 2000 will be restated to give effect to the new accounting policy's impact on the current year. The Company is currently evaluating what impact the adoption of SAB 101 will have on its financial condition and results of operations, and there can be no assurance that such impact will not be material. 15 PART II. OTHER INFORMATION Item 5. OTHER INFORMATION BTG is currently in a dispute with Serono Laboratories, Inc. ("Serono") relating to a 1998 co-promotion agreement with respect to Serono's recombinant human growth hormone product, Saizen7. Serono is contesting BTG's termination of that agreement in 1999 and asserting that a non-compete provision, which BTG maintains will expire in mid-2000 if it is applicable at all, should continue until April 30, 2002. In March 2000, BTG filed a lawsuit in New Jersey to confirm BTG's position on these issues. Serono has commenced an action against BTG in Massachusetts to enforce the agreement. The New Jersey court denied Serono's motion to dismiss and enjoined Serono from pursuing its action in Massachusetts. The New Jersey court also denied BTG's motion for summary judgment. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS: 10.1 Intention letter for granting credit, dated March 22, 2000, between Bank Hapoalim B.M. and Bio-Technology General (Israel) Ltd. 10.2 Unlimited guaranty of Bio-Technology General Corp. in favor of Bank Hapoalim B.M. 27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K: None 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BIO-TECHNOLOGY GENERAL CORP. (Registrant) By: /s/ Sim Fass --------------------------------------- Sim Fass Chairman and Chief Executive Officer, Principal Executive Officer /s/ Yehuda Sternlicht --------------------------------------- Vice President-Finance and Chief Financial Officer, Principal Financial and Accounting Officer Dated: August 10, 2000 17 EX-10.1 2 ex-10_1.txt EX-10.1 EXHIBIT 10.1 22nd March, 2000 Bank Hapoalim B.M. Head Office 45 Rothschild Boulevard Tel-Aviv To: BIO - TECHNOLOGY GENERAL ( ISRAEL ) LTD.. RE: INTENTION LETTER FOR GRANTING CREDIT As per your request we ,Bank Hapoalim B.M. hereby confirm that we will provide you with a credit line up to the sum of $ 20,000,000 ( Twenty Million United States Dollars ) ( hereinafter :" the Credit") subject to the terms and conditions as stated hereinbelow: 1. THE CREDIT a) DRAWDOWN PERIOD - from March 1 2000 until December 31, 2000. b) DURATION - for long term credit - 5 ( five) years from each drawdown date. for short term credit - 12 (twelve ) months from each drawdown date. c) INTEREST - for long term credit - LIBOR plus 1% p.a. for short term credit - LIBOR plus 0.5% p.a. d) PREPAYMENT - You may on every interest payment date of long term loan prepay such loan without any premium or penalty upon giving at least 14 days prior written notice. e) COMMITMENT FEE - 0.125% p.a. of the Credit, to be paid on the beginning of the Drawdown Period. 2. CONDITIONS a) You will create in our favour a first ranking floating charge over all your assets in form and substance satisfactory to us. Said charge will rank pari passu with the floating charge you have or will create in favour of Bank Leumi Le-Israel B.M.. b) You will furnish us with a guarantee signed by Bio - Technology General Corporation in form and substance satisfactory to us to secure the repayment of the Credit. c) You will sign and execute all credit documents and other documents concerning the Credit which we customarily require and which will be in form and substance satisfactory to us in all aspects. d) The Credit will be granted if there is no legal ( or any other ) impediment thereto. e) We would appreciate your acceptance of the above no later than April 15, 2000. If we do not receive your acceptance by the said date , this letter will be null and void. Very truly Yours, BANK HAPOALIM B.M. /s/ R. Simha G.Moshe We hereby agree to the conditions set out in this letter. /S/ - --------------------------------------------------- Bio - Technology General ( Israel) Ltd. EX-10.2 3 ex-10_2.txt EX-10.2 EXHIBIT 10.2 UNLIMITED GUARANTY In consideration of financial accommodations given or to be given or continued to Bio-Technology General (Israel) Ltd., herein called "Borrower" by BANK HAPOALIM B.M., having branch offices outside the United States, herein called "Bank", the undersigned irrevocably and unconditionally guarantee to the Bank, payment when due, whether by acceleration or otherwise, of any and all liabilities of the Borrower to the Bank, to any principal amount ,UNLIMITED IN AMOUNT at any one time outstanding, together with all interest thereon and all attorney's fees as customarily incurred by the Bank in such circumstances, costs and expenses of collection incurred by the Bank in enforcing any of such liabilities and/or the terms hereof. The term "liabilities of the Borrower" shall include all liabilities, direct or contingent, joint, several or independent, of the Borrower now or hereafter existing, due or to become due to the Bank. The undersigned waive notice of acceptance of this guaranty and notice of any liability to which it may apply, and waive presentment, demand of payment, protest, notice of dishonour or non-payment of any such liabilities, suit or taking other action by the Bank against, and any other notice to, any part liable thereon (including the undersigned). The Bank may at any time and from time to time without the consent of, or notice (except as shall be required by applicable statute and cannot be waived) to, the undersigned, without incurring responsibility to the undersigned, without impairing or releasing the obligations of the undersigned hereunder, upon or without any terms or conditions and in whole or in part: 1. change the manner, place of terms of payment, and/or change or extend the time of payment of, renew or alter, any liability of the Borrower, any security therefor, or any liability incurred directly or indirectly in respect thereto and the guaranty herein made shall apply to the liabilities of the Borrower as so changed, extended, renewed or altered; 2. sell, exchange, release, surrender, realise upon or otherwise deal with in any manner and in any order any property by whosoever at any time pledged or mortgaged to secure or howsoever securing, the liabilities hereby guaranteed or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against; 3. exercise or refrain from exercising any rights against the Borrower or others (including the undersigned) or otherwise act or refrain from acting; 4. settle or compromise any liability hereby guaranteed, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, 5. apply any sums by whomsoever paid or howsoever realised to any liability or liabilities of the Borrower to the Bank regardless of what liability or liabilities of the Borrower remain unpaid. 6. If any of the liabilities of the Borrower are payable in a currency other than U.S. currency, then any payment by the undersigned shall be applied to the liabilities of the Borrower at the then applicable exchange rate - that is, at the price in U.S. currency at which the Bank in accordance with regular banking procedures shall be able to purchase the currency of such liabilities in the regular interbank money market - at the place such liabilities shall be payable and at the time such payment shall be made. The undersigned shall continue to be liable for any deficiency until all amounts due pursuant to this guaranty shall be paid in full. No invalidity, irregularity or unenforceability of all or any part of the liabilities hereby guaranteed or of any security therefor shall affect, impair or be a defence to this guaranty and this guaranty is a primary obligation of the undersigned. This guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon., This guaranty shall continue until written notice of revocation signed by the undersigned or upon repayment in full of the Liabilities of the Borrower to the Bank., . No revocation or termination hereof shall affect in any manner rights arising under this guaranty with respect to (a) liabilities which shall have been created, contracted, assumed or incurred prior to receipt by the Bank of written notice of such revocation or termination or (b) liabilities which shall have been created, contracted, assumed or incurred after receipt of such written notice pursuant to any contract entered into by the Bank prior to receipt of such notice; and the sole effect of revocation or termination hereof shall be to exclude from this guaranty liabilities thereafter arising which are unconnected with liabilities therefore arising or transactions therefore entered into. All notices provided to be given to the Bank herein shall be sent by registered or certified mail, return receipt requested. Any and all rights and claims of the undersigned against the Borrower of any of its property, arising by reason of any payment by the undersigned to the Bank pursuant to the provisions of this guaranty, shall be subordinate and subject in right of payment to the prior payment in full of all liabilities of the Borrower to the Bank. All property of the undersigned shall be held by the Bank subject to a lien and a security interest in favor of the Bank, as security for any and all liabilities of the undersigned to the Bank. The term "property of the undersigned" shall include all property of every description, now or hereafter in the possession or custody of the Bank for any purpose, including safekeeping, collection or pledge, for account of the undersigned, or as to which the undersigned may have any right or power. the balance of every account of the undersigned with, and each claim of the undersigned against, the Bank existing from time to time, shall be subject to a lien and subject to be set off against any and all liabilities of the undersigned to the Bank, and the Bank may at any time or from time to time at its option and without notice appropriate and apply toward the payment of any such liabilities the balance of each such account of the undersigned with, and each such claim of the undersigned against, the Bank Upon the happening of any of the following events: the insolvency (however evidenced) of the Borrower and\or the undersigned an material adverse change in the financial condition of the Borrower according to the Bank's discretion and\or the undersigned, or suspension of business of the Borrower and\or of the undersigned, or the issuance of any warrant, process or order of attachment, garnishment or other lien and/or the filing of a lien as a result thereof against any of the property of the Borrower and\or the undersigned which is not withdrawn or set aside within forty five (45) days, or the making by the Borrower and\or the undersigned of an assignment for the benefit of creditors, or a trustee or receiver being appointed for the Borrower and\or the undersigned or for any property of any of them, or any proceeding being commenced by or against the Borrower and\or the undersigned which is not withdrawn or set aside within forty five (45) days under any bankruptcy, reorganisation, arrangement of debts, insolvency, readjustment of debt, receivership, liquidation or disolution law or statute, or it appears that any representation in any financial or other statement of the Borrower and\or the undersigned, delivered to the Bank by or on behalf of the Borrower or the undersigned is untrue or incomplete, or if the Bank ,according to his reasonablr discretion, deems itself insecure - then and in any such event, and at any time thereafter, the Bank may, , make the liabilities of the Borrower to the Bank, whether or not then due, immediately due and payable hereunder as to the undersigned, and the Bank shall be entitled to enforce the obligations of the undersigned hereunder. If claim is ever made upon the Bank for repayment or recovery of any amount or amounts received by the Bank in payment or on account of any of the liabilities of the Borrower and the Bank repays all or part of said amount by reason of (a) any judgement, decree or order of any court or administrative body having jurisdiction over the Bank or any of its property, or (b) any settlement or compromise of any such claim effected by the Bank with any such claimant (including the Borrower), then and in such event the undersigned agree that any such judgement, decree, order, settlement or compromise shall be binding upon the undersigned, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing any liability of the Borrower, and the undersigned shall be and remain liable to the Bank hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Bank. Any acknowledgement or new promise, whether by payment of principal or interest or otherwise and whether by the Borrower or others (including the undersigned), with respect to any of the liabilities of the Borrower shall, if the statute of limitations in favor of the undersigned against the Bank shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations. No delay on the part of the Bank in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof. No waiver of any of its rights hereunder, and no modification or amendment of this guaranty, shall be deemed to be made by the Bank unless the same shall be in writing, duly signed on behalf of the Bank, and each such waiver, if any, shall apply only with respect to the specific issue involved, and shall in no way impair the rights of the Bank or the obligations of the undersigned to the Bank in any other respect at any other time. The undersigned shall pay the unpaid accounts of the obligations of the Borrower in U.S. currency and at the same places where such liabilities are payable by their terms. The term "Bank" includes any agent of the Bank acting for it. This Guaranty and the rights and obligations of the Bank and of the undersigned hereunder shall be governed and construed in accordance with the internal laws of the State of New York without giving effect to conflict of law principles. The undersigned submit to the jurisdiction of the federal and state courts in the State of New York with respect to any dispute arising hereunder or relating to any of the liabilities of the Borrower. Service of process may be made on the undersigned by personal delivery at, or by mail addressed to, any address to which the Bank may address notices to the undersigned as set forth below. Any judicial proceeding shall take place in New York County without a jury, which is hereby waived. The undersigned also waive the right to assert any counterclaim or setoff in any litigation brought to enforce the Bank's rights and remedies hereunder. In connection with any litigation, the undersigned irrevocable waive any sovereign immunity that they may have or hereafter acquire, including but not limited to immunity from the jurisdiction of any court, from any legal process, from attachment prior to judgement, from attachment in aid of execution, from execution or otherwise. Any notice in connection with this Guaranty shall be in writing and may be delivered personally or by cable, telex, telecopy or other electronic means of communication, or by certified mail, return receipt requested, addressed (a) to the undersigned as set forth below and (b) to the Bank at Bank Hapoalim B.M. Any such notice or other communication may also be addressed to such other address(es) as may be designated in writing afterwards. All such notices or other communication shall be deemed given when delivered personally or electronically or when mailed, except notice of change of address, which shall be deemed to have been given when received. DATE: ______________________ PRINT NAME OF GUARANTOR: Bio Technology General Corporation PRINT ADDRESS: ----------------------------------------------- TELEX, TELECOPY OR SIMILAR NUMBER: --------------------------- (SIGNATURE) BY: /s/ ---------------------------------------------- PRINT NAME AND TITLE: ---------------------------------------- EX-27 4 ex-27.txt EX-27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROMTHE CONSOLIDATED BALANCCE SHEET AND THE CONSOLIDATED STATEMENT OF OPERATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-2000 JUN-30-2000 16,594 85,196 35,175 0 9,882 152,234 43,210 20,968 182,640 22,254 0 0 0 544 155,361 182,640 26,589 42,030 4,247 31,396 0 0 47 10,587 3,639 6,948 0 0 0 6,948 .13 .12
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