-----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, Q4fLG3+VWHjbLKWcdNj2n/b3XL1c9l7tCijZ6Aqtj5o6lTO76FaYiqBaBB7zvWUC wSh3Eid+NifWSv9VKTczbQ== 0000950146-97-000177.txt : 19970222 0000950146-97-000177.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950146-97-000177 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970213 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPLIGEN CORP CENTRAL INDEX KEY: 0000730272 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042729386 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14656 FILM NUMBER: 97529768 BUSINESS ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 BUSINESS PHONE: 6174499560 MAIL ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 10-Q 1 REPLIGEN 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1996 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 0-14656 REPLIGEN CORPORATION Delaware 04-2729386 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 117 Fourth Avenue Needham, Massachusetts 02194 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617)-449-9560 ------------------------------------------------------------------ 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 February 10, 1997. Common Stock, par value $.01 per share 15,903,211 - -------------------------------------- ---------------- Class Number of Shares REPLIGEN CORPORATION INDEX PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Condensed Consolidated Balance Sheets as of December 31, 1996 and March 31, 1996 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 1996 and March 31, 1996 4 Condensed Consolidated Statement of Cash Flows for the Nine Months Ended December 31, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities 11 Item 3. Defaults Upon Senior Securities None Item 4. Submissions of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K 11 (a) Exhibits 10.1 Form of Stock Exchange Agreement 10.2 Form of Warrant Exchange Agreement 27.1 Financial Data Schedule (b) Reports on Form 8-K None Signature 12 Exhibit Index 13 Exhibits 14 2 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS REPLIGEN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, March 31, 1996 1996 ASSETS ------------ --------- Current assets: Cash and cash equivalents $ 3,317,172 $ 6,944,140 Marketable securities 140,411 278,115 Accounts receivable 663,974 421,254 Amounts due from affiliates -- 42,284 Inventories 444,440 701,224 Prepaid expenses and other current assets 153,367 188,554 ----------- ----------- Total current assets 4,719,364 8,575,571 Property, plant and equipment, at cost: Equipment 701,146 688,091 Furniture and fixtures 25,966 20,422 Leasehold improvements 350,421 2,000 ----------- ----------- 1,077,533 710,513 Less: accumulated depreciation and amortization 301,747 176,946 ----------- ----------- 775,786 533,567 Restricted cash 104,466 -- Other assets, net 115,489 121,389 ----------- ----------- $ 5,715,105 $ 9,230,527 =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $253,875 $ 546,129 Accrued expenses 332,826 3,720,881 Unearned income 233,314 154,998 ----------- ----------- Total current liabilities 820,015 4,422,008 Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value -- authorized -- 5,000,000 shares -- outstanding -- none -- -- Common stock, $.01 par value -- authorized -- 30,000,000 shares-- outstanding -- 15,903,211 and 15,602,542 shares at December 31, 1996 and March 31, 1996, respectively 159,032 156,025 Additional paid-in capital 128,111,286 127,694,145 Accumulated deficit (123,375,228) (123,041,651) ----------- ----------- Total stockholders' equity 4,895,090 4,808,519 ----------- ----------- $ 5,715,105 $ 9,230,527 =========== ============ See accompanying notes to consolidated financial statements. 3 REPLIGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended December 31, Nine Months Ended December 31, 1996 1995 1996 1995 ---- ---- ---- ---- Revenues: Research and development $ 440,180 $ 1,674,850 $ 890,641 $ 7,534,479 Product 503,049 169,289 1,123,827 1,543,026 Investment income 98,744 161,394 206,543 624,111 Other 24,593 98,833 667,180 258,184 --------- --------- --------- --------- 1,066,566 2,104,366 2,888,191 9,959,800 --------- --------- --------- --------- Costs and expenses: Research and development 240,139 2,863,923 934,599 10,194,582 Selling, general and administrative 353,775 1,426,515 1,540,137 4,469,977 Cost of goods sold 211,538 113,828 363,187 1,103,505 Interest -- 2,125 -- 66,601 Charge for purchased research & development 365,285 -- 365,285 -- --------- --------- --------- --------- 1,170,737 4,406,391 3,203,208 15,834,665 Net loss $(104,171) $(2,302,025) $ (315,017) $(5,874,865) ========= ========= ========= ========= Net loss per common share $ (0.01) $ (0.15) $ (0.02) $ (0.38) ========= ========= ========= ========= Weighted average common shares outstanding 15,605,846 15,358,938 15,603,639 15,358,555 ========= ========= ========= =========
See accompanying notes to consolidated financial statements. 4 REPLIGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended December 31, ------------------------------ 1996 1995 ------------ ------------ Cash flows from operating activities: Net loss $ (315,017) $ (5,874,865) Adjustments to reconcile net loss to net cash used in operating activities - Depreciation and amortization 128,709 1,126,356 Compensation charge from stock options 32,395 -- Equity in net loss of an affiliate -- 227,636 Charge for purchased research & development 365,285 -- Net proceeds from sales of property, plant & equipment -- 133,389 Changes in assets and liabilities - Accounts receivable (242,720) 1,436,993 Amounts due from affiliates 42,284 960,435 Inventories 256,784 (9,149) Prepaid expenses and other current assets 35,187 187,973 Accounts payable (292,254) (223,829) Accrued expenses (3,388,055) (2,720,615) Unearned income 78,316 (203,000) ----------- ----------- Net cash used in operating activities (3,299,086) (4,958,676) ----------- ----------- Cash flows from investing activities: Decrease in marketable securities 137,704 116,488 Purchases of property, plant and equipment, net (367,020) (687,581) Decrease in other assets 5,900 -- (Increase) decrease in restricted cash (104,466) 273 ----------- ----------- Net cash used in investing activities (327,882) (570,820) ----------- ----------- Cash flows from financing activities: Proceeds from sales of common stock -- 418,726 Proceeds from note receivable due from affiliate -- 4,620,000 Payment of term loan to bank -- (4,620,000) ----------- ----------- Net cash provided by financing activities -- 418,726 ----------- ----------- Net decrease in cash and cash equivalents (3,626,968) (5,110,770) Cash and cash equivalents, beginning of period 6,944,140 13,821,387 ----------- ----------- Cash and cash equivalents, end of period $ 3,317,172 $ 8,710,617 =========== =========== Supplemental disclosure of cash flow information: Cash paid for interest $ -- $ 280,042 =========== =========== Supplemental disclosure of non-cash financing activities: Restricted cash released to lessor of certain equipment $ -- $ 1,000,000 =========== ===========
See accompanying notes to consolidated financial statements. 5 REPLIGEN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The condensed consolidated financial statements included herein have been prepared by Repligen Corporation (the "Company" or "Repligen"), pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and footnote disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Form 10-K for the year ending March 31, 1996. In the opinion of management, the accompanying unaudited financial statements include all adjustments consisting of only normal, recurring adjustments necessary to present fairly, the consolidated financial position, results of operations and cash flows. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Net Loss Per Common Share Net loss per common share has been computed by dividing net loss by the weighted average number of shares outstanding during the period. Common stock equivalents have not been included as the effect would be antidilutive and as the company anticipates a loss for fiscal 1997 no common stock equivalents are used for the net income per share calculation. Fully diluted net loss per common share has not been presented as it is not significantly different. 3. Cash Equivalents and Marketable Securities The Company considers all highly liquid investments with a maturity of three months or less at the time of acquisition to be cash equivalents. Included in cash equivalents at December 31, 1996 are $589,000 of money market funds and $2,588,000 of commercial paper. Investments with a maturity period of greater than three months are classified as marketable securities and consist of approximately $140,000 of marketable securities and approximately $45,000 of collateralized mortgage obligations at December 31, 1996. These collarateralized mortgage obligations are reported at amortized cost, which approximates fair market value at December 31, 1996. 4. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: December 31, March 31, 1996 1996 ----------- -------- Raw materials and work-in-process $141,662 $ 1,955 Finished goods 302,778 699,269 -------- -------- $444,440 $701,224 ======== ======== 6 Work in process and finished goods inventories consist of material, labor and manufacturing overhead. 5. Restructuring of Operations During the fiscal year ended March 31, 1996, the Company completed a major downsizing and consolidation of its operations in an effort to stabilize its financial condition and preserve its cash resources. The restructuring included a substantial reduction in the Company's work force, the termination of several research programs and the closing of its Cambridge research and manufacturing facility. During the fourth quarter of fiscal 1996, the Company recorded a charge of $3,567,000 to cover severance costs and related benefits, the settlement of operating equipment lease and facility lease obligations, the write-off of certain leasehold improvements and equipment no longer being utilized, reduced in part by cash received from the sale of assets and the reversal of certain accruals no longer required. During the first quarter of fiscal 1997, ended June 30, 1996, the Company paid approximately $300,000 and $3,033,000 in settlement fees to the facility landlord and equipment lessors, respectively. The settlement fees with respect to the operating equipment lease agreements represent discounted remaining lease obligations and the purchase price of certain leased equipment from the equipment lessors. In May 1996, a substantial amount of this equipment originally on lease as well as certain surplus Company owned equipment was sold at public auction for approximately $1,314,000, net of selling expenses. In addition to the settlement payment of $300,000 made to the facility landlord, the Company was also required to set aside $250,000 of restricted cash in an escrow account. These funds are to be invested by the Company, with the landlord's prior approval, in leasehold improvements, primarily refurbishment of laboratory spaces at its Needham, Massachusetts headquarters. As of December 31, 1996, the balance in this escrow account was $104,466. 5. Charge for Purchased Research & Development In the three months ended December 31, 1996, the company acquired, in exchange for the Company's common stock, all of the outstanding preferred shares and warrants to purchase common stock of Glycan's subsidiary, ProsCure, Inc. This acquisition increases Repligen's interest in ProsCure from 63% to 90%. Proscure has licensed the rights to certain drug discovery technologies and lead compounds for application to the field of cancer from Glycan, a wholly owned subsidiary of the Company. The technology acquired will require further development by the Company. Accordingly, these costs were expensed as of the acquisition date. Expenses for the three and nine months ended December 31, 1996 include this non-recurring charge of $365,000 for purchased research and development. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statement Regarding Forward-Looking Statements Statements in this Quarterly Report on Form 10-Q under this caption, "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as oral statements that may be made by the Company or by officers, directors or employees of the Company acting on the Company's behalf, that are not historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any results expressed or implied by such forward-looking statements. Fiscal 1996 Restructuring During the 1996 fiscal year ended March 31,1996, the Company completed a major downsizing and consolidation of its operations in an effort to stabilize its financial condition and preserve its cash resources. The restructuring included a substantial reduction in the Company's work force, the termination of several research programs and the closing of its Cambridge research and manufacturing facility. The Company's research and development programs are now primarily focused on the development of new therapies for chronic and acute inflammation and immunosuppression and the development of enabling technologies for discovery of new drugs by rapid screening of combinatorial chemical libraries. The Company's strategy is to use internal resources for research and preclinical studies and to use pharmaceutical companies or third party contractors to provide manufacturing and clinical development support and for certain administrative functions. Significant expansion of the Company's research or product development efforts is dependent on increased product sales, future financing or new partnerships with pharmaceutical companies. Certain Factors That May Affect Future Results The Company's future operating results are subject to risks and uncertainties and are dependent upon many factors, including, without limitation, the Company's ability to (i) meet its working capital and future liquidity needs, (ii) successfully implement its restructuring and strategic growth strategies, (iii) understand, anticipate and respond to rapidly changing technologies and market trends, (iv) develop, manufacture and deliver high quality, technologically advanced products on a timely basis to withstand competition from competitors which may have greater financial, information gathering and marketing resources than the Company, (v) obtain and protect licensing and intellectual property rights necessary for the Company's technology and product development on terms favorable to the Company, and (vi) recruit and retain highly talented professionals in a competitive job market. Each of these factors, and others, are discussed from time to time in the filings made by the Company with the Securities and Exchange Commission. Results of Operations Revenues Total revenues for the three month periods ended December 31, 1996 and 1995 were $1,067,000 and $2,104,000, respectively, a decrease of approximately 49%. Year to date total revenues decreased approximately 71% to $2,888,000 at December 31, 1996 from $9,960,000 at December 31, 1995. 8 Research and development revenues for the three month period ended December 31, 1996 were $440,000 compared to $1,675,000 in the comparable fiscal 1996 period. The decrease in the second quarter of fiscal 1997 from the comparable fiscal 1996 period is due primarily to the loss of significant revenues related to contracts with Eli Lilly and Company ("Lilly") and Repligen Clinical Partners, L.P. (the "Partnership"). In the first nine months of fiscal 1997, the Company recorded research and development revenues totaling $891,000 consisting primarily of $662,000 from contracted research and development programs and $229,000 from licensing revenues. In the first nine months of fiscal 1996, research and development revenues were $7,534,000. Product revenues for the three months ended December 31, 1996 and 1995 were $503,000 and $169,000, respectively, and were $1,124,000 and $1,543,000 for the nine months ended December 31, 1996 and 1995, respectively. The decrease in product sales is attributable to the discontinuance by Repligen of contract manufacturing that took place during fiscal 1996, partially offset by an increase in sales of the Protein A product line. Investment income decreased in fiscal 1997 over the comparable three and nine month periods in fiscal 1996 primarily due to lower average funds available for investment. Other revenues for the three and nine month periods ended December 31, 1996 increased from the comparable fiscal 1996 periods primarily due to the one-time sale of equipment and furnishings by the Company for $207,000 and the one-time sale of non-investment securities held by the Company for approximately $300,000. Expenses During fiscal 1996, the Company substantially restructured its operations, resulting in a significant reduction in its current rate of expenditures. In May 1996, the Company relocated its headquarters operations from Cambridge, Massachusetts to approximately 13,000 square feet of subleased office and laboratory space in Needham, Massachusetts. This move has resulted in a substantial savings in rent and related facility costs. If the move had been effective as of April 1, 1996, facility related expenses during the nine months ended December 31, 1996 would have been lower by approximately $436,000. Total expenses for the three month periods ended December 31, 1996 and 1995 decreased 73% to $1,171,000 from $4,406,000 and decreased 80% to $3,203,000 from $15,835,000 for the nine months ended December 31, 1996 and 1995, respectively. The decrease in expenses reflects lower operating costs as a result of the fiscal 1996 restructuring efforts, including significantly lower headcount. Research and development expenses for the three months ended December 31, 1996 and 1995 were $240,000 and $2,864,000 and for the nine months ended December 31, 1996 and 1995 were $935,000 and $10,195,000. The decrease in expenses in fiscal 1997 from the comparable period in fiscal 1996 reflect the discontinuation of activities pursuant to the contract with Lilly and the Partnership and the Company's efforts to reduce costs. Selling, general and administrative expenses for the three month and nine month periods ended December 31, 1996 were $354,000 and $1,540,000, respectively, which reflects a decrease of $1,073,000 and $2,930,000 from the comparable 1996 periods. These decreases resulted from the reduction of administrative personnel and related expenses as part of the Company's cost reduction efforts. Cost of goods sold for the three month and nine month periods ended December 31, 1996 were $212,000 and $363,000 respectively, as compared to $114,000 and $1,104,000 for the three and nine months ended December 31, 1995. Cost of goods sold in the three month and nine month periods ended December 31, 1996 and 1995 were 42% and 32% of product revenues and were 67% and 72% in the comparable 1996 periods. The decreases in cost of sales as a percentage of revenue 9 are primarily a result of the realization of inventory that had previously been reserved for and the discontinuation of contract manufacturing activity in fiscal 1996. In the three months ended December 31, 1996, the company acquired, in exchange for the Company's common stock, all of the outstanding preferred shares of Glycan's subsidiary, ProsCure, Inc. This acquisition increases Repligen's interest in ProsCure from 63% to 90%. Proscure has licensed the rights to certain drug discovery technologies and lead compounds for application to the field of cancer from Glycan, a wholly owned subsidiary of the Company. The technology acquired will require further development by the Company. Accordingly, these costs were expensed as of the acquisition date. Expenses for the three and nine months ended December 31, 1996 include this non-recurring charge of $365,000 for purchased research and development. Capital Resources and Liquidity The Company's total cash, cash equivalents and marketable securities decreased to $3,458,000 at December 31, 1996 from $7,222,000 at March 31, 1996, a decrease of $3,764,000 or 52%. The decrease reflects net losses during the nine month period ended December 31, 1996 of approximately $315,000, the reduction of accounts payable and accrued expenses of $3,680,000 including the net payment of accrued restructuring expenses of $2,469,000, offset in part by the reduction in inventories and prepaid expenses of $292,000. Working capital decreased to $3,899,000 at December 31, 1996 from $4,154,000 at March 31, 1996. The Company has funded operations primarily with cash derived from the sales of its equity securities, research and development contracts, product sales, investment income and the sale of the Company's share of a joint venture. The Company believes it has sufficient cash equivalents and marketable securities to satisfy working capital and capital expenditure requirements for the next twelve months. Should the Company need to secure additional financing to meet its future liquidity requirements, there can be no assurances that the Company will be able to secure such financing, or that such financing, if available, will be on terms favorable to the Company. Management believes that the Company's current operations are not materially impacted by the effects of inflation. 10 PART II. OTHER INFORMATION Item 2. CHANGES IN SECURITIES On December 30, 1996 the Company issued 300,669 shares of common stock in exchange for all of the outstanding preferred shares and warrants to purchase common stock of Glycan's subsidiary, Proscure, Inc. The Company claims that the offer and sale of the shares were exempt from registration pursuant to Rule 505 of Regulation D under the Securities Act of 1933, as amended, in reliance upon the representations and warranties of the purchasers of the shares. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits EXHIBIT DESCRIPTION ------- ----------- 10.1 Form of Stock Exchange Agreement 10.2 Form of Warrant Exchange Agreement 27.1 Financial Data Schedule (b) Reports on Form 8-K No current reports on Form 8-K were filed by the Company during the quarter covered by this report. 11 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 thereunto duly authorized. REPLIGEN CORPORATION (Registrant) Date: February 10, 1997 By: /S/ Walter C. Herlihy --------------------- Chief Executive Officer Signing on behalf of the Registrant and as Principal Financial and Accounting Officer 12 REPLIGEN CORPORATION AND SUBSIDIARIES EXHIBIT INDEX EXHIBIT NO. DESCRIPTION PAGE ----------- ----------- ---- 10.1 Form of Stock Exchange Agreement 15 10.2 Form of Warrant Exchange Agreement 19 27.1 Financial Data Schedule 23 13 EXHIBIT 10.1 FORM OF STOCK EXCHANGE AGREEMENT ((Name)) ----------------------- Name of Stockholder STOCK EXCHANGE AGREEMENT Repligen Corporation 117 Fourth Avenue Needham, Massachusetts 02194 Ladies and Gentlemen: 1. Exchange. Subject to the terms and conditions hereof, the undersigned hereby irrevocably agrees to exchange (the "Exchange") an aggregate of ((PShares)) shares of ((Series)) Preferred Stock, $.01 par value (the "Preferred Shares"), of ProsCure, Inc., a Delaware corporation ("ProsCure"), for ((RShares)) shares of Common Stock, $.01 par value (the "Repligen Shares"), of Repligen Corporation, a Delaware corporation ("Repligen"), and tenders herewith the certificate or certificates representing the Preferred Shares and a completed stockpower (the "Stockpower") transferring ownership of such shares to Repligen. The Preferred Shares tendered herewith shall be deemed transferred to Repligen effective as of the Closing (as defined below) and the undersigned shall be deemed to have received the Repligen Shares as of the Closing. 2. The Closing. Subject to the terms of this Agreement, the exchange of the shares shall take place at a closing (the "Closing") to be held at the offices of Testa, Hurwitz and Thibeault, LLP at 10:00am on or before December 18, 1996 (the "Closing Date"), or at such other place and time as may be mutually agreed upon. 3. Condition to Exchange; Escrow Account. The undersigned understands and agrees that the Closing of the Exchange is conditional upon the receipt by Repligen of commitments to exchange not fewer than an aggregate of 245,000 shares of Series A Preferred Stock, $.01 par value, and Series B Preferred Stock, $.01 par value, of ProsCure from the stockholders listed on Schedule A attached hereto. The undersigned understands that the certificate or certificates representing the Preferred Shares and the Stockpower will be returned to the undersigned if all conditions precedent to Closing are not satisfied by December 18, 1996. It is understood and agreed that if all conditions precedent to Closing are satisfied, the Preferred Shares tendered herewith shall be deemed transferred to Repligen effective as of the Closing and the undersigned shall be deemed to have received the Repligen Shares as of the Closing. 4. Representations and Warranties of the Undersigned. In connection with the exchange of the Preferred Shares for the Repligen Shares, the undersigned hereby represents and warrants to Repligen as follows: (a) The undersigned has, and on the Closing Date will have, valid and unencumbered title to the Preferred Shares to be exchanged by the undersigned, free and clear of all liens, charges, restrictions, claims and encumbrances of any nature other than those imposed under any applicable federal and state securities laws. (b) The undersigned has the full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Preferred Shares to Repligen, free and clear of all liens, restrictions, claims and encumbrances of any nature other than those imposed under applicable federal and state securities laws, and upon the delivery of the Repligen Shares as payment for the Preferred Shares hereunder, Repligen will acquire valid and unencumbered title to the Preferred Shares to be transferred by the undersigned. 14 (c) The undersigned confirms that the undersigned understands and has fully considered for purposes of this investment the risks of this investment and understands that (i) this investment is suitable only for an investor who is able to bear the economic consequences of losing his, her or its entire investment, (ii) the exchange of the Preferred Shares for the Repligen Shares is a speculative investment which involves a high degree of risk, and (iii) there are substantial restrictions on the transferability of, and there will be no immediate public market for, the Repligen Shares, and accordingly, it may not be possible for the undersigned to liquidate his, her or its investment in case of emergency. (d) The undersigned has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of this speculative investment and of making an informed investment decision. The undersigned has reviewed copies of Repligen's filings with the Securities and Exchange Commission that were sent to the undersigned along with this Agreement. (e) The Repligen Shares are being acquired by the undersigned solely for the undersigned's own personal account, for investment purposes only, and not with a view to, or in connection with, any resale or distribution thereof. The undersigned has no contract, undertaking, understanding, agreement or arrangement, formal or informal, with any person to sell, transfer or pledge to any person the Repligen Shares, or any part thereof, or any interest therein or any rights thereto. The undersigned has no present plans to enter into any such contract, undertaking, agreement or arrangement. The undersigned must bear the economic risk of the investment for an indefinite period of time because the Repligen Shares have not been registered under the Securities Act and applicable state securities laws and, therefore, cannot be sold unless they are subsequently registered under the Securities Act and applicable state securities laws or unless an exemption from such registration is available. (f) This Agreement has been duly executed and delivered by the undersigned and constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. 5. Representations and Warranties of Repligen. (a) Repligen has full power and authority and has taken all required corporate and other action necessary to permit it to execute and deliver and to carry out the terms of this Agreement and all other documents or instruments required hereby. (b) The Repligen Shares have been duly authorized and when issued in accordance with the terms of this Agreement will be validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof. 6. Restrictive Legend: The undersigned consents to the placement of a restrictive legend on the certificate(s) for the Repligen Shares as required by applicable securities laws. 7. Registration Rights. Repligen hereby agrees to use its best efforts to prepare and file a registration statement on Form S-3 under the Securities Act of 1933, as amended (the "Registration Statement"), within 180 days following the Closing Date to register the Repligen Shares issued hereunder for resale in the public market. Repligen will use its best efforts to achieve and maintain the effectiveness of such Registration Statement until the earlier of (i) the third anniversary of the Closing Date or (ii) all shares originally registered under such Registration Statement shall have been sold. Repligen may from time to time amend or supplement the Registration Statement and the prospectus contained therein (the "Prospectus") to the extent necessary to comply with the Securities Act of 1933, as amended, and any applicable state securities statue or regulation. Repligen will pay all expenses incident to Repligen's performance or compliance with this Section 7, including, without limitation, all registration and filing fees, all printing expenses, all transfer agents' fees and all fees and disbursements of Repligen's counsel. 8. Transferability. The undersigned agrees that its interest hereunder are not assignable or transferable, and further agrees that the assignment and transfer of the Repligen Shares acquired pursuant hereto shall be made only in accordance with all applicable laws. 15 9. Miscellaneous. This Agreement constitutes the entire agreement between the parties relative to the subject matter of the Exchange, and supersedes all proposals or agreements, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. No provision of this Agreement shall be waived, amended, modified, superseded, canceled, terminated, renewed or extended except in a written instrument signed by both parties hereto. Any waiver shall be limited to the particular instance and for the particular purpose when and for which it is given. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way effect the validity, legality or enforceability of any other provision of this Agreement and this Agreement shall be construed and reformed by any court of competent jurisdiction to give full effect to the essential purposes of this Agreement. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the state of Delaware and the federal securities laws. All notices provided for in this Agreement shall be given in writing and shall be effective when either served by personal delivery, express overnight courier service, electronic facsimile transmission, or by first class mail, postage prepaid, addressed to the parties at their respective addresses herein set forth, or to such other address or addresses as either party may later specify by written notice to the other. This Agreement may be executed in duplicate counterparts, which, when taken together, shall constitute one instrument and each of which shall be deemed to be an original instrument. 10. Survival of Representations. The representations and warranties of the undersigned contained in Section 4 are true and accurate as of the date of this Agreement and shall be true and accurate as of the date of the Closing and the undersigned's receipt of the Repligen Shares, and such representations and warranties shall survive such delivery and acceptance. If in any respect such representations and warranties shall not be true and accurate, the undersigned shall give immediate written notice of such fact to Repligen specifying which representations and warranties are not true and accurate and the reasons therefor. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 16 IN WITNESS WHEREOF, the undersigned has hereby executed this Stock Exchange Agreement as of this ___ day of ________, 1996. - ------------------------------ -------------------------------- Signature Street Address -------------------------------- - ------------------------------ City of Town Print Name -------------------------------- State Zip Code - ------------------------------ -------------------------------- Social Security Number Telephone Number REPLIGEN CORPORATION By:_____________________________ Walter C. Herlihy President 17 EXHIBIT 10.2 FORM OF WARRANT EXCHANGE AGREEMENT ((Name)) -------- Name of Warrant holder WARRANT EXCHANGE AGREEMENT Repligen Corporation 117 Fourth Avenue Needham, Massachusetts 02194 Ladies and Gentlemen: 1. Exchange. Subject to the terms and conditions hereof, the undersigned hereby irrevocably agrees to exchange (the "Exchange") a warrant (the "Warrant") to purchase an aggregate of ((PShares)) shares of common stock, $.01 par value, of ProsCure, Inc., a Delaware corporation ("ProsCure"), for ((RShares)) shares of Common Stock, $.01 par value (the "Repligen Shares"), of Repligen Corporation, a Delaware corporation ("Repligen"), and tenders herewith the original Warrant and a completed assignment (the "Assignment") transferring ownership of such shares to Repligen. The Warrant tendered herewith shall be deemed transferred to Repligen as of the Closing (as defined below) and the undersigned shall be deemed to have received the Repligen Shares as of the Closing. 2. The Closing. Subject to the terms of this Agreement, the Exchange shall take place at a closing (the "Closing") to be held at the offices of Testa, Hurwitz and Thibeault, LLP at 10:00am on or before December 18, 1996 (the "Closing Date"), or at such other place and time as may be mutually agreed upon. 3. Condition to Exchange; Escrow Account. The undersigned understands and agrees that the Closing of the Exchange is conditional upon the receipt by Repligen of commitments to exchange not fewer than an aggregate of 245,000 shares of Series A Preferred Stock, $.01 par value, and Series B Preferred Stock, $.01 par value, of ProsCure from the stockholders listed on Schedule A attached hereto. The undersigned understands that the Warrant and the Assignment will be returned to the undersigned if all conditions precedent to Closing are not satisfied by December 18, 1996. It is understood and agreed that if all conditions precedent to the Closing of the Exchange are satisfied, the Warrant shall be deemed transferred to Repligen effective as of the Closing and the undersigned shall be deemed to have received the Repligen Shares as of the Closing. 4. Representations and Warranties of the Undersigned. In connection with the exchange of the Warrant for the Repligen Shares, the undersigned hereby represents and warrants to Repligen as follows: (a) The undersigned has, and on the Closing Date will have, valid and unencumbered title to the Warrant to be exchanged by the undersigned, free and clear of all liens, charges, restrictions, claims and encumbrances of any nature other than those imposed under any applicable federal and state securities laws. (b) The undersigned has the full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Warrant to Repligen, free and clear of all liens, restrictions, claims and encumbrances of any nature other than those imposed under applicable federal and state securities laws, and upon the delivery of the Repligen Shares as payment for the Warrant hereunder, Repligen will acquire valid and unencumbered title to the Warrant to be transferred by the undersigned. 18 (c) The undersigned confirms that the undersigned understands and has fully considered for purposes of this investment the risks of this investment and understands that (i) this investment is suitable only for an investor who is able to bear the economic consequences of losing his, her or its entire investment, (ii) the exchange of the Warrant for the Repligen Shares is a speculative investment which involves a high degree of risk, and (iii) there are substantial restrictions on the transferability of, and there will be no immediate public market for, the Repligen Shares, and accordingly, it may not be possible for the undersigned to liquidate his, her or its investment in case of emergency. (d) The undersigned has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of this speculative investment and of making an informed investment decision. The undersigned has reviewed copies of Repligen's filings with the Securities and Exchange Commission that were sent to the undersigned along with this Agreement. (e) The Repligen Shares are being acquired by the undersigned solely for the undersigned's own personal account, for investment purposes only, and not with a view to, or in connection with, any resale or distribution thereof. The undersigned has no contract, undertaking, understanding, agreement or arrangement, formal or informal, with any person to sell, transfer or pledge to any person the Repligen Shares, or any part thereof, or any interest therein or any rights thereto. The undersigned has no present plans to enter into any such contract, undertaking, agreement or arrangement. The undersigned must bear the economic risk of the investment for an indefinite period of time because the Repligen Shares have not been registered under the Securities Act and applicable state securities laws and, therefore, cannot be sold unless they are subsequently registered under the Securities Act and applicable state securities laws or unless an exemption from such registration is available. (f) This Agreement has been duly executed and delivered by the undersigned and constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. 5. Representations and Warranties of Repligen. (a) Repligen has full power and authority and has taken all required corporate and other action necessary to permit it to execute and deliver and to carry out the terms of this Agreement and all other documents or instruments required hereby. (b) The Repligen Shares have been duly authorized and when issued in accordance with the terms of this Agreement will be validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof. 6. Restrictive Legend: The undersigned consents to the placement of a restrictive legend on the certificate(s) for the Repligen Shares as required by applicable securities laws. 7. Registration Rights. Repligen hereby agrees to use its best efforts to prepare and file a registration statement on Form S-3 under the Securities Act of 1933, as amended (the "Registration Statement"), within 180 days following the Closing Date to register the Repligen Shares issued hereunder for resale in the public market. Repligen will use its best efforts to achieve and maintain the effectiveness of such Registration Statement until the earlier of (i) the third anniversary of the Closing Date or (ii) all shares originally registered under such Registration Statement shall have been sold. Repligen may from time to time amend or supplement the Registration Statement and the prospectus contained therein (the "Prospectus") to the extent necessary to comply with the Securities Act of 1933, as amended, and any applicable state securities statue or regulation. Repligen will pay all expenses incident to Repligen's performance or compliance with this Section 7, including, without limitation, all registration and filing fees, all printing expenses, all transfer agents' fees and all fees and disbursements of Repligen's counsel. 8. Transferability. The undersigned agrees that its interest hereunder are not assignable or transferable, and further agrees that the assignment and transfer of the Repligen Shares acquired pursuant hereto shall be made only in accordance with all applicable laws. 19 9. Miscellaneous. This Agreement constitutes the entire agreement between the parties relative to the subject matter of the Exchange, and supersedes all proposals or agreements, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. No provision of this Agreement shall be waived, amended, modified, superseded, canceled, terminated, renewed or extended except in a written instrument signed by both parties hereto. Any waiver shall be limited to the particular instance and for the particular purpose when and for which it is given. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way effect the validity, legality or enforceability of any other provision of this Agreement and this Agreement shall be construed and reformed by any court of competent jurisdiction to give full effect to the essential purposes of this Agreement. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the state of Delaware and the federal securities laws. All notices provided for in this Agreement shall be given in writing and shall be effective when either served by personal delivery, express overnight courier service, electronic facsimile transmission, or by first class mail, postage prepaid, addressed to the parties at their respective addresses herein set forth, or to such other address or addresses as either party may later specify by written notice to the other. This Agreement may be executed in duplicate counterparts, which, when taken together, shall constitute one instrument and each of which shall be deemed to be an original instrument. 10. Survival of Representations. The representations and warranties of the undersigned contained in Section 4 are true and accurate as of the date of this Agreement and shall be true and accurate as of the date of the Closing and the undersigned's receipt of the Repligen Shares, and such representations and warranties shall survive such delivery and acceptance. If in any respect such representations and warranties shall not be true and accurate, the undersigned shall give immediate written notice of such fact to Repligen specifying which representations and warranties are not true and accurate and the reasons therefor. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 20 IN WITNESS WHEREOF, the undersigned has hereby executed this Warrant Exchange Agreement as of this ___ day of ________, 1996. - ------------------------------ ------------------------------- Signature Street Address ------------------------------- - ------------------------------ City of Town Print Name ------------------------------- State Zip Code - ------------------------------ ------------------------------- Social Security Number Telephone Number REPLIGEN CORPORATION By:___________________________ Walter C. Herlihy President 21 EX-27.1 2 FDS
5 1,000 9-MOS MAR-31-1997 DEC-31-1996 3,317 140 664 0 444 4,719 1,078 302 5,715 820 0 0 0 0 4,895 5,715 1,124 2,888 363 3,203 0 0 0 0 0 0 0 0 0 (315) (.02) (.02)
-----END PRIVACY-ENHANCED MESSAGE-----