-----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, FdC6qLP+eHuyV9qzMRxTcNvGtSQ9FE4X0BJfQv0sWcVMydVpRezX8HW77yCU4IBP ZKA7g1CWEHZ/4C9dg3o0Zg== 0001047469-99-031720.txt : 19990816 0001047469-99-031720.hdr.sgml : 19990816 ACCESSION NUMBER: 0001047469-99-031720 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 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: SEC FILE NUMBER: 000-14656 FILM NUMBER: 99687362 BUSINESS ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 BUSINESS PHONE: 7814499560 MAIL ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 10-Q 1 FORM 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 June 30, 1999 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 (exact name of registrant as specified in its charter) Delaware 04-2729386 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 117 Fourth Avenue Needham, Massachusetts 02494 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 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 July 31, 1999. Common Stock, par value $.01 per share 21,868,085 -------------------------------------- ---------------- Class Number of Shares 2 REPLIGEN CORPORATION INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of June 30, 1999 (Unaudited) and March 31, 1999 (Audited) 4 Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended June 30, 1999 and 1998 5 Condensed Consolidated Statement of Cash Flows (Unaudited) for the Three Months Ended June 30, 1999 and 1998 6 Notes to Condensed Consolidated Financial Statements (Unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 2. Changes in Securities 14 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 15 Signature 17 Exhibit Index 18 Exhibits 19
3 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS REPLIGEN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1999 March 31, 1999 ------------- ------------- ASSETS (Unaudited) (Audited) Current assets: Cash and cash equivalents $ 11,817,472 $ 3,250,751 Accounts receivable 404,370 429,720 Inventories 581,762 630,329 Prepaid expenses and other current assets 267,704 181,617 ------------- ------------- Total current assets 13,071,308 4,492,417 Property and equipment, at cost: Equipment 969,471 944,644 Furniture and fixtures 139,385 101,376 Leasehold improvements 467,368 460,319 ------------- ------------- 1,576,224 1,506,339 Less: accumulated depreciation and amortization 936,053 862,934 ------------- ------------- 640,171 643,405 Other assets, net 81,411 88,472 ------------- ------------- $ 13,792,890 $ 5,224,294 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 352,800 $ 268,708 Accrued expenses 338,244 313,926 Unearned income 27,384 49,969 ------------- ------------- Total current liabilities 718,428 632,603 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 - 21,868,085 shares at June 30, 1999 and 18,264,285 shares at March 31, 1999 218,680 182,642 Additional paid-in capital 140,141,927 131,272,607 Accumulated deficit (127,286,145) (126,863,558) ------------- ------------- Total stockholders' equity 13,074,462 4,591,691 ------------- ------------- $ 13,792,890 $ 5,224,294 ============= =============
See accompanying notes to condensed consolidated financial statements. 4 REPLIGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended ------------------ June 30,1999 June 30, 1998 ------------ ------------ Revenues: Research and development $ 378,502 $ 268,406 Product 232,470 229,138 Investment income 46,538 61,691 Other 30,658 33,188 ------------ ------------ 688,168 592,423 ------------ ------------ Costs and expenses: Research and development 488,203 466,069 Selling, general and administrative 426,169 356,932 Cost of products sold 196,383 112,282 ------------ ------------ 1,110,755 935,283 ------------ ------------ Net loss $ (422,587) $ (342,860) ============ ============ Basic and diluted net loss per share $ (0.02) $ (0.02) ============ ============ Basic and diluted weighted average common shares outstanding 18,744,863 18,001,785 ============ ============
See accompanying notes to condensed consolidated financial statements. 5 REPLIGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended June 30, ------------------------------ 1999 1998 ------------ ------------ Cash flows from operating activities: Net loss $ (422,587) $ (342,860) Adjustments to reconcile net loss to net cash used in operating activities - Depreciation and amortization 73,119 64,213 Changes in assets and liabilities - Accounts receivable 25,349 (193,724) Inventories 48,567 (37,111) Prepaid expenses and other current assets (86,087) 44,512 Accounts payable 84,094 (1,208) Accrued expenses 24,318 116,491 Unearned income (22,585) (33,332) ------------ ------------ Net cash used in operating activities (275,812) (383,019) ------------ ------------ Cash flows from investing activities: Purchases of property and equipment, at cost (69,886) (55,953) Changes in other assets 7,061 -- ------------ ------------ Net cash used in investing activities (62,825) (55,953) ------------ ------------ Cash flows from financing activities: Net proceeds from the issuance of common stock and warrants, net of issuance costs 8,905,358 -- ------------ ------------ Net cash provided by financing activities 8,905,358 -- ------------ ------------ Net increase (decrease) in cash and cash equivalents 8,566,721 (438,971) Cash and cash equivalents, beginning of period 3,250,751 4,725,544 ------------ ------------ Cash and cash equivalents, end of period $ 11,817,472 $ 4,286,573 ============ ============
See accompanying notes to condensed consolidated financial statements. 6 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 ended March 31, 1999. 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 Share The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share, effective December 15, 1998. SFAS No. 128 establishes standards for computing and presenting earnings per share and applies to entities with publicly held common stock or potential common stock. The Company has applied the provisions of SFAS No. 128, retroactively to all periods presented. Basic and diluted net loss per share represents net loss divided by the weighted average number of common shares outstanding during the period. The dilutive effect of the potential common shares consisting of outstanding stock options and warrants is determined using the treasury stock method in accordance with SFAS No. 128. Diluted weighted average shares outstanding at June 30, 1999 and 1998 excluded the potential common shares from warrants and stock options because to do so would be antidilutive for the periods presented. At June 30, 1999, there are 1,335,491 options outstanding with a weighted average exercise price of $1.82 and 3,207,050 warrants outstanding with a weighted average exercise price of $3.19. 3. Cash and Cash Equivalents 7 The Company considers highly liquid investments purchased with original maturities at the date of acquisition of three months or less to be cash equivalents. Cash equivalents consist of the following at June 30, 1999 and March 31, 1999: Three Months Ended June 30,1999 March 31, 1999 ------------ -------------- U.S. Government and Agency securities ...... $ 5,585,426 $ 1,197,624 Commercial paper ........................... 5,185,168 1,136,119 Money markets .............................. 969,188 802,755 Cash ....................................... 77,690 114,253 ----------- ----------- Total cash and cash equivalents ......... $11,817,472 $ 3,250,751 =========== =========== 4. Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: June 30, 1999 March 31,1999 (Unaudited) Raw materials and work-in-process $420,726 $412,480 Finished goods 161,036 217,849 -------- -------- Total $581,762 $630,329 ======== ======== Work in process and finished goods inventories consist of material, labor, outside processing costs and manufacturing overhead. 5. Comprehensive Income Effective January 1, 1998, the Company adopted SFAS No. 130 Reporting Comprehensive Income, effective January 1, 1998. SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components in financial statements. Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The comprehensive net loss is the same as net loss for all periods presented. 6. Disclosures about Segments of an Enterprise and Significant Customers The Company has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, in the fiscal year ended March 31, 1999. SFAS No. 131 establishes 8 standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS No. 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions now to allocate resources and assess performance. To date, the Company has viewed its operations and manages its business as principally one operating segment. As a result, the financial information disclosed herein, represents all of the material financial information related to the Company's principal operating segment. The following table represents the Company's revenue by country: Three Months Ended June 30, ----------------------------------------- 1999 1998 1997 ---- ---- ---- United States 56% 57% 85% Sweden 25% 4% 1% United Kingdom 14% 12% 8% Other 5% 27% 6% Total 100% 100% 100% During the three months ended June 30,1999, there were two significant customers which accounted for approximately 25% and 14% of the Company's revenues or $172,000 and $96,000. The related accounts receivable for these two customers at June 30, 1999 was fully paid and $96,000, respectively. 7. Sale of Securities Pursuant to two stock purchase agreements dated as of April 30, 1999 and May 14, 1999, respectively, by and among Repligen and the respective parties thereto, Repligen issued to the parties thereto an aggregate of 3,600,000 shares of Common Stock of Repligen for an aggregate purchase price of $9 million. Based on the representations of the investing parties and a reasonable belief of Repligen that all such parties were "accredited" (as such term is defined in Rule 501 of the Securities Act of 1933) and that the parties were acquiring the shares of Common Stock of Repligen for investment and not with a view to the distribution thereof, Repligen consummated a private placement of the 3,600,000 shares of Common Stock of Repligen pursuant to Regulation D, Rule 506 of the Securities Act of 1933. Repligen closed the private placement transaction on June 23, 1999. There were no underwriters involved in such private placement transaction. Repligen will use the proceeds from the private placement transaction for working capital and other general corporate purposes. Repligen filed a registration statement with the Securities and Exchange Commission on Form S-3 on June 16, 1999 for the resale of the 3,600,000 shares of Common Stock of Repligen sold to the parties in the private placement transaction. The 9 Securities and Exchange Commission declared such resale registration statement effective on June 23, 1999. 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 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 Section 21E of the Securities Exchange Act of 1934. 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. 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 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, (vi) recruit and retain highly talented professionals in a competitive job market, (vii) realize future revenues, (viii) maintain a timeline for clinical activity, (ix) obtain successful results of pending or future clinical trials, (x) continue to establish collaborative arrangements with third parties, and (xi) compete against the biotechnology and pharmaceutical industries. Further information on potential factors that could affect the Company's financial results are included in filings made by the Company from time to time with the Securities and Exchange Commission included in the section entitled "Risk Factors" contained in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1999 (File No.000-14656). Overview Repligen develops new drugs for the treatment of neurological disease, organ transplantation and cancer. To expand our drug development program, on March 9, 1999, Repligen acquired the exclusive rights to patent applications for the use of secretin in the treatment of autism. Autism is a developmental disorder characterized by poor communication and social skills, negative behavior, irregular sleep patterns and diminished ability to learn. Secretin is a hormone produced in the small intestine which regulates the function of the pancreas as part of the process of digestion. A form of secretin derived from pigs is approved by the United States Food and Drug Administration for use in diagnosing problems with pancreatic function. Recent anecdotal reports indicate that secretin may have beneficial effects in treating 10 autism, including improvements in sleep, digestive function, speech and social behavior. Following media reports of the potential benefits of secretin, more than 2,000 autistic children have been treated with the pig-derived hormone. We intend to manufacture a human, synthetic form of secretin and evaluate it in FDA approved clinical trials in order to confirm the benefits of secretin in treating autism and to determine the optimal dosing schedule. Currently there are no drugs approved by the FDA for the treatment of autism. Repligen also is developing a product named "CTLA4-Ig," which has been shown to suppress unwanted immune responses in animal models of organ transplants and autoimmune diseases, such as lupus or multiple sclerosis, in which the immune system mistakenly attacks the body. Our product candidate is a derivative of a natural protein whose role is to turn-off an immune response. In animal models of organ transplantation and autoimmune diseases, CTLA4-Ig has been shown to block the rejection of a transplanted organ or the effects of the autoimmune disease. Initial clinical testing of CTLA4-Ig has been carried out in patients receiving a bone marrow transplant, which is a potential cure for several diseases of the immune system, including leukemia, myeloma, lymphoma and sickle cell anemia. Despite the clinical success of bone marrow transplants, a significant number of patients experience a severe and potentially life-threatening complication known as Graft Versus Host Disease, in which the newly transplanted immune system attacks the host (i.e., the patient). In December 1998, investigators from the Dana-Farber Cancer Institute, a research hospital in Boston, reported that treatment of bone marrow from a family member who was taking CTLA4-Ig substantially reduced Graph Versus Host Disease in twelve transplant patients. Repligen intends to further evaluate CTLA4-Ig in bone marrow transplants for leukemia. Repligen develops, manufactures and markets products for the production of therapeutic antibodies. We currently market a line of products for the purification of antibodies based on a naturally occurring protein, Protein A, which can specifically bind to antibodies. In December 1998, Repligen entered into a ten year relationship to supply recombinant Protein A to Amersham Pharmacia Biotech, a leading supplier to the biopharmaceutical market. Results of Operations Revenues Total revenues for the three month period ended June 30, 1999 and 1998 were approximately $688,000 and $592,000, respectively, an increase of approximately $96,000 or 16%. This increase was largely attributable to increased research and development revenue. Research and development revenues for the three month period ended June 30, 1999 and 1998 were approximately $379,000 and $268,000, respectively, an increase of approximately $111,000 or 41%. This increase was largely attributable to a licensing payment received during the three months ended June 30, 1999 offset by decreased revenues associated with research collaborations on its drug discovery programs during the 11 three months ended June 30, 1999. Product revenues for the three month period ended June 30, 1999 and 1998 were approximately $232,000 and $229,000, respectively, an increase of $3,000 or 1%. This increase is attributable to increased sales of Protein A products offset by decreased sales of reagent products. Investment income for the three month period ended June 30, 1999 and 1998 was approximately $47,000 and $62,000, respectively, a decrease of approximately $15,000 or 24%. This decrease is largely attributable to higher average funds available for investment and higher interest rates during the three months ended June 30, 1998. The Company completed its common stock financing on June 23, 1999. Other revenues for the three month period ended June 30, 1999 were approximately $31,000, a decrease of $2,000 or 6% from the comparable period ended June 30, 1998. This decrease is primarily due to the sale of equipment held by Repligen reported as other income in fiscal 1999. Expenses Total expenses for the three month period ended June 30, 1999 and 1998 increased to approximately $1,111,000 from $935,000, an increase of $176,000 or 18%. Research and development expenses for the three month period ended June 30, 1999 and 1998 were approximately $488,000 and $466,000, respectively, an increase of $22,000 or 5%. This increase reflects increased staffing in research and development as Repligen expands its investment in its drug development programs. Selling, general and administrative expenses for the three months ended June 30, 1999 and 1998 were approximately $426,000 and $357,000, respectively, an increase of $69,000 or 19%. This increase is attributable to increased costs in administrative salaries and associated benefits. Cost of products sold for the three months ended June 30, 1999 and 1998 were approximately $196,000 and $112,000, respectively, an increase of $84,000, or 75%. Cost of products sold in the three months ended June 30, 1999 and 1998 were 85% and 49%, respectively, of product revenues. This increase is largely attributable to costs associated with the startup of its manufacturing contract for AP Biotech during the three month period ended June 30, 1999. Liquidity and Capital Resources Repligen's total cash and cash equivalents increased to $11,817,000 at June 30, 1999 from $3,251,000 at March 31, 1999. This increase of $8,566,000 reflects $8,900,000 of proceeds resulting from the sale of Common Stock to certain investors through a private placement that closed during the three months ended June 30, 1999, offset by a net 12 loss from operations incurred during the three month period ended June 30, 1999 of approximately $423,000, an increase in prepaid expenses of $86,000 and capital expenditures of $70,000, offset in part by the increase in accrued expenses and accounts payable of $108,000 and accounts receivable of $49,000. Working capital increased to $12,353,000 at June 30, 1999 from $3,860,000 at March 31, 1999. Repligen has entered into agreements with a number of collaborative partners and licensees. Under the terms of these agreements, Repligen may be eligible to receive research support, additional milestones or royalty revenue if these collaborations result in clinical evaluation and commercialization of products developed. Repligen can not be certain of the continuation of these collaborations or of receiving any future payments related to these agreements. While the cost of operations is anticipated to increase in fiscal 2000 as Repligen expands its investment in proprietary product development, Repligen believes that the private placement financing, yielding an aggregate of $8,900,000 in net proceeds will provide sufficient funding to satisfy its working capital and capital expenditure requirements for the next twenty-four months. Should Repligen need to secure additional financing to meet its future liquidity requirements, Repligen may not be able to secure such financing, or obtain such financing on favorable terms because of the volatile nature of the biotechnology market place. Year 2000 Repligen has undertaken an initial review of its information technology computer systems and it believes that the Year 2000 problem does not pose significant operational problems to its information technology systems. The majority of Repligen's software and computer equipment has been purchased within the last five years from third-party vendors who have already provided upgrades intended to bring their products into Year 2000 compliance. Repligen has begun to address the small number of internal systems that are not yet Year 2000 compliant, and expects full compliance by the end of 1999. Repligen currently believes that the costs of addressing these issues should not exceed $50,000 and will not have a material adverse impact on Repligen's financial position. Repligen has recently begun interviewing various third parties, including vendors and suppliers of Repligen, to determine their exposure to Year 2000 issues, their anticipated risks and responses to those risks. To date, the third parties that have been contacted have indicated that their hardware or software is or will be Year 2000 compliant in a time frame that meets Repligen's requirements. Even with the vendor compliance however, Repligen intends to continue to assess its exposure to Year 2000 noncompliance on the part of any of its material vendors. There can be no assurance that the vendor's systems will be Year 2000 compliant in a time frame satisfactory to Repligen. 13 Repligen does not have a contingency plan in the event Year 2000 compliance cannot be achieved in a timely manner. A contingency plan will be developed immediately upon completion of Repligen's Year 2000 compliance assessment. Item 1. LEGAL PROCEEDINGS On July 17, 1998, Repligen filed a complaint at the United States District Court for the District of Massachusetts in Boston, Massachusetts seeking correction of inventorship of certain United States patents which claim compositions and methods of use for CTLA4 as well as unspecified monetary damages. A correction of inventorship would result in the University of Michigan being designated as a co-assignee on any corrected Bristol-Myers patent. Repligen would then have rights to such technology pursuant to a 1992 License Agreement with the University of Michigan, a 1995 Asset Acquisition Agreement with Genetics Institute, and other related agreements. On July 13, 1999, the court dismissed the complaint without prejudice citing a lack of legal standing of Repligen to bring such a complaint. We believe that the court's finding on standing was in error. The court did not rule on the validity of Repligen's inventorship claim. Repligen continues to believe that the University of Michigan is a rightful co-assignee of the aforesaid Bristol-Myers patents and we intend to continue to pursue the correction of inventorship. There can be no assurances that litigation will conclude in a result beneficial to Repligen, and failure to obtain shared ownership rights in the patents may restrict Repligen's ability to commercialize CTLA4-Ig. Item 2. CHANGES IN SECURITIES Pursuant to two stock purchase agreements dated as of April 30, 1999 and May 14, 1999, respectively, by and among Repligen and the respective parties thereto, Repligen issued to the parties thereto an aggregate of 3,600,000 shares of Common Stock of Repligen for an aggregate purchase price of $9 million. Based on the representations of the investing parties and a reasonable belief of Repligen that all such parties were "accredited" (as such term is defined in Rule 501 of the Securities Act of 1933) and that the parties were acquiring the shares of Common Stock of Repligen for investment and not with a view to the distribution thereof, Repligen consummated a private placement of the 3,600,000 shares of Common Stock of Repligen pursuant to Regulation D, Rule 506 of the Securities Act of 1933. Repligen closed the private placement transaction on June 23, 1999. There were no underwriters involved in such private placement transaction. Repligen will use the proceeds from the private placement transaction for working capital and other general corporate purposes. Repligen filed a registration statement with the Securities and Exchange Commission on Form S-3 on June 16, 1999 for the resale of the 3,600,000 shares of Common Stock of Repligen sold to the parties to the private placement transaction. The Securities and Exchange Commission declared such resale registration statement effective on June 23, 1999. 14 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits EXHIBIT DESCRIPTION 3.1 Restated Certificate of Incorporation, dated June 30, 1992 and filed July 13, 1992 (filed as Exhibit 4.12 to Repligen Corporation's Annual Report on Form 10-K File No. 0-14656 for the year ended March 31, 1993 and incorporated herein by reference). 3.2 By-laws (filed as Exhibit 3.4 to Repligen Corporation's Form S-1 Registration Statement No. 33-3959 and incorporated herein by reference). 4.1 Stock Purchase Agreement dated as of April 30, 1999, by and among Repligen Corporation and Wellington Management Company, LLP, as Investment Advisor to the investors listed on Schedule I thereto (previously filed as Exhibit 4.1 to Repligen's current report on Form 8-K on May 17, 1999 and incorporated herein by reference). 4.2 Stock Purchase Agreement dated as of May 14, 1999, by and among Repligen Corporation and the investors listed on the Schedule I thereto (previously filed as Exhibit 4.2 to Repligen's current report on Form 8-K on May 17, 1999 and incorporated herein by reference). 10.1* Supply Agreement dated as of May 26, 1999 by and between Repligen Corporation and Amersham Pharmacia Biotech AB (with certain confidential information deleted) (filed herewith). 27.1 Financial Data Schedule (filed herewith) * The Appendixes to the Supply Agreement, included as Exhibit 10.1 hereto, are not being filed herewith. The Supply Agreement filed herewith contains a list briefly identifying the contents of all appendixes to such document. The Company undertakes to furnish a copy of any omitted appendix to the Commission upon request (except that Appendix C and D thereto shall 15 remain confidential). Pursuant to Item 601 (b) (2) of Regulation S-K, set forth below is a list of the omitted appendixes. SUPPLY AGREEMENT (EXHIBIT 10.1 HERETO) Appendix A Biotech IPA Products Appendix B Certificate of Analysis Appendix C Price Schedule for First Contract Year Appendix D New Product (b) Reports on Form 8-K 1. Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 15, 1999 (amending Current Report on Form 8-K filed March 24, 1999) (description of transaction relating to acquisition of all rights to certain patent applications). 2. Current Report on Form 8-K filed with the Securities and Exchange Commission on May 17, 1999 (description of private placement transaction relating to sale of common stock of the Company for an aggregate purchase price of $9 million). 16 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: August 13, 1999 By: /s/ Walter C. Herlihy ------------------------------ Chief Executive Officer and President, Principal Financial and Accounting Officer 17 Repligen Corporation Exhibit Index EXHIBIT DESCRIPTION 3.1 Restated Certificate of Incorporation, dated June 30, 1992 and filed July 13, 1992 (filed as Exhibit 4.12 to Repligen Corporation's Annual Report on Form 10-K File No. 0-14656 for the year ended March 31, 1993 and incorporated herein by reference). 3.2 By-laws (filed as Exhibit 3.4 to Repligen Corporation's Form S-1 Registration Statement No. 33-3959 and incorporated herein by reference). 4.1 Stock Purchase Agreement dated as of April 30, 1999, by and among Repligen Corporation and Wellington Management Company, LLP, as Investment Advisor to the investors listed on Schedule I thereto (previously filed as Exhibit 4.1 to Repligen's current report on Form 8-K on May 17, 1999 and incorporated herein by reference). 4.2 Stock Purchase Agreement dated as of May 14, 1999, by and among Repligen Corporation and the investors listed on the Schedule I thereto (previously filed as Exhibit 4.2 to Repligen's current report on Form 8-K on May 17, 1999 and incorporated herein by reference). 10.1 Supply Agreement dated as of May 26, 1999 by and between Repligen Corporation and Amersham Pharmacia Biotech AB (with certain confidential information deleted) (filed herewith). 27.1 Financial Data Schedule (filed herewith) 18 EX-10.1 2 EXHIBIT 10.1-SUPPLY AGREEMENT EXHIBIT 10.1 SUPPLY AGREEMENT This agreement ("Agreement") is made as of May 26, 1999, by and between Repligen Corporation ("REPLIGEN"), a Delaware corporation with principal offices at 117 Fourth Ave., Needham, MA 02494 and Amersham Pharmacia Biotech AB ("BIOTECH"), a corporation incorporated in Sweden with principal offices at Bjorkgatan 30, SE-751 84 Uppsala (each a "Party" and collectively "the Parties"). WHEREAS, REPLIGEN possesses capabilities relating to the large scale manufacture of recombinant proteins including protein A; and WHEREAS, BIOTECH utilizes a proprietary form of recombinant protein A in a variety of products marketed and sold by BIOTECH; and [*] WHEREAS, the Parties wish to enter a long term relationship wherein REPLIGEN will be the preferred manufacturer of recombinant protein A for BIOTECH's use. NOW THEREFORE, for the mutual covenants contained herein, and for other good and valuable considerations, the Parties agree as follows: 1. DEFINITIONS For the purpose of this Agreement, the terms set forth hereunder shall be defined as follows: a. "Biotech IPA" means those forms of immobilized Biotech rPA which are manufactured, marketed, and sold to the general public by BIOTECH as further described in Appendix A attached hereto. b. "Biotech rPA" means that form of unimmobilized recombinant protein A which is proprietary to BIOTECH. c. "Biotech Specifications" means that set of physical, chemical, and functional characteristics that are reported in the Certificate of Analysis, attached hereto as Appendix B. Biotech Specifications may be modified from time to time by mutual agreement of the Parties. 19 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. d. "Confidentiality Agreement" shall mean that confidentiality agreement dated April 20, 1998 entered into by and between the Parties. e. "New Product" means that product described in Appendix D. f. "First Agreement" means that agreement made by and between the Parties on September 29, 1992. g. "License Agreement" means that agreement between the Parties made effective on the execution date of this Agreement in which REPLIGEN grants to BIOTECH i) a non-exclusive license to US Patent No. 5,084,559 ("Protein A Domain Mutants") and ii) a license to technology, know-how, and certain other rights relating to New Product. h. "Process Technology" means any and all know-how, proprietary materials and reagents, documentation, trade secrets, and technology relating to the production of Biotech rPA. i. "Repligen rPA" means those forms of unimmobilized recombinant protein A which are proprietary to REPLIGEN. j. "Master Agreement" means that agreement made by and between the Parties and dated December 17, 1998. k. "Contract Year" means each calendar year during the term of the Agreement. l. "Article(s)" shall mean either or both of Biotech rPA and New Product produced by REPLIGEN for BIOTECH under this Agreement. 2. MANUFACTURING a. During the term of this Agreement, REPLIGEN agrees to manufacture Biotech rPA in compliance with the Biotech Specifications and those documented processes or any modification thereto to which the Parties may mutually agree and to supply it to BIOTECH according to the terms and conditions herein. b. During the term of this Agreement, REPLIGEN agrees to manufacture New Product in compliance with the documented procedures developed by REPLIGEN and to supply it to 20 BIOTECH according to the terms and conditions of this Agreement and the License Agreement. c. Any and all subcontractors engaged by REPLIGEN to carry out any aspect of the manufacture of Biotech rPA will be bound by a confidential disclosure agreement ("CDA") with terms and conditions substantially similar to the Confidentiality Agreement. BIOTECH will have the right to consent to all subcontractors involved in manufacture of Biotech rPA which consent shall not be unreasonably withheld. Following consent by BIOTECH and execution by the subcontractor of a CDA, REPLIGEN may share Process Technology with such party. BIOTECH may not contact REPLIGEN's sub-contractors with specific reference to the manufacture of Biotech rPA without the prior consent of REPLIGEN. REPLIGEN may utilize alternative facilities under its control in the manufacture of Biotech rPA. REPLIGEN will give BIOTECH nine (9) months prior written notice of any intended change in facility or sub-contractor for approval by BIOTECH, such approval not to be unreasonably withheld by BIOTECH. d. From time to time, BIOTECH may request that reasonable changes be made in the process used by REPLIGEN to manufacture Biotech rPA and REPLIGEN agrees to use best efforts to incorporate such changes. In the event that requested changes may effect the cost of production, the Parties shall agree on new firm prices prior to the implementation of said change. e. REPLIGEN shall inform BIOTECH nine (9) months in advance of any changes which it may wish to make in the process used to manufacture Biotech rPA or any major changes which it may wish to make in the process used to manufacture New Product and BIOTECH shall have ninety (90) days to approve such change, such approval not to be unreasonably withheld. If BIOTECH cannot approve such change, REPLIGEN agrees to continue to supply Biotech rPA and/or New Product as manufactured by the mutually agreed upon process. f. Changes to any aspect of the manufacturing process for New Product which are not considered to constitute a major 21 process change may be made at any time by mutual agreement of the Parties. g. REPLIGEN represents that it possesses the resources required including personnel, machinery and premises, to meet its obligations under the terms of this Agreement in all material respects provided that BIOTECH complies with its obligations under this Agreement. 3. PURCHASE AND SALE OF PRODUCT a. During the term of this Agreement, BIOTECH agrees to purchase and REPLIGEN agrees to sell Biotech rPA and New Product according to the terms and conditions set forth herein. b. During each Contract Year, BIOTECH intends to purchase from REPLIGEN and REPLIGEN agrees to maintain the ability to manufacture for BIOTECH no less than [*] of BIOTECH's total requirements for Biotech rPA. In any Contract Year in which BIOTECH does purchase [*] of said annual requirements from REPLIGEN, REPLIGEN shall be considered to be the preferred supplier ("Preferred Supplier") to BIOTECH for Biotech rPA. c. BIOTECH shall purchase a minimum quantity of New Product from REPLIGEN during the first Contract Year, i.e. calendar 1999, according to the following schedule: [*] [*] as well as such additional quantities which it may elect to purchase. d. Within 20 days following the completion of each quarter of a Contract Year, BIOTECH will inform REPLIGEN as to the status of: i) the inventory of Biotech rPA and Biotech IPA on hand as well as the aggregate quantity of Biotech IPA that has been sold during the preceding quarter, ii) the inventory of New Product on hand, and iii) the total quantities of BIOTECH rPA ordered from third party suppliers in said preceding quarter. REPLIGEN will have the right to audit all relevant records of BIOTECH with respect to this information, however BIOTECH shall have no 22 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. obligation to reveal the terms or conditions of any arrangements regarding third parties. 4. PRODUCT PRICING a. The price paid by BIOTECH to REPLIGEN for all Biotech rPA purchased during the first Contract Year, i.e. calendar 1999, will be according to the schedule set forth in Appendix C: b. The price for Biotech rPA purchased by BIOTECH from REPLIGEN in each Contract Year after the first year of the Agreement will be based upon the price schedule in Appendix C and adjusted on the basis of the average yield obtained in the previous year according to the following formula: [*] wherein average yield is the average yield obtained over all manufacturing runs carried out in the immediately preceding calendar year of production. c. The price paid to REPLIGEN by BIOTECH for New Product under the Agreement will be as set forth in Appendix C: d. On or before October 31 of each Contract Year, the Parties will agree upon new, firm pricing for the subsequent Contract Year based upon: i) any price reduction based on yield according to this Section 4b herein, ii) any change in the United States Consumer Price Index as published at the end of the third quarter of the preceding calendar year or some other index or indices as may be mutually agreed upon by the parties, and iii) any other factors, such as justifiable and documented changes in REPLIGEN's cost of manufacture, altered market conditions, process modifications, etc. The new, firm prices will be made effective as of January 1 of the following Contract Year and will remain in effect throughout said Contract Year. In the event that the Parties cannot agree on any price changes, the prices shall remain unchanged for the following Contract Year. 23 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. 5. ORDERS, FORECASTS, AND PAYMENT a. On or before September 30, 1999 and thereafter prior to the end of each calendar quarter while this Agreement is in force BIOTECH shall deliver a written rolling forecast by quarter of its estimated need of Articles during the coming twelve-month period, stating Article numbers, and quantities with reasonable detail. This forecast will provide a basis for REPLIGEN's resource planning with regard to component and materiel procurement and production capacity. The first, third, and fourth quarterly forecast within each rolling twelve-month forecast shall be non-binding upon either of BIOTECH and REPLIGEN. The forecast for the second quarter within each rolling twelve-month forecast ("Set Quarter") will have certain binding obligations upon each of the Parties with respect to said second quarter, as set forth in this Section 5 hereunder. Once the forecast which establishes a Set Quarter has been received by REPLIGEN, it shall not be changed except by mutual agreement of the Parties. b. Commencing January 1, 2000 (i.e. the first Set Quarter to occur under this Agreement) and thereafter throughout the term of the Agreement, BIOTECH shall, from time to time and as it deems appropriate, issue written, binding purchase orders to REPLIGEN, stating the Article number, quantity, shipping destination, and shipping date for each Article. Shipping for international destinations shall be solely on Mondays. The stated shipping date shall be based on the agreed lead time. Lead time is defined as the number of days from the date on which BIOTECH issues the order until the date on which product is delivered by REPLIGEN according to Section 6 herein. c. In each Set Quarter during the term of the Agreement, REPLIGEN agrees to deliver to BIOTECH with a two week lead time up to one hundred-fifty percent (150%) of the quantity of Articles forecast for that Set Quarter. If, in any Set Quarter, REPLIGEN does not deliver Articles up to said 150% of that forecast according to said two week lead time, BIOTECH is entitled to reduce the price paid for such Articles by 1% for each week of delay up to a maximum of 10%. d. For quantities of Articles ordered by BIOTECH in any Set Quarter that exceed 150% but do not exceed 200% of the 24 amount forecasted for that Set Quarter, REPLIGEN shall make best efforts to deliver said quantities with a lead time of six (6) weeks. If, in any Set Quarter, REPLIGEN does not deliver Articles in excess of 150% but less than 200% of that forecast according to said six week lead time, BIOTECH is entitled to reduce the price paid for such Articles by 1% for each week of delay up to a maximum of 10%. For any quantities of Articles ordered by BIOTECH in any Set Quarter that exceed 200% of the amount forecasted for that Set Quarter, REPLIGEN shall have no obligation to meet prescribed lead time for shipping with respect to those excess quantities. REPLIGEN shall, however, in all cases use reasonable efforts to adhere to a two week lead time, to keep BIOTECH informed as to expected shipping dates, and to supply BIOTECH with such excess quantities as promptly as possible. e. In the event of the occurrence of Force Majeure or any other event beyond the reasonable control of REPLIGEN which results in the inability of REPLIGEN to deliver Articles according to prescribed lead times of this Section 5, REPLIGEN's sole obligations hereunder shall be: i) to give BIOTECH prompt notice of said event in writing and ii) to seek diligently to deliver such Articles at the earliest opportunity. f. [*] of the forecast for each Set Quarter shall be binding upon BIOTECH with respect to purchase of Articles in that quarter. Prior to the last Monday of any quarter in which BIOTECH has failed to submit purchase orders that total [*] of the amount which was forecast for that quarter when it was a Set Quarter, REPLIGEN shall request that an order be placed by BIOTECH for such quantity of Articles as represents the difference between the quantity of Articles ordered for that quarter to date and the amount of Articles binding on BIOTECH for that Set Quarter. In response to such request, BIOTECH agrees to place a purchase order in respect of such quantity prior to the end of said Set Quarter. g. Nothing in any purchase order submitted by BIOTECH or invoice or order acknowledgment submitted by REPLIGEN pursuant to this Agreement shall be construed as superseding or amending the terms of this Agreement absent 25 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. written agreement by the other Party which specifically references this Agreement. h. Payment shall be made in full, in US dollars, thirty (30) days after invoice. Invoices shall be sent upon delivery of the Articles i. If BIOTECH fails to make timely payment, REPLIGEN shall be entitled to charge interest on the aggregate amount of the overdue payment commencing on the due date at a rate equal to the current discount rate set by the US Federal Reserve Board plus five (5) percentage points. j. Within three (3) days of receipt of a purchase order for Articles, REPLIGEN shall inform BIOTECH as to when delivery should be made. REPLIGEN shall further inform BIOTECH at that time as to whether any delay in delivery may be expected. 6. DELIVERY, SHIPPING, AND TITLE a. Delivery shall be made as FCA, Repligen, 117 Fourth Ave. Needham, MA as defined by Incoterms. b. The ownership, right to possession, title to and all risk of loss of all Articles shall pass to BIOTECH at the time of delivery. 7. OTHER OBLIGATIONS a. For any Contract Year in which REPLIGEN is the Preferred Supplier under this Agreement, BIOTECH's obligation to pay royalties to REPLIGEN under the First Agreement shall be waived and no royalties shall be due. b. For any Contract Year in which REPLIGEN does not achieve Preferred Supplier status due to a failure on the part of BIOTECH to submit purchase orders to REPLIGEN, royalties under the First Agreement will be retroactively due on all product sales which occurred during that Contract Year according to terms of the First Agreement. Such royalties shall be due and payable in full within 90 days of the end of any Contract Year in which REPLIGEN is not the Preferred Supplier due to the failure of BIOTECH to submit purchase orders. 26 c. For any Contract Year in which REPLIGEN does not achieve Preferred Supplier status due to a failure on the part of REPLIGEN to deliver Biotech rPA in response to purchase orders from BIOTECH, BIOTECH's obligation to pay royalties to REPLIGEN under the First Agreement shall be waived and no royalties shall be due. 8. SECURITY STOCK AND DISASTER PLAN a. As part of a comprehensive disaster plan and commencing upon April 1, 2000, REPLIGEN will maintain a security stock of [*] of Biotech rPA, to be stored under controlled and documented conditions at Livingston Health Care, 220 Lake Street, Newark, DE 19702 or an equivalent facility(s) designated by Repligen. This security stock will be turned over on an annual basis. b. Within two months of the signing of this Agreement, REPLIGEN and BIOTECH hereby agree to establish and set in place a detailed action plan for how REPLIGEN will handle obligations under the Agreement in case of a disruption of production due to such events as Force Majeure or due to such similar events not within REPLIGEN's control. The Parties agree that the establishment, implementation, and/or maintenance of such disaster plan shall not result in significant additional costs for REPLIGEN. The basic elements of the disaster plan will consist of: o maintenance of a security stock by REPLIGEN o identification and qualification of a second fermentation subcontractor before the end of the second Contract Year o plan for transfer of purification/finishing within a six (6) week time frame to an alternative facility for a period of up to six (6) months in the event that REPLIGEN's facility becomes incapacitated c. The presentation of such action plan shall not in any event be interpreted as to affect BIOTECH's rights to 27 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. other remedies in case of REPLIGEN's breach of the Agreement. 9. QUALITY ASSURANCE, CERTIFICATES, AND INSPECTIONS a. REPLIGEN shall establish and maintain a quality assurance system which, after being approved by BIOTECH, will enable REPLIGEN to issue a Certificate of Analysis (CoA) showing that delivered Articles are conforming to the Biotech Specifications. BIOTECH is prepared to accept Articles received as complying with the Agreement and with this CoA. b. All Articles delivered by REPLIGEN to BIOTECH shall conform to the Biotech Specifications and such conformance shall be documented by a CoA. Articles delivered by REPLIGEN to BIOTECH shall also be in compliance with all testing which may be required by the agreed and documented procedures, this Agreement, and applicable law. All testing procedures shall be in accordance with those documented quality control procedures developed by the Parties in connection with the process developed and approved by the Parties. REPLIGEN shall accompany each shipment of Articles with a CoA evidencing that the Article being shipped has passed all purity, quality control, and other tests required hereunder. c. With reasonable prior notice to REPLIGEN and at BIOTECH's sole expense, BIOTECH is entitled to inspect and observe REPLIGEN's manufacture of Articles, to audit REPLIGEN's quality control and inspection procedures, and to have access to all data from such control of the Article and to take samples and make such other investigations as BIOTECH deems necessary. REPLIGEN shall reserve the right for BIOTECH to perform such inspections on the premises of subcontractors engaged by REPLIGEN, such inspections to be scheduled by REPLIGEN following reasonable prior notice by BIOTECH and to be carried out jointly by representatives of both Parties and at the sole expense of BIOTECH. BIOTECH's right of inspection under this head shall not diminish REPLIGEN's obligation to deliver Articles which comply with the specifications of this Agreement. 10. WARRANTY 28 a. Except as otherwise agreed in writing, REPLIGEN warrants that: i) the Articles delivered to BIOTECH under this Agreement shall be manufactured and tested in accordance with the documented procedures, ii) the Articles will conform to the CoA, iii) the requirements under this Agreement will have been performed and satisfied, and iv) title to Articles will pass to BIOTECH free and clear of all liens, charges, and encumbrances save for those which occur pursuant to this Agreement (Warranty). This Warranty shall survive receipt of the Articles by BIOTECH for twelve (12) months in the case of Biotech rPA and for eighteen (18) months in the case of New Product and no claim for a breach of this warranty may be brought after the end of the applicable period. Except as otherwise agreed by REPLIGEN in writing, the foregoing Warranty sets forth REPLIGEN's sole and exclusive representations with respect to Articles sold to BIOTECH under this Agreement. BIOTECH's remedies under this Warranty shall be limited to the replacement of non-conforming Articles according to the terms and conditions of this Section 10 with REPLIGEN bearing the cost of shipping and insurance. The foregoing Warranty shall not apply to defects resulting from misuse, negligence, or accident on the part of BIOTECH or any third party. b. Following notification by BIOTECH that any Articles are non-conforming under the Warranty, replacement under the Warranty shall be made as follows: i. REPLIGEN shall ship requested Articles to BIOTECH within five (5) days of receipt of the replacement request from BIOTECH at no cost for BIOTECH at such time. ii. Within five (5) days of any replacement request, BIOTECH shall ship a sample of the non-conforming Articles to REPLIGEN and REPLIGEN shall complete comparative testing between said non-conforming sample and an archived sample from the same lot of Articles. If this comparative testing demonstrates that both the non-conforming sample and the archived sample do not conform to the CoA, the Parties agree that the replacement under i. falls under the Warranty. If, however, REPLIGEN 29 determines that the archived sample is conforming to the CoA, and REPLIGEN can make it likely that the non-conformance of the Articles replaced is due to BIOTECH's handling of said Articles or other circumstances outside of REPLIGEN's control, BIOTECH will pay for the replacement Articles in full. iii. The quantity of Biotech rPA replaced under the Warranty in any quarter shall be limited to [*]. The quantity of New Product replaced under the Warranty in any single quarter shall be limited to [*]. Replacement of Articles under the Warranty may be made from security stock maintained pursuant to this Agreement. c. The Parties agree that the Warranty with respect to Biotech rPA is based on good faith estimates of expected minimum stability under defined storage conditions and that stability tests will be performed by BIOTECH and REPLIGEN to confirm these estimates. Such stability tests will be completed no later than December 31, 2000 and will be used by the Parties to establish a Warranty period for the remaining term of the Agreement, which may be different than 12 months. The Parties agree that there is no reason to differentiate the Warranty periods for Biotech rPA and New Product. d. If REPLIGEN has made any replacements of Biotech rPA under the Warranty according to the provisions of Section 10.b.i. and stability testing conducted according to Section 10.c. indicates that the non-conformance leading to such replacement occurred as a result of instability under controlled storage conditions, BIOTECH shall immediately reimburse REPLIGEN as if such replacement had been a new sale of Biotech rPA. 11. TERM AND TERMINATION a. This Agreement will remain in effect from the date of signing until December 31, 2008 unless terminated earlier according to the provisions of this Section 11. b. Either Party may terminate this Agreement upon the material breach of the other Party's performance pursuant 30 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. to either of this Agreement or the Master Agreement, upon 90 days written notice. The failure to cure such breach to the other Party's satisfaction within 90 days will result in the immediate termination of this Agreement. c. In the event that BIOTECH issues no purchase orders to REPLIGEN for Biotech rPA in any two consecutive Contract Years, REPLIGEN may terminate this Agreement. 12. COLLABORATION a. The Parties agree to cooperate with each other and to act in good faith in carrying out the purpose and intent of this Agreement. Toward that end Parties agree to meet twice each year in the first two Contract Years and thereafter once during each Contract Year to analyze results achieved and to take joint action to achieve good results for both. The site for such meetings will alternate between REPLIGEN's place of business in Needham, MA and BIOTECH's place of business in Uppsala, Sweden or such other location as may be mutually agreed by the Parties. 13. INFRINGEMENT a. REPLIGEN shall indemnify and hold harmless BIOTECH, its associated companies and its customers from every claim, lawsuit or action alleging that the use or maintenance of any Article constitutes infringement of a patent, copyright or other intellectual right except in the instance where the infringement is a direct consequence of a method, design or other instruction furnished by BIOTECH for manufacture of the Article. During the term of this Agreement, each Party further agrees not to make any claim for intellectual rights against the other Party or in respect of a customers' use or maintenance of BIOTECH rPA, BIOTECH IPA, or REPLIGEN rPA. b. If a judgment or injunction concerning infringement has been entered which: 1) prohibits or prevents any further use or maintenance of an Article by BIOTECH, and 2) is not a direct consequence of a method, design, or other 31 instruction furnished by BIOTECH for the manufacture of the Article; REPLIGEN shall at BIOTECH's request and at its own expense use best efforts to either: (i) replace or provide another equivalent Article, the use of which does not to REPLIGEN's knowledge constitute an infringement, or (ii) modify the Article so that it no longer constitutes to REPLIGEN's knowledge an infringement or violates the judgment or order, provided that such modification does not affect the function of the Article or its compatibility with the end product. The provisions of this Subsection 13b shall not apply to Articles which have been modified, adapted or otherwise altered by BIOTECH. c. If either Party learns that an infringement exists or is possible as a result of use of an Article, the other Party shall be informed as soon as possible. 14. PRODUCT LIABILITY a. With respect to Articles manufactured under this Agreement, REPLIGEN agrees to carry product liability insurance, for a total coverage of $2 million dollars, to cover claims which may be made against BIOTECH and/or REPLIGEN as a result of hazardous defects occurring in such Articles. b. Upon request from BIOTECH, REPLIGEN shall produce proof of product liability insurance coverage. In the event that BIOTECH requests that REPLIGEN increase its insurance coverage, the Parties will immediately negotiate an adjustment to the price of the Articles accordingly. 15. GROUNDS FOR EXEMPTION a. The following circumstances constitute grounds for exemption insofar as they render compliance with the Agreement impossible or unduly onerous (Force Majeure): 32 Labor dispute and every other circumstance over which the Parties have no control, such as fire, war, mobilization or unforeseen callup to military service of comparable extent, requisition, confiscation, currency restrictions, revolts and riots, scarcity of means of transportation, general scarcity of goods and limited availability of motive power, as well as deficiencies and delays in delivery of goods from subcontractors caused by such exempting circumstances. b. It is incumbent upon a Party who wishes to cite Force Majeure to inform the other Party without delay when the relevant circumstances have arisen and when they have ceased to prevail. c. If compliance with the Agreement is delayed for more than six (6) months by Force Majeure as specified in Subsection 15a above, either Party shall be entitled to terminate the Agreement by giving thirty days prior written notice to the other Party. 16. GENERAL a. This Agreement is not assignable by either Party absent the other Party's written consent. If REPLIGEN is purchased by a third party which is a competitor of BIOTECH, BIOTECH has the right to approve the transfer of the Agreement. For purposes hereof, the term "purchase" shall mean i) a sale of all or substantially all of the assets of REPLIGEN or ii) the merger and consolidation of REPLIGEN with or into another corporation such that the stockholders of REPLIGEN immediately following such transaction hold, directly or indirectly, less than 50% of the voting securities of the corporation surviving such transaction. b. Any and all information disclosed by one Party to the other under this Agreement shall be handled in accordance with the terms and conditions of the Confidentiality Agreement and consequently be treated as confidential - as agreed therein - for the duration of the Agreement and for a period of five (5) years thereafter. 33 c. Any changes or amendments to this Agreement shall be in writing and made by mutual agreement of the Parties. d. REPLIGEN will not sell or transfer Biotech rPA to any party other than BIOTECH, except with BIOTECH's consent. e. During the term of the Agreement, BIOTECH will supply REPLIGEN with any and all requested quantities of chromatography media which are marketed and sold by BIOTECH and required by REPLIGEN in the manufacture of Biotech rPA at a [*] discount to the then current list price. f. Sepharose 4FF which is used specifically in the manufacture of New Product for BIOTECH under this Agreement will be provided to REPLIGEN at no cost. At the time of signing of this Agreement, BIOTECH will repurchase from REPLIGEN up to 100 liters of Sepharose 4FF at the invoice price paid by REPLIGEN, said Sepharose 4FF to be used solely for the manufacture of New Product. g. This Agreement is subject to and shall be construed and enforced in accordance with the laws of the State of New York. Any disputes arising hereunder shall be resolved with reference to the English language version of this Agreement regardless of any translations made for the convenience of the Parties. All disputes between the Parties shall be resolved by binding arbitration in accordance with the rules and regulations of the American Arbitration Association in the city of New York, NY. Notwithstanding anything herein to the contrary, the Parties acknowledge and agree that each shall have the right to obtain equitable relief against the other provided that each Party hereby agrees to submit to the jurisdiction of the courts of the State of New York or the federal courts of the United States located in New York and that the venue for all such proceedings shall lie in the State of New York. IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands and seals and duly executed this Agreement the day and year first written above. FOR REPLIGEN CORPORATION FOR AMERSHAM PHARMACIA BIOTECH AB /s/ Daniel P. Witt /s/ Arne Forsell 34 [*] indicates material which has been omitted and for which confidential treatment has been requested. All such material has been filed with the Commission pursuant to rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. /s/ Daniel P. Witt /s/ Arne Forsell - -------------------------------------------------------------------------------- Name Name VP, Business Development President - -------------------------------------------------------------------------------- Title Title May 26, 1999 June 27,1999 - -------------------------------------------------------------------------------- Date Date 35 EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS FOR REPLIGEN CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1999 JUN-30-1999 11,817 0 404 (25) 582 13,022 1,576 (936) 13,744 669 0 0 0 219 4,409 12,855 232 688 196 1,111 0 0 0 0 0 0 0 0 0 (423) (.02) (.02)
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