-----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, KHRlGT9U22e0aCcBmz5YXdwVsQiKa3oJvfWqvOboGNC3tLlKXpZNwdsAc1fnKLD4 iKgfi9QULKYdmpCvXH+6mw== 0000950144-97-009014.txt : 19970814 0000950144-97-009014.hdr.sgml : 19970814 ACCESSION NUMBER: 0000950144-97-009014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOVEN PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000815838 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 592767632 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17254 FILM NUMBER: 97659013 BUSINESS ADDRESS: STREET 1: 11960 SW 144TH ST CITY: MIAMI STATE: FL ZIP: 33186 BUSINESS PHONE: 3052535099 MAIL ADDRESS: STREET 1: 11960 SW 144TH STREET CITY: MIAMI STATE: FL ZIP: 33185 10-Q 1 NOVEN PHARMACEUTICALS, INC. 10-Q 6/30/97 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange - ------ Act of 1934 For the quarterly period ended JUNE 30, 1997 ------------- or ____ Transition Report Pursuant to Section 13 of the Securities Exchange Act of 1934 For the transition period from ____________ to_____________ Commission file number 0-17254 ------- NOVEN PHARMACEUTICALS, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) STATE OF DELAWARE 59-2767632 ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 11960 S.W. 144TH STREET, MIAMI, FL 33186 - ---------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (305) 253-5099 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. CLASS OUTSTANDING AT JULY 24, 1997 ----- ------------------------------ Common stock $.0001 par value 20,461,284 Page 1 of 14 2 NOVEN PHARMACEUTICALS, INC. --------------------------- INDEX TO FORM 10-Q PART I - FINANCIAL INFORMATION PAGE NO. - ------ --------------------- -------- Item 1 - Financial Statements Statements of Operations and Accumulated Deficit for the three months ended June 30, 1997 and 1996 3 Statements of Operations and Accumulated Deficit for the six months ended June 30, 1997 and 1996 4 Balance Sheets as of June 30, 1997 and December 31, 1996 5 Statements of Cash Flows for the six months ended June 30, 1997 and 1996 6 Notes to Financial Statements 7 - 8 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 12 PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 12 - 13 Item 6 - Exhibits and Reports on Form 8-K 13 SIGNATURES 14 - ---------- Page 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NOVEN PHARMACEUTICALS, INC. STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT THREE MONTHS ENDED ----------------------------- JUNE 30, JUNE 30, 1997 1996 ------------ ------------- REVENUES: Product sales $ 3,918,709 $ 5,151,015 License revenue 56,499 256,499 Interest income 188,501 305,459 Other income -- 36,250 ------------ ------------ Total revenues 4,163,709 5,749,223 ------------ ------------ EXPENSES: Cost of products sold 1,581,560 2,696,535 Research and development 2,342,280 1,949,683 Marketing, general and administrative 2,269,003 920,640 ------------ ------------ Total expenses 6,192,843 5,566,858 ------------ ------------ NET (LOSS) INCOME FOR THE PERIOD (2,029,134) 182,365 ACCUMULATED DEFICIT BEGINNING OF PERIOD (26,806,924) (22,683,286) ------------ ------------ ACCUMULATED DEFICIT END OF PERIOD $(28,836,058) $(22,500,921) ============ ============ NET (LOSS) INCOME PER SHARE $ (0.10) $ 0.01 ============ ============ WEIGHTED AVERAGE SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS 19,958,166 21,668,979 ============ ============ The accompanying notes are an integral part of this statement. Page 3 4 NOVEN PHARMACEUTICALS, INC. STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT SIX MONTHS ENDED ---------------------------------- JUNE 30, JUNE 30, 1997 1996 ----------------- ------------- REVENUES: Product sales $ 5,265,230 $ 10,323,006 License revenue 137,998 362,998 Interest income 410,435 581,494 Other income 31,325 36,250 ------------- ------------- Total revenues 5,844,988 11,303,748 ------------- ------------- EXPENSES: Cost of products sold 2,174,816 5,588,378 Research and development 4,481,840 4,359,287 Marketing, general and administrative 3,977,075 1,793,642 ------------- ------------- Total expenses 10,633,731 11,741,307 ------------- ------------- NET LOSS FOR THE PERIOD (4,788,743) (437,559) ACCUMULATED DEFICIT BEGINNING OF PERIOD (24,047,315) (22,063,362) ------------- ------------- ACCUMULATED DEFICIT END OF PERIOD $ (28,836,058) $ (22,500,921) ============= ============= NET LOSS PER SHARE $ ( 0.24) $ ( 0.02) ============= ============= WEIGHTED AVERAGE SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS 19,921,007 19,772,937 ============= ============= The accompanying notes are an integral part of this statement. Page 4 5 NOVEN PHARMACEUTICALS, INC. BALANCE SHEETS
JUNE 30, DECEMBER 31, 1997 1996 ------------ -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 10,673,278 $ 5,456,826 Securities held to maturity 4,873,358 13,692,010 Accounts receivable 2,361,421 3,366,489 Inventories 4,170,101 4,151,020 Prepaid and other current assets 272,777 248,357 ------------ ------------- Total current assets 22,350,935 26,914,702 ------------ ------------- PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation and amortization of $3,346,383 at June 30, 1997 and $2,873,401 at December 31, 1996 15,574,930 15,701,474 ------------ ------------- OTHER ASSETS: Patent development costs, net 1,578,240 1,547,434 Deposits and other assets 64,069 65,128 ------------ ------------- Total other assets 1,642,309 1,612,562 ------------ ------------- TOTAL $ 39,568,174 $ 44,228,738 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 2,293,107 $ 2,055,780 ------------ ------------- DEFERRED LICENSE REVENUE 5,983,017 6,096,015 ------------ ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock - authorized 100,000 shares of $.01 par value; no shares issued or outstanding Common stock - authorized 40,000,000 shares, par value $.0001 per share; issued and outstanding - 19,961,284 shares at June 30, 1997 and 19,831,538 shares at December 31, 1996 1,996 1,983 Additional paid-in capital 60,126,112 60,122,275 Accumulated deficit (28,836,058) (24,047,315) ------------ ------------- Total stockholders' equity 31,292,050 36,076,943 ------------ ------------- TOTAL $ 39,568,174 $ 44,228,738 ============ =============
The accompanying notes are an integral part of this statement. Page 5 6 NOVEN PHARMACEUTICALS, INC. STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED -------------------------------- JUNE 30, JUNE 30, 1997 1996 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (4,788,743) $ (437,559) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 553,012 532,094 Decrease in accounts receivable 1,005,068 2,263,920 Increase in inventories (19,081) (228,862) (Increase) decrease in prepaid and other current assets (24,420) 110,471 Increase (decrease) in accounts payable and accrued liabilities 237,327 (1,176,021) Decrease in deferred license revenue (112,998) (112,998) ------------- ------------ Cash flows provided by (used in) operating activities (3,149,835) 951,045 ------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Maturity (purchase) of securities, net 8,818,652 (6,522,564) Purchase of fixed assets, net (346,438) (638,531) Payments for patent development costs (110,836) (175,451) Refund of deposits 1,059 600 ------------- ------------ Cash flows provided by (used in) investing activities 8,362,437 (7,335,946) ------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Sale of common stock 3,850 16,885 ------------- ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,216,452 (6,368,016) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 5,456,826 16,131,263 ------------- ------------ CASH AND CASH EQUIVALENTS - END OF PERIOD $ 10,673,278 $ 9,763,247 ============= ============
The accompanying notes are an integral part of this statement. Page 6 7 NOTES TO FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The financial statements of Noven Pharmaceuticals, Inc. (the "Company"), included herein, do not include all footnote disclosures normally included in annual financial statements and, therefore, should be read in conjunction with the Company's financial statements and notes thereto for each of the three years in the period ended December 31, 1996 included in the Company's annual report on Form 10-K. The interim financial statements for the three months and six months ended June 30, 1997 are unaudited and, in the opinion of management, reflect all adjustments (consisting only of normal recurring accruals) necessary for fair presentation of the balance sheets, statements of operations and cash flows of the Company. The statements of operations for the three months and six months ended June 30, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997. 2. SUMMARY OF ACCOUNTING POLICIES The following is a summary of the significant accounting policies consistently applied in the preparation of the Company's financial statements: "INVENTORIES" Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Inventories at June 30, 1997 related primarily to the Company's transdermal estrogen delivery system. To date the Company has not experienced and does not anticipate in the future, any difficulty acquiring materials necessary to manufacture its transdermal systems. The following are the major classes of inventory: June 30, December 31, 1997 1996 ---- ---- Finished goods $ 1,978,987 $ 1,399,858 Work in process 370,658 491,014 Raw materials 1,820,456 2,260,148 ------------ ------------- Total $ 4,170,101 $ 4,151,020 ============ ============= "PROPERTY AND EQUIPMENT" Property and equipment is recorded at cost. Depreciation is provided over the estimated useful lives of the assets. Leasehold improvements are amortized over the life of the lease or the service life of the improvements, whichever is shorter. The straight-line method of depreciation is primarily followed for financial purposes. Page 7 8 NOTES TO FINANCIAL STATEMENTS (CONTINUED) "PATENT DEVELOPMENT COSTS" Costs, principally legal fees related to the development of patents, are capitalized and amortized over the lesser of their estimated economic useful lives or their remaining legal lives. "EARNINGS AND LOSS PER SHARE" Earnings per share is based on the weighted average number of shares including common stock and common stock equivalent shares. Common stock equivalent shares include outstanding warrants and options (using the Treasury Stock Method). The loss per share is based only on the weighted average number of shares outstanding. "NEW ACCOUNTING STANDARDS" In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share." The statement is effective for financial statements for periods ending after December 15, 1997, and changes the method in which earnings per share will be determined. Adoption of this statement by the Company will not have a material impact on earnings per share. 3. STOCKHOLDERS' EQUITY A schedule of the transactions in the common stock and the additional paid in capital accounts is as follows:
Common Stock Additional ------------------------ Paid-in Shares Amount Capital ---------- -------- ------------ Balance, January 1, 1997 19,831,538 $ 1,983 $ 60,122,275 Issuance of 129,746 shares of stock pursuant to stock option plan, net 129,746 13 3,837 ------- -- ----- Balance, June 30, 1997 19,961,284 $ 1,996 $ 60,126,112 ============ ======= ============
On June 26, 1997 Noven extended RPR's warrant to purchase its common stock in consideration for RPR's agreement to purchase 500,000 shares of common stock under the warrant. On July 1, 1997 RPR remitted $4 million to purchase 500,000 shares at $8 per share. Noven extended RPR's warrant for the remaining 500,000 shares for a period of 18 months. Page 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL ------- From inception (1987) through 1994, the Company primarily engaged in the research and development of transdermal drug delivery systems. During this period, the Company's revenues were principally generated by license fees, milestone payments pursuant to various license agreements and interest earned on funds raised through the sale of its common stock. In 1995, due to the receipt of regulatory approvals for its transdermal estrogen delivery system, a significant portion of the Company's revenues were derived from the sale of this product to the Company's two licensing partners, Rhone-Poulenc Rorer Pharmaceuticals, Inc. ("RPR") and Novartis Pharmaceuticals Corporation ("Novartis"). In 1996, revenues from the sale of these products increased substantially as the Company's licensing partners, initiated marketing and distribution. Noven expects that revenues from product sales to its licensing partners will fluctuate from quarter to quarter and year to year depending upon various factors not in Noven's control, including, but not limited to, the inventory requirements of each licensing partner at different times throughout the year, possible special selling efforts undertaken by each licensing partner at different times during the year, and, in the case of RPR the introduction of the product into new territories. Noven experienced fluctuations in sales of its transdermal estrogen delivery systems, Vivelle(TM) and MENOREST, to its licensing partners from the first three quarters to the last quarter of 1996 and the first half of 1997, when sales to these licensing partners declined. Although in-market sales of Noven's estrogen delivery system continue to increase on a global basis, inventory balancing by the Company's licensing partners resulted in significantly lower levels of reorders during the first half of 1997, causing losses. Noven believes this circumstance has been corrected and expects that product sales to its licensing partners will increase in the second half of 1997. Noven also expects to generate revenues in the second half of 1997 from licensing agreements with respect to products under development, although such revenues will fluctuate from period to period depending upon such factors as the number of new agreements finalized, timely achievement of milestones and strategic decisions affecting self-funding of products. Finally, during calendar year 1996, the Company commenced the marketing of its DentiPatch(TM) system on a regional basis. The product was launched nationally early in the second quarter of 1997 and increasing revenues are anticipated during the remainder of the year. RESULTS OF OPERATIONS --------------------- Total revenues decreased approximately $1,586,000 or 28% for the three month period ended June 30, 1997 from the same period in the prior year and decreased approximately $5,459,000 or 48% for the comparable six month period. This decrease in revenues was primarily the result of the decrease of approximately $5,058,000 in sales of the Company's transdermal estrogen delivery system to its two licensing partners during the first half of 1997. Royalties from transdermal estrogen delivery system are included in product sales. Licensing income decreased approximately $200,000 or 78% for Page 9 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) the three month period ended June 30, 1997 from the same period in the prior year and decreased approximately $225,000 or 62% for the comparable six month period. Interest income decreased approximately $117,000 or 38% for the three month period ended June 30, 1997 from the same period in the prior year and decreased approximately $171,000 or 29% for the comparable six month period, primarily due to lower balances in securities. Cost of product sold decreased approximately $1,115,000 or 41% for the three month period ended June 30, 1997 from the same period in the prior year and approximately $3,414,000 or 61% from the comparable six month period. The gross margin percentage was 60% for the three month period of 1997 as compared to 48% for the same period of the prior year and 59% for the first half of 1997 as compared to 46% in 1996. The gross margins vary depending on the amount of product sold to each licensing partner and manufacturing efficiencies including those relating to production volumes and in the first half of 1997 were favorably impacted by the sale of the DentiPatch product. Research and development increased approximately $393,000 or 20% for the three month period ended June 30, 1997 from the same period in the prior year and increased approximately $123,000 or 3% from the comparable six month period. In 1997 research and development expenses for new product development continued at approximately the same rate as in 1996. New product development included work related to transoral delivery systems in the areas of dental therapeutics, glucose metabolism, hormone deficiency and cardiovascular disease, in addition to transdermal delivery systems for NSAIDs and other widely sold drugs. Marketing, general and administrative expenses increased approximately $1,348,000 or 146% for the three month period ended June 30, 1997 from the same period in the prior year and approximately $2,183,000 or 122% for the comparable six month period. The increase in marketing, general and administrative expenses was primarily due to marketing expenses to support the launch of the DentiPatch system, increases in staffing and associated office expenses. LIQUIDITY AND CAPITAL RESOURCES The Company has historically financed its operations through public offerings of common stock, including the exercise of warrants issued in connection with the first such offerings, private placements of its equity securities, license and contract revenues, and interest income. However, since the launch of its first commercial product in 1995, the Company's operations have been principally financed increasingly by revenues from the sale of its transdermal estrogen delivery system to its licensing partners. The Company has neither utilized debt nor has it engaged in significant commercial lease transactions to finance its operations. Net cash used in operating activities for the six months ended June 30, 1997 was approximately $3,150,000. In 1997 this funded the net loss of approximately $4,789,000 partially offset by a decrease in accounts receivable of approximately $1,005,000 and an increase in accounts payable of approximately $237,000. In 1996, operating activities provided approximately $951,000. In 1996 the decrease in accounts receivable of approximately $2,300,000 funded the net loss of approximately $438,000, the decrease in accounts payable of approximately $1,176,000 and the increase in inventory of approximately $228,000. Page 10 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED ) During the six months ended June 30, 1997 the Company's investing activities provided approximately $8,400,000 compared to approximately $7,300,000 used in the six months ended June 30, 1996. Net cash provided during 1997 in investing activities resulted primarily from the sale of securities held to maturity to finance operating activities partially offset by capital expenditures for commercial manufacturing equipment, improvements at the new manufacturing site and investments in patents. Net cash used in 1996, resulted primarily from the purchase of securities held to maturity, partially offset by capital expenditures for manufacturing equipment, improvements at the new manufacturing site and investments in patents. As of June 30, 1997 the Company had commitments for capital expenditures of approximately $16,000. Net cash provided by financing activities of approximately $4,000 and $17,000 for six months ended June 30, 1997 and 1996 respectively, resulted from the exercise of options in the employee stock option plan. The Company expects to incur additional costs related to product development activities, increased marketing, general and administrative expenses and the completion of its manufacturing facilities. Although the Company believes that existing cash, anticipated contract and manufacturing revenues will be adequate for the foreseeable future, circumstances could arise which may result in a desire to raise additional capital. There can be no assurance that such capital will be available on acceptable terms, or at all. FORWARD LOOKING STATEMENTS -------------------------- From time to time, Noven may publish forward looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, usage and development activities and some other matters. The words "may", "will", "expect", "anticipate", "continue", "estimate", "project", "intend" and similar expressions are intended to identify such forward looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward looking statements. In order to comply with the terms of the safe harbor, Noven notes that a variety of factors could cause its actual results and experience to differ materially from anticipated results and other expectations expressed by Noven's forward looking statements. The risks and uncertainties that may effect the operations, performance, development and results of Noven's business, include the following: 1. Dependence upon RPR and Novartis, its two licensing partners, with respect to (i) the commercialization and marketing of certain transdermal hormonal products and (ii) obtaining regulatory approval of certain other transdermal hormonal products. 2. Uncertainties regarding (i) the market share for Noven's transdermal hormonal products which can be captured by Noven's licensing partners, and (ii) the market for DentiPatch(TM) product and Noven's ability to successfully establish and effectuate a marketing program. 3. Unanticipated difficulties associated with the manufacturing process of Menorest and Vivelle(TM) for its licensing partners as well as its DentiPatch(TM) product, that could result in delays in delivery and shortages of product. Page 11 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 4. Competition from other entities engaged in transdermal and/or transoral research, development, manufacturing and marketing, as well as other entities engaged in alternative drug delivery technologies. 5. Difficulties associated with (i) identifying appropriate licensing partners capable of meeting the financial requirements of research and development and/or marketing new products, and (ii) consummating satisfactory licensing agreements. 6. The time required to obtain regulatory approval of products and its associated expenses. 7. The possible exposure to product liability suits in excess of insurance policy limits or excluded from insurance coverage. Readers are cautioned not to place undue reliance on forward looking statements when made, which speak only as of the date made. Noven undertakes no obligation to publicly release the results of any revision of these forward looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events. Also, unless expressly stated, Noven does not adopt projections, forecasts or other forward looking statements which may be disseminated from time to time by analysts and others. PART II - OTHER INFORMATION --------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Annual Meeting of Stockholders held on June 3, 1997. (i) Election of Directors
FOR AGAINST ABSTAIN --- ------- ------- Steven Sablotsky 16,287,428 399,652 0 Mitchell Goldberg 16,310,828 376,252 0 Sheldon H. Becher 15,548,328 1,138,752 0 Sidney Braginsky 16,310,828 376,252 0 Lawrence J. DuBow 16,310,828 376,252 0
(ii) The ratification and approval of an amendment to the Certificate of Incorporation increasing the authorized shares of common stock ($.0001 par value) from 30,000,000 to 40,000,000 was approved by an affirmative vote of 16,069,470 shares to a negative vote of 493,787 shares, with 123,823 shares abstaining. Page 12 13 PART II - OTHER INFORMATION (CONTINUED) (iii) The ratification and approval of the 1997 Stock Option Plan which provides for the grant of incentive stock options and non-qualified stock options was approved by an affirmative vote of 13,947,171 shares to a negative vote of 1,621,676 shares, with 144,855 shares abstaining and 973,378 broker non-votes. (iv) The ratification of the appointment of Deloitte & Touche LLP as the independent certified public accountants for 1997 was approved by an affirmative vote of 16,532,771 shares to a negative vote of 45,997 shares, with 108,312 shares abstaining. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ------- -------------------------------- 3.7 Certificate of Amendment of Certificate of Incorporation of Noven Pharmaceuticals, Inc. filed with the Secretary of State of Delaware on June 13, 1997. 10.29 Amendment dated June 26, 1997 to the warrant to purchase 1,000,000 shares of common stock dated June 26, 1992 by and between the Company and Rhone-Poulenc Rorer Pharmaceuticals, Inc. 27 Financial Data Schedule (for S.E.C. use only). Page 13 14 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NOVEN PHARMACEUTICALS, INC . (Registrant) Date: August 12, 1997 By: /s/ Steven Sablotsky ------------------------ --------------------------------- Steven Sablotsky, Chairman of the Board and President By: /s/ William A.Pecora --------------------------------- William A. Pecora Chief Financial Officer Page 14 EX-3.7 2 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORP 1 EXHIBIT 3.7 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF NOVEN PHARMACEUTICALS, INC. NOVEN PHARMACEUTICALS, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That by unanimous consent of the Board of Directors of Noven Pharmaceuticals, Inc. resolutions were duly adopted setting forth a proposed amendment to the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and submitting it to the stockholders entitled to vote thereto for adoption at a meeting of stockholders. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered "Fourth" so that, as amended, said Article shall be and read as follows: The total number of shares of capital stock which the corporation shall have authority to issue is 40,100,000, of which 40,000,000 shall be common stock of $.0001 par value per share and of which 100,000 shall be preferred stock of $.01 par value per share. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is expressly authorized, in the resolution or any resolutions providing for the issue of any wholly unissued series of Preferred Stock, to fix, state and express the powers, rights, designations, preferences, qualifications, limitations and restrictions thereof, including, without limitation: the rate of dividends upon which and the times at which dividends on shares of such series shall be payable and the preferences, if any, 2 which such dividends shall have relative to dividends on shares of any other class or classes or any other series of stock of this corporation, whether such dividends shall be cumulative or non-cumulative, and if cumulative, the date or dates from which dividends on shares of such series shall be cumulative; the voting rights, if any, to be provided for shares of such series; the rights, if any, which the holders of shares of such series shall have in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; the rights, if any, which the holders of shares of such series shall have to convert such shares into or exchange such shares for shares of Common Stock of this Company and the terms and conditions, including price and rate of exchange of such conversion or exchange; the redemption (including sinking fund provisions), if any, of shares of such series; and such other powers, rights, designations, preferences, qualifications, limitations and restrictions as the Board of Directors may desire to so fix. The Board of Directors is also expressly authorized to fix the number of shares constituting such series and to increase or decrease the number of shares of any series prior to the issue of shares of that series and to decrease, but not increase, the number of shares of any series subsequent to the issue of shares of that series, but not below, the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series. SECOND: That thereafter, pursuant to resolution of its Board of Directors, the amendment was submitted to the stockholders entitled to vote thereon for adoption at the annual meeting of stockholders with the required notice in accordance with Section 242 of the General Corporation Law of the State of Delaware and at which the necessary number of shares as required by statute were voted in favor of the amendment. 3 THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Noven Pharmaceuticals, Inc. caused this certificate to be signed by Steven Sablotsky, its President and Noreen Sablotsky, its Secretary, this 9th day of June, 1997. /s/ Steven Sablotsky --------------------------- STEVEN SABLOTSKY, President /s/ Noreen Sablotsky --------------------------- NOREEN SABLOTSKY, Secretary The foregoing instrument was acknowledged before me this 9th day of June, 1997 by STEVEN SABLOTSKY and NOREEN SABLOTSKY, President and Secretary, respectively, of Noven Pharmaceuticals, Inc., a Delaware corporation, who are personally known to me, and did not take an oath. Monica A. Holliday /s/ Monica A. Holliday - ------------------------------- --------------------------- Typed, Printed or Stamped Notary Public -- State of Name of Notary Public Florida at large My Commission expires: August 11, 2000 [SEAL] EX-10.29 3 AMENDMENT TO WARRANT TO PURCHASE 1 Exhibit 10.29 AMENDMENT TO WARRANT TO PURCHASE 1,000,000 SHARES OF COMMON STOCK OF NOVEN PHARMACEUTICALS, INC. DATED JUNE 26, 1992 AND ISSUED TO RHONE POULENC RORER PHARMACEUTICALS, INC. WHEREAS, Rhone-Poulenc Rorer Pharmaceuticals, Inc. ("RPR") has certain rights pursuant to a certain Warrant to purchase 1,000,000 shares of common stock of Noven Pharmaceuticals, Inc. ("Noven") dated June 26, 1992 (the "Warrant"); and WHEREAS, Noven has agreed, at RPR's request, to extend the term of the Warrant; NOW THEREFORE, in consideration of $10.00 and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. The term of the Warrant with respect to 500,000 shares shall be extended until 3 P.M., July 1, 1997 (the "Exercise Date"). 2. Upon receipt of $4,000,000 by Noven with respect to the exercise of the Warrant for 500,000 shares no later than the Exercise Date, the term of the Warrant for the remaining 500,000 shares shall be deemed extended for a period of eighteen months and therefore can be exercised at any time and from time to time on or before 3:00 P.M. Eastern Day Light Time, December 26, 1998, but not thereafter. 3. Notwithstanding the provisions of 2 above, the right to exercise the Warrant will terminate, if not exercised, within ten (10) days from the filing by RPR of a marketing authorization application for the second generation Menorest product with the appropriate regulatory agency of any country in the European Union. 2 4. Other than the modifications set forth herein, the terms of the Warrant shall remain the same. Dated: June 26, 1997 NOVEN PHARMACEUTICALS, INC. By: /s/ Robin Norris ------------------------ ROBIN NORRIS , M.D., Vice-President ACCEPTED AND AGREED this ___ day of June, 1997. RHONE POULENC RORER PHARMACEUTICALS, INC. By: /s/ --------------------------- EX-27 4 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 10,673,278 4,873,358 2,361,421 0 4,170,101 22,350,935 18,921,313 3,346,383 39,568,174 2,293,107 0 0 0 1,996 31,292,050 39,568,174 5,265,230 5,844,988 2,174,816 2,174,816 4,481,840 0 0 (4,788,743) 0 (4,788,743) 0 0 0 (4,788,743) (.24) (.24)
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