-----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, E2CwGoMLaKOrVIdVK/eLQyJNGCsYaEQt0WvuOXdqgvcxbMReC6zeIpQxKqxhWXPt 6XbTCmtfdiaCpffCJbJEnA== 0000950135-99-005124.txt : 19991115 0000950135-99-005124.hdr.sgml : 19991115 ACCESSION NUMBER: 0000950135-99-005124 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991012 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARIAD PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000884731 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 223106987 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21696 FILM NUMBER: 99746544 BUSINESS ADDRESS: STREET 1: 26 LANDSDOWNE ST CITY: CAMBRIDGE STATE: MA ZIP: 02139 BUSINESS PHONE: 6174940400 MAIL ADDRESS: STREET 2: 26 LANDSDOWNE CITY: CAMBRIDGE STATE: MA ZIP: 02139 8-K 1 ARIAD PHARMACEUTICALS, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): OCTOBER 12, 1999 --------------------------- ARIAD PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-21696 22-3106987 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of incorporation) 26 LANDSDOWNE STREET, CAMBRIDGE, MASSACHUSETTS 02139 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 494-0400 ------------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. OTHER EVENTS 1. On October 12, 1999, ARIAD Pharmaceuticals, Inc. (the "REGISTRANT") announced that it had entered into a letter of intent (the "LETTER OF INTENT") with Hoechst Marion Roussel, Inc. ("HMR"), pursuant to which HMR confirmed its intention to purchase the Registrant's 50% ownership interest (the "ARIAD INTEREST") in the Hoechst-ARIAD Genomics Center, LLC, a joint venture that was created in 1997. Under the terms outlined in the Letter of Intent, the Registrant shall receive the following consideration from HMR for the ARIAD Interest: (i) $40 million in cash, of which $5 million has been advanced to the Registrant as a down payment, (ii) the return of 3,004,436 shares of series B convertible preferred stock, (iii) the forgiveness by HMR of all long-term debt, including accrued interest, which as of September 30, 1999 was approximately $1,828,000, and (iv) the rights to compounds and related technologies resulting from a collaboration on the development of Src tyrosine kinase inhibitors. The purchase and sale of the ARIAD Interest is subject to the negotiation and execution of definitive documentation and the satisfaction of closing conditions, including approval under the Hart-Scott-Rodino Anti-Trust Improvement Act of 1976. A copy of the press release disclosing the sale of the ARIAD Interest is filed herewith as Exhibit 99.1. 2. On October 28, 1999, the Registrant announced that it had entered into an agreement with Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson Strategic Growth Fund, L.P. (individually, a "FUND", and collectively, the "FUNDS") to repurchase (the "REPURCHASE") an aggregate of 2,000 shares of series C convertible preferred stock (the "SERIES C STOCK") held by the Funds and other rights for an aggregate purchase price of $3,250,000, subject to adjustment under certain circumstances. The closing of the Repurchase is presently expected to occur on or before December 31, 1999, subject to the satisfaction of closing conditions. In connection with the Repurchase, each of the Funds has agreed to forbear during the time prior to the closing from exercising certain rights arising under the Securities Purchase Agreement dated November 9, 1998 (the "SECURITIES PURCHASE AGREEMENT"), the Registration Rights Agreement dated November 9, 1998, and the Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock (the "CERTIFICATE OF DESIGNATIONS"), including without limitation: (i) the right to convert or redeem any shares of Series C Stock, (ii) the right to receive dividends, (iii) the right to purchase additional shares of Series C Stock from the Registrant, and (iv) the right to participate, through a right of first refusal, in certain future financings of the Registrant. A copy of the press release disclosing the Repurchase is filed herewith as Exhibit 99.2. 3. On October 28, 1999, the Registrant also announced that on October 26, 1999 it filed an action against both HFTP Investments, LLC ("HFTP"), an affiliate of Promethean Investment Group, LLC ("PROMETHEAN"), and Promethean in the United States District Court for the Southern District of New York entitled ARIAD PHARMACEUTICALS, INC. V. PROMETHEAN INVESTMENT GROUP, LLC AND HFTP INVESTMENTS, LLC, C.A. No. 99-Civ-10794, alleging (i) violations of the federal securities laws by Promethean and HFTP, including insider trading and stock manipulation through short sales of the Registrant's common stock, (ii) breach of contract, and (iii) breach of the covenant of good faith and fair dealing. At the time that the action was filed, the Registrant was in negotiations to repurchase 3,000 shares of Series C Stock held by HFTP. The Registrant is seeking an order enjoining Promethean and HFTP from further trading in the Registrant's common stock and damages in an amount to be determined at trial. Also on October 26, 1999, HFTP filed an action against the Registrant in the Chancery Court of the State of Delaware entitled HFTP INVESTMENTS, LLC V. ARIAD PHARMACEUTICALS, INC., C.A. No. 17501NC, principally alleging breach of contract by the Registrant for failure to recognize and 2 3 effectuate the conversion by HFTP of 612 shares of Series C Stock into 1,078,038 shares of the Registrant's common stock. HFTP is seeking an order requiring the issuance of such shares and unspecified damages. On November 1, 1999, HFTP filed a motion to amend and supplement its complaint to include an allegation of breach of contract for the anticipated failure by the Registrant to honor a right of redemption that HFTP attempted to exercise on November 1, 1999 with respect to 650 shares of Series C Stock. HFTP also alleges that Registrant will refuse to honor any additional redemptions of Series C Stock attempted by HFTP. Based on these new allegations, HFTP seeks damages in the amount of $2,403,256.50 for the redemption right that it has attempted to exercise, plus additional amounts for any redemptions that are refused by Registrant in the future. Thereafter, HFTP attempted to exercise its right of redemption with respect to 170 shares of Series C Stock on November 2, 1999, with respect to 1,474 shares of Series C Stock on November 3, 1999 and with respect to its remaining 94 shares of Series C Stock on November 4, 1999, demanding a total cash payment of $6,644,724.13 with respect thereto. The Registrant has not converted or redeemed any shares of its outstanding preferred stock held by HFTP and has filed a motion to dismiss or stay the action filed by HFTP in the Chancery Court of the State of Delaware. On November 8, 1999, the Registrant amended its complaint against HFTP and Promethean in the action pending before the United States District Court for the Southern District of New York, principally seeking (i) to enjoin Promethean and HFTP from further artificially manipulating the price of ARIAD common stock and trading in ARIAD common stock on the basis of material non-public information, (ii) to rescind the purchase by HFTP of the 3,000 shares of Series C Stock, (iii) to obtain a judicial determination that Promethean and HFTP have breached, and that the Registrant has complied with, the Securities Purchase Agreement and the Certificate of Designations, and (iv) to obtain a judicial declaration that HFTP is not entitled to convert or redeem any shares of Series C Stock under the Securities Purchase Agreement and the Certificate of Designations. A copy of the press release disclosing the initiation of the litigation between the Registrant and HFTP and Promethean is filed herewith as Exhibit 99.2. Item 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. Exhibit NO. DESCRIPTION ------- ----------- 99.1 Press Release, dated October 12, 1999. 99.2 Press Release, dated October 28, 1999. 3 4 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. ARIAD PHARMACEUTICALS, INC. Dated: November 10, 1999 By: /s/ Jay R. Lamarche ------------------------- Jay R. LaMarche Executive Vice President 4 5 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 99.1 Press Release, dated October 12, 1999. 99.2 Press Release, dated October 28, 1999. 5 EX-99.1 2 PRESS RELEASE DATED OCTOBER 12, 1999 1 EXHIBIT 99.1 NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: Jay LaMarche Chief Financial Officer (617) 494-0400 Jennifer LaVin Bridge Communications (212) 554-4158 Lori Kraut Hoechst Marion Roussel US (908) 231-5752 HOECHST MARION ROUSSEL TO ACQUIRE ARIAD'S INTEREST IN GENOMICS JOINT VENTURE ARIAD TO RECEIVE RIGHTS FROM OSTEOPOROSIS COLLABORATION FRANKFURT, GERMANY AND CAMBRIDGE, MA, OCTOBER 12, 1999 -- Hoechst Marion Roussel, the pharmaceutical company of Hoechst AG, and ARIAD Pharmaceuticals, Inc. (Nasdaq: "ARIA") today announced that Hoechst Marion Roussel Inc. intends to purchase ARIAD's 50% ownership interest in the Hoechst-ARIAD Genomics Center, LLC, a joint venture created in 1997. ARIAD and Hoechst Marion Roussel established the Hoechst-ARIAD Genomics Center to pursue functional genomics based upon state-of-the-art technologies in molecular and cellular 2 genetics and bioinformatics. The center's goal is to analyze human genes and identify those genes that encode novel therapeutic proteins or targets for small-molecule drug discovery. ARIAD and HMR began collaborating on the discovery and development of drugs to treat osteoporosis and related bone diseases in 1995. The collaboration has focused on developing novel, small-molecule drugs that block the activity of Src, an intracellular signaling protein that is critical to the osteoporosis disease process. Under the terms of an agreement outlined in a letter of intent signed today, upon closing of the sale ARIAD will receive $40 million in cash; return of approximately three million shares of ARIAD series B convertible preferred stock; forgiveness of approximately $2 million of long-term debt held by Hoechst Marion Roussel; and rights to compounds and related technologies resulting from a collaboration on the development of Src tyrosine kinase inhibitors. Hoechst Marion Roussel will receive certain payments related to approval and commercial sale of Src inhibitors. ARIAD will be advanced $5 million of the purchase price immediately. Closing of the sale is expected before year-end 1999, pending execution of definitive agreements and approval under the Hart-Scott-Rodino Anti-Trust Improvement Act of 1976. "Sole ownership of the Hoechst-ARIAD Genomics Center will further enhance our drug discovery capabilities by affording us exclusive access to technologies required to analyze human genes and identify novel therapeutic targets," said Frank L. Douglas, M.D., member of the board and head of Drug Innovation and Approval for Hoechst Marion Roussel. "This transaction with Hoechst Marion Roussel is the first step in redefining our business. This restructuring of our relationship with Hoechst Marion Roussel will allow ARIAD to focus on near-term development programs and its own products with the goal of bringing one of our proprietary osteoporosis drug candidates to the clinic as soon as possible," said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. Hoechst Marion Roussel, a world leader in pharmaceutical-based health care, is dedicated to extending and enhancing human life through the discovery, development, manufacture and 2 3 sale of pharmaceutical products. Its major products are among the world's leading therapies for allergic, metabolic, and central nervous systems disorders and cardiovascular and infectious diseases. Based in Frankfurt, Germany, Hoechst Marion Roussel is the pharmaceutical company of Hoechst AG, an international company that focuses on life sciences. ARIAD Pharmaceuticals (www.ariad.com) is engaged in the discovery and development of novel therapeutics based on signal transduction technology. ARIAD is developing small-molecule drugs to block intracellular signaling pathways that play a critical role in major diseases, including osteoporosis and various immune-related disorders. ARIAD is also developing ARGENT(TM), a proprietary gene regulation technology for orally active protein therapy and cellular immunotherapy that utilizes small-molecule drugs to control intracellular signaling pathways in engineered cells. Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, which include, but are not limited to, risks and uncertainties regarding the successful completion of the sale of ARIAD's interest in the Genomics Center under the terms described above, if at all, ARIAD's preclinical studies, the ability of ARIAD to conduct clinical trials of its products and the success of such trials, as well as risks and uncertainties relating to economic conditions, markets, products, competition, intellectual property, services and prices, key employees, future capital needs, dependence on our collaborators and other factors under the heading "Cautionary Statement Regarding Forward-Looking Statements" in ARIAD's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 filed with the Securities and Exchange Commission. ### 3 EX-99.2 3 PRESS RELEASE DATED OCTOBER 28, 1999 1 EXHIBIT 99.2 NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: Jay LaMarche Chief Financial Officer (617) 494-0400 Eytan Apter Small Caps Online Communications (212) 554-4158 ARIAD SEEKS REPURCHASE OF SERIES C PREFERRED STOCK ARIAD AGREES TO REPURCHASE 2,000 SHARES HELD BY BROWN SIMPSON FUNDS AND FILES LAWSUIT AGAINST PROMETHEAN INVESTMENT GROUP AND HFTP INVESTMENTS CAMBRIDGE, MA, OCTOBER 28, 1999 -- ARIAD Pharmaceuticals, Inc. (Nasdaq: "ARIA") today announced that it has entered into an agreement with Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson Strategic Growth Fund, L.P. to repurchase their 2,000 shares of ARIAD's series C preferred stock and other rights for an aggregate purchase price of $3,250,000, subject to certain closing conditions and price adjustments under certain circumstances. The closing is expected to occur during the fourth quarter of 1999. To facilitate the repurchase, the Brown Simpson funds agreed to forbear during the 1 2 time prior to the closing from exercising certain rights under the series C purchase agreement, including the right to convert or redeem their preferred stock, the right to receive dividends, the right to purchase additional shares of series C preferred stock from ARIAD and the right to participate, through a right of first refusal, in future financings of ARIAD. The 2,000 shares of series C preferred stock were issued by ARIAD to the Brown Simpson funds in November 1998 for $2,000,000. Another 3,000 shares of series C preferred stock were issued to HFTP Investments, LLC, an affiliate of Promethean Investment Group, LLC, in November 1998 for $3,000,000. HFTP attempted earlier this month to convert certain of these shares of series C preferred stock into ARIAD common stock. Although ARIAD is in ongoing negotiations to repurchase these shares, on October 26, 1999, it filed an action in the United States District Court for the Southern District of New York entitled ARIAD PHARMACEUTICALS, INC. V. PROMETHEAN INVESTMENT GROUP, LLC AND HFTP INVESTMENTS, LLC, C.A. No. 99-Civ-10794. ARIAD's complaint relies upon Promethean's admission of substantial short sales of ARIAD common stock prior to sending its conversion notice, and ARIAD alleges violations of the federal securities laws by Promethean and HFTP, including insider trading and stock manipulation through short sales, breach of contract and breach of the covenant of good faith and fair dealing, and is seeking an order enjoining defendants from further trading in ARIAD's common stock and damages in an amount to be determined at trial. On the same date, HFTP filed an action against ARIAD in the Chancery Court of the State of Delaware entitled HFTP INVESTMENTS, LLC V. ARIAD PHARMACEUTICALS, INC., C.A. No. 17501NC, 2 3 alleging ARIAD's breach of contract for failure to convert certain shares of series C preferred stock into approximately 1.1 million shares of ARIAD common stock, and seeking an order requiring issuance of such shares and incidental damages in an amount specified in the certificate of designations for the series C preferred stock. To date, ARIAD has not converted any preferred shares due to the alleged wrongful activities of Promethean and HFTP. "We are extremely pleased by the agreement of the Brown Simpson funds to sell their preferred shares back to ARIAD on terms which are fair to all parties involved," said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "Brown Simpson's willingness to agree to this repurchase before year end will prevent conversion of these preferred shares and the resulting dilution to ARIAD's common shareholders." ARIAD Pharmaceuticals (www.ariad.com) is engaged in the discovery and development of novel therapeutics based on signal transduction technology. ARIAD is developing small-molecule drugs to block intracellular signaling pathways that play a critical role in major diseases, including osteoporosis and various immune-related disorders. ARIAD is also developing ARGENT(TM), a proprietary gene regulation technology for orally active protein therapy and cellular immunotherapy that utilizes small-molecule drugs to control intracellular signaling pathways in engineered cells. Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, which include, but are not limited to, risks and uncertainties regarding the successful completion of the purchase of the series C preferred stock under the terms described above, if at all, the successful sale of ARIAD's interest in the Genomics Center or ability to obtain other financing for the series C preferred stock repurchase, the outcome of ARIAD's litigation with Promethean and HFTP or ability to settle on reasonable terms, or at all, as well as risks and uncertainties relating to economic conditions, markets, products, competition, intellectual property, services and prices, key employees, future capital needs, dependence on our collaborators and other factors under the heading "Cautionary Statement Regarding Forward-Looking Statements" in ARIAD's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 filed with the Securities and Exchange Commission. ### 3 -----END PRIVACY-ENHANCED MESSAGE-----