Attached files
file | filename |
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EX-2.1 - EX-2.1 - CLINICAL DATA INC | b84085exv2w1.htm |
EX-99.1 - EX-99.1 - CLINICAL DATA INC | b84085exv99w1.htm |
EX-10.3 - EX-10.3 - CLINICAL DATA INC | b84085exv10w3.htm |
EX-10.4 - EX-10.4 - CLINICAL DATA INC | b84085exv10w4.htm |
EX-10.2 - EX-10.2 - CLINICAL DATA INC | b84085exv10w2.htm |
EX-10.1 - EX-10.1 - CLINICAL DATA INC | b84085exv10w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2010
CLINICAL DATA, INC.
(Exact name of registrant as specified in its charter)
Delaware | 000-12716 | 04-2573920 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer | ||
Identification No.) |
One Gateway Center, Suite 702, Newton, Massachusetts
|
02458 | |||
(Address of Principal Executive Offices)
|
(Zip Code) |
Registrants telephone number, including area code: (617) 527-9933
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 1.01 Entry into a Material Definitive Agreement.
The response to this item is contained in Item 2.01. Completion of Acquisition or Disposition
of Assets below and is incorporated by reference herein in its entirety.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 29, 2010, Clinical Data, Inc. (the Company) completed the previously announced
sale (the Transaction) to Transgenomic, Inc. (Transgenomic) of substantially all of the assets associated
with the Companys FAMILION® Testing and Pharmacogenomics Biomarker Development Business
(the Business). The consideration received from Transgenomic at the closing consisted of $6
million in cash, a secured promissory note (the First Note) issued by Transgenomic in the
principal amount of $8,639,650 and a secured promissory note (the Second Note) in the principal
amount of $988,500. In addition, the Company is entitled to receive additional consideration in the
future based on Transgenomics collection of the accounts receivable of the Business, the
successful development and commercialization of biomarker assays for any FCGamma gene or any ABCB
or MDR gene, reimbursements received by Transgenomic from payors or any sublicencees in connection
with the performance of certain biomarker assays of the Business (or sales of reagent-assay
kits) and a subsequent sale or exclusive license to any third party by Transgenomic of certain of the assets of
the Business.
Contemporaneous with the closing of the Transaction (the Closing), the Company and PGxHealth, LLC, a
subsidiary of the Company, entered into an Amendment to Asset Purchase Agreement (the Amendment),
which amended certain terms of the Asset Purchase Agreement (the Purchase Agreement) entered into
by the parties on November 29, 2010. In particular, the Amendment increased the amount of the
Second Note from $932,000 to $988,500 and reduced the potential payments to the Company based on
Transgenomics collection of the accounts receivable of the Business.
The First Note is a three-year note bearing interest at 10% per annum and is payable in equal
quarterly installments commencing on the eighteen-month anniversary of the Closing. The Second Note
is a one-year note bearing interest at 6.5% per annum and is payable in equal monthly installments
commencing on the one-month anniversary of the Closing. In connection with the Closing and the
issuance of the First Note and Second Note, the parties entered into a Security Agreement (the
Security Agreement) that provides the Company with a first lien security interest in all of
Transgenomics assets, including the assets of the Business. The Security Agreement also restricts Transgenomics
ability to incur additional indebtedness, dispose of the collateral covered by the Security
Agreement and declare any dividends or make distributions to its stockholders.
Pursuant to the terms of the Purchase Agreement the parties have also entered into a
Noncompetition and Nonsolicitation Agreement (the Noncompetition and Nonsoliciation Agreement)
that prohibits the Company from engaging in any activity that is competitive with the Business for a period of three years or from soliciting the
employment of Transgenomics employees for a period of three years.
In connection with the Closing, Randal J. Kirk, one of the Companys
directors, the Chairman of the Companys Board of Directors and a stockholder of the Company
invested, through certain of his affiliates, $6 million in Transgenomic in the form of a purchase
of Transgenomics Series A convertible preferred stock and warrants to purchase Series A
convertible
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preferred stock. The investment by Mr. Kirk was used to fund the cash portion of Transgenomics
acquisition of the Business.
The foregoing summary of the Amendment, First Note, Second Note, Security Agreement and the
Noncompetition and Nonsoliciation Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Amendment, First Note, Second Note, Security
Agreement and the Noncompetition and Nonsoliciation Agreement, copies of which are filed as
Exhibits 2.1, 10.1, 10.2, 10.3 and 10.4, respectively, to
this Current Report on Form 8-K and are incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On December 29, 2010, the Company issued a press release announcing the Closing referred to in Item 2.01 above. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed financial statements include
adjustments to reflect the sale of the Business on the financial position and to exclude the results
of operations of the Business.
The data are presented for informational purposes only and are not intended to represent or be
indicative of the results of operations or financial condition of the Company that would have
been reported had the disposition of the Business been completed as of the dates presented, and
should not be taken as representative of future results of operations or financial condition of
the Company. The unaudited pro forma condensed financial information should be read in
conjunction with the historical consolidated financial statements and the accompanying notes of
the Company.
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CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
For the six months ended September 30, 2010 | For the six months ended September 30, 2009 | |||||||||||||||||||||||
Historical | Pro Forma | Historical | Pro Forma | |||||||||||||||||||||
Clinical Data | Disposition(1) | Clinical Data | Clinical Data | Disposition(1) | Clinical Data | |||||||||||||||||||
(In thousands, except per share) | ||||||||||||||||||||||||
Revenues |
$ | 8,873 | $ | (6,873 | ) | $ | 2,000 | $ | 6,737 | $ | (6,737 | ) | $ | | ||||||||||
Cost of revenues |
3,238 | (2,738 | ) | 500 | 3,278 | (3,278 | ) | | ||||||||||||||||
Gross profit |
5,635 | (4,135 | ) | 1,500 | 3,459 | (3,459 | ) | | ||||||||||||||||
OPERATING EXPENSES: |
||||||||||||||||||||||||
Research and development |
20,503 | (1,693 | ) | 18,810 | 20,422 | (1,704 | ) | 18,718 | ||||||||||||||||
Sales and marketing |
2,845 | (2,845 | ) | | 4,118 | (4,118 | ) | | ||||||||||||||||
General and administrative |
11,113 | (2,761 | ) (2) | 8,352 | 10,511 | (2,829 | ) (2) | 7,682 | ||||||||||||||||
Restructuring and lease exiting costs |
| | | 1,783 | | 1,783 | ||||||||||||||||||
Transaction costs incurred in connection
with the Avalon acquisition |
| | | 1,978 | | 1,978 | ||||||||||||||||||
Total operating expenses |
34,461 | (7,299 | ) | 27,162 | 38,812 | (8,651 | ) | 30,161 | ||||||||||||||||
Operating loss |
(28,826 | ) | 3,164 | (25,662 | ) | (35,353 | ) | 5,192 | (30,161 | ) | ||||||||||||||
Interest expense |
(516 | ) | 4 | (3) | (512 | ) | (750 | ) | 25 | (3) | (725 | ) | ||||||||||||
Interest expense (related party) |
(3,185 | ) | | (3,185 | ) | (4,700 | ) | | (4,700 | ) | ||||||||||||||
Interest income |
15 | 456 | (5) | 471 | 54 | 456 | (5) | 510 | ||||||||||||||||
Other income (expense) |
1,978 | | 1,978 | 1,841 | | 1,841 | ||||||||||||||||||
Loss from continuing operations before taxes |
(30,534 | ) | 3,624 | (26,910 | ) | (38,908 | ) | 5,673 | (33,235 | ) | ||||||||||||||
Provision for income taxes |
| | | | | | ||||||||||||||||||
Loss from continuing operations |
$ | (30,534 | ) | $ | 3,624 | $ | (26,910 | ) | $ | (38,908 | ) | $ | 5,673 | $ | (33,235 | ) | ||||||||
Loss from continuing operations per basic and diluted share |
$ | (1.06 | ) | $ | (0.94 | ) | $ | (1.66 | ) | $ | (1.42 | ) | ||||||||||||
Weighted average common shares outstanding |
28,678 | 28,678 | 23,412 | 23,412 | ||||||||||||||||||||
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CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
For the year ended March 31, 2010 | For the year ended March 31, 2009 | For the year ended March 31, 2008 | ||||||||||||||||||||||||||||||||||
Historical | Pro Forma | Historical | Pro Forma | Historical | Pro Forma | |||||||||||||||||||||||||||||||
Clinical Data | Disposition(1) | Clinical Data | Clinical Data | Disposition(1) | Clinical Data | Clinical Data | Disposition(1) | Clinical Data | ||||||||||||||||||||||||||||
(In thousands, except per share) | ||||||||||||||||||||||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||||||||||||||||||||||
Revenues |
$ | 13,085 | $ | (13,085 | ) | $ | | $ | 10,442 | $ | (10,442 | ) | $ | | $ | 5,107 | $ | (5,107 | ) | $ | | |||||||||||||||
Cost of revenues |
6,244 | (6,244 | ) | | 6,489 | (6,489 | ) | | 2,627 | (2,627 | ) | | ||||||||||||||||||||||||
Gross profit |
6,841 | (6,841 | ) | | 3,953 | (3,953 | ) | | 2,480 | (2,480 | ) | | ||||||||||||||||||||||||
OPERATING EXPENSES: |
||||||||||||||||||||||||||||||||||||
Research and development |
56,785 | (3,159 | ) | 53,626 | 44,134 | (1,048 | ) (4) | 43,086 | 16,889 | (349 | ) (4) | 16,540 | ||||||||||||||||||||||||
Sales and marketing |
8,155 | (8,155 | ) | | 7,764 | (7,764 | ) | | 3,612 | (3,612 | ) | | ||||||||||||||||||||||||
General and administrative |
23,699 | (5,122 | ) (2) | 18,577 | 19,730 | (4,100 | ) (2) | 15,630 | 16,806 | (1,224 | ) (2) | 15,582 | ||||||||||||||||||||||||
Restructuring and lease exiting costs |
2,447 | | 2,447 | | | | | | | |||||||||||||||||||||||||||
Purchased in-process research and development |
| | | 55,100 | | 55,100 | | | | |||||||||||||||||||||||||||
Transaction costs incurred in connection
with the Avalon acquisition |
1,978 | | 1,978 | | | | | | | |||||||||||||||||||||||||||
Total operating expenses |
93,064 | (16,436 | ) | 76,628 | 126,728 | (12,912 | ) | 113,816 | 37,307 | (5,185 | ) | 32,122 | ||||||||||||||||||||||||
Operating loss |
(86,223 | ) | 9,595 | (76,628 | ) | (122,775 | ) | 8,959 | (113,816 | ) | (34,827 | ) | 2,705 | (32,122 | ) | |||||||||||||||||||||
Interest expense |
(1,367 | ) | 28 | (3) | (1,339 | ) | (1,257 | ) | 46 | (3) | (1,211 | ) | (76 | ) | | (76 | ) | |||||||||||||||||||
Interest expense (related party) |
(7,761 | ) | | (7,761 | ) | (545 | ) | | (545 | ) | | | | |||||||||||||||||||||||
Interest income |
80 | 899 | (5) | 979 | 716 | 899 | 1,615 | (5) | 2,020 | 899 | (5) | 2,919 | ||||||||||||||||||||||||
Other income (expense) |
1,771 | | 1,771 | 179 | | 179 | 305 | | 305 | |||||||||||||||||||||||||||
Loss from continuing operations before taxes |
(93,500 | ) | 10,522 | (82,978 | ) | (123,682 | ) | 9,904 | (113,778 | ) | (32,578 | ) | 3,604 | (28,974 | ) | |||||||||||||||||||||
Benefit from (provision for) income taxes |
| | | | 230 | 230 | ||||||||||||||||||||||||||||||
Net (loss) income from continuing operations |
$ | (93,500 | ) | $ | 10,522 | $ | (82,978 | ) | $ | (123,682 | ) | $ | 9,904 | $ | (113,778 | ) | $ | (32,348 | ) | $ | 3,604 | $ | (28,744 | ) | ||||||||||||
Loss per
basic and diluted share |
$ | (3.77 | ) | $ | (3.35 | ) | $ | (5.63 | ) | $ | (5.18 | ) | $ | (1.69 | ) | $ | (1.51 | ) | ||||||||||||||||||
Weighted
average shares outstanding, basic and diluted |
24,769 | 24,769 | 21,962 | 21,962 | 19,081 | 19,081 | ||||||||||||||||||||||||||||||
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CLINICAL DATA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEETS
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEETS
As of September 30, 2010 | As of March 31, 2010 | |||||||||||||||||||||||
Historical | Pro Forma | Historical | Pro Forma | |||||||||||||||||||||
Clinical Data | Disposition(1) | Clinical Data | Clinical Data | Disposition(1) | Clinical Data | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Current Assets: |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | 47,027 | $ | 5,650 | $ | 52,677 | $ | 49,245 | $ | 5,650 | $ | 54,895 | ||||||||||||
Accounts receivable, net |
2,972 | (2,972 | ) | | 2,851 | (2,851 | ) | | ||||||||||||||||
Prepaid expenses and other current assets |
1,543 | (730 | ) | 813 | 1,488 | (639 | ) | 849 | ||||||||||||||||
Note receivable |
| 989 | 989 | | 989 | 989 | ||||||||||||||||||
Total current assets |
51,542 | 2,937 | 54,479 | 53,584 | 3,149 | 56,733 | ||||||||||||||||||
Property, plant and equipment, net |
2,317 | (1,533 | ) | 784 | 2,795 | (1,813 | ) | 982 | ||||||||||||||||
Goodwill |
31,849 | (1,016 | ) | 30,833 | 31,849 | (1,016 | ) | 30,833 | ||||||||||||||||
Intangibles assets, net |
9,791 | (3,437 | ) | 6,354 | 10,665 | (3,753 | ) | 6,912 | ||||||||||||||||
Note receivable |
| 8,640 | 8,640 | | 8,640 | 8,640 | ||||||||||||||||||
Other assets, net |
61 | | 61 | 62 | | 62 | ||||||||||||||||||
TOTAL ASSETS |
$ | 95,560 | $ | 5,591 | $ | 101,151 | $ | 98,955 | $ | 5,207 | $ | 104,162 | ||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||
Current portion of long-term debt |
$ | 6,115 | $ | | $ | 6,115 | $ | 6,635 | $ | | $ | 6,635 | ||||||||||||
Current portion of capital lease obligations |
143 | (96 | ) | 47 | 138 | (93 | ) | 45 | ||||||||||||||||
Accounts payable |
2,355 | | 2,355 | 5,550 | | 5,550 | ||||||||||||||||||
Accrued expenses and other current liabilities |
9,864 | (272 | ) | 9,592 | 25,065 | (486 | ) | 24,579 | ||||||||||||||||
Total current liabilities |
18,477 | (368 | ) | 18,109 | 37,388 | (579 | ) | 36,809 | ||||||||||||||||
Long-Term Liabilities: |
||||||||||||||||||||||||
Long-term debt, net of current portion |
8,800 | | 8,800 | 11,329 | (229 | ) | 11,100 | |||||||||||||||||
Convertible note payable (related-party), net of unamortized discount |
30,878 | | 30,878 | 30,129 | | 30,129 | ||||||||||||||||||
Capital lease obligations, net of current portion |
84 | (22 | ) | 62 | 157 | (71 | ) | 86 | ||||||||||||||||
Contingent acquisition costs |
15,372 | | 15,372 | 16,039 | | 16,039 | ||||||||||||||||||
Other long-term liabilities |
15 | | 15 | 20 | 20 | |||||||||||||||||||
Total long-term liabilities |
55,149 | (22 | ) | 55,127 | 57,674 | (300 | ) | 57,374 | ||||||||||||||||
Stockholders equity: |
||||||||||||||||||||||||
Common stock |
299 | | 299 | 265 | | 265 | ||||||||||||||||||
Additional paid-in capital |
391,886 | | 391,886 | 343,345 | | 343,345 | ||||||||||||||||||
Accumulated deficit |
(370,251 | ) | 5,981 | (364,270 | ) | (339,717 | ) | 6,086 | (333,631 | ) | ||||||||||||||
Total stockholders equity |
21,934 | 5,981 | 27,915 | 3,893 | 6,086 | 9,979 | ||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 95,560 | $ | 5,591 | $ | 101,151 | $ | 98,955 | $ | 5,207 | $ | 104,162 | ||||||||||||
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Notes to Unaudited Pro Forma Condensed Financial Statements
(1) | On December 29, 2010, the Company completed the previously announced sale to Transgenomic, of substantially all of the assets associated with the Companys FAMILION® Testing and Pharmacogenomics Biomarker Development Business. The consideration received from Transgenomic at the closing consisted of $6 million in cash, a secured promissory note issued by Transgenomic in the principal amount of approximately $8,639,650 and a secured promissory note in the principal amount of $988,500. The Company has valued these notes at face amount which is an estimate and may be subject to change based on a valuation to be performed by the Company. In addition, the Company is entitled to receive additional consideration in the future based on Transgenomics collection of the accounts receivable included in the assets of the Business, the successful development and commercialization of biomarker assays for any FCGamma gene or any ABCB or MDR gene, reimbursements received by Transgenomic from payors or any sublicencees in connection with the performance of certain biomarker assays of the Business (or sales of reagent-assay kits) and a subsequent sale or exclusive license to any third party by Transgenomic of certain of the assets of the Business. These pro forma financials do not include the effects of such potential consideration. |
The First Note is a three-year note bearing interest at 10% per annum and is payable in equal quarterly installments commencing on the eighteen-month anniversary of the Closing. The Second Note is a one-year note bearing interest at 6.5% per annum and is payable in equal monthly installments commencing on the one-month anniversary of the Closing. |
In connection with the Transaction, the Company is obligated to pay severance and other related costs to certain employees of the Business not assumed by Transgenomic, as well as certain costs associated with the laboratory information systems. In addition, the Company incurred or will incur fees in connection with this transaction for legal, bankers fees and other professional fees. The Company estimates these costs to total $1.2 million, of which approximately $350,000 has been paid as of the date of the Closing. |
(2) | Includes amortization of intangible assets related to the clinical laboratory and biomarkers for the six months ended September 30, 2010 and 2009 of $445,000 and $592,000, respectively, and for the years ended March 31, 2010, 2009 and 2008 of $865,000, $600,000 and $446,000 respectively. This does not include any allocation of corporate overhead costs such as legal, accounting, human resources and information technology. |
(3) | To adjust interest expense to reflect the pro forma effects of the elimination of the long-term debt and capital leases related to the Business. |
(4) | The Company did not segregate research and development expenses related to the biomarkers prior to fiscal year 2010. The biomarkers largely consist of the biomarkers PGxHealth, LLC acquired from Epidauros Biotechnologie AG in December 2008. The Company does not believe that research and development expenses related to biomarkers during the fiscal year ended March 31, 2009 and 2008 were material. The Company did not segregate research and development expenses related to the development of new genetic tests prior to fiscal year 2009. The Company does not believe that research and development |
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expenses related to the development of new genetic tests during the fiscal year ended March 31, 2008 were material. |
(5) | To adjust interest income to reflect the pro forma effects of the promissory notes received. |
(d) Exhibits.
2.1
|
Amendment to Asset Purchase Agreement, dated as of December 29, 2010, by and among PGxHealth, LLC, Clinical Data, Inc. and Transgenomic, Inc. | |
10.1
|
Secured Promissory Note, dated December 29, 2010, issued by Transgenomic, Inc. to PGxHealth, LLC | |
10.2
|
Secured Promissory Note, dated December 29, 2010, issued by Transgenomic, Inc. to PGxHealth, LLC | |
10.3
|
Security Agreement, dated as of December 29, 2010, by and between PGxHealth, LLC and Transgenomic, Inc. | |
10.4
|
Noncompetition and Nonsolicitation Agreement, dated as of December 29, 2010, by and among PGxHealth, LLC, Clinical Data, Inc. and Transgenomic, Inc. | |
99.1
|
The press release issued by Clinical Data, Inc. on December 29, 2010 |
| Confidential treatment has been requested with respect to certain portions of this exhibit. This exhibit omits the information subject to this confidentiality request. Omitted portions have been filed separately with the SEC. |
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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 hereunto duly authorized.
Clinical Data, Inc. |
||||
By: | /s/ Caesar J. Belbel | |||
Caesar J. Belbel | ||||
Executive Vice President, Chief Legal Officer and Secretary |
||||
DATE: January 5, 2011
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EXHIBIT INDEX
Exhibit No. | Description | |
2.1
|
Amendment to Asset Purchase Agreement, dated as of December 29, 2010, by and among PGxHealth, LLC, Clinical Data, Inc. and Transgenomic, Inc. | |
10.1
|
Secured Promissory Note, dated December 29, 2010, issued by Transgenomic, Inc. to PGxHealth, LLC | |
10.2
|
Secured Promissory Note, dated December 29, 2010, issued by Transgenomic, Inc. to PGxHealth, LLC | |
10.3
|
Security Agreement, dated as of December 29, 2010, by and between PGxHealth, LLC and Transgenomic, Inc. | |
10.4
|
Noncompetition and Nonsolicitation Agreement, dated as of December 29, 2010, by and among PGxHealth, LLC, Clinical Data, Inc. and Transgenomic, Inc. | |
99.1
|
The press release issued by Clinical Data, Inc. on December 29, 2010 |
| Confidential treatment has been requested with respect to certain portions of this exhibit. This exhibit omits the information subject to this confidentiality request. Omitted portions have been filed separately with the SEC. |