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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 5, 2004
Keryx Biopharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-30929 13-4087132
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
750 Lexington Avenue
New York, New York 10022
(Address of principal executive offices)
(212)-531-5965
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On February 5, 2004, Keryx Biopharmaceuticals, Inc., or Keryx, completed
the acquisition of ACCESS Oncology, Inc., or ACCESS, a Delaware corporation.
ACCESS is a biopharmaceutical company focused on acquiring, developing and
marketing novel therapeutics for cancer and related conditions. The transaction
was structured as a merger of AXO Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Keryx, with and into ACCESS, with ACCESS remaining as
the surviving corporation. As a result of the transaction, ACCESS is now a
wholly-owned subsidiary of Keryx.
Under the terms of the merger agreement, as amended, at the effective time
of the merger the outstanding shares of preferred stock of ACCESS were converted
into the right to receive, at the election of each preferred stockholder, either
(i) shares of Keryx common stock to be issued approximately 30 days after the
merger having a value (as determined in accordance with the merger agreement)
equal to the value of the liquidation preference associated with the
stockholder's shares of preferred stock, or (ii) a portion of the contingent
milestone consideration (described below) payable to the holders of ACCESS
common stock and securities convertible into ACCESS common stock in an amount
equal to what the preferred stockholder would have received had he converted his
preferred stock immediately before the consummation of the merger. At the
effective time of the merger, each share of ACCESS common stock, including
shares issuable upon the exercise of options exercised before March 1, 2004 and
upon the exercise of outstanding warrants, was converted into the right to share
in milestone consideration pro rata with such other holders of ACCESS common
stock.
The contingent milestone consideration will be paid upon the achievement of
the following milestones:
o 500,000 shares of Keryx common stock upon initiation of the first
Keryx-sponsored Phase III (or other Pivotal) clinical trial for
any of the acquired ACCESS drug candidates;
o 750,000 shares of Keryx common stock upon the first NDA acceptance
by the FDA for any of the acquired ACCESS drug candidates;
o 1,750,000 shares of Keryx common stock upon the first FDA approval
of any of the acquired ACCESS drug candidates;
o 500,000 shares of Keryx common stock in the first 12-month period
that sales of all of the acquired ACCESS drug candidates combined
exceeds $100MM; and
o 500,000 shares of Keryx common stock in the first 12-month period
that sales of all of the acquired ACCESS drug candidates combined
exceeds $250MM.
In no event will Keryx issue more than 4,000,000 shares of its common stock
pursuant to the merger agreement. Accordingly, the amount of Keryx common stock
deliverable to the ACCESS stockholders as milestone consideration will be
reduced by an amount equal to the number of shares of Keryx common stock issued
to the holders of ACCESS preferred stock who do not elect to receive milestone
consideration. The Keryx stockholders must approve the issuance of shares of
Keryx common stock payable as contingent milestone consideration. If they do not
approve such issuance, Keryx will instead pay the former ACCESS stockholders
cash in an amount equaling the value (determined in accordance with the merger
agreement) of the Keryx common stock that would have been issued as milestone
consideration. Stockholder approval is not required for the initial issuance of
Keryx common stock to the ACCESS preferred stockholders electing to receive
contingent milestone consideration.
Keryx and certain of its executive officers and directors had material
relationships with ACCESS, as described below:
Michael S. Weiss, who is the Chairman and Chief Executive Officer of
Keryx, is a founder and former executive officer of ACCESS, was the largest
stockholder of ACCESS, and was the Chairman of ACCESS; Lindsay A.
Rosenwald, M.D., was a director of ACCESS prior to the consummation of the
merger and is a director of Keryx. Dr. Rosenwald, and related entities,
were also substantial holders of ACCESS stock; Dr. Rosenwald, Mr. Weiss,
and Dr. I. Craig Henderson (the President and Chief Executive Officer of
ACCESS) hold certain promissory notes issued by ACCESS having an aggregate
principal amount of $775,000; Dr. Rosenwald and Mr. Weiss have directly or
indirectly guaranteed certain outstanding promissory notes issued by
ACCESS; and ACCESS owes Mr. Weiss and Dr. Henderson approximately $380,000
and $61,800 in deferred compensation, respectively.
The foregoing summary is qualified in its entirety by reference to the
merger agreement and the first amendment to the merger agreement. The full text
of the first amendment is attached hereto as Exhibit 2.2.
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Item 5. Other Events
As discussed above, on February 5, 2004 Keryx Biopharmaceuticals, Inc.
completed the acquisition of ACCESS Oncology, Inc., a Delaware corporation. The
February 6, 2004 press release announcing the completion of the transaction is
incorporated by reference and is attached hereto as Exhibit 99.1
On February 17, 2004 Keryx Biopharmaceuticals, Inc. completed the private
placement of 3.2 million shares of its common stock at $10.00 per shares,
resulting in gross proceeds to the Company of $32 million. The February 13, 2004
press release announcing the execution of definitive agreements with the
investors is incorporated herein by reference and is attached hereto as Exhibit
99.2.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements required by this item are not included in this
initial report on Form 8-K but will be filed by amendment not later than 60 days
after the date that this initial report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information required by this item is not
included in this initial report on Form 8-K but will be filed by amendment not
later than 60 days after the date that this initial report on Form 8-K is
required to be filed.
(c) Exhibits
The following exhibits are filed as a part of this report:
Exhibit
Number Description
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2.1 Agreement and Plan of Merger by and among Keryx
Biopharmaceuticals, Inc., AXO Acquisition Corp., and
ACCESS Oncology, Inc., dated as of January 7, 2004,
filed as Exhibit 2.1 to the Registrant's Current
Report on Form 8-K dated January 8, 2004 and
incorporated herein by reference.
2.2 First Amended to the Agreement and Plan of Merger
dated as of February 5, 2004
99.1 Press Release dated February 6, 2004
99.2 Press Release dated February 13, 2004.
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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.
Keryx Biopharmaceuticals, Inc.
(Registrant)
Date: February 20, 2004 By: /s/ Michael S. Weiss
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Michael S. Weiss
Chairman and Chief Executive Officer
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