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Biotech / Medical : Pharmacyclics (PCYC) -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (512)	9/3/1999 6:43:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 717

From the 8-K filed today: PCYC gets $750k cash, gets to write off $2.8m in accrued liabilities and gets all the technical know-how to manufacture texaphyrins. Nice deal in the short run, although it of course does make an eventual NDA harder as they now have to prove equivalence between the Celanese product and that provided by their new manufacturers. BTW, it was disclosed that Celanese wanted out in their 10K, so that isn't news. On August 27, 1999, Pharmacyclics, Inc. (the "Company") and Celanese, Ltd. ("Celanese") entered into an agreement to terminate their manufacturing development and supply agreement. In September 1996, the Company entered into an agreement with Hoechst Celanese Corporation ("Hoechst Celanese"), a manufacturer of chemicals and pharmaceutical intermediates, to optimize and scale up a manufacturing process for and supply of the Company's texaphyrin-based products (the "Manufacturing Agreement"). In October 1997, Hoechst Celanese assigned the agreement to Celanese, Ltd. in connection with Hoechst Celanese's corporate restructuring. The Manufacturing Agreement granted Celanese exclusive worldwide manufacturing rights and required Celanese to supply all of the Company's texaphyrin-based products for late-stage clinical and commercial use. As a result of the change in its business focus, Celanese requested that the Company pursue alternative supply sources. Pursuant to the Termination Agreement, dated as of August 27, 1999, between the Company and Celanese (the "Termination Agreement"), Celanese assigned to the Company all right, title and interest in and to the manufacturing technology and intellectual property for the Company's texaphyrin-based products and agreed to make a cash payment of $750,000 to the Company. The Termination Agreement also relieved the Company of all obligations to pay Celanese for shared development costs incurred prior to termination of the Manufacturing Agreement. As of June 30, 1999, the Company had accrued approximately $2.8 million associated with such costs. During discussions with Celanese that resulted in the Termination Agreement, the Company entered into agreements with three new manufacturers to evaluate their ability to supply the Company with the components of the texaphyrin-based products. These manufacturers are currently in the process of producing initial supplies, which include commercial quantities, of such products for delivery to the Company during fiscal year 2000. The Company has sufficient quantities of texaphyrin-based products to supply its current clinical trial plans.