From the Elan annual report [ which does not distinguish between licensing and equity investments ] the following puffery:
Elan partners with companies who are leaders in their fields, to better provide solutions to complex drug delivery challenges. Some collaborating partners include:
Isis Pharmaceuticals, Inc. to create a drug delivery technology for the oral delivery of oligonucleotides
Targeted Genetics Corporation to combine Elan drug delivery technologies with TGENTM gene delivery systems to deliver genes effectively and safely to specific target sites
Delsys Pharmaceutical Corporation to provide precision drug loading and manufacturing for controlled release of high potency/low-dose drugs
Atrix Laboratories, Inc. to develop a range of novel drug products delivered transmucosally from the buccal cavity
The collaborations can be classified as:
Product-focused
Photogen Technologies, Inc.
Acorda Therapeutics, Inc.
Formulation of product refractory
to standard technologies
Isis Pharmaceuticals, Inc.
Targeted Genetics Corporation
Ribozyme Pharmaceuticals, Inc.
Technology-focused
Delsys Pharmaceutical Corporation
Atrix Laboratories, Inc.
Fundamental tools for novel drug delivery systems
Digital Gene Technologies, Inc.
Targeted Molecules Corporation
Snips from the TGEN 10-K:
Emerald Gene Systems Joint Venture
In July 1999, Targeted Genetics and Elan International Services, Ltd. formed Emerald Gene Systems, Ltd., a joint venture to develop enhanced gene delivery technology and products. Elan has agreed to loan Targeted Genetics up to $12.0 million, in the form of a convertible promissory note, to support Targeted Genetics' share of Emerald's research and development costs. The note has a six-year term and any draws made under the note accrue interest at 12% per year. The note and related accrued interest are convertible, at Elan's option, into Targeted Genetics common stock at a conversion price equal to 150% of the average closing price of Targeted Genetics common stock for the 60 trading days ending two business days before the draws. Alternatively, the note agreement includes provisions allowing Targeted Genetics, at its option, to convert the note into common stock at the lesser of the then-current market price and the Elan conversion price. As of December 31, 2000 and 1999, Targeted Genetics had not drawn on the note. Targeted Genetics also entered into an agreement with Elan that requires Elan to purchase up to $10.0 million of Targeted Genetics common stock. Elan purchased $5.0 million of common stock (2,148,899 shares) at the closing of the joint venture transaction and purchased the remaining $5.0 million of common stock (382,739 shares) in July 2000, the one-year anniversary of the agreement.
...
14. Joint Venture
When Targeted Genetics and Elan formed the Emerald joint venture in July 1999, Elan purchased $12.0 million of Targeted Genetics' Series B convertible exchangeable preferred stock. The preferred stock is convertible, at Elan's option, into Targeted Genetics common stock or into shares representing a 30.1% interest in Emerald, which would increase Elan's ownership in Emerald to 50%. Targeted Genetics used the proceeds of the convertible exchangeable preferred stock sale to purchase its 80.1% interest in Emerald. Emerald used these proceeds to pay $15.0 million to Elan for a license giving Emerald exclusive rights to use Elan drug delivery technologies within the gene delivery field. At its formation, Emerald issued preferred and common stock valued at $15.0 million to Targeted Genetics and Elan. Targeted Genetics currently owns an 80.1% interest in Emerald in common stock, and Elan owns a 19.9% nonvoting interest, in preferred shares. Although Targeted Genetics owns 100% of the voting common shares, Elan and its subsidiaries have retained significant minority investor rights that are considered "participating rights" under the FASB's Emerging Issues Task Force Bulletin 96-16, Investors' Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder Has Certain Approval or Veto Rights. Because Elan's participating rights prevent Targeted Genetics from exercising control over Emerald, Targeted Genetics does not consolidate the financial statements of Emerald but instead accounts for its investment in Emerald under the equity method of accounting. The condensed financial statements of Emerald as of December 31, 2000 and 1999 and for the year ended December 31, 2000 and the period from July 21, 1999 (date of inception) through December 31, 1999 are as follows:
December 31, December 31,
2000 1999
------------ ------------
Current assets................................... $ 6,114 $ 2,250
--------- ---------
Total assets..................................... $ 6,114 $ 2,250
========= =========
Current liabilities.............................. 331,143 744,696
Total shareholders' equity....................... (325,029) (742,446)
--------- ---------
Total liabilities and shareholders' equity....... $ 6,114 $ 2,250
========= =========
Period from July 21, 1999
Year ended (date of inception) through
December 31, 2000 December 31, 1999
----------------- ---------------------------
Revenue........................ $ -- $ --
Technology access fee.......... -- 15,000,000
Operating expenses............. 3,087,091 742,446
------------ -------------
Net loss....................... $( 3,087,091) $( 15,742,446)
============ =============
Included in Targeted Genetics' December 31, 2000 and 1999 balance sheets are $177,000 and $446,000, respectively, of receivables from Emerald for services performed by Targeted Genetics for Emerald. The balance sheets also include accounts payable to Emerald of $262,000 for 2000 and $595,000 for 1999, for Targeted Genetics' 80.1% share of Emerald's funding requirements as of each date. Targeted Genetics expects to advance Emerald its share of the required funding and collect the $177,000 Emerald account receivable for 2000 during the first quarter of 2001. Targeted Genetics is required to provide additional funding to Emerald as needed in relation to its ownership interest in Emerald. Targeted Genetics provided $2.8 million of funding to Emerald in 2000 and no funding to Emerald in 1999.
Just a pittance or maybe a tuppance <g> |
