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: August 6, 1999
Date of earliest event reported: July 29, 1999
GILEAD SCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-19731 94-3047598
(Commission File No.) (IRS Employer Identification No.)
333 LAKESIDE DRIVE
FOSTER CITY, CA 94404
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (650) 574-3000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 29, 1999, Gilead Sciences, Inc. ("Gilead") acquired all of the
outstanding stock of NeXstar Pharmaceuticals, Inc., a Delaware corporation
(the "Company" or "NeXstar"), pursuant to an Agreement and Plan of Merger,
dated as of February 28, 1999 (the "Merger Agreement"), among Gilead, the
Company, and a merger subsidiary wholly owned by Gilead. Pursuant to the
Merger Agreement, the Company was merged with the wholly owned subsidiary of
Gilead, with the Company as the surviving corporation (the "Merger"). As a
result of the Merger, the Company became a wholly owed subsidiary of Gilead.
In connection with the Merger, Gilead issued a total of approximately
11,212,730 shares of Gilead common stock, or 0.3786 of a share of Gilead
common stock for each share of Company common stock, to the existing
stockholders of the Company as consideration for all shares of capital stock
of the Company. In addition, holders of options and warrants outstanding at
the time of the Merger to purchase an aggregate of approximately 2,236,413
shares of Company common stock will receive, upon exercise of such options
and warrants, the same fraction of a share of Gilead's common stock per share
of Company common stock, and holders of $80,000,000 principal amount of 6
1/4% Convertible Subordinated Debentures of the Company (the "Debentures")
will now have the right to convert the Debentures into an indeterminate
number of shares of Gilead Common Stock, pursuant to a First Supplemental
Indenture dated July 29, 1999 by and among IBJ Whitehall Bank & Trust Company
("IBJ Whitehall") as Trustee, the Company and Gilead amending the Indenture
between the Company and IBJ Whitehall dated July 31, 1997. The Merger is
intended to qualify as a tax-free reorganization and to be accounted for as a
"pooling of interests." A copy of the press release announcing the closing
of the merger transaction is filed as Exhibit 99.1 to this Form 8-K.
The Company is an integrated biopharmaceutical company engaged in the
discovery, development, manufacture and marketing of proprietary
pharmaceutical products to treat life-threatening and other serious
infectious, oncological and hematalogical diseases. Gilead intends to
continue to use the assets acquired to conduct such business.
ITEM 5. OTHER EVENTS.
At Gilead's Annual Meeting of Stockholders on July 29, 1999, the stockholders
of Gilead approved an amendment to Gilead's restated certificate of
incorporation to increase the authorized shares of Gilead common stock from
60,000,000 to 100,000,000 shares.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial statements of the Company.
The required financial statements of the Company have been filed
previously by the Registrant in the Registrant's Registration Statement on
Form S-4 relating to the merger transaction (File No. 333-81415), by
incorporation thereof by reference to the following Company reports filed
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended
(File No.000-23012) and are hereby incorporated by reference herein:
(i) The unaudited condensed consolidated balance sheet of the Company
as of March 31, 1999, and the related unaudited condensed consolidated
statements of
operations, stockholders' equity and cash flows for the three months
ended March 31, 1999 and March 31, 1998, together with the
accompanying description and explanatory notes as filed in the
Company's Form 10-Q for the quarter ending March 31, 1999.
(ii) The consolidated balance sheets of the Company as of December
31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1998, together with
the accompanying notes and the report of independent auditors with
respect to those financial statements as filed in the Company's
Form 10-K/A for the year ending December 31, 1998.
b. Pro forma financial information.
The following required pro forma financial statements have been filed
previously by the Registrant in the Registrant's Registration Statement on
Form S-4 relating to the merger transaction (File No. 333-81415) and are
hereby incorporated by reference herein:
(i) the unaudited pro forma condensed combined statements of
operations of Gilead for the years ended December 31, 1998, 1997
and 1996, giving effect to the merger transaction under the pooling
of interests method of accounting, and the accompanying description
and explanatory notes.
The following pro forma financial information is filed as part of this
report beginning on the page following the signature page:
(ii) The unaudited pro forma condensed combined balance sheet of
Gilead as of June 30, 1999 and the unaudited pro forma condensed
combined statements of operations of Gilead for the six months
ended June 30, 1999 and 1998, giving effect to the merger
transaction under the pooling of interests method of accounting,
and the accompanying description and explanatory notes.
c. EXHIBITS
2.1 (1) Agreement and Plan of Merger, dated as of February 28,
1999, among the Registrant, Gazelle Acquisition Sub,
Inc. and NeXstar Pharmaceuticals, Inc.
3.1 Certificate of Amendment to Restated Certificate of
Incorporation of the Registrant
3.2 (2) Amended and Restated Certificate of Incorporation of
the Registrant
3.3 (3) Bylaws of the Registrant, as amended and restated
March 30, 1999
4.1 Reference is made to Exhibits 3.1, 3.2, and 3.3
4.2 (4) Rights Agreement dated as of November 21, 1994, between
Registrant and First Interstate Bank, with exhibits
4.3 (4) Form of letter sent to Gilead Sciences, Inc.
stockholders, dated December 14, 1994
4.4 First Supplemental Indenture dated July 29, 1999 among
IBJ Whitehall Bank & Trust Company, NeXstar
Pharmaceuticals, Inc. and the Registrant to the
Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
4.5 (5) Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
for NeXstar's 6 1/4% Convertible Subordinated Debentures
99.1 Press Release dated July 29, 1999.
(1) Filed as an exhibit to the Registrant's Current Report on
Form 8-K filed on March 9, 1999 and incorporated herein by
reference.
(2) Filed as an exhibit to Registrant's Registration Statement on
Form S-8 (No. 33-46058) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on Form
10-K/A for the fiscal year ended December 31, 1998 and
incorporated herein by reference.
(4) Filed as an exhibit to Registrant's Quarterly Report on Form
10-Q for the quarter ended December 31, 1994 and incorporated
herein by reference.
(5) Filed as an exhibit to NeXstar Pharmaceuticals, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 and incorporated herein by reference.
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.
GILEAD SCIENCES, INC.
Dated: August 6, 1999 By: /s/ Mark L. Perry
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Mark L. Perry
Senior Vice President, Chief Financial
Officer and General Counsel
Exhibits Index
2.1 (1) Agreement and Plan of Merger, dated as of February 28,
1999, among the Registrant, Gazelle Acquisition Sub,
Inc. and NeXstar Pharmaceuticals, Inc.
3.1 Certificate of Amendment to Restated Certificate of
Incorporation of the Registrant
3.2 (2) Amended and Restated Certificate of Incorporation of
the Registrant
3.3 (3) Bylaws of the Registrant, as amended and restated
March 30, 1999
4.1 Reference is made to Exhibits 3.1, 3.2, and 3.3
4.2 (4) Rights Agreement dated as of November 21, 1994, between
Registrant and First Interstate Bank, with exhibits
4.3 (4) Form of letter sent to Gilead Sciences, Inc.
stockholders, dated December 14, 1994
4.4 First Supplemental Indenture dated July 29, 1999 among
IBJ Whitehall Bank & Trust Company, NeXstar
Pharmaceuticals, Inc. and the Registrant to the
Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
4.5 (5) Indenture dated July 31, 1997 between IBJ Whitehall
Bank & Trust Company and NeXstar Pharmaceuticals, Inc.
for NeXstar's 6 1/4% Convertible Subordinated Debentures
99.1 Press Release dated July 29, 1999.
(1) Filed as an exhibit to the Registrant's Current Report on
Form 8-K filed on March 9, 1999 and incorporated herein by
reference.
(2) Filed as an exhibit to Registrant's Registration Statement on
Form S-8 (No. 33-46058) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on Form
10-K/A for the fiscal year ended December 31, 1998 and
incorporated herein by reference.
(4) Filed as an exhibit to Registrant's Quarterly Report on Form
10-Q for the quarter ended December 31, 1994 and incorporated
herein by reference.
(5) Filed as an exhibit to NeXstar Pharmaceutical, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 and incorporated herein by reference.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1.
On a combined basis, there were no material transactions between Gilead and
NeXstar (the "Combined Company") during any period presented.
There are no material differences between the accounting policies of Gilead
and NeXstar.
The pro forma combined provisions for income taxes do not represent the
amount that would have resulted had Gilead and NeXstar filed consolidated
income tax returns during the periods presented. Any unrecognized future
deductible temporary differences will be evaluated on a quarterly basis based
upon the income tax attributes of the Combined Company.
NOTE 2. PRO FORMA CONDENSED COMBINED BALANCE SHEET
The Pro Forma Condensed Combined Balance Sheet reflects a credit balance in
accounts receivable for Gilead. This balance of $(0.1) million primarily
represents the remaining balance of $(0.3) million from aggregate provisions for
product returns of $(0.8) million recorded since December 31, 1998 in accordance
with the Company's sales return policy. This $(0.3) million remaining allowance
for product returns, along with previously recorded reserves for cash discounts,
government discounts and rebates, and bad debts, exceeded gross outstanding
accounts receivable of $0.5 million as of June 30, 1999.
NOTE 3. PRO FORMA COMBINED EARNINGS (LOSS) PER SHARE
Under the merger agreement, each share of NeXstar common stock converted
into the right to receive 0.3786 of a share of Gilead stock (the "Exchange
Ratio"). The Exchange Ratio was used in computing share and per share amounts
in the accompanying unaudited pro forma condensed combined financial
statements.
NOTE 4. MERGER COSTS
The Pro Forma Condensed Combined Balance Sheet at June 30, 1999 reflects an
adjustment of $9 million for direct merger-related transaction costs, primarily
consisting of professional and registration fees.