UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-16043
ALTEON INC.
------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3304550
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
170 WILLIAMS DRIVE, RAMSEY, NEW JERSEY 07446
--------------------------------------------
(Address of principal executive offices)
(Zip Code)
(201)934-5000
--------------------------------------------
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Exchange
Title of Each Class On Which Registered
-------------------------------------- ------------------------
Common Stock, Par Value $.01 per share American Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
The aggregate market value of the equity stock held by non-affiliates of the
registrant, based on the American Stock Exchange closing price of the Common
Stock ($4.25 per share), as of February 20, 2002, was $134,651,713.
At February 20, 2002, 31,764,846 shares of the registrant's Common Stock, par
value $.01 per share, were outstanding.
EXPLANATORY NOTE
Alteon Inc. hereby amends its Annual Report on Form 10-K for the year
ended December 31, 2001, as filed with the Securities and Exchange Commission on
March 7, 2002, for the sole purpose of correcting the typographical error in the
caption in the common stock line of the stockholders' equity section of the
audited balance sheet as filed, which indicated that Alteon has 40,000,000,
rather than 80,000,000 shares of authorized common stock. The caption in the
audited balance sheet included in the financial statements filed herewith
reflects the 80,000,000 authorized shares.
This correction has no impact on the number of outstanding shares of
Alteon's common or preferred stock or on earnings per share or on any other item
in the audited financial statements.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, this
amendment contains the complete text of Item 8 and Item 14, the items being
amended. The Index to Exhibits, which is incorporated by reference into Item 14,
indicates the exhibits being filed herewith.
2
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
a) The financial statements required to be filed pursuant to this Item 8
are appended to this Annual Report on Form 10-K/A. A list of the financial
statements filed herewith is found at "Index to Financial Statements and
Schedules" on page 5.
b) The unaudited quarterly financial data for the two-year period ended
December 31, 2001 is as follows:
Net Loss
Loss Before Applicable to
Income Tax Common Basic/Diluted
Revenues Expenses Benefit Stockholders Loss Per Share
-------- -------- ------- ------------ --------------
(in thousands, except per share amounts)
2001
First Quarter ......... $153 $ 4,181 $ (4,028) $ (4,793) $ (0.21)
Second Quarter ........ 101 2,407 (2,306) (3,096) (0.14)
Third Quarter ......... 107 2,321 (2,214) (3,239) (0.13)
Fourth Quarter ........ 91 4,313 (4,222) (3,869) (0.13)
---- ------- -------- -------- --------
Total Year ......... $452 $13,222 $(12,770) $(14,997) $ (0.61)
2000
First Quarter ......... $166 $ 2,762 $ (2,596) $ (3,305) $ (0.17)
Second Quarter ........ 143 2,402 (2,259) (2,983) (0.15)
Third Quarter ......... 110 3,339 (3,229) (3,977) (0.20)
Fourth Quarter ........ 151 3,185 (3,034) (2,250) (0.11)
---- ------- -------- -------- --------
Total Year $570 $11,688 $(11,118) $(12,515) $ (0.63)
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Financial Statements:
Our audited financial statements, financial statement schedules and
the Report of Independent Public Accountants are appended to this Annual Report
on Form 10-K/A. Reference is made to the "Index to Financial Statements and
Schedules" on page 5.
(b) Reports on Form 8-K.
On December 18, 2001, we filed a current report on Form 8-K, dated
December 10, 2001, announcing the issuance of a key patent covering glucose
lowering agents.
On November 13, 2001, we filed a current report on Form 8-K, dated
November 7, 2001, announcing the initiation of a Phase I human testing of
ALT-711 in ESRD patients undergoing peritoneal dialysis.
On October 25, 2001, we filed a current report on Form 8-K, dated
October 23, 2001, announcing the initiation of a second Phase IIb trial of
ALT-711 in systolic hypertension.
On October 19, 2001, we filed a current report on Form 8-K, dated
October 18, 2001, announcing the appointment of Thomas A. Moore to the Board of
Directors.
(c) Exhibits.
The exhibits required to be filed with this Annual Report on Form
10-K/A are listed on the Index to Exhibits attached hereto, which is
incorporated herein by reference.
3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized this 9th
day of April 2002.
ALTEON INC.
By: /s/ Kenneth I. Moch
-----------------------------
Kenneth I. Moch
President and Chief Executive Officer
4
Form 10-K/A - Item 14(a)(1)
Alteon Inc.
Index to Financial Statements and Schedules
Page
----
Report of Independent Public Accountants - Arthur Andersen LLP........... 6
Financial Statements:
Balance Sheets at December 31, 2001 and 2000.................... 7
Statements of Operations for the years ended
December 31, 2001, 2000 and 1999............................. 8
Statements of Stockholders' Equity for the years ended
December 31, 2001, 2000 and 1999............................. 9
Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999............................. 10
Notes to Financial Statements................................... 11
5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Alteon Inc.:
We have audited the accompanying balance sheets of Alteon Inc. (a Delaware
corporation) as of December 31, 2001 and 2000, and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the U.S. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Alteon Inc. as of December 31,
2001 and 2000, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the U.S.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
January 22, 2002
6
ALTEON INC.
BALANCE SHEETS
ASSETS
December 31, December 31,
2001 2000
------------- -------------
Current Assets:
Cash and cash equivalents.................................................... $ 4,249,439 $ 3,600,328
Short-term investments....................................................... 6,476,384 6,354,479
Other current assets......................................................... 1,394,765 1,735,660
------------- -------------
Total current assets....................................................... 12,120,588 11,690,467
Property and equipment, net.................................................. 1,109,676 1,696,082
Deposits and other assets.................................................... 2,815 2,815
------------- -------------
Total assets.................................................................... $ 13,233,079 $ 13,389,364
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................................................. $ 307,153 $ 304,779
Accrued expenses............................................................. 2,054,980 1,631,579
------------- -------------
Total current liabilities.................................................. 2,362,133 1,936,358
------------- -------------
Commitments and Contingencies................................................... -- --
Stockholders' Equity:
Preferred stock, $0.01 par value, 1,993,329 shares authorized, and 992 and
912 of Series G and 2,980 and 2,739 of Series H shares issued and
outstanding, as of December 31, 2001 and December 31, 2000, respectively... 40 37
Common stock, $0.01 par value, 80,000,000 shares authorized, and 27,314,846
and 22,399,660 shares issued and outstanding, as of
December 31, 2001 and December 31, 2000, respectively...................... 273,148 223,997
Additional paid-in capital................................................... 159,596,934 145,241,265
Accumulated deficit.......................................................... (149,008,641) (134,011,423)
Accumulated other comprehensive income/(loss)................................ 9,465 (870)
------------- -------------
Total stockholders' equity................................................. 10,870,946 11,453,006
------------- -------------
Total liabilities and stockholders' equity...................................... $ 13,233,079 $ 13,389,364
============= =============
The accompanying notes are an integral part of these statements.
7
ALTEON INC.
STATEMENTS OF OPERATIONS
Year ended December 31,
----------------------------------------------------------
2001 2000 1999
------------ ------------ ------------
Revenues:
Investment income.................................... $ 451,518 $ 570,444 $ 834,661
Other income......................................... -- -- 600,000
------------ ------------ ------------
Total revenues.................................. 451,518 570,444 1,434,661
------------ ------------ ------------
Expenses:
Research and development
(which includes non-cash variable stock
compensation expense in 2001 and 2000 of
$164,988 and $353,065, respectively)............... 8,461,476 6,375,380 10,598,008
General and administrative
(which includes non-cash variable stock
compensation expense in 2001 and 2000 of
$657,295 and $890,604, respectively)............... 4,760,747 5,312,750 4,356,447
Total expenses.................................. 13,222,223 11,688,130 14,954,455
------------ ------------ ------------
Loss before income tax benefit.......................... (12,770,705) (11,117,686) (13,519,794)
Income tax benefit................................... 1,186,921 1,547,763 2,588,210
------------ ------------ ------------
Net loss................................................ (11,583,784) (9,569,923) (10,931,584)
Preferred stock dividends............................ 3,203,906 2,945,451 2,707,844
Common stock warrant deemed dividends................ 209,528 -- --
------------ ------------ ------------
Net loss applicable to common stockholders.............. $(14,997,218) $(12,515,374) $(13,639,428)
============ ============ ============
Basic/diluted loss per share to common stockholders..... $ (0.61) $ (0.63) $ (0.72)
------------ ------------ ------------
Weighted average common shares used in computing
basic/diluted loss per share......................... 24,555,885 19,860,847 19,054,750
============ ============ ============
The accompanying notes are an integral part of these statements.
8
ALTEON INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated
Preferred Stock Common Stock Additional Other Total
--------------- ----------------- Paid-in Accumulated Comprehensive Stockholders'
Shares Amount Shares Amount Capital Deficit Income/(Loss) Equity
------ ------ ------ ------ ------- ------- ------------- ------
Balances at
DECEMBER 31, 1998 ................... 3,086 $31 18,814,740 $188,147 $131,005,033 $(107,856,621) $ 1,768 $ 23,338,358
Net loss .......................... -- -- -- -- -- (10,931,584) -- (10,931,584)
Change in unrealized gains/(losses) -- -- -- -- -- -- (475) (475)
------------
Comprehensive loss ................ -- -- -- -- -- -- -- (10,932,059)
------------
Issuance of Series G and H
preferred stock dividends ........ 271 3 -- -- 2,707,841 (2,707,844) -- --
Exercise of employee stock
options .......................... -- -- 374,961 3,750 162,691 -- -- 166,441
Compensation expense
in connection with the issuance
of non-qualified stock options,
stock option modifications and
options granted to non-employees . -- -- -- -- 253,948 -- -- 253,948
----- --- ---------- -------- ------------ ------------- -------- ------------
DECEMBER 31, 1999 ................... 3,357 34 19,189,701 191,897 134,129,513 (121,496,049) 1,293 12,826,688
Net loss .......................... -- -- -- -- -- (9,569,923) -- (9,569,923)
Change in unrealized gains/(losses) -- -- -- -- -- -- (2,163) (2,163)
------------
Comprehensive loss ................ -- -- -- -- -- -- -- (9,572,086)
------------
Issuance of Series G and H
preferred stock dividends ........ 294 3 -- -- 2,945,448 (2,945,451) -- --
Exercise of employee stock
options .......................... -- -- 375,871 3,759 500,786 -- -- 504,545
Private placement of common
stock and warrants ............... -- -- 2,834,088 28,341 6,103,151 -- -- 6,131,492
Compensation expense related to
variable plan employee
stock options .................... -- -- -- -- 1,243,669 -- -- 1,243,669
Compensation expense
in connection with the issuance
of non-qualified stock options,
stock option modifications and
options granted to non-employees . -- -- -- -- 318,698 -- -- 318,698
----- --- ---------- -------- ------------ ------------- -------- ------------
DECEMBER 31, 2000 ................... 3,651 37 22,399,660 223,997 145,241,265 (134,011,423) (870) 11,453,006
Net loss .......................... -- -- -- -- -- (11,583,784) -- (11,583,784)
Change in unrealized gains/(losses) -- -- -- -- -- -- 10,335 10,335
------------
Comprehensive loss ................ -- -- -- -- -- -- -- (11,573,449)
------------
Issuance of Series G and H
preferred stock dividends ........ 321 3 -- -- 3,203,903 (3,203,906) -- --
Exercise of employee stock
options .......................... -- -- 415,186 4,151 428,698 -- -- 432,849
Public offering of common stock ... -- -- 4,500,000 45,000 9,365,080 -- -- 9,410,080
Compensation expense related to
variable plan employee
stock options .................... -- -- -- -- 822,283 -- -- 822,283
Common stock warrant deemed
dividends ........................ -- -- -- -- 209,528 (209,528) -- --
Compensation expense
in connection with the issuance
of non-qualified stock options,
stock option modifications and
options granted to non-employees . -- -- -- -- 326,177 -- -- 326,177
----- --- ---------- -------- ------------ ------------- -------- ------------
DECEMBER 31, 2001 ................... 3,972 $40 27,314,846 $273,148 $159,596,934 $(149,008,641) $ 9,465 $ 10,870,946
===== === ========== ======== ============ ============= ======== ============
The accompanying notes are an integral part of these statements.
9
ALTEON INC.
STATEMENTS OF CASH FLOWS
Year ended December 31,
----------------------------------------------------
2001 2000 1999
------------ ------------ ------------
Cash flows from operating activities:
Net loss ......................................................... $(11,583,784) $ (9,569,923) $(10,931,584)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization .................................... 636,565 765,601 743,820
Stock compensation expense ....................................... 326,177 318,698 253,948
Non-cash compensation expense related to
variable plan employee stock options .......................... 822,283 1,243,669 --
Changes in operating assets and liabilities:
Other current assets ............................................. 340,895 (1,486,677) 25,162
Other assets ..................................................... -- -- 257,265
Accounts payable and accrued expenses ............................ 425,775 (257,844) (2,119,073)
------------ ------------ ------------
Net cash used in operating activities ......................... (9,032,089) (8,986,476) (11,770,462)
------------ ------------ ------------
Cash flows from investing activities:
Capital expenditures ............................................. (50,159) (62,377) (157,969)
Purchases of marketable securities ............................... (16,743,570) (11,550,202) (54,461,475)
Sales and maturities of marketable securities .................... 16,632,000 12,227,817 60,719,408
------------ ------------ ------------
Net cash (used in) provided by investing activities ........... (161,729) 615,238 6,099,964
------------ ------------ ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock ....................... 9,842,929 6,636,037 166,441
------------ ------------ ------------
Net cash provided by financing activities ..................... 9,842,929 6,636,037 166,441
------------ ------------ ------------
Net increase/(decrease) in cash and cash equivalents .................. 649,111 (1,735,201) (5,504,057)
Cash and cash equivalents, beginning of period ........................ 3,600,328 5,335,529 10,839,586
------------ ------------ ------------
Cash and cash equivalents, end of period .............................. $ 4,249,439 $ 3,600,328 $ 5,335,529
============ ============ ============
Non-cash transactions:
Preferred stock dividends ........................................ 3,203,906 2,945,451 2,707,844
Common stock warrant deemed dividends ............................ 209,528 -- --
The accompanying notes are an integral part of these statements.
10
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
Alteon Inc. ("Alteon" or the "Company") is a product-based
biopharmaceutical company engaged in the discovery and development of oral drugs
to reverse or inhibit cardiovascular aging and diabetic complications. The
Company's product candidates represent novel approaches to some of the largest
pharmaceutical markets, such as cardiovascular and kidney diseases. The Company
conducts its business in one operating segment. Alteon's proprietary technology
focuses on Advanced Glycosylation End-products ("A.G.E.s"). A.G.E.s ultimately
form crosslinks with adjacent proteins, leading to a loss of flexibility and
function in body tissues, vessels and organs. All of the Company's products are
in research or development, and no revenues have been generated from product
sales.
The Company's lead A.G.E. Crosslink Breaker compound, ALT-711, is
initially being developed for cardiovascular indications, including systolic
hypertension. Alteon completed a Phase IIa trial to evaluate the effect of
ALT-711 on cardiovascular compliance. Based on the positive results of this
trial, Alteon initiated two Phase IIb efficacy trials of ALT-711, the SAPPHIRE
(Systolic And Pulse Pressure Hemodynamic Improvement by Restoring Elasticity)
and SILVER (Systolic Hypertension Interaction with Left VEntricular Remodeling)
trials. The compound is also under Phase I investigation in end-stage renal
disease ("ESRD") patients undergoing peritoneal dialysis.
A topical formulation of an A.G.E. Crosslink Breaker, ALT-744, is being
clinically evaluated in skin aging for cosmetic applications. The Company
continues to evaluate product development opportunities from its A.G.E.
Crosslink Breaker compounds and other classes of compounds in its patent estate.
The Company's business is subject to significant risks including, but
not limited to, (i) its ability to obtain funding, (ii) its uncertainty of
future profitability, (iii) the risks inherent in its research and development
efforts, including clinical trials, (iv) uncertainties associated with obtaining
and enforcing its patents and with the patent rights of others, (v) the lengthy,
expensive and uncertain process of seeking regulatory approvals, (vi)
uncertainties regarding government reforms and product pricing and reimbursement
levels, (vii) technological change and competition, (viii) manufacturing
uncertainties and (ix) dependence on collaborative partners and other third
parties. Even if the Company's product candidates appear promising at an early
stage of development, they may not reach the market for numerous reasons. Such
reasons include the possibilities that the products will prove ineffective or
unsafe during clinical trials, will fail to receive necessary regulatory
approvals, will be difficult to manufacture on a large scale, will be
uneconomical to market or will be precluded from commercialization by
proprietary rights of third parties. Alteon will require substantial additional
funding in order to continue the research, product development, pre-clinical
testing and clinical trials of its product candidates. If adequate funding is
not available, the Company may be required to curtail significantly one or more
of its research or development programs and other Company activities.
Pervasiveness of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the U.S. requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
11
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Cash and Cash Equivalents and Short-Term Investments
Cash and cash equivalents include cash and highly liquid investments,
which have a maturity of less than three months at the time of purchase.
Short-term investments are considered available-for-sale and are recorded at
fair market value, as determined by quoted market value. As of December 31, 2001
and 2000, short-term investments were invested in debt instruments of the U.S.
government, government agencies, financial institutions and corporations with
strong credit ratings. They consist of the following:
December 31,
--------------------------------
2001 2000
---------- ----------
U.S. government agency funds....................... $5,479,434 $2,651,255
Corporate obligations.............................. 996,950 3,703,224
---------- ----------
$6,476,384 $6,354,479
========== ==========
The amortized cost of short-term investments was $6,466,919 and
$6,355,349 at December 31, 2001 and December 31, 2000, respectively. Gross
unrealized gains or losses are not significant.
Property and Equipment
Property and equipment are stated at cost. Depreciation and
amortization are computed using the straight-line method over the useful lives
of owned assets, which range from three to five years. Leasehold improvements
and equipment under capital leases are amortized using the straight-line method
over the shorter of the lease term or the useful life of the assets.
Research and Development
Expenditures for research and development are charged to operations as
incurred.
Stock-Based Compensation
The Company accounts for employee stock-based compensation and awards
issued to non-employee directors under Accounting Principles Board Opinion No.
25 ("APB Opinion No. 25") and related interpretations. Stock option awards
issued to consultants and contractors are accounted for in accordance with the
provision of Statement of Financial Accounting Standard No. 123 ("SFAS No.
123"), which requires options issued to these parties to be valued at their fair
market value when computing compensation.
Net Loss Per Share
Basic loss per share is computed by dividing net loss applicable to
common stockholders by the weighted average number of shares outstanding during
the year. Diluted loss per share is the same as basic loss per share, as the
inclusion of common stock equivalents would be antidilutive.
Comprehensive Income/(Loss)
The only comprehensive income/(loss) items the Company has are
unrealized gains/(losses) on available-for-sale investments and net loss.
12
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Revenue Recognition
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The adoption of SAB 101 had no impact on the accompanying financial statements.
Recently Issued Accounting Standards
In August 2001, Financial Accounting Standards Board ("FASB") issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
("SFAS No. 144"), which is effective for fiscal years beginning after December
15, 2001, and addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. This statement supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("SFAS No. 121"), and the accounting and reporting provisions of
Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations
-- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions" ("APB
No. 30"), for the disposal of a segment of a business. Alteon plans to adopt the
standard on January 1, 2002, and does not expect that the adoption of SFAS No.
144 will have a material effect on the Company's results of operations or
financial position.
During June 2001, the FASB issued Statements of Financial Accounting
Standards No. 141, "Business Combinations" ("SFAS No. 141") and No. 142,
"Goodwill and Other Intangible Assets" ("SFAS No. 142"). SFAS No. 141 changes
the accounting for business combinations, requiring that all business
combinations be accounted for using the purchase method and that intangible
assets be recognized as assets apart from goodwill if they arise from
contractual or other legal rights, or if they are separable or capable of being
separated from the acquired entity and sold, transferred, licensed, rented or
exchanged. SFAS No. 141 is effective for all business combinations initiated
after June 30, 2001. SFAS No. 142 specifies the financial accounting and
reporting for acquired goodwill and other intangible assets. Goodwill and
intangible assets that have indefinite useful lives will not be amortized, but
rather will be tested at least annually for impairment. SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001.
SFAS No. 142 requires that the useful lives of intangible assets
acquired on or before June 30, 2001, be reassessed and the remaining
amortization periods adjusted accordingly. Previously recognized intangible
assets deemed to have indefinite lives shall be tested for impairment. Goodwill
recognized on or before June 30, 2001, shall be assigned to one or more
reporting units and shall be tested for impairment as of the beginning of the
fiscal year in which SFAS No. 142 is initially applied in its entirety. The
Company is required to and will adopt SFAS No. 142 as of January 1, 2002. Based
on the Company's current activities, the Company does not believe the adoption
of these pronouncements will have an impact on the Company's results of
operations, cash flows or financial position.
Reclassifications
Certain prior year amounts have been reclassified to conform to current
year presentation.
13
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
NOTE 2 -- PROPERTY AND EQUIPMENT
December 31,
------------------------
2001 2000
---------- ----------
Laboratory equipment................................ $1,183,034 $1,167,780
Furniture and equipment............................. 686,560 686,560
Computer equipment.................................. 409,496 374,589
Leasehold improvements.............................. 5,215,069 5,215,069
---------- ----------
7,494,159 7,443,998
Less: Accumulated depreciation & amortization...... (6,384,483) (5,747,916)
----------- -----------
$1,109,676 $1,696,082
=========== ===========
Depreciation and amortization expense was $636,565, $765,601 and
$743,820 for the years ended December 31, 2001, 2000 and 1999, respectively.
NOTE 3 -- COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT
In December 1997, Alteon and Genentech, Inc. ("Genentech") entered into
a stock purchase agreement and a development collaboration and license agreement
providing for the development and marketing of pimagedine, a second-generation
A.G.E.-Formation Inhibitor. Pursuant to the stock purchase agreement, Genentech
purchased Common Stock, Series G Preferred Stock and Series H Preferred Stock
for an aggregate purchase price of $37,544,000 (See Note 7). Genentech's
obligations to purchase shares of Alteon's stock terminated December 31, 1998.
Pursuant to a letter agreement dated February 11, 1999, between Alteon and
Genentech, the development collaboration and license agreement terminated
effective June 30, 1999.
NOTE 4 -- OTHER DEVELOPMENT AGREEMENTS
Alteon has entered into a number of licensing and collaboration
agreements relating to the development and distribution of its A.G.E-related
technology. The Company granted to Yamanouchi Pharmaceutical Co., Ltd. an
exclusive license to commercialize our A.G.E.-Formation Inhibitor, pimagedine,
in Japan, South Korea, Taiwan and The People's Republic of China. Alteon has
entered into an exclusive licensing arrangement with Roche Diagnostics GmbH for
Alteon's technology for diagnostic applications, and we have also entered into
clinical testing and distribution agreements with Gamida for Life which grant
Gamida the exclusive right to distribute pimagedine, if successfully developed
and approved for marketing, in Israel, Bulgaria, Cyprus, Jordan and South
Africa. Alteon has a license and supply agreement with IDEXX Laboratories, Inc.
pursuant to which the Company licensed pimagedine to IDEXX as a potential
therapeutic in companion animals (dogs, cats and horses) and Alteon's A.G.E.
diagnostics technology for companion animal use. All of these agreements will
entitle Alteon to receive royalties on sales if any products covered by the
agreements are developed and sold.
In October 2000, Alteon entered into an agreement with HemoMax, LLC
("HemoMax") for the development of a novel technology designed to increase the
delivery of oxygen to tissues in the body through enhanced blood circulation. On
February 9, 2002, HemoMax advised Alteon that because of uncertainties regarding
its ability to receive patents adequate to support commercialization of the
technology, it has decided to cease operations and liquidate.
In August 1999, Alteon and Taisho Pharmaceutical Co., Ltd. ("Taisho")
entered into an agreement under which Taisho was granted an exclusive option
through December 31, 1999, to acquire a license to Alteon's lead A.G.E.
Crosslink Breaker, ALT-711, for Japan, South Korea, Taiwan and The People's
Republic of China for a non-refundable option fee of $600,000. This amount is
reflected in other income in the statement of operations. The option expired on
December 31, 1999.
14
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Alteon has also entered into a number of academic research and license
agreements. Pursuant to an agreement with Rockefeller University, we have
exclusive, royalty-free, worldwide and perpetual rights to the technology and
inventions relating to A.G.E.s and other protein crosslinking, including those
relating to the complications of aging and diabetes. The Company also obtained
an exclusive, worldwide, royalty-bearing license from Washington University for
patents covering the use of pimagedine as an inhibitor of inducible nitric oxide
synthase. In addition Alteon received from The Picower Institute for Medical
Research ("The Picower Institute") an exclusive worldwide, royalty-bearing
license for certain commercial health care applications of A.G.E.-related
inventions. On December 31, 2001, The Picower Institute ceased operations, and
we expect to assume all responsibility and costs for the worldwide filing and
prosecution of patent applications and maintenance of patents for such
inventions.
Alteon's commercial partners may develop, either alone or with others,
products that compete with the development and marketing of the Company's
products. Competing products, either developed by the commercial partners or to
which the commercial partners have rights, may result in their withdrawal of
support with respect to all or a portion of the Company's technology, which
would have a material adverse effect on the Company's business, financial
condition and results of operations.
The Company has also entered into various arrangements with independent
research laboratories to conduct studies in conjunction with the development of
the Company's technology. The Company receives certain rights to inventions or
discoveries that may arise from this research.
NOTE 5 -- ACCRUED EXPENSES
December 31,
-------------------------
2001 2000
---------- ----------
Clinical trial expense.............................. $1,379,693 $ 848,745
Professional fees................................... 191,000 291,000
Payroll and related expenses........................ 224,287 167,680
Rent expense........................................ 100,673 155,585
Patent fees......................................... 85,571 111,529
Other............................................... 73,756 57,040
---------- ----------
$2,054,980 $1,631,579
========== ==========
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Commitments
The Company leases its headquarters and research facility and related
equipment and furniture under non-cancelable operating leases. As of December
31, 2001, future minimum rentals under operating leases that have initial or
remaining non-cancelable terms in excess of one year are as follows:
Operating
Leases
------
2002................................................ $536,500
2003................................................ 447,000
Thereafter.......................................... ---
--------
$983,500
========
Rent expense for each of the years in the three-year period ended
December 31, 2001 was $599,655, $586,294 and $573,962, respectively.
15
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Contingencies
The Company is party to various claims and lawsuits arising in the
normal course of business. In the opinion of management, these suits and claims
will not result in judgments or settlements, which, in the aggregate, would have
a material adverse effect on the Company's condition or the results of
operations.
NOTE 7 -- STOCKHOLDERS' EQUITY
Common/Preferred Stock Issuances
In July 2001, Alteon completed a public offering of 4,500,000 shares of
common stock, which provided net proceeds of approximately $9,365,000. In
connection with this offering, certain previously issued warrants were repriced
from $3.40 to $2.25 per share pursuant to antidilution provisions connected to
the warrants. Such repricing resulted in a $209,528 deemed dividend on the
underlying common stock.
In September 2000, Alteon entered into an agreement with several
investors pursuant to which Alteon sold, in a private placement, an aggregate of
2,834,088 shares of common stock and warrants to purchase 1,133,636 shares of
common stock (the "Warrants") for an aggregate purchase price of $6,235,000. The
adjusted exercise price of the Warrants is $2.25 per share, while the term is
seven years.
In December 1997, the Company and Genentech entered into a stock
purchase agreement pursuant to which Genentech agreed to buy shares of Common
Stock, Series G Preferred Stock and Series H Preferred Stock (See Note 3). In
December 1997, Genentech purchased Common Stock and Series G Preferred Stock for
an aggregate purchase price of $15,000,000. On July 27, 1998 and October 1,
1998, Genentech purchased $8,000,000 and $14,544,000 respectively, of Series H
Preferred Stock. As of December 31, 2001, 2000 and 1999 respectively,
approximately $3,204,000, $2,945,000 and $2,708,000 of Preferred Stockholder
Dividends were recorded. Series G Preferred Stock and Series H Preferred Stock
Dividends are payable quarterly in shares at a rate of 8.5%. Each share of
Series G Preferred Stock and Series H Preferred Stock is convertible upon 70
days' prior written notice into a number of shares of common stock determined by
dividing $10,000 by the average of the closing sales price of the common stock,
as reported on the American Stock Exchange for the 20 business days immediately
preceding the date of conversion.
In connection with an April 1997 offering, warrants to purchase 60,000
shares of common stock at an exercise price of $4.025 per share are still
outstanding.
Stock Option Plan
The Company has established two stock option plans for its employees,
officers, directors, consultants and independent contractors. Options to
purchase up to 4,192,000 shares of common stock may be granted under the first
plan and options to purchase up to 7,000,000 shares of common stock may be
granted under the second plan.
The plans are administered by a committee of the Board of Directors,
which may grant either non-qualified or incentive stock options. The committee
determines the exercise price and vesting schedule at the time the option is
granted. Options vest over various periods and may expire no later than 10 years
from date of grant. Each option entitles the holder to purchase one share of
common stock at the indicated exercise price. The plans also provide for certain
antidilution and change in control rights, as defined.
16
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
The following table summarizes the activity in the Company's stock
options:
Exercise Weighted Average
Price Range Exercise Price
Options Per Share Per Share
---------- --------------- ----------------
Balance, December 31, 1998 4,799,260 $5.39
Granted .................. 1,928,701 $0.780- $ 1.125 0.99
Exercised ................ (374,961) 0.300- 0.600 0.44
Canceled ................. (1,277,804) 0.810 - 15.000 3.88
---------- ---------------
Balance, December 31, 1999 5,075,196 $3.40
Granted .................. 1,105,820 $1.630- $ 7.000 4.57
Exercised ................ (375,871) 0.600- 5.130 1.34
Canceled ................. (550,326) 0.600- 9.500 1.12
---------- ---------------
Balance, December 31, 2000 5,254,819 $4.02
Granted .................. 873,942 $2.600- $ 4.150 3.13
Exercised ................ (415,186) 0.844- 1.125 1.04
Canceled ................. (1,008,269) 0.813- 11.150 8.53
---------- ---------------
Balance, December 31, 2001 4,705,306 $3.15
==========
The following table summarizes information regarding stock options
outstanding at December 31, 2001:
Options Outstanding at Options Exercisable at
December 31, 2001 December 31, 2001
-------------------------------------------- ----------------------------
Weighted Weighted Weighted
Range of Average Average Number of Average
Exercise Number of Remaining Exercise Shares Exercise
Prices Shares Contractual Life Price Exercisable Price
---------------- --------- ---------------- --------- ----------- --------
$0.7810-$ 1.0630 1,493,512 6.15 $0.9500 1,433,356 $0.9532
1.1250- 3.5200 1,179,593 8.81 1.9770 585,156 1.2970
3.5625- 5.1250 1,238,076 7.76 3.9428 725,235 4.0525
5.3750- 15.0000 794,125 5.49 7.7841 592,412 8.0511
---------------- --------- ---------------- --------- ----------- --------
$0.7810-$15.0000 4,705,306 7.13 $3.1484 3,336,159 $2.9476
The weighted average fair value of the options granted was $3.13, $2.54
and $0.53 during 2001, 2000 and 1999, respectively. Included in options at
December 31, 2001, are 1,095,000 options granted to certain executives with
option prices ranging from $0.875 per share to $3.90 per share, the fair market
value on the date of grant. Such options vest upon the earlier of five years
after grant or upon achievement of certain Company milestones.
The Company accounts for its stock option plans for options granted to
employees and non-employee directors under APB Opinion No. 25, under which no
compensation cost (excluding those options granted below fair market value) has
been recognized. Had compensation costs for these plans been determined
consistent with SFAS No. 123, the Company's pro forma net loss and loss per
share applicable to common stockholders for 2001, 2000 and 1999 would have been
$16,507,000, $13,651,000 and $13,935,000, and $0.67, $0.69 and $0.73,
respectively. Stock option awards issued to consultants and contractors have
been accounted for in accordance with SFAS No. 123. The 2001, 2000 and 1999 pro
forma net loss and loss per share applicable to common stockholders reflects a
benefit of $53,000, $157,000 and $1,458,000, respectively, for the reversal of
previously recognized pro forma compensation costs on options forfeited.
Consistent with SFAS No. 123, the Company elected not to estimate these
forfeitures in the prior period pro forma compensation cost calculation. Because
SFAS No. 123 has not been applied to options granted prior to January 1, 1995,
the resulting pro forma compensation cost may not be representative of that to
be expected in future years.
17
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Under SFAS No. 123, the fair value of each stock option grant is
estimated on the date of grant using the Black-Scholes option pricing model with
the following assumptions used for grants in 2001, 2000 and 1999, respectively;
risk free interest rates ranging from 2.04% to 5.30%, 5.24% to 6.64% and 4.73%
to 6.07%, respectively; expected life of 2.02 years over the vesting periods;
expected dividend yield of 0%; and expected volatility of 70%.
In March 2000, the FASB released Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation, An Interpretation of APB
Opinion No. 25". The interpretation became effective on July 1, 2000, but in
some circumstances applies to transactions that occurred prior to the effective
date. Under the interpretation, stock options that are repriced must be
accounted for as variable-plan arrangements until the options are exercised,
forfeited or expire. This requirement applies to any options repriced after
December 15, 1998. On February 2, 1999, the Company repriced certain stock
options. The total non-cash stock compensation expense resulting from the
repricing for the years ended December 31, 2001 and December 31, 2000 is
$822,283 and $1,243,669 respectively, which includes research and development
charges of $164,988 and $353,065, and general and administrative charges of
$657,295 and $890,604, respectively. As of December 31, 2001, there are
approximately 605,000 repriced options outstanding.
NOTE 8 -- SAVINGS AND RETIREMENT PLAN
The Company maintains a savings and retirement plan under Section
401(k) of the Internal Revenue Code which allows eligible employees to annually
contribute a portion of their annual salary to the plan. In 1998, the Company
began making discretionary contributions at a rate of 25% of an employee's
contribution up to a maximum of 5% of the employee's base salary. The Company
made contributions of $38,669, $30,530 and $49,000 for the years ended December
31, 2001, 2000 and 1999, respectively.
NOTE 9 -- RELATED PARTY TRANSACTIONS
Since the Company's inception, the Company has entered into certain
collaborative agreements with organizations with which Dr. Anthony Cerami, a
former member of the Company's Board of Directors, was affiliated. These
organizations included The Picower Institute, The Rockefeller University, Cerami
Consulting Corporation and the Kenneth S. Warren Laboratories, Inc. The Company
paid to the organizations $0, $0 and $243,000 in 2001, 2000, and 1999,
respectively. In addition, the Company paid patent maintenance fees for
technology related to the organizations of $17,000, $120,000 and $73,000 in
2001, 2000 and 1999, respectively. Although the Company has terminated its
collaborative relationship with The Picower Institute, the Company has a royalty
obligation on all net sales and other revenues associated with certain
technologies developed, payable to The Picower Institute's successor. Effective
May 17, 1999, the Company terminated its consulting agreement with Cerami
Consulting Corporation and its research agreement with Kenneth S. Warren
Laboratories, Inc. In addition, Dr. Cerami resigned from the Company's Board of
Directors on April 19, 1999.
Prior to 2000, the Company had a Scientific Advisory Board. The
Chairman and two other Scientific Advisory Board members provided consulting
services to the Company. Consulting fees paid to these members totaled $55,000
in 1999.
NOTE 10 -- INCOME TAXES
At December 31, 2001, the Company had available Federal net operating
loss carryforwards, which expire in the years 2006 through 2020, of
approximately $135,500,000 for income tax purposes and State net operating loss
carryforwards, which expire in the years 2002 through 2007, of approximately
$85,100,000. In addition, the Company has Federal research and development tax
credit carryforwards of approximately $5,100,000 and State research and
development tax credit carryforwards of approximately $1,600,000. The amount of
Federal net operating loss and research and development tax credit carryforwards
which can be utilized in any one period may
18
ALTEON INC.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
become limited by Federal income tax regulations if a cumulative change in
ownership of more than 50% occurs within a three-year period.
The components of the deferred tax assets and the valuation allowance
are as follows:
December 31,
------------------------------
2001 2000
------------ ------------
Net operating loss carryforwards.. $ 51,300,000 $ 47,700,000
Research and development credit... 6,700,000 7,100,000
Other temporary differences....... 4,100,000 2,400,000
------------ ------------
Gross deferred tax assets......... 62,100,000 57,200,000
Valuation allowance............... (62,100,000) (57,200,000)
------------ ------------
Net deferred tax assets........... $ -- $ --
============ ============
A valuation allowance was established since the realization of the
Company's deferred tax assets is uncertain. In 2001, 2000 and 1999, the Company
sold $6,243,000, $14,129,000 and $27,687,000, respectively, of its gross State
net operating loss carryforwards and $802,000, $590,000 and $645,000,
respectively, of its State research and development tax credit carryforwards
under the State of New Jersey's Technology Business Tax Certificate Transfer
Program (the "Program"). The Program allows qualified technology and
biotechnology business in New Jersey to sell unused amounts of net operating
loss carryforwards and defined research and development tax credits for cash.
The proceeds from the sale in 2001, 2000 and 1999 were approximately $1,187,000,
$1,548,000 and $2,588,000, respectively, and such amounts were recorded as a tax
benefit in the statements of operations. The proceeds from the sale of the net
operating loss carryforwards and the research and development tax credit
carryforwards sold in 2001 were received on January 4, 2002. The State renews
the Program annually and limits the aggregate proceeds to $10,000,000. Due to
the uncertainty at any time as to the Company's ability to effectuate the sale
of Alteon's available State net operating losses, since the Company has no
control or influence over the program, the benefits are recorded once the
agreement with the counterpart is signed and the sale is approved by the State.
NOTE 11 - SUBSEQUENT EVENT
In January 2002, Alteon completed a public offering of 4,450,000 shares
of common stock, which provided net proceeds of approximately $18,588,000.
19
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
-------- ----------------------
3.1 Restated Certificate of Incorporation, as amended. (Incorporated by
reference to Exhibit 3.1 to the Company's Report on Form 10-Q filed
on November 10, 1999).
3.2 Certificate of the Voting Powers, Designations, Preference and
Relative Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of Series F Preferred
Stock of the Company. (Incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the year ended December
31, 2000).
3.3 Certificate of Retirement dated September 10, 2000, of Alteon Inc.
(Incorporated by reference to Exhibit 3.1 to the Company's Report on
Form 10-Q filed on November 10, 1999).
3.4 Certificate of Designations of Series G Preferred Stock of Alteon
Inc. (Incorporated by reference to Exhibit 3.4 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997).
3.5 Certificate of Amendment of Certificate of Designations of Series G
Preferred Stock of Alteon Inc. (Incorporated by reference to Exhibit
3.4 to the Company's Report on Form 10-Q filed on August 14, 1998).
3.6 Certificate of Designations of Series H Preferred Stock of Alteon
Inc. (Incorporated by reference to Exhibit 3.5 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997).
3.7 Amended Certificate of Designations of Series H Preferred Stock of
Alteon Inc. (Incorporated by reference to Exhibit 3.6 to the
Company's Report on Form 10-Q filed on August 14, 1998).
3.8 Certificate of Retirement dated November 20, 2000, of Alteon Inc.
(Incorporated by reference to Exhibit 3.8 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000).
3.9 Certificate of Amendment to Restated Certificate of Incorporation of
Alteon Inc., dated June 7, 2001 (Incorporated by reference to
Exhibit 3.8 to the Company's Report on Form 10-Q filed on August 14,
2001).
3.10 By-laws, as amended. (Incorporated by reference to Exhibit 3.7 to
the Company's Report on Form 10-Q filed on May 12, 1999).
4.1 Stockholders' Rights Agreement dated as of July 27, 1995, between
Alteon Inc. and Registrar and Transfer Company, as Rights Agent.
(Incorporated by reference to Exhibit 4.1 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000).
4.2 Amendment to Stockholders' Rights Agreement dated as of April 24,
1997, between Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit 4.4 to the
Company's Current Report on Form 8-K filed on May 9, 1997).
4.3 Registration Rights Agreement dated as of April 24, 1997, between
Alteon Inc. and the investors named on the signature page thereof.
(Incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K filed on May 9, 1997).
4.4 Form of Common Stock Purchase Warrant. (Incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K filed on May
9, 1997).
4.5 Amendment to Stockholders' Rights Agreement dated as of December 1,
1997, between Alteon Inc. and Registrar and Transfer Company, as
Rights Agent. (Incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on December 10, 1997).
4.6 Registration Rights Agreement dated September 29, 2000.
(Incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K filed on October 5, 2000).
4.7 Form of Series 1 Common Stock Purchase Warrant. (Incorporated by
reference to Exhibit 4.2 to the Company's Current Report on Form 8-K
filed on October 5, 2000).
4.8 Form of Series 2 Common Stock Purchase Warrant. (Incorporated by
reference to Exhibit 4.3 to the Company's Current Report on Form 8-K
filed on October 5, 2000).
10.1+ Amended and Restated 1987 Stock Option Plan. (Incorporated by
reference to Exhibit 10.1 to the Company's Annual Report on Form
10-K for the year ended December 31, 1997).
10.2+ Amended 1995 Stock Option Plan.
10.3 Form of Employee's or Consultant's Invention Assignment,
Confidential Information and Non-Competition Agreement executed by
all key employees and consultants as employed or retained from time
to time. (Incorporated by Reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1 (File Number 33-42574), which
became effective on November 1, 1991).
10.4 Amendment and Assignment of Research and Option Agreement dated as
of September 25, 1987, among Telos Development Corporation
("Telos"), The Rockefeller University ("The Rockefeller"), the
Company and Anthony Cerami. (Incorporated by reference to Exhibit
10.5 to the Company's Registration Statement on Form S-1 (File
Number 33-42574), which became effective on November 1, 1991).
10.5 License Agreement dated as of September 25, 1987, among Telos,
Applied Immune Sciences, Inc., the Company and The Rockefeller, as
amended by letter agreement dated September 25, 1987, and letter
agreement dated August 15, 1991. (Incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement on Form S-1
(File Number 33-42574), which became effective on November 1, 1991).
10.6* License Agreement dated as of June 16, 1989, between the Company and
Yamanouchi Pharmaceutical Co., Ltd. ("Yamanouchi"). (Incorporated by
reference to Exhibit 10.17 to the Company's Registration Statement
on Form S-1 (File Number 33-42574), which became effective on
November 1, 1991).
10.7* Research and License Agreement dated as of September 5, 1991,
between the Company and The Picower Institute for Medical Research.
(Incorporated by reference to Exhibit 10.29 to the Company's
Registration Statement on Form S-1 (File Number 33-42574), which
became effective on November 1, 1991).
10.8 Lease Agreement dated January 11, 1993, between Ramsey Associates
and the Company. (Incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the year ended December 31,
2000).
10.9* License Agreement dated as of December 30, 1994, between the Company
and Corange International Limited. (Incorporated by reference to
Exhibit 10.9 to the Company's Annual Report on Form 10-K for the
year ended December 31, 2000).
10.10* Research Collaboration and License Agreement dated as of June 2,
1995, between Washington University and the Company. (Incorporated
by reference to Exhibit 10.10 to the Company's Annual Report on Form
10-K for the year ended December 31, 2000).
10.11 Distribution Agreement dated September 25, 1995, between the Company
and Eryphile BV. (Incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended December 31,
2000).
10.12+ Employment Agreement dated as of October 21, 2000, between the
Company and Elizabeth O'Dell. (Incorporated by reference to Exhibit
10.12 to the Company's Annual Report on Form 10-K for the year ended
December 31, 2000).
10.13+ Alteon Inc. Change in Control Severance Benefits Plan. (Incorporated
by reference to Exhibit 10.13 to the Company's Annual Report on Form
10-K for the year ended December 31, 2000).
10.14 Preferred Stock Investment Agreement dated as of April 24, 1997,
between Alteon Inc. and the investors named on the signature page
thereof. (Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed on May 9, 1997).
10.15* License and Supply Agreement dated June 17, 1997, between IDEXX
Laboratories, Inc. and Alteon Inc. (Incorporated by reference to
Exhibit 10.1 to the Company's Report on Form 10-Q filed on August
13, 1997).
10.16 Stock Purchase Agreement dated as of December 1, 1997, between
Alteon Inc. and Genentech, Inc. (Incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
December 10, 1997).
10.17+ Amended and Restated Employment Agreement dated as of December 15,
1998, between the Company and Kenneth I. Moch (Incorporated by
reference to Exhibit 10.28 to the Company's Annual Report on Form
10-K for the year ended December 31, 1999).
10.18 Letter Agreement dated February 11, 2000, between the Company and
Genentech, Inc. (Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed on February 19, 1999).
10.19+ Consulting Agreement dated as of December 15, 1998, between the
Company and Mark Novitch, M.D., as amended by letter agreement dated
as of January 18, 2001. (Incorporated by reference to Exhibit 10.19
to the Company's Annual Report on Form 10-K for the year ended
December 31, 2000).
10.20+ Employment Agreement dated as of March 14, 2000, between the Company
and Robert deGroof, Ph.D. (Incorporated by reference to Exhibit 10.1
to the Company's Report on Form 10-Q filed on May 12, 2000).
10.21 Common Stock and Warrants Purchase Agreement dated as of September
29, 2000, among Alteon Inc. and EGM Medical Technology Fund, L.P.,
EGM Technology Offshore Fund, Narragansett I, L.P., Narragansett
Offshore, Ltd., S.A.C. Capital Associates, LLC, SDS Merchant Fund,
LP and Herriot Tabuteau. (Incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K filed on October 5,
2000).
10.22* Development Services Agreement dated September 25, 2000.
(Incorporated by reference to Exhibit 10.2 to the Company's Report
on Form 10-Q filed on November 13, 2000).
10.23+ Letter Agreement dated December 3, 2001 between the Company and
Kenneth I. Moch amending Amended and Restated Employment Agreement
dated as of December 15, 1998.
23.1 Consent of Independent Public Accountants.
99.1 Letter to Commission Pursuant to Temporary Note 3T.
---------------
* Confidentiality has been granted for a portion of this exhibit.
+ Denotes a management contract or compensatory plan or arrangement required.