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
September 16, 2008
Date of report (Date of earliest event reported)
SurModics, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Minnesota
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0-23837
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41-1356149 |
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer |
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Identification No.) |
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9924 West 74th Street |
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Eden Prairie, Minnesota
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55344 |
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(Address of Principal Executive Offices)
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(Zip Code) |
(952) 829-2700
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.02. Termination of a Material Definitive Agreement.
On September 17, 2008, SurModics, Inc. (the Company) announced in a press release that the
Company was informed on September 16, 2008, that Merck & Co., Inc. (Merck) is terminating the
License and Research Collaboration Agreement (the License Agreement) and separate Supply
Agreement (the Supply Agreement, and collectively, the Agreements), between the companies, each
dated June 26, 2007. The effective date of the termination of
the Agreements will be December 16, 2008.
Mercks decision to discontinue the collaboration was made following a strategic review of its
business and product development portfolio. This decision was not based on any concerns about the
safety or efficacy of I-vation TA, the I-vation platform or any of SurModics other sustained drug
delivery systems. Clinical data on I-vation TA generated to date has provided strong support for
the tolerability profile of I-vation TA, and more generally, that of the I-vation sustained
delivery platform.
Under the License Agreement, the parties were to pursue the joint development and
commercialization of the I-vation sustained drug delivery platform with triamcinolone acetonide
(TA) and other products that combine Merck proprietary drug compounds with the I-vation platform.
The License Agreement provided that Merck would (a) pay SurModics an up front licensing fee of $20
million; (b) fund the research and development collaboration; (c) pay SurModics up to $288 million
in fees and development milestone payments; and (d) pay SurModics royalties on net sales of
Licensed Products. Other terms and conditions of the Agreements are described in the Companys
Current Report on Form 8-K dated June 26, 2007, and in the Agreements which were filed by the
Company with its Quarterly Report on Form 10-Q on August 9, 2007, which are incorporated
herein by reference.
As
a result of the termination of Mercks development of I-vation TA, Merck is required to pay SurModics an
additional $9 million payment. Merck will also be responsible for SurModics costs, expenses, and fees incurred in performance of services under the collaboration programs, and for SurModics non-cancelable commitments made up to the effective date of the termination of the collaboration programs. As of June 30, 2008,
the Company had a deferred revenue balance of $34.6 million associated with fees paid by Merck
under the Agreements. Upon termination of the Agreements, the company expects to recognize this
balance in addition to those additional amounts payable as a result of termination not previously recognized as revenue.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.