SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 18, 1998
Date of Report (Date of earliest event reported)
DISCOVERY LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-26422 94-3171943
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
3359 Durham Road
Doylestown, Pennsylvania 18901
(Address of principal executive offices)
(212) 223-9504
(Registrant's telephone number, including area code)
Item 5. Other Events
Discovery Laboratories, Inc. has announced that its Board of
Directors has approved the adoption of a shareholder rights plan. Reference is
made to the Registrant's related press release attached hereto as Exhibit 99.1
and incorporated by reference herein (including without limitation the
information set forth in the cautionary statement contained in the final
paragraph of the press release).
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits:
99.1 Press Release dated August 20, 1998.
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.
DISCOVERY LABORATORIES, INC.
Date: August 21, 1998
By: /s/ Robert J. Capetola
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Name: Robert J. Capetola, Ph.D.
Title: President and Chief Executive Officer
Exhibit Index
Exhibit Number Description
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99.1 Press Release dated August 20, 1998.
EXHIBIT 99.1
For Immediate Release
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Discovery Laboratories to Adopt Shareholder Rights Plan
DOYLESTOWN, PA - August 20, 1998 - Discovery Laboratories, Inc. ("Discovery")
(NASDAQ: DSCO, DSCOU) announced today that its Board of Directors has approved
the adoption of a shareholder rights plan (the "Rights Plan"). The Rights Plan
is intended to (i) discourage coercive acquisition efforts and stock
accumulation programs that could be undertaken by third parties and (ii) improve
the probability of a successful implementation, free of inappropriate
distraction from corporate opportunists, of Discovery's long-term clinical
product development plan. The Rights Plan, when implemented, will provide for
the distribution with respect to each share of Discovery's outstanding common
stock of a right to purchase 1/100th of a share of a new series of preferred
stock of Discovery (the "Series D Preferred Stock").
Discovery believes that the Rights Plan will arm its Board of Directors to
protect shareholders from coercively structured acquisition proposals and the
accompanying pressure on shareholders to surrender their Discovery securities in
a disadvantageous transaction at an inadequate price. The recent trading range
of Discovery's shares has been near its 52-week low, in line with most other
publicly traded development stage biotechnology research companies. Dr. Robert
Capetola, President and Chief Executive Officer of Discovery, observed that "the
equity markets have often proved to be inaccurate and inadequate predictors of
the intrinsic value of the clinical products under development by similarly
situated biotechnology companies. We believe the current bear market in small
biotechnology companies has had such an effect on Discovery's share price,
significantly raising our attractiveness to corporate opportunists. While we
hope there will never be a need to rely on the Rights Plan, we felt that
protective measures were appropriate in this environment.
Each 1/100th of a share of Series D Preferred Stock will be designed to be the
substantial economic equivalent of a share of Discovery's common stock, and the
purchase price for such preferred stock upon exercise of a right will be subject
to adjustment upon the occurrence of certain events (including the acquisition
by a third party (an "Acquiring Person") of 15% or more of Discovery's
outstanding common stock (a "Stock Acquisition") or the determination by the
Board of Directors that the holder of 10% or more of such common stock is an
"Adverse Person") so that the Series D Preferred Stock will be purchasable by
holders of the rights (other than any Acquiring Person or Adverse Person) at a
price equal to 50% of its fair market value. Initially, the rights will not be
separately tradeable or exercisable, and will be "attached" to and traded with
shares of Discovery's common stock. The rights will be subject to redemption
prior to the occurrence of a Stock Acquisition or an Adverse Person
determination at a redemption price of $0.01 per right.
The implementation of the Rights Plan is subject to the approval of the holders
of Discovery's existing outstanding preferred stock. Discovery anticipates that
the rights contemplated by the Rights Plan will be distributed to the holders of
its common stock shortly following its receipt of such approval from the
preferred stockholders.
Discovery is a bio-pharmaceutical company whose mission is to develop and
commercialize medically novel therapeutics for critical care. Presently,
Discovery is developing proprietary pharmaceuticals to treat direct acute
respiratory distress syndrome, meconium aspiration syndrome, idiopathic
respiratory distress syndrome and cystic fibrosis. More information about
Discovery is available on the company's web site at
www.disco_Hlt406472602v_Hlt406472602erylabs.com.
To the extent that statements in this press release are not strictly historical,
including statements as to future financial conditions, events conditioned on
stockholder or other approval, or otherwise as to future events, such statements
are forward-looking, and are made pursuant to the safe harbor provisions of the
Securities Litigation Reform Act of 1995. The forward-looking statements
contained in this release are subject to certain risks and uncertainties that
could cause results to differ materially from the statements made. Among the
factors which could affect the company's actual results and could cause results
to differ from those from those contained in the forward-looking statements
contained herein are the risk that financial conditions may change, risks
relating to the
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progress of the company's research and development and the development of
competing therapies and/or technologies by other companies. Those associated
risks and others are further described in the company's filings with the
Securities and Exchange Commission.
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