UNITED STATES
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 (date of earliest event reported): September 30, 2003
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-26224 51-0317849
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
311 Enterprise Drive
Plainsboro, NJ 08536
(Address of principal executive offices) (Zip Code)
(609)-275-0500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. Other Events.
On September 30, 2003, Integra LifeSciences Corporation and Ethicon, Inc., a
division of Johnson & Johnson, ("Ethicon") entered into an amendment to their
June 3, 1999 Supply, Distribution and Collaboration Agreement, which governs the
marketing and distribution rights to INTEGRA Dermal Regeneration Template(R).
Under the terms of the amendment, Ethicon's exclusive right to sell and market
INTEGRA Dermal Regeneration Template will terminate on December 31, 2003 and
Ethicon will make certain payments to Integra upon execution of the amendment
and on December 31, 2003. Ethicon will continue to sell and market INTEGRA
Dermal Regeneration Template through the end of this year under the terms of the
1999 agreement. On January 1, 2004 Integra LifeSciences Corporation will resume
exclusive responsibility for the sales, marketing and distribution of the
product.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits.
Exhibit
Number Description of Exhibit
---------- ----------------------------
10.1 Amendment to Supply, Distribution and Collaboration Agreement
by and between Integra LifeSciences Corporation and
Ethicon, Inc. dated as of September 30, 2003.
99.1 Press release issued October 6, 2003 regarding amendment to
the INTEGRA Dermal Regeneration Template Supply, Distribution
and Collaboration Agreement.*
*This exhibit is being furnished under Item 5, Other Events of
this Form 8-K and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, nor shall
it be deemed incorporated by reference in any filing under the
Securities Act of 1933, except as shall be expressly set forth
by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
Date: October 6, 2003 By: /s/ Stuart M. Essig
-----------------------------
Stuart M. Essig
President and Chief Executive Officer
Exhibit Index
-------------
Exhibit
Number Description of Exhibit
------- ----------------------
10.1 Amendment to Supply, Distribution and Collaboration Agreement
by and between Integra LifeSciences Corporation and
Ethicon, Inc. dated as of September 30, 2003.
99.1 Press release issued October 6, 2003 regarding amendment to
the INTEGRA Dermal Regeneration Template Supply, Distribution
and Collaboration Agreement.
Exhibit 10.1
Amendment to Supply, Distribution and Collaboration Agreement
This Amendment to Supply, Distribution and Collaboration Agreement
(this "Amendment") is effective as of September 30, 2003 by and between Integra
LifeSciences Corporation, a Delaware corporation ("Integra") and Ethicon, Inc.,
a New Jersey corporation ("Ethicon") on behalf of its Johnson & Johnson Wound
Management(TM) division.
WHEREAS, Integra and the Johnson & Johnson Medical division of Ethicon,
Inc. ("JJM") entered into a Supply, Distribution and Collaboration Agreement,
dated June 3, 1999 relating to the Integra(TM) Dermal Regeneration Template(TM)
(the "Original Agreement"); and
WHEREAS, Johnson & Johnson Wound Management(TM) ("JJWM") is the
division of Ethicon which is the successor through reorganization of Johnson &
Johnson Medical(TM) ; and
WHEREAS, Integra and JJWM deem it in their mutual interests to amend
the Original Agreement in the manner described below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. General. The purpose of this Amendment is to amend certain specific
provisions of the Original Agreement. All capitalized terms used but not defined
herein are used as defined in the Original Agreement. Except as expressly
modified by this Amendment, all terms and conditions of the Original Agreement
shall remain in full force and effect. The Original Agreement as amended by this
Amendment is referred to as the "Agreement."
2. Replacement of References to JJM. All references to JJM in the
Original Agreement are hereby amended to be references to JJWM.
3. Adjustment of Termination Date; Orderly Transition.
(a) Section 29.1 of the Agreement is hereby amended
in its entirety to read as follows:
Section 29.1 Term. The term of this
Agreement shall commence on the date hereof and shall
expire on December 31, 2003. For purposes of this
Agreement, such period shall be referred to as both
the "Initial Period" and the "Term". JJWM shall have
no right to extend the Term of this Agreement and any
references herein to "Extension Periods" shall be of
no force or effect.
(b) During the period between the date of this
Amendment and the expiration of the Term of the Agreement,
except as otherwise expressly provided for in this Amendment,
the provisions of the Agreement shall remain in full force and
effect, JJWM shall continue to use its commercially reasonable
efforts to market and sell the Products in the Territory and
JJWM shall not enter into any transactions or take any actions
with respect to the Products other than in the ordinary course
of business consistent with its past practices, and Integra
shall continue to meet JJWM's purchase orders consistent with
its past practices.
(c) During the period between the date of this
Amendment and the expiration of the Term of the Agreement, the
Joint Steering Committee shall meet at intervals no less
frequent than once every two weeks to plan for and coordinate
an orderly transition from JJWM to Integra of the marketing,
sales, distribution, order processing, billing and collection,
intellectual property, domestic and international complaints
management, regulatory matters, clinical matters and research
and development, in each case relating to the Products
throughout the Territory, and JJWM shall use all commercially
reasonable efforts to effect such transition at its expense
prior to January 1, 2004 (except for those elements of the
transition that the parties agree shall occur after such
date). Such transition plan (the "Transition Plan") shall
include, among other things, the elements specified in Exhibit
A to this Amendment (the "Transition Plan Requirements").
(d) During the period between the date of this
Amendment and the expiration of the Term of the Agreement,
Integra agrees to refrain from direct contact with any of
JJWM's customers of Product relating to the marketing and/or
sales of such Product without the prior written consent of
JJWM. Notwithstanding the preceding sentence, JJWM will work
with Integra on developing and implementing a plan where joint
customer visits will be initiated in December 2003.
(e) From and after the date of this Amendment, the
provisions of Sections 2.3 and 2.4 shall cease to apply and
shall be of no further force and effect; JJWM shall be
relieved of its obligation under Section 3.3 to deliver a
marketing plan for the calendar year 2004, and Integra shall
be relieved of its obligation under Section 11.3 to deliver an
annual research plan for the calendar year 2004. In addition,
notwithstanding the provisions of Section 4(a), JJWM shall
have no obligation to purchase forecasted quantities of
Products for any time period after December 31, 2003.
4. C&R Event Payments.
(a) JJWM hereby acknowledges the C&R Event set forth
in Section 13.1(vi) of the Original Agreement to have been
achieved and, simultaneously with the execution and delivery
of this Amendment, JJWM shall pay Integra $500,000 in respect
thereof.
(b) Simultaneously with the execution and delivery of
this Amendment, JJWM shall pay Integra $2,000,000 for the
completion of the C&R Events that were described in the C&R
Notice dated January 31, 2003 previously submitted to JJWM.
(c) In consideration for the payments above, Integra
and JJWM agree that no additional C&R Event Payments will be
due and owing from JJWM to Integra under the Agreement, and
Integra hereby waives any claims which it has had or may have
with respect to the payment of such C&R Event Payments.
5. Effect of Termination. Upon the expiration of the Agreement at the
end of the Term, in addition to the provisions of the Agreement contained in
Section 29.3:
(a) JJWM shall pay to Integra on December 31, 2003 by
wire transfer $2,000,000; provided that during the period
between the execution of this Amendment and the expiration of
the Term, if any JJWM customer orders have not been filled
because of action or inaction by Integra, such $2,000,000
payment will be reduced by an amount equal to (A) the customer
purchase prices of such unfilled orders times (B) 62.5%.
(b) JJWM and its affiliates shall cooperate fully in
the completion of those elements of the Transition Plan that
have not been completed by December 31, 2003, until such
elements have been completed;
(c) JJWM shall assign or transfer to Integra any
assets (whether tangible or intangible) to be transferred to
Integra pursuant to the Transition Plan;
(d) JJWM shall assign the "Avagen" trademark to
Integra;
(e) Notwithstanding Section 29.3(v), the license to
reproduce the Licensed Trademark granted by Integra to JJWM
pursuant to Section 5.2 of the Original Agreement shall
terminate on December 31, 2003;
(f) Notwithstanding Sections 29.3(vi - viii), any
rights and interests to Jointly-Owned Inventions in the Field
owned by JJWM or its affiliates shall be assigned to Integra
on December 31, 2003, and such Jointly-Owned Inventions
thereafter shall be the property of Integra exclusively.
6. Final Payments Obligations. Integra acknowledges that the following
quarterly payments made or to be made by JJWM to Integra for the fourth quarter
2003: (1) the $500,000 quarterly Research Payment pursuant to Section 12.1 (to
be made on or around October 1, 2003) and (2) the $2,109,375 quarterly Minimum
Prepayment pursuant to Sections 6.7 and 6.8, shall represent JJWM's final
payment obligations to Integra under those sections in the Agreement prior to
the end of the Term. Integra further acknowledges that JJWM's payments to
Integra under paragraphs 4(a), 4(b), 5(a) and 6 of this Amendment shall
represent JJWM's final payment obligations to Integra under the Agreement and
this Amendment, with the exception of those specific costs for which JJWM will
be responsible for relating to transition services in Exhibit A.
7. Release. Effective upon the execution of this Amendment, the parties
for themselves and their successors and assigns, hereby release and forever
discharge each other, and each other's officers, directors, employees, agents,
representatives, contract manufacturers, and licensees, from any and all claims,
demands, and causes of action whatsoever, known or unknown, that either party
may have arising out of the Original Agreement and Amendments prior to and as of
the date hereof.
8. Further Assurances. Each of the parties shall execute, prior to and
following December 31, 2003, such documents and other papers and perform such
further acts as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby, including with
respect to the transactions contemplated by the Transition Plan.
9. Counterparts. This Amendment may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
[This space left intentionally blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of this
30th day of September, 2003.
INTEGRA LIFESCIENCES CORPORATION
By:____________________________
Name:
Title:
JOHNSON & JOHNSON WOUND MANAGEMENT,
A DIVISION OF ETHICON, INC.
By:____________________________
Name:
Title:
Exhibit 99.1
News Release
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III John Bostjancic
Executive Vice President Senior Director of Finance
Chief Administrative Officer (609) 936-2239
(609) 936-2481 jbostjancic@integra-ls.com
jhenneman@integra-ls.com
Integra LifeSciences Announces Plans to Market
INTEGRA Dermal Regeneration Template(R) through its Direct Sales Force
Alliance with ETHICON, Inc. to Terminate at end of 2003
Plainsboro, NJ / October 6, 2003 / -- Integra LifeSciences Holdings Corporation
(NASDAQ: IART - news) announced today that it has reached agreement with ETHICON
Inc. for the return to Integra of the exclusive right to sell, market and
distribute the INTEGRA Dermal Regeneration Template(R).
The INTEGRA Dermal Regeneration Template is the first and only product to
receive FDA approval as a skin replacement system with a claim for regeneration
of dermal tissue for the treatment of life-threatening burns and repair of scar
contractures. INTEGRA Dermal Regeneration Template was developed by Integra
LifeSciences Corporation, and has been sold in the United States since 1996. In
that time, the INTEGRA product has helped thousands of patients recover from
severe thermal injuries.
ETHICON will continue to sell and market the product through the end of this
year under the terms of a 1999 supply and distribution agreement between Integra
and ETHICON. In 2004 Integra LifeSciences Corporation will resume exclusive
responsibility for the sales, marketing and distribution of the product. Integra
and ETHICON are working together to develop a plan to ensure a smooth transition
of the product's distribution.
"We are delighted to again take responsibility for the sales, marketing and
clinical education for this extraordinary product," said Stuart M. Essig,
Integra's President and Chief Executive Officer. "In the four years that ETHICON
has managed the INTEGRA product, it has attained widespread use in burn units
for the treatment of life threatening burns. Going forward, our objective will
be to continue to expand the usage of INTEGRA Dermal Regeneration Template to
the plastic and reconstructive markets."
Integra expects the impact of the amendment to be accretive to earnings in 2003
and neutral or accretive to earnings in 2004. Certain amounts, including event
payment revenues related to the prior achievement of clinical and regulatory
events, and various revenues, transition costs and other income amounts related
to the amendment, will be recognized during the third and fourth quarters of
2003. Additional financial information will be made available on Integra
LifeSciences' quarterly earnings conference call, which is scheduled for October
31, 2003 at 9:00 a.m.
Integra LifeSciences Holdings Corporation is a diversified medical technology
company that develops, manufactures, and markets medical devices for use in a
variety of applications. The primary applications for our products are
neuro-trauma and neurosurgery, plastic and reconstructive surgery, and soft
tissue repair. Integra is a leader in applying the principles of biotechnology
to medical devices that improve patients' quality of life. The Company has its
corporate headquarters in Plainsboro, New Jersey, with manufacturing and
research facilities located throughout the world. The Company has approximately
860 permanent employees. Please visit the Company's Website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements concerning expectations for
Integra's ability to expand the usage of the INTEGRA product to the plastic and
reconstructive markets and the impact that the amendment to the supply and
distribution agreement will have on Integra's future financial results. Such
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from predicted or expected results. Among
other things, Integra LifeSciences Corporation's ability to successfully recruit
and build a direct sales and marketing infrastructure around the INTEGRA product
may affect its ability to expand the usage of the product to the plastic and
reconstructive markets, and the costs of maintaining such a direct sales and
marketing infrastructure may affect Integra LifeSciences Corporation's future
financial results. In addition, the economic, competitive, governmental,
technological and other factors identified under the heading "Risk Factors"
included in the Business section of Integra's Annual Report on Form 10-K for the
year ended December 31, 2002 and information contained in subsequent filings
with the Securities and Exchange Commission could affect actual results.
Source: Integra LifeSciences Holdings Corporation