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):
May 30, 2001
Interneuron Pharmaceuticals, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-18728 04-3047911
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
One Ledgemont Center
99 Hayden Avenue
Lexington, MA 02421
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(Address of principal executive offices)
Registrant's telephone number, including area code:
(781-861-8444)
ITEM 5. Other Items.
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On May 30, 2001, Interneuron Pharmaceuticals, Inc. (the "Company") entered into
an Indemnity and Release Agreement (the "Agreement") with American Home Products
Corporation ("AHP") which provides for AHP's indemnification of the Company with
respect to certain classes of product liability claims filed against the Company
related to the prescription drug Redux(R), which was withdrawn from the market
in September 1997.
Pursuant to the Agreement, AHP has agreed to indemnify and hold harmless the
Company and its officers, directors and certain employees (collectively,
"Interneuron Indemnified Parties") against all losses after the date of the
Agreement (including, damages, settlements and judgments) arising from Redux-
related claims by (i) persons who have already opted out of AHP's National Class
Action Settlement Agreement in Brown v. AHP, No. 99-20593 (E.D. Pa.) (the "Brown
Settlement") and (ii) any Brown class member alleging Primary Pulmonary
Hypertension (PPH) as a result of the use of Redux. AHP further agreed to
assume the Company's defense in all litigation arising out of such indemnified
claims.
In addition, AHP agreed to assume the defense of and fund all future legal
expenses in Redux-related product liability litigation brought by claimants
other than those described above. AHP further agreed to provide additional
insurance coverage to fund losses resulting from any settlements or judgments in
current or future Redux-related product liability claims that are not covered by
AHP's indemnification obligations under the Agreement.
The Company believes that AHP's indemnification of certain claims, the insurance
provided by AHP for other claims, and AHP's funding of legal expenses, as
described above, along with the Company's existing insurance, will be sufficient
to address the Company's potential Redux product liability exposure. However,
there can be no assurance that uninsured or insufficiently insured Redux-related
claims that may arise in the future will not have a material adverse effect on
the Company's future business, results of operations or financial condition.
The Agreement does not provide indemnification or defense by AHP of the
Interneuron Indemnified Parties for losses and litigation expenses (i) incurred
by Interneuron Indemnified Parties prior to the date of the Agreement, (ii)
arising out of claims asserted against Interneuron Indemnified Parties for
breaches or violations of any state or federal securities laws or (iii) any
costs related to regulatory or government actions.
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Pursuant to the Agreement, AHP and the Company agreed also to mutually release
each other for Redux-related claims. In addition, the Company agreed (i) to
dismiss with prejudice its lawsuit, Interneuron v. AHP, No. 00-294 (Mass.
Superior Court, Middlesex County), which the Company filed in January, 2000,
(ii) to withdraw its appeal to the United States Third Circuit Court of Appeals
from the order approving the Brown Settlement, and (iii) to withdraw its
counterclaims against AHP in all pending Redux-related product liability
litigation.
Except for the descriptions of historical facts contained herein, this Current
Report on Form 8-K contains forward-looking statements that involve risks and
uncertainties that could cause the Company's actual results and financial
condition to differ materially from those anticipated by the forward-looking
statements. The words "believe", "expect", "anticipate", "intend", "plan",
"estimate" or other expressions which are predictions of or indicate future
events and trends do not relate to historical matters but identify forward-
looking statements. Risks and uncertainties related to forward-looking
statements are set forth in the Company's filings under the Securities Act of
1933 and the Securities Exchange Act of 1934 under "Risk Factors" and elsewhere,
and include, but are not limited to, risks relating to the Redux-related
litigation; uncertainties relating to clinical trials, regulatory approval and
commercialization of the Company's products; the early stage of products under
development; need for additional funds and corporate partners; history of
operating losses and expectation of future losses; product liability; dependence
on third parties for manufacturing and marketing; competition; government
regulation; risks associated with contractual arrangements; limited patents and
proprietary rights; dependence on key personnel; uncertainty regarding
pharmaceutical pricing and reimbursement and other risks.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Business Acquired: N/A.
(b) Pro Forma Financial Information: N/A
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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.
INTERNEURON PHARMACEUTICALS, INC.
Dated: June 14, 2001 By: /s/ Glenn L. Cooper
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Glenn L. Cooper
President, Chief Executive Officer
and Chairman
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