SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8) *
NEXELL THERAPEUTICS INC.
(Formerly Known as VIMRx Pharmaceuticals Inc.)
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(Name of Issuer)
COMMON SHARES, $0.001 PAR VALUE PER SHARE
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(Title of Class of Securities)
65332H104
(Previous CUSIP Number: 927186106)
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(CUSIP Number)
Jan Stern Reed
BAXTER INTERNATIONAL INC.
One Baxter Parkway
Deerfield, Illinois 60015
847.948.2212
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 23, 2002, October 31, 2002 and November 1, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [_].
NOTE: Schedules filed in paper format should include a signed original
and five (5) copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons (entities only)
BAXTER INTERNATIONAL INC., I.R.S. Identification Number: 36-0781620
BAXTER HEALTHCARE CORPORATION, I.R.S. Identification Number:
36-2604143
BIOSCIENCE 2002 LLC, I.R.S. Identification Number: 36-2604143
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [_]
(b) [_]
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3) SEC Use Only
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4) Source of Funds (See Instructions)
WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [_]
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6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
-0-
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Number of Shares
Beneficially Owned (8) Shared Voting Power
by Each Reporting 18,177,631
Person With
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(9) Sole Dispositive Power
-0-
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(10) Shared Dispositive Power
18,177,631
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
713,211,232 (Includes the right to acquire 1,300,000 shares of Common
Stock pursuant to the Warrant (as defined herein), the right to
acquire 7,609,545 shares of Common Stock pursuant to the shares of
Series A Preferred Stock described herein, the right to acquire
685,315,369 shares of Common Stock pursuant to the Series B Preferred
Stock described herein and the right to acquire 808,686 shares of
Common Stock pursuant to the Class B Warrant described herein)
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
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(13) Percent of Class Represented by Amount in Row (11)
97.1% (Assumes the exercise of the Warrant, the conversion of the
shares of Series A Preferred Stock, the conversion of the Series B
Preferred Stock and the exercise of the Class B Warrant, none of which
have occurred)
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(14) Type of Reporting Person (See Instructions)
CO
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Page 2 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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This Amendment No. 8 amends and restates the Schedule 13D and relates to the
holdings of BioScience 2002 LLC, a Delaware limited liability company and a
wholly-owned subsidiary of BHC and Parent ("Owner"), of 18,177,631 shares (the
"Shares") of common stock, $0.001 par value per share ("Common Stock"), of
Nexell Therapeutics Inc. (formerly known as VIMRx Pharmaceuticals Inc.) (the
"Company" or "Issuer"); a Warrant to purchase 1,300,000 shares of Common Stock;
83,705 shares of Series A Preferred Stock presently convertible into 7,609,546
shares of Common Stock; 61,679 shares of Series B Preferred Stock presently
convertible into 685,315,369 shares of Common Stock; a Class A Warrant to
purchase up to 1,500,000 shares of Common Stock; and a Class B Warrant to
purchase 808,686 shares of Common Stock.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock of the Company. The address of the
principal executive offices of the Company is:
9 Parker
Irvine, California 92618-1605
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Owner, Baxter Healthcare Corporation, a
Delaware corporation and the owner of 100% of the membership interests of Owner
("BHC") and Baxter International Inc., a Delaware corporation and the owner of
100% of the capital stock of BHC ("Parent"). The principal executive offices of
Owner, BHC and Parent are:
One Baxter Parkway
Deerfield, Illinois 60015
Telephone: 847.948.2000
Parent, BHC and Owner, through its subsidiaries, are engaged in the worldwide
development, distribution and manufacture of a diversified line of products,
systems and services used primarily in the health care field.
Neither Parent, BHC nor Owner, nor, to the best of the knowledge of Parent, BHC
and Owner, any director or executive officer of Parent, BHC or Owner, has been,
during the last five years, (a) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (b) a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As described in Item 4 below, in consideration of the BHC's tender of common
stock, warrants and debentures of Issuer's subsidiary to the Issuer, BHC
received from Issuer 750,000 shares of
Page 3 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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Common Stock, a warrant to purchase 1,300,000 shares of Common Stock, and
certain debentures of the Issuer.
As described in Item 4 below, BHC received 63,000 shares of Series B Preferred
Stock of The Issuer from four institutional investors and their affiliates in
exchange for $72,658,868.57, which funds were obtained from internally generated
funds.
As described in Item 4 below, upon conversion of 1,321 shares of Series B
Preferred Stock of the Issuer, BHC received 14,677,631 shares of Common Stock of
the Issuer.
ITEM 4. PURPOSE OF TRANSACTION.
Prior to June 30, 1999, the Company owned 80.5% of Nexell of California, Inc.
(formerly known as Nexell Therapeutics Inc.) ("Sub"), the Company's principal
business unit, which it acquired through the acquisition of certain assets from
BHC in December 1997 in exchange for (1) 2,500,000 shares of Common Stock, (2)
66,304 shares of Series A Convertible Preferred Stock of the Company with a
liquidation value of $1,000 per share ("Series A Preferred Stock"), (3) 19.5 %
of Sub's outstanding common stock, (4) a warrant to purchase an additional 6% of
Sub's common stock for $6,000,000, and (5) the right of BHC to receive payments
from Sub upon the occurrence of certain milestone events, which could aggregate
$21,000,000 if all the milestones were achieved. In addition, for $30,000,000
paid to Sub, BHC received $30,000,000 principal amount of Sub's 6 1/2%
convertible subordinated debentures convertible into Sub's common stock upon a
public offering of common stock by Sub.
The acquisition by the Company of BHC's interests in Sub, other than its right
to milestone payments, was effected through an exchange of BHC's interests in
Sub for an equivalent value of interests directly in the Company (the
"Acquisition"). The Company and BHC agreed to exchange BHC's interests in Sub
(common stock, warrant and convertible subordinated debentures, but excluding
its right to milestone payments) for:
.. 750,000 shares of Common Stock;
.. an adjustment of the conversion price of the shares of Series A Preferred
Stock owned by BHC to $11.00 per share;
.. a warrant to purchase 1,300,000 shares of Common Stock at a price of $4.60
per share (the "Warrant"); and
.. $32,884,537.50 principal amount of 6 1/2% Convertible Subordinated
Debentures convertible, commencing November 30, 2002, into Common Stock at
a conversion price equal to 95% of the average of the closing prices of the
Common Stock on the Nasdaq National Market for the 30 consecutive trading
days preceding the date of conversion.
On May 28, 1999, December 17, 1999, December 17, 2000 and December 17, 2001,
pursuant to the terms of the Series A Preferred Stock owned by BHC, the Company,
respectively, issued 3,978, 4,216, 4,469 and 4,738 additional shares of Series A
Preferred Stock to BHC as a result of dividends payable in kind.
Page 4 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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As contemplated by the Process Agreement described in Item 6, on October 23,
2002 BHC acquired 63,000 shares of Series B Preferred Stock together with the
Class A Warrant and Class B Warrant described in Item 5 from four institutional
investors and their affiliates for a purchase price of $72,658,868.57. On
October 31, 2002 BHC put the Series B Preferred Stock to Parent and Parent
transferred such Preferred Stock to BHC. On November 1, 2002 BHC converted 1,321
shares of the Series B Preferred Stock into 14,677,631 shares of Common Stock of
the Issuer. Subsequently, BHC transferred all of its interests in Common Stock,
Series A Preferred Stock, Series B Preferred Stock and warrants to purchase
Common Stock of the Issuer to Owner.
Other than as described herein in Items 4 and 6, neither Owner, BHC nor Parent
presently has any plans or proposals which relate to, or may result in, any of
the matters listed in Items 4(a) - 4(j) of Schedule 13D, although each reserves
the right to develop such plans.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Except as set forth herein, neither Owner, BHC, Parent, nor, to the best of the
knowledge of Owner, BHC and Parent, any director or executive officer of Owner,
BHC or Parent beneficially owns any other shares of Common Stock of the Company.
(a) Owner, BHC and Parent beneficially own an aggregate of 18,177,631
shares of Common Stock, which constitute approximately 51% of the
total number of presently outstanding shares of Common Stock. Owner,
BHC and Parent also each beneficially own the right to acquire up to
1,300,000 more shares of Common Stock pursuant to the Warrant. In
addition, Owner, BHC and Parent each beneficially own 83,705 shares of
Series A Preferred Stock presently convertible into 7,609,545 shares
of Common Stock, and 61,679 shares of Series B Preferred Stock
presently convertible into 685,315,369 shares of Common Stock. Owner,
BHC and Parent also each beneficially own the right to acquire up to
808,686 shares of Common Stock pursuant to the Class B Warrant. The
Class A Warrant will not become exercisable until November 24, 2004.
The number of shares of Common Stock into which the Class A Warrant is
exercisable will be between 0 and 1,500,000, depending on the market
price of Common Stock on November 24, 2004. Assuming the exercise of
the Warrant and the Class B Warrant and the conversion of the shares
of Series A and Series B Preferred Stock, Owner, BHC and Parent would
each beneficially own 713,211,232 shares of Common Stock, which would
constitute approximately 97% of the outstanding shares of Common
Stock.
(b) Owner, BHC and Parent share the power to vote and dispose of the
Shares.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Page 5 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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ITEM 6. CONTRACTS OR ARRANGEMENTS WITH RESPECT TO ISSUER SECURITIES.
In addition to the agreement documenting the Acquisition described in Item 4
above, BHC has entered into the following contracts or arrangements with the
Company and others with respect to the Company's securities:
The Series A Preferred Stock
Owner holds 83,705 shares of Series A Preferred Stock, which are presently
convertible at the option of Owner. The shares will automatically convert into
Common Stock on December 17, 2004 or upon other specified events, if not
otherwise already converted. The conversion price at which shares of Common
Stock will be deliverable upon conversion without the payment of additional
consideration by Owner is $11.00 per share, subject to adjustment for stock
splits and combinations, certain dividends and distributions, and
reclassification, exchange or substitution. There is a 6% dividend payable
annually in kind on the shares of Series A Preferred Stock. Accordingly, if
Owner does not convert any shares prior to December 17, 2004, on such date it
would own 99,693 shares of Series A Preferred Stock as a result of the
additional shares of Series A Preferred Stock issued in payment of the 6% annual
dividend; such 99,693 shares would automatically convert into 9,063,000 shares
of Common Stock on such date.
The Warrant
The Warrant entitles Owner to purchase up to 1,300,000 shares of Common Stock at
any time prior to May 27, 2006 at 5:00 p.m. at a purchase price of $4.60 per
share, subject to adjustment from time to time in the event of cash dividends,
stock dividends, stock subdivisions, stock splits, stock combinations or reverse
stock splits. Pursuant to the Process Agreement described below, BHC and Parent
have agreed not to exercise the Warrant unless the Plan of Complete Liquidation
and Dissolution of the Company is not carried out as contemplated by the Process
Agreement.
Registration Rights Agreement
Owner and the Company are parties to a Registration Rights Agreement whereby the
Company has granted certain demand and piggyback rights to Owner.
Voting Agreement
BHC is a party to a Voting Agreement with certain other stockholders of the
Company pursuant to which all parties agree to vote all of their Common Stock of
the Company in favor of one BHC-nominated director. In addition, BHC agrees to
vote all of its Common Stock of the Company in favor of the nominees for
director recommended by the Company's nominating committee.
Relationship Restructuring
On November 24, 1999, BHC and the Company entered into a Put Agreement whereby
BHC agreed to issue Put Rights in connection with the private placement by the
Company of $63,000,000 aggregate principal amount of Series B Preferred Stock,
warrants to purchase common stock of Company, and Put Rights. Each Put Right
entitles the holder to cause Parent to
Page 6 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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purchase the shares of Series B Preferred Stock during a specified time frame at
a price equal to the original purchase price of the Series B Preferred Stock
plus a specified rate of return. The Put Right is exercisable by holders at any
time between November 24, 2002 and November 24, 2004, unless earlier terminated
as provided in the Put Certificate. In addition, Parent and the Company entered
into a Side Letter whereby the conversion price of the Series B Preferred Stock
is to be adjusted downward per the terms of the Side Letter in the event of a
put to Parent of the Series B Preferred Stock by the holders.
Process Agreement
On October 16, 2002 BHC and Parent entered into a Process Agreement with the
Company pursuant to which the Company's Board of Directors approved a Plan of
Complete Liquidation and Dissolution and BHC and Parent agreed that,
notwithstanding the liquidation preference of the holders of Series A Preferred
Stock and Series B Preferred Stock in the aggregate amount of approximately $151
million, the holders of the Company's common stock (other than BHC, Parent and
their affiliates) would be entitled to receive a cash distribution in an amount
of $0.05 per share (but not to exceed an aggregate amount of $872,026 to all
holders of our common stock). BHC and Parent also agreed to acquire all of the
Company's Series B Preferred Stock, together with associated warrants, from
eight institutional investors. The Series B Preferred Stock is subject to
certain put rights described below granted by Parent on November 24, 1999,
pursuant to which Parent is obligated to purchase such shares, at the option of
the holders of such shares. BHC and Parent also agreed to cause the exercise of
the put rights in full no later than immediately prior to the record date for
stockholder consent to the Company's Plan of Complete Liquidation and
Dissolution. In consideration of the benefits afforded to the Company and the
holders of its common stock (other than BHC, Parent and their affiliates) the
Company agreed to the acceleration of the exercisability of the put rights, and,
that pursuant to the terms of a Side Letter Agreement dated November 24, 1999,
among Parent, the Company and certain other parties, the conversion price of the
Series B Preferred Stock in the hands of BHC, Parent and their affiliates
following the exercise of the put rights would be adjusted to a price of $0.09
per share. BHC and Parent agreed to cause the conversion into common stock of
the number of shares of the Series B Preferred Stock required for BHC, Parent
and their affiliates to hold a majority of the outstanding shares of the
Company's common stock, and further agreed to cause the execution of a written
consent approving the Company's Plan of Complete Liquidation and Dissolution.
The remaining Series B Preferred Stock and all of the Series A Preferred Stock
will not be converted to common stock and will retain their liquidation
preference, which will allow BHC, Parent and their affiliates to receive
substantially all of the assets of the Company, other than the distribution of
$0.05 per share of Company common stock and other than a contingency reserve to
satisfy current and anticipated liabilities. The Process Agreement also provides
that immediately after the approval of the Board of Directors of the Company of
the Plan of Complete Liquidation and Dissolution and certain other matters,
Victor W. Schmitt will be appointed to the Board of Directors of the Company.
The Series B Preferred Stock
Owner holds 61,679 shares of Series B Preferred Stock, which are presently
convertible at the option of Owner. The shares will automatically convert into
Common Stock on November 24, 2006, if not otherwise already converted. The
conversion price at which shares of Common Stock
Page 7 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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will be deliverable upon conversion without the payment of additional
consideration by Owner is $0.09 per share, subject to adjustment for stock
splits and combinations, certain dividends and distributions, and
reclassification, exchange or substitution. There is a 3% dividend payable
semi-annually in cash. If Owner does not convert any shares prior to November
24, 2006, on such date such shares would automatically convert into 685,315,369
shares of Common Stock.
The Class A Warrant
The Class A Warrant entitles Owner to purchase shares of Common Stock beginning
on November 24, 2004 and ending on December 16, 2004 at a purchase price of
$0.04 per share, subject to adjustment from time to time in the event of cash
dividends, stock dividends, stock subdivisions, stock splits, stock combinations
or reverse stock splits. The number of shares of Common Stock into which the
Class A Warrant is exercisable will be between 0 and 1,500,000, depending on the
market price of Common Stock on November 24, 2004. Pursuant to the Process
Agreement described below, BHC and Parent have agreed not to exercise the Class
A Warrant unless the Plan of Complete Liquidation and Dissolution of the Company
is not carried out as contemplated by the Process Agreement.
The Class B Warrant
The Class B Warrant entitles Owner to purchase up to 808,686 shares of Common
Stock at any time prior to December 16, 2004 at a purchase price of $11.129 per
share, subject to adjustment from time to time in the event of cash dividends,
stock dividends, stock subdivisions, stock splits, stock combinations or reverse
stock splits. Pursuant to the Process Agreement described below, BHC and Parent
have agreed not to exercise the Class B Warrant unless the Plan of Complete
Liquidation and Dissolution of the Company is not carried out as contemplated by
the Process Agreement.
Securities Agreement
The Series B Preferred Stock was issued to the original institutional investor
holders thereof pursuant to a Securities Agreement, dated November 24, 1999.
Under that agreement, which was assigned to BHC in connection with the
acquisition by BHC of the Series B Preferred Stock, the holders of the Series B
Preferred Stock are entitled to the benefit of certain covenants and consent
rights relating to certain significant transactions by the Company. The rights
under the Securities Agreement are currently held by Owner.
Except as set forth above, to the best knowledge of Owner, BHC and Parent, no
contracts, arrangements, understandings or relationships (legal or otherwise)
exist among the persons named in Item 2 above, or between such persons and any
other person with respect to any securities of the Company, including, but not
limited to, transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding or proxies.
Pages 8 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
EXHIBIT 7.1* Acquisition Agreement dated February 18, 1999, by and among
the Company, BHC and Sub (incorporated by reference to Annex A
of the Proxy Statement contained in the Schedule 14-A filed by
the Company) (Commission File No. 000-19153) on April 13,
1999.
EXHIBIT 7.2* Common Stock Purchase Warrant for 5,200,000 shares of Common
Stock of Nexell Therapeutics Inc.
EXHIBIT 7.3 Omitted
EXHIBIT 7.4 Omitted
EXHIBIT 7.5* Registration Rights Agreement, dated December 17, 1997, by and
between BHC and the Company.
EXHIBIT 7.6* Voting Agreement, dated December 17, 1997, by and between BHC,
Lindsay A. Rosenwald, M.D., Paramount Capital Asset Management
Inc., Donald Drapkin, Richard L. Dunning, Laurence D. Fink and
Eric A. Rose.
EXHIBIT 7.7* Put Agreement, dated November 24, 1999, by and between Parent
and the Company.
EXHIBIT 7.8* Form of Put Certificate held by the Investors.
EXHIBIT 7.9* Side Letter dated November 24, 1999, by and between Parent and
the Company.
EXHIBIT 7.10* Process Agreement dated October 16, 2002, by and among the
Company, BHC and Parent.
EXHIBIT 7.11 Form of Class A Warrant (filed as Exhibit 10.47 to the
Company's Current Report on Form 8-K filed December 7, 1999
and incorporated herein by reference).
EXHIBIT 7.12 Class B Warrant (filed as Exhibit 10.48 to the Company's
Current Report on Form 8-K filed December 7, 1999 and
incorporated herein by reference).
EXHIBIT 7.13 Securities Agreement dated as of November 24, 1999 among the
Company and the Purchasers named in Schedule I thereto (filed
as Exhibit 2.6 to the Company's Current Report on Form 8-K
filed December 7, 1999 and incorporated herein by reference).
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* Previously Filed
Page 9 of 10 Pages
CUSIP No. 65332H104 (Previous CUSIP No.: 927186106)
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S I G N A T U R E
After reasonable inquiry and to the best of my knowledge and belief, each of the
undersigned corporations certifies that the information set forth in this
statement is true, complete and correct.
Dated: November 1, 2002
BAXTER HEALTHCARE CORPORATION
By: /s/ Jan Stern Reed
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Jan Stern Reed
Secretary
BAXTER INTERNATIONAL INC.
By: /s/ Jan Stern Reed
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Jan Stern Reed
Corporate Secretary
BIOSCIENCE 2002 LLC
By: /s/ Jan Stern Reed
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Jan Stern Reed
Secretary
Page 10 of 10 Pages