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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934
For the fiscal year ended December 31, 1997

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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934
From the transition period from _________________ to _________________
Commission file number 0-4829-03

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NABI

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(Name of Registrant)

Delaware 59-1212264

- --------------------------------------------------------------------------------

(State or Jurisdiction of Incorporation I.R.S. Employer

or Organization) Identification Number

5800 Park of Commerce Boulevard N.W., Boca Raton, Florida 33487

- --------------------------------------------------------------------------------

Securities Registered Pursuant to Section 12(g) of the Act:

COMMON STOCK, PAR VALUE $.10 PER SHARE
Indicate by check mark whether the Registrant (1) has filed all reports

required to be filed by Section 13 or 15(d) of the Securities Exchange Act of

1934 during the preceding 12 months (or for such shorter period that the

Registrant was required to file such reports), and (2) has been subject to such

filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to

Item 405 of Regulation S-K is not contained herein, and will not be contained,

to the best of registrant's knowledge, in definitive proxy or information

statements incorporated by reference in Part III of this Form 10-K or any

amendment to this Form 10-K. [ ]
As of March 25, 1998, 34,893,934 shares of common stock were

outstanding, of which 33,324,917 shares were held of record by non-affiliates.

The aggregate market value of shares held by non affiliates was approximately

$108,305,980 based on the closing price per share of such common stock on such

date as reported by the Nasdaq National Market.
Documents Incorporated by Reference
Portions of Nabi's definitive Proxy Statement for its annual meeting of

shareholders which Nabi intends to file within 120 days after the end of Nabi's

fiscal year ended December 31, 1997 are incorporated by reference into Part III

hereof as provided therein.


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PART I
ITEM 1. BUSINESS
OVERVIEW
Nabi is a research and development driven biopharmaceutical company making and

marketing unique products for people with life threatening conditions. Nabi

possesses a broad portfolio of therapeutic products and vaccines to treat and

prevent infectious diseases and immune disorders. Nabi's product portfolio

includes three products approved by the United States Food and Drug

Administration (the "FDA") and nine main products across four classes in

development, including four products in clinical trials. Nabi has completed

construction and is in the process of validating a new biopharmaceutical

manufacturing facility designed to process plasma into therapeutic products. In

addition, Nabi is one of the world's largest suppliers of source plasma and

specialty plasmas which are sold to pharmaceutical and diagnostic companies.

Some of the plasma that Nabi collects also is used to manufacture Nabi's

proprietary products. Nabi collects plasma from an extensive donor base through

71 collection centers in the United States and four collection centers in

Germany. During 1996 and 1997 Nabi collected and processed approximately

2,322,000 and 2,274,000 liters of plasma, respectively. In addition, Nabi

manufactures and markets human-blood and plasma-based diagnostic products and

provides testing services on plasma and blood samples for third parties.
Nabi intends to achieve its objective of becoming a leader in the development

and marketing of proprietary therapeutic products and vaccines by expanding its

therapeutics franchise to include new antiviral and antibacterial products,

developing unique vaccines targeted to significant niche markets, developing its

own manufacturing capabilities, and continuing to optimize its plasma business

through sales of higher-margin specialty products. Nabi has combined its

expertise in the plasma business and the revenues and critical raw materials

generated by that business with a research and development team of more than 100

people capable of developing multiple product opportunities simultaneously and

bringing products through the clinical development and FDA approval processes.
Nabi has a diverse portfolio of plasma-based therapeutic products, such as

H-BIG(R), H-BIG(R) IV, WinRho SDF(TM), Autoplex(R)T, Nabi-Altastaph(TM)

(formerly StaphGAM), Nabi-Altastaph(TM)+ and, Nabi-Civacir(TM) (formerly H-CIG)

for immediate short-term protection against autoimmune and infectious diseases

and their associated complications. Nabi is also developing vaccines, such as

Nabi-StaphVAX(TM) and Nabi-StaphVAX(TM)+, to be used both as stand-alone

vaccines and as immunizing agents in plasma donors to produce purified human

antibodies for its antibody-based therapeutic products. The therapeutics

franchise has further diversified with the addition of small molecule nucleoside

analogs, such as Nabi-Cytera(TM).
MARKETED PRODUCTS
THERAPEUTIC PRODUCTS
Revenue generated by Nabi's therapeutic products has almost doubled since 1995.

Sales of these products grew 31% from $26.4 million in 1996 to $34.5 million in

1997. Nabi is currently marketing three therapeutic products approved by the

FDA: H-BIG(R), WinRho SDF(TM) and Autoplex(R)T. These products are described

below:
H-BIG(R)
Despite the availability of hepatitis B vaccines, hepatitis B infection has

spread rapidly and now affects an estimated 300 million people worldwide. The

Centers for Disease Control and Prevention (the "CDC")

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recommends that newborn infants of mothers who are hepatitis B-positive be

inoculated with both hepatitis B immune globulin and a hepatitis B vaccine.

H-BIG(R) is an intramuscular, human polyconal antibody product used following

exposure by blood transfusion, accidental ingestion, transmission from a

hepatitis B antigen-positive mother or sexual exposure. H-BIG(R), which has been

marketed since 1977, was the first hepatitis B plasma-based therapeutic product

to be licensed by the FDA. Nabi has marketed H-BIG(R) since September 1992 when

it acquired the product from Abbott Laboratories ("Abbott"). See "-Strategic

Alliances, Licenses and Royalty Obligations".
WinRho SDF(TM)
WinRho SDF(TM) is a human polyconal antibody product approved for the treatment

of Idiopathic Thrombocytopenia Purpura ("ITP") and for the suppression of Rh

isoimmunization. ITP is an autoimmune blood disorder characterized by abnormally

low platelet levels due to platelet destruction by the patient's own immune

system. Because platelets are required for blood clotting, the disorder can

result in uncontrolled bleeding, either spontaneously or in response to trauma.

In certain cases, such as severe trauma or spontaneous intracranial hemorrhage,

the bleeding can be life-threatening. ITP can occur as either a primary disease,

with no other associated condition, or secondary to another underlying disease,

such as HIV infection or lupus. Unless associated with HIV infection, ITP in

children is generally an acute condition which does not generally become

chronic. In adults, whether primary or secondary to HIV infection, the disease

is usually chronic in nature.
Nabi began exclusive marketing of WinRho SDF(TM) in the United States in

mid-1995 under a license and distribution agreement with Cangene Corporation.

WinRho SDF(TM) for the treatment of ITP has been designated an Orphan Drug. In

1997, Nabi initiated two Phase IV clinical trials for WinRho SDF(TM) and will

add another Phase IV trial in 1998 for the following indications: acute

pediatric ITP, splenectomy sparing in chronic ITP of adults and refractory

platelet alloimmunization. See "-Strategic Alliances, Licenses and Royalty

Obligations" and "-Government and Industry Regulation-Orphan Drug Act".
AutoPlex(R)T
AutoPlex(R)T is a complex of blood coagulation factors derived from plasma and

used to treat hemophilia A patients who have developed antibodies (inhibitors)

to Factor VIII, the standard therapy for people suffering from hemophilia A. In

May 1997, Nabi acquired certain assets associated with the product sales of

AutoPlex(R)T and obtained exclusive marketing rights for this product in the

United States, Canada and Mexico from Baxter Healthcare Corporation ("Baxter").
PLASMA PRODUCTS
Source Plasma
Nabi is one of the world's largest suppliers of human blood plasma to the

pharmaceutical and diagnostic industries. During 1996 and 1997, Nabi derived

revenues of $121.0 million and $135.3 million, respectively, from the sale of

source plasma, representing 58.2% and 71.3%, respectively, of Nabi's total

revenues from the sale of plasma.
Plasma is the liquid portion of blood which contains various proteins, as

distinguished from formed elements of the blood such as red blood cells, white

blood cells and platelets. Plasma is composed of several primary proteins

including: albumin, anti-hemophilic factor ("AHF") VIII and IX, and immune

globulin. After collection from donors, plasma is fractionated into these

purified proteins. The therapeutic market for these proteins drives overall

demand for plasma. The primary uses of these proteins are as follows:
o Albumin is the protein used to restore plasma volume subsequent to shock,

trauma, surgery and burns.

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o AHF VIII and IX are the clotting factors in plasma used to treat hemophilia

A and B as well as other clotting disorders.
o Immune globulin is the component of plasma, also known as antibodies, which

helps the body to fight or prevent disease. Therapeutic uses of standard

immune globulin from source plasma include the treatment of pediatric HIV,

bone marrow transplantation, B cell chronic lymphocytic leukemia,

hypogammaglobulinemia, Kawasaki syndrome and other chronic immune

deficiencies.
Specialty Plasma
During 1996 and 1997, Nabi derived revenues of $86.8 million and $54.3 million,

respectively, from the sale of specialty plasma, representing 41.8% and 28.7%,

respectively, of Nabi's total revenues from the sale of plasma.
Plasma which contains high concentrations of specific antibodies is known as

specialty plasma and is distinguished from source plasma, which has normal

concentrations of antibodies. Specialty plasma is used primarily to manufacture

hyperimmune globulins which are used to bolster the immunity of patients to help

fight a particular infection or to treat certain immune system disorders.

Following advances in intravenous immune globulin therapy in the mid-1980s, use

of specialty plasmas to generate therapeutic immune globulin products

significantly increased. Among the current uses for specialty plasmas are the

production of hyperimmune globulins to prevent or treat exposure to hepatitis A

and B, cytomegalovirus ("CMV"), tetanus and rabies and production of products to

treat ITP and Rh incompatibility in newborns. Specialty plasmas and hyperimmune

globulins derived from them are also used for diagnostic and tissue culture

purposes. Like source plasma, specialty plasma is fractionated into its

component proteins and the resulting hyperimmune globulin fraction is used to

manufacture therapeutic products.
Nabi identifies potential specialty plasma donors through internal screening and

testing procedures. Nabi also has developed FDA-licensed programs to vaccinate

potential donors to stimulate their production of specific antibodies. Through

Nabi's nationwide operations and access to its large and diverse donor base of

approximately 300,000 individuals, Nabi believes it has a strategic advantage in

its ability to collect specialty plasmas.
Nabi's principal specialty plasmas include:
o ANTI-D PLASMA. Specialty plasma containing anti-D antibodies has long been

used when there is a mismatch between a mother's Rh factor and that of her

fetus. Plasma collected from donors who have natural levels of anti-D or

who have been vaccinated to raise their anti-D levels is used to make

products to protect the infant. Nabi has proprietary donor stimulation and

management programs which enhance its ability to increase collection of

anti-D plasma. WinRho SDF(TM), a therapeutic product that Nabi markets in

the U.S. for the treatment of ITP, is also produced from anti-D plasma.
o ANTI-HEPATITIS B PLASMA. Nabi provides specialty plasma containing high

levels of antibodies to hepatitis B virus to manufacturers of hepatitis B

immune globulin therapeutic products which provide passive immunity against

hepatitis B virus. This specialty plasma collected by Nabi is also used to

produce H-BIG(R), Nabi's propriety hepatitis B therapeutic product. Nabi

believes that its proprietary donor stimulation and donor management

programs generally allow Nabi to produce anti-hepatitis B plasma having a

higher concentration and broader specificity than competing products.
o CMV PLASMA. Many individuals have been exposed to CMV. By screening its

large donor population, Nabi can identify individuals with high

concentrations of CMV antibodies in their plasma, and can supply the plasma

to product manufacturers to enhance intravenous products and to produce

CMV-specific immune globulin therapeutic products.

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o RABIES PLASMA. Nabi is a major supplier of specialty plasma enriched in

antibodies to rabies virus. Rabies plasma is used by manufacturers to make

therapeutic products which provide a short-term protective antibody

immunity to patients exposed to the rabies virus.
o RESPIRATORY SYNCYTIAL VIRUS ("RSV") PLASMA. Many individuals have been

exposed to RSV during childhood. By screening its large donor population,

Nabi can identify individuals with high concentrations of RSV-specific

antibodies in their plasma. This plasma is supplied to the major

manufacturers of RSV immune globulin therapeutic product. RSV is the

leading cause of lower respiratory tract infections in infants and young
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