AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 1997
REGISTRATION NO. 333-29617
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALEXION PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3648318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
25 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 776-1790
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
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LEONARD BELL, M.D.
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 776-1790
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of all communications, including all communications sent to the agent for
service, should be sent to:
MERRILL M. KRAINES, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plane, please check the following
box: |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
Title of each class Amount to be Proposed maximum price Proposed maximum aggregate Amount of
of securities registered per unit offering price registration fee
- ------------------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 par value 1,974,744 $9.125(1) $18,019,539 $5,461
per share
========================================================================================================================
(1) The price is estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee and is $9.125, the average of the high and low prices of
Alexion Pharmaceuticals, Inc. Common Shares as reported on The Nasdaq Stock
Market on June 17, 1997.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OF QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION -- DATED JULY 7, 1997
ALEXION PHARMACEUTICALS, INC.
1,974,744 Shares
Common Stock
This Prospectus relates to the resale of shares of Common Stock, $.0001 par
value per share (the "Common Stock") of Alexion Pharmaceuticals, Inc. (the
"Company" or "Alexion") from time to time for the account of the Selling
Stockholders (the "Selling Stockholders"). Certain of the Common Stock
registered hereby is issuable upon the exercise of warrants (the "Warrants")
owned by certain of the Selling Stockholders. The Company will not receive any
of the proceeds from the sale of the Common Stock by the Selling Stockholders.
The proceeds from the exercise of the Warrants, if any, will be received by the
Company. See "Use of Proceeds."
Of the 1,974,744 shares of Common Stock offered hereby, 1,450,000 shares
were acquired by Selling Stockholders from the Company in a private placement in
June 1997, 126,310 shares were acquired by Selling Stockholders upon the
conversion of Series A Preferred Stock which was sold in a private placement in
December 1994, 312,498 shares were acquired by Selling Stockholders in a private
placement of securities in December 1993 and, as stated above, 85,936 shares may
be acquired upon the exercise of the Warrants which were issued by the Company
in connection with the December 1993 private placement. The Warrants allow the
holders thereof to purchase shares of Common Stock at a price of $7.50 per
share, subject to adjustment in certain circumstances and are exercisable at any
time prior to the close of business on December 4, 1997.
The distribution of the Common Stock by the Selling Stockholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market (including the Nasdaq National
Market) or any exchange on which the Common Stock may then be listed, in
negotiated transactions, through the writing of options on shares (whether such
options are listed on an options exchange or otherwise), or a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
and/or purchasers of shares for whom they may act as agent (which compensation
may be in excess of customary commissions). The Selling Stockholders may also
sell the shares of Common Stock pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or may pledge shares
as collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts. The Selling Stockholders and any broker-dealers that
act in connection with the sale of Common Stock might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commissions received by them and any profit on the resale of the shares might be
deemed to be underwriting discounts or commissions under the Securities Act. The
Selling Stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the Common Stock against
certain liabilities, including liabilities arising under the Securities Act.
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "ALXN." On June 17, 1997, the closing sale price of the Common Stock was
$9.125 per share.
All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Stockholders will pay
underwriting discounts, selling commissions, and fees and the expenses, if any,
of counsel or other advisers to the Selling Stockholders.
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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" LOCATED ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is July __, 1997
No person is authorized in connection with the offering made hereby to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy by any person
in any jurisdiction in which it is unlawful for such person to make such offer
or solicitation. Neither the delivery of this Prospectus at any time nor any
sale made hereunder shall under any circumstance imply that the information
contained herein is correct as of any date subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and the regional offices of the Commission
located at Seven World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison Street, Chicago, Illinois 60661, and copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference facilities in New
York, New York and Chicago, Illinois, at prescribed rates. Copies of such
information may also be inspected at the reading room of the library of the
National Association of Securities Dealers, Inc., 1735 K Street, Washington,
D.C. 20006. This Prospectus does not contain all of the information set forth in
the Registration Statement of which this Prospectus is a part and exhibits
thereto which the Company has filed with the Commission under the Securities Act
of 1933 as amended (the "Securities Act") and to which reference is hereby made.
The Commission maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding the Company and other registrants that file
electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This Prospectus (including the documents incorporated by reference herein)
contains certain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) and information relating to
Alexion that are based on the beliefs of the management of Alexion, as well as
assumptions made by and information currently available to the management of
Alexion. When used in this Prospectus, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements reflect the current
views of Alexion with respect to future events and are subject to risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements. For a discussion of such risks,
see "Risk Factors." Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Alexion does
not undertake any obligation to publicly release any revisions to these forward
looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
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-2-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Alexion Pharmaceuticals, Inc. are
incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended July
31, 1996.
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
October 31, 1996.
3. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
January 31, 1997, as amended by Form 10-Q/A, filed March 17, 1997, and Form
10Q/A2, filed June 19, 1997.
4. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 1997.
5. The description of the Company's Common Stock contained in Item 1 of the
Company's Registration Statement on Form 8-A, dated February 12, 1996.
6. The Company's Current Report on Form 8-K, dated February 28, 1997.
7. The Company's Current Report on Form 8-K, filed June 18, 1997.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available upon request from:
Alexion Pharmaceuticals, Inc., 25 Science Park, New Haven, CT 06511, Attention:
David W. Keiser, Executive Vice President and Chief Operating Officer, (203)
776-1790. The Company undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request of such person,
a copy of any or all of the foregoing documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents.
-3-
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. Investors should carefully consider the information set
forth under the heading "Risk Factors."
This Prospectus contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in, or incorporated
by reference in this Prospectus.
THE COMPANY
Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") is a
biopharmaceutical company engaged in research and the development of proprietary
immunoregulatory compounds for the treatment of autoimmune and cardiovascular
diseases. The Company is developing C5 complement inhibitors ("C5 Inhibitors")
and Apogens ("Apogens"), two classes of potential therapeutic compounds designed
to selectively target specific disease-causing segments of the immune system.
The Company believes that its C5 Inhibitors and Apogens, which are based upon
distinct immunoregulatory technologies, may have the advantage of achieving a
higher level of efficacy with the potential for reduced side effects when
compared to existing therapeutic approaches. Alexion's lead C5 Inhibitor,
5G1.1-SC, is currently being studied in a Phase I/II clinical trial in
cardiopulmonary bypass patients. The Company's lead Apogen product candidate,
MP4, for the treatment of multiple sclerosis is expected to enter clinical
trials in the second half of 1997. The Company will need to undertake and
complete further tests in order to confirm its belief regarding the safety and
efficacy of its product candidates, and there can be no assurance as to the
results of any such tests.
As an outgrowth of its core immunoregulatory technologies, the Company is
developing immunoprotected materials for transplantation and gene therapy. In
collaboration with United States Surgical Corporation ("US Surgical"), Alexion
is developing non-human UniGraft organ products which are designed for
transplantation into humans. Further, in a collaboration with Genetic Therapy
Inc., a subsidiary of Novartis ("GTI/Novartis"), which was initiated in December
1996, Alexion is developing immunoprotected gene transfer systems which are
designed to enable the injectable delivery of therapeutic genes to patients'
cells. See "Recent Developments" below.
The Human Immune System. The role of the human immune system is to defend
the body from attack or invasion by infectious agents or pathogens. This is
accomplished through a complex system of proteins and cells, primarily
complement proteins, antibodies and various types of white blood cells, each
with a specialized function. Under normal circumstances, complement proteins,
together with antibodies and white blood cells, act beneficially to protect the
body by removing pathogenic microorganisms, cells containing antigens (foreign
proteins), and disease-causing immune complexes (combinations of antigens and
antibodies). However, any number of stimuli, including antibodies, pathogenic
microorganisms, injured tissue, normal tissue, proteases (inflammatory enzymes)
and artificial surfaces can locally activate complement proteins in a cascade of
enzymatic and biochemical reactions (the "complement cascade") to form
inflammatory byproducts leading, for example, in the case of rheumatoid
arthritis, to severe joint inflammation and, in the case of cardiovascular
disorders such as myocardial infarction (death of heart tissue), to additional
significant damage to the heart tissue. T-cells, a type of white blood cell,
play a critical role in the normal immune response by recognizing cells
containing antigens, initiating the immune response, attacking the
antigen-containing tissue and directing the production of antibodies directed at
the antigens, all of which lead to the elimination of the antigen-bearing
foreign organism. When a T-cell mistakenly attacks host tissue, the T-cell may
cause an inflammatory response resulting in tissue destruction and severe
autoimmune disease leading, for example, in the case of multiple sclerosis, to
severe and crippling destruction of nerve fibers in the brain.
-4-
C5 Inhibitors. Alexion is developing specific and potent biopharmaceutical
C5 Inhibitors which are designed to intervene in the complement cascade at what
the Company believes to be the optimal point so that the disease-causing actions
of complement proteins generally are inhibited while the normal
disease-preventing functions of complement proteins generally remain intact. In
laboratory and animal models of human disease, Alexion has shown that C5
Inhibitors are effective in substantially preventing inflammation during
cardiopulmonary bypass ("CPB"), limiting myocardial infarction during coronary
ischemia and reperfusion, enhancing survival in lupus and preserving kidney
function in nephritis (kidney inflammation) and reducing the incidence and
severity of inflammation and joint damage in rheumatoid arthritis. The Company
is developing two C5 Inhibitors, a short acting humanized (compatible for human
use) single chain antibody (5G1.1-SC) designed for acute therapeutic settings
such as in CPB procedures and in treating myocardial infarctions, and a long
acting humanized monoclonal antibody (5G1.1) designed for treating chronic
disorders such as nephritis and rheumatoid arthritis. See "Recent Developments"
below for a discussion of the regulatory status of 5G1.1-SC. The Company's long
acting monoclonal antibody is in process development.
Apogens. The Company's Apogen compounds are based upon discoveries at the
National Institutes of Health ("NIH") which are exclusively licensed to Alexion
and upon further discoveries by Alexion. These discoveries involve a mechanism
by which substantially all disease-causing T-cells are selectively eliminated in
vivo in animal models of disease. The highly specific recombinant Apogens under
development by the Company are designed to selectively eliminate disease-causing
T-cells in patients with certain autoimmune diseases including multiple
sclerosis and diabetes mellitus. The Company has demonstrated that its lead
proprietary Apogen, MP4 ("MP4"), is effective at preventing neurologic disease
and in ameliorating established disease in animal models of multiple sclerosis.
Clinical trial quantities of MP4 are currently in production and the Company
anticipates it will file an IND for the multiple sclerosis indication in the
second half of 1997.
UniGraft Program. The Company's UniGraft program, in collaboration with US
Surgical, is focused on developing non-human organ products designed for
transplantation into humans without clinical rejection. Alexion has tested
genetically engineered pig hearts, livers and lungs in primates and has
demonstrated transplant organ function substantially longer than for
transplanted non-genetically engineered porcine organs.
Gene Transfer Systems. Alexion is developing, in collaboration with
GTI/Novartis, immunoprotected retroviral vector particles and producer cells
which are designed to resist rejection and therefore may be able to be used for
direct injectable delivery of therapeutic genes to patients' cells. Such
particles and producer cells are being engineered by Alexion for subsequent
preclinical evaluation by GTI.
The Company was founded in New Haven, Connecticut in January 1992 with
scientific founders largely drawn from the faculty of Yale University. The
Company's principal executive offices are at 25 Science Park, New Haven,
Connecticut 06511, and its telephone number is (203) 776-1790.
THE OFFERING
Common Stock offered by the Selling Stockholders........ 1,974,744 shares (1)
NASDAQ symbol........................................... ALXN
Risk factors............................................ See "Risk Factors" for
a discussion of certain
factors to be
considered by
prospective investors.
- --------
(1) Includes 85,936 shares of Common Stock issuable upon the exercise of the
Warrants.
-5-
RECENT DEVELOPMENTS
C5 Inhibitor 5G1.1-SC Clinical Trials
- -------------------------------------
An Investigational New Drug application ("IND") was filed with the United
States Food and Drug Administration ("FDA") during March 1996 for 5G1.1-SC, and
after receiving FDA authorization, a Phase I clinical trial in healthy male
volunteers began in June 1996. Results of the Phase I trial indicated that a
single dose administration of 5G1.1-SC was safe and well-tolerated in the study
population. In September 1996, the Company received FDA authorization for its
second clinical trial and in October 1996 commenced a Phase I/II study of
5G1.1-SC in patients undergoing CPB.
Gene Transfer Systems - GTI/Novartis
- ------------------------------------
In December 1996, Alexion and GTI/Novartis entered into a License and
Collaborative Research Agreement with respect to the Company's gene transfer
technology. Under the Agreement, GTI/Novartis has been granted a worldwide
exclusive license to use the Alexion technology in its gene therapy products.
Terms of the agreement call for Alexion to receive up front license fees,
research payments and milestone payments from GTI/Novartis totalling up to $10
million. Alexion will also receive royalties on net sales of such products, if
any.
ApogenMS - MP4
- --------------
In April 1997, Alexion announced the results of a study demonstrating the
efficacy of MP4, Alexion's proprietary Apogen compound, for the treatment of
Multiple Sclerosis ("MS") in a primate model of MS. In the study, relative to
untreated control animals, treatment with MP4 was associated with a clear
dose-dependent reduction in the severity of symptoms, with animals in the high
dose treatment group displaying no apparent clinical manifestations of disease.
Further, MP4 prolonged the time to onset of lesions detected by magnetic
resonance imaging. There can be no assurance that the results of studies in
animals can be reproduced, or are predictive of results, in humans. See "Risk
Factors - Early Stage of Product Development; Risks of Clinical Trials."
Private Placement of Common Stock
- ---------------------------------
The Company has entered into Stock Purchase Agreements, dated as of June
12, 1997 (the "Stock Purchase Agreements"), with certain investors, pursuant to
which the investors have committed to purchase 1,450,000 shares of the Common
Stock of the Company at a price of $7.75 per share, subject to the effectiveness
of the Registration Statement of which this Prospectus is a part. The offer and
sale by the Company of the Common Stock to the investors pursuant to the Stock
Purchase Agreements was made pursuant to an exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof. The Stock
Purchase Agreements contain representations and warranties as to each investor's
status as an "accredited investor" as such term is defined in Rule 501
promulgated under the Securities Act. Robertson, Stephens & Company LLC ("RS &
Co.") acted as the placement agent for the private placement. The Company
agreed, in addition to payment of the commissions described below, to reimburse
RS & Co. for its reasonable out-of-pocket expenses incurred in connection with
the private placement.
If the Registration Statement is declared effective on or prior to
September 17, 1997, the investors will purchase the shares of Common Stock at a
price per share of $7.75, resulting in gross proceeds to the Company of
$11,237,500. The Company would be obligated to pay RS & Co. commissions of 6% of
the gross proceeds, or $674,250 in the aggregate, in addition to expenses as
described above. RS & Co. has agreed to pay 10% of its fees to Josephthal Lyon &
Ross Incorporated for its assistance in connection with the private placement.
All of the investors in the June 1997 private placement are Selling Stockholders
herein. See "Selling Stockholders."
-6-
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree
of risk. Prospective investors should consider carefully the following risk
factors, as well as the other information set forth in this Prospectus, in
connection with an investment in the Common Stock offered hereby. This
Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in "Risk Factors," as well as those discussed elsewhere in this Prospectus.
Operating Losses; Uncertainty of Future Profitability. Alexion has
generated no revenues from product sales and is dependent upon its research and
development contracts, including the agreements with US Surgical and
GTI/Novartis, external financing, other research and development contracts and
research and development grants to the extent that they can be obtained and
interest income to pursue its intended business activities. The Company has
incurred losses since inception and has cumulative net losses of $29.1 million
through April 30, 1997. Losses have resulted principally from costs incurred in
research activities aimed at identifying and developing the Company's product
candidates and from general and administrative costs. The Company expects to
incur substantial additional operating losses over the next several years and
expects losses to increase as the Company's research and development efforts
expand and clinical trials continue and potentially expand. The Company's
ability to achieve profitability is dependent on its ability to obtain patent
protection and regulatory approval for its products, to obtain licenses from
third parties to use technology which it may need, to enter into agreements for
product development and commercialization with corporate partners and to develop
the capacity to manufacture and sell products. There can be no assurance that
the Company will successfully develop, commercialize, manufacture or market any
of its potential products, obtain required regulatory approvals, patents or
third party licenses to technology or ever achieve profitability.
Early Stage of Product Development; Risks of Clinical Trials. The
Company's research and development programs are at an early stage. There can be
no assurance that the Company's drug discovery efforts will result in the
development of commercially successful therapeutic drugs. Potential products
which have been identified will require significant additional development,
preclinical and clinical testing, regulatory approval, and additional investment
prior to their commercialization, which may never be achieved. Potential
products may be found to be ineffective or cause harmful side effects during
preclinical testing or clinical trials, fail to receive necessary regulatory
approvals, be difficult to manufacture on a large scale, fail to achieve market
acceptance, be uneconomical or be precluded from commercialization by
proprietary rights of third parties. The results from preclinical studies and
early clinical trials may not be predictive of results that will be obtained in
large-scale clinical trials and do not necessarily predict or prove safety or
efficacy in humans.
In addition, the Company has recently commenced clinical trials of one of
its product candidates. There can be no assurance that clinical trials of the
Company's product candidates will demonstrate sufficient safety and efficacy to
obtain the requisite regulatory approvals or will result in marketable products.
Clinical trials are often conducted with patients that are critically ill.
During the course of treatment, these patients can die or suffer other adverse
medical effects for reasons that may not be related to the pharmaceutical agent
being tested but which can nevertheless affect clinical trial results. A number
of companies in the pharmaceutical industry have suffered significant setbacks
in advanced clinical trials, even after promising results in earlier trials. Any
such setback could have a material adverse effect on the Company's business,
financial condition and results of operations. The completion of clinical trials
of the Company's product candidates may be delayed by many factors and there can
be no assurance that delays or terminations will not occur. One such factor is
the rate of enrollment of patients, which generally varies throughout the course
of a clinical trial and which depends on the size of the patient population, the
number of clinical trial sites, the proximity of patients to clinical trial
sites, the eligibility criteria for the trial and the existence of competing
clinical trials. The Company cannot control the rate at which patients present
themselves for enrollment, and there can be no assurance that the rate of
patient enrollment will be consistent with the Company's expectations or be
sufficient to enable clinical trials of the Company's product candidates to be
completed in a timely manner.
-7-
Need for Additional Funds. The Company will require substantial
additional funds for its research and product development programs, for
operating expenses, for pursuing regulatory approval and for developing required
production, sales and marketing capabilities. With the exception of the
Company's agreements with US Surgical and GTI/Novartis and certain research
grants, the Company does not have any commitments or arrangements to obtain any
such funds and there can be no assurance that funds for these purposes, whether
through additional sales of securities or collaborative or other arrangements
with corporate partners or from other sources, will be available to the Company
when needed or on terms favorable to the Company. The unavailability of
additional financing could require the Company to delay, scale back or eliminate
certain of its research and product development programs or to license third
parties to commercialize products or technologies that the Company would
otherwise undertake itself, any of which would have a material adverse effect on
the Company. The Company believes that its existing available resources,
together with anticipated future funding from US Surgical and GTI/Novartis and
certain research grants, and interest income should be sufficient to fund its
operating expenses and capital requirements as currently planned for at least 12
months. However, the Company's cash requirements may vary materially from those
now planned because of results of research and development, results of product
testing, relationships with strategic partners, changes in the focus and
direction of the Company's research and development programs, competitive and
technological factors, developments in the regulatory process and other factors,
none of which can be predicted.
Rapid Technological Change. The Company is engaged in pharmaceutical
fields characterized by extensive research efforts, rapidly evolving technology
and intense competition from numerous organizations, including pharmaceutical
companies, biotechnology firms, academic institutions and others. New
developments are expected to continue at a rapid pace in both industry and
academia. There can be no assurance that research and discoveries by others will
not render any of the Company's programs or potential products obsolete or
uneconomical. In order to compete successfully, the Company will need to
complete development of and obtain regulatory approval of products that keep
pace with technological developments on a timely basis. Any failure by the
Company to anticipate or respond adequately to technological developments will
have a material adverse effect on the Company's business, financial condition
and results of operations.
Patent, License and Proprietary Rights Uncertainties. The Company's
success will depend in part on its ability to obtain United States and foreign
patent protection for its products, preserve its trade secrets and proprietary
rights, and operate without infringing on the proprietary rights of third
parties or having third parties circumvent the Company's rights. Because of the
length of time and expense associated with bringing new products through
development and regulatory approval to the marketplace, the health care industry
has traditionally placed considerable importance on obtaining patent and trade
secret protection for significant new technologies, products and processes.
There can be no assurance that any patents will issue from any of the patent
applications owned by or licensed to the Company. Further, even if patents were
to issue, there can be no assurance that they will provide the Company with
significant protection against competitive products or otherwise be commercially
valuable. In addition, patent law relating to certain of the Company's fields of
interest, particularly as to the scope of claims in issued patents, is still
developing and it is unclear how this uncertainty will affect the Company's
patent rights. Litigation, which could be costly and time consuming, may be
necessary to enforce patents issued to the Company and/or to determine the scope
and validity of others' proprietary rights, in either case in judicial or
administrative proceedings. The Company's competitive position is also dependent
upon unpatented trade secrets which generally are difficult to protect. There
can be no assurance that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
the Company's trade secrets, that the Company's trade secrets will not be
disclosed or that the Company can effectively protect its rights to unpatented
trade secrets. As the biotechnology industry expands and more patents are
issued, the risk increases that the Company's potential products may give rise
to claims that they infringe the patents of others. Any such infringement
litigation would be costly and time consuming to the Company.
The Company is aware of broad patents owned by third parties relating to
the manufacture, use, and sale of recombinant humanized antibodies, recombinant
humanized single chain antibodies and genetically engineered animals. The
Company has received notice from one company regarding the existence of a patent
which the owners claim may be relevant to the development and commercialization
of certain of the Company's proposed UniGraft organ transplantation products.
The Company has
-8-
identified and is testing various approaches which it believes should not
infringe this patent and which should permit commercialization of its products.
There can be no assurance that the owner of this patent will not seek to enforce
the patent against the Company's so-modified commercial products or against the
development activities related to the non-modified products. To the extent it
becomes necessary, there can be no assurance that the Company will be able to
obtain a license on commercially reasonable terms. If the Company does not
obtain necessary licenses, it could encounter delays in product market
introductions while it attempts to design around such patent, or could find that
the development, manufacture or sale of products requiring such a license could
be foreclosed. Further, there can be no assurance that owners of patents that
the Company does not believe are relevant to the Company's product development
and commercialization will not seek to enforce their patents against the
Company. Such action could result in litigation which would be costly and time
consuming. There can be no assurance that the Company would be successful in
such litigations. The Company is currently unaware of any such threatened
action.
Certain of the licenses by which the Company obtained its rights in and
to certain technologies require the Company to diligently commercialize or
attempt to commercialize such technologies. There can be no assurance that the
Company will meet such requirements, and failure to do so for a particular
technology could result in the Company losing its rights to that technology.
Currently, the Company has not sought to register its potential
trademarks and there can be no assurance that the Company will be able to obtain
registration for such trademarks.
No Assurance of FDA Approval; Government Regulation. The preclinical and
clinical testing, manufacturing, and marketing of the Company's products are
subject to extensive regulation by numerous government authorities in the United
States and other countries, including, but not limited to, the FDA. Among other
requirements, FDA approval of the Company's products, including a review of the
manufacturing processes and facilities used to produce such products, will be
required before such products may be marketed in the United States. Similarly,
marketing approval by a foreign governmental authority is typically required
before such products may be marketed in a particular foreign country. In order
to obtain FDA approval of a product, the Company must, among other things,
demonstrate to the satisfaction of the FDA that the product is safe and
effective for its intended uses and that the Company is capable of manufacturing
the product with procedures that conform to the FDA's then current good
manufacturing practice ("cGMP") regulations, which must be followed at all
times. The process of seeking FDA approvals can be costly, time consuming, and
subject to unanticipated and significant delays. There can be no assurance that
such approvals will be granted to the Company on a timely basis, or at all. Any
delay in obtaining or any failure to obtain such approvals would adversely
affect the Company's ability to introduce and market products and to generate
product revenue.
The Company's research and development processes involve the controlled
use of hazardous materials. The Company is subject to federal, state and local
laws and regulations governing the use, manufacture, storage, handling and
disposing of such materials and certain waste products. In the event of such an
accident, the Company could be held liable for any damages that result and any
such liability could exceed the resources of the Company. There can be no
assurance that the Company will not be required to incur significant costs to
comply with the environmental laws and regulations in the future, or that the
business, financial condition and results of operations of the Company will not
be materially adversely affected by current or future environmental laws or
regulations.
Substantial Competition. The pharmaceutical and biotechnology industries
are characterized by intense competition. Many companies, including major
pharmaceutical and chemical companies, as well as specialized biotechnology
companies, are engaged in activities similar to those of the Company. Certain of
these companies have substantially greater financial and other resources, larger
research and development staffs, and more extensive marketing and manufacturing
organizations than the Company. Many of these companies have significant
experience in preclinical testing, human clinical trials, product manufacturing,
marketing and distribution and other regulatory approval procedures. In
addition, colleges, universities, governmental agencies and other public and
private research organizations conduct research and may market commercial
products on their own or through joint ventures. These institutions are becoming
more active in seeking patent protection and licensing arrangements to collect
royalties for
-9-
use of technology that they have developed. These institutions also compete with
the Company in recruiting and retaining highly qualified scientific personnel.
In particular, T-Cell Sciences, Inc. and Chiron Corporation have both
publicly announced intentions to develop complement inhibitors to treat diseases
related to trauma and inflammation indications and the Company is aware that
SmithKline Beecham Plc, Merck & Co., Inc. and CytoMed Inc. are attempting to
develop similar therapies. In addition, each of Bayer A.G. ("Bayer"), Immunex
Corporation, Pharmacia & Upjohn and Rhone-Poulenc Rorer, Inc. sells a product
which is used to reduce surgical bleeding during CPB. The Company is also aware
of announced and ongoing clinical trials of certain companies, including
Autoimmune, Inc., ImmuLogic Pharmaceutical Corporation, Neurocrine Biosciences,
Inc., and Anergen, Inc. employing T-cell specific tolerance technologies and
addressing patients with multiple sclerosis or diabetes mellitus. Baxter
Healthcare Corporation and Sandoz, Inc., in collaboration with Biotransplant
Inc., have publicly announced intentions to commercially develop xenograft
organs and the Company is aware that Diacrin Inc. is also working in this field.
These companies may succeed in developing products that are more effective or
less costly than any that may be developed by Alexion and may also prove to be
more successful than Alexion in production and marketing. Competition may
increase further as a result of potential advances in the commercial
applicability of biotechnology and greater availability of capital for
investment in these fields.
Dependence on Qualified Personnel. The Company is highly dependent upon
the efforts of its senior management and scientific personnel including its
consultants, generally, and Dr. Leonard Bell, its President and Chief Executive
Officer, in particular. The Company and Dr. Bell are parties to an employment
agreement which expires on April 1, 2000. The loss of the services of one or
more of these individuals could have a material adverse effect on the Company's
ability to achieve its development objectives on a timely basis or at all. The
Company has a $2,000,000 key man life insurance policy on the life of Dr. Bell
of which the Company is the beneficiary. Because of the specialized scientific
nature of its business, Alexion is also highly dependent upon its ability to
continue to attract and retain qualified scientific and technical personnel.
There is intense competition for qualified personnel in the areas of the
Company's activities, and there can be no assurance that Alexion will be able to
continue to attract and retain the qualified personnel necessary for the
development of its business. Loss of the services of, or failure to recruit, key
scientific and technical personnel would be significantly detrimental to the
Company's product development programs.
All members of the Company's Board of Scientific Advisors and the
Company's other scientific consultants are employed on a full-time basis by
academic or research institutions. Accordingly, such advisors and consultants
will be able to devote only a small portion of their time to the Company. In
addition, in certain circumstances, inventions or processes discovered by them
may not become the property of the Company but may be the property of their
full-time employers or of other companies and institutions for which they now
consult. There can be no assurance that the interests and motivations of the
Company's collaborators are or will remain consistent with those of the Company.
Furthermore, there can be no assurance that the Company will be able to
successfully negotiate license rights to the results of collaborations or that
such licenses will be on commercially reasonable terms.
Dependence on Outside Parties and Collaborators. The Company's strategy
for the research, development, manufacture and commercialization of certain of
its products contemplates that it will enter into various arrangements with
corporate partners, licensors, licensees, outside researchers, consultants and
others and, therefore, the success of the Company is, and will be, dependent in
part upon the efforts of outside parties. There can be no assurance that the
Company will be able to negotiate acceptable collaborative arrangements to
develop or commercialize its products, that arrangements or other collaborations
entered into, if any, will be successful, or that current or potential
collaborators will not pursue treatments for other diseases or seek alternative
means of developing treatments for the diseases targeted by programs with the
Company. The Company has entered into research and development agreements with
US Surgical and GTI/Novartis to commercialize potential products to be developed
in the UniGraft program and for gene therapy. The amount and timing of resources
which US Surgical, GTI/Novartis or any other potential parties to collaboration
arrangements devote to these activities may not be within the control of the
Company. There can be no assurance that outside parties and collaborators will
perform their obligations as expected or that any revenue will be derived from
outside arrangements. The Joint Development Agreement with US Surgical may be
terminated by US Surgical
-10-
for any or no reason effective on or after January 1, 1998, if notice is given
by US Surgical at least six months prior thereto. If any of the Company's
collaborators breaches or terminates its agreement with the Company or otherwise
fails to conduct its collaborative activities in a timely manner, the
development or commercialization of the product candidate or the research
program which is the subject of the agreement may be delayed and the Company may
be required to undertake unforeseen additional responsibilities or to devote
additional resources to development or commercialization or terminate the
development or commercialization. This could have a material adverse effect on
the Company's prospects, financial condition, intellectual property position and
results of operations.
Limited Manufacturing, Marketing, Sales, Clinical Testing and Regulatory
Compliance Capability. The Company has not invested in the development of
commercial manufacturing, marketing, distribution or sales capabilities.
Moreover, the Company has insufficient capacity to manufacture more than one
product candidate at a time or to manufacture its product candidates for later
stage clinical development or commercialization. If the Company is unable to
develop or contract for additional manufacturing capabilities on acceptable
terms, the Company's ability to conduct human clinical testing will be
materially adversely affected, resulting in delays in the submission of products
for regulatory approval and in the initiation of new development programs, which
could have a material adverse effect on the Company's competitive position and
the Company's prospects for achieving profitability. In addition, as the
Company's product development efforts progress, the Company will need to hire
additional personnel skilled in clinical testing, regulatory compliance, and, if
the Company develops products with commercial potential, marketing and sales.
There can be no assurance that the Company will be able to acquire, or establish
third-party relationships to provide, any or all of these resources or be able
to obtain required personnel and resources to manufacture, or perform testing or
engage in marketing, distribution and sales on its own.
Uncertainty of Availability of Health Care Reimbursement. The Company's
ability to commercialize its products successfully may depend in part on the
extent to which reimbursement for the cost of such products and related
treatments will be available from government health administration authorities,
private health insurers and other organizations. Third-party payors are
attempting to control costs by limiting coverage of products and treatments and
the level of reimbursement for medical products and services. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and if the Company succeeds in bringing one or more products to
market, there can be no assurance that these products will be considered
cost-effective, that reimbursement will be available, or, if available, that the
payor's reimbursement policies will not materially adversely affect the
Company's ability to sell its products on a profitable basis.
Product Liability; Potential Liability for Human Clinical Trials. The
Company's business exposes it to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of human therapeutic
products and there can be no assurance that the Company will be able to avoid
significant product liability exposure. With respect to the Company's UniGraft
program, little is known about the potential long-term health risks of
transplanting non-human tissue into humans. In addition to product liability
risks associated with sales of products, the Company may be liable to the claims
of individuals who participate in human clinical trials of its products. While
the Company has obtained, and will seek, waivers of liability from all persons
who participated or may in the future participate in human clinical trials
conducted by or on behalf of the Company, there can be no assurance that waivers
will be effective to protect the Company from liability or the costs of product
liability litigation. The Company currently has product liability insurance to
cover certain liabilities relating to the conduct of human clinical trials.
However, there can be no assurance that it will be able to maintain such
insurance on acceptable terms or that the insurance will provide adequate
protection against potential liabilities. An inability to maintain sufficient
insurance coverage at an acceptable cost or otherwise to protect against
potential product liability claims could prevent or limit the commercialization
of products developed by the Company. Furthermore, a product liability related
claim or recall could have a material adverse effect on the business, financial
condition and results of operations of the Company.
Volatility of Share Price. The market prices for securities of
biopharmaceutical companies have been volatile. Factors such as announcements of
technological innovations or new commercial products by the Company or its
competitors, government regulation, patent or proprietary rights developments,
public concern as to the safety or other implications of biopharmaceutical
products, results of preclinical
-11-
or clinical trials, positive or negative developments related to the Company's
collaborators and market conditions in general may have a significant impact on
the market price of the Company's Common Stock.
Dilutive Effect of Stock Issuances, Grants, Options and Warrants. As of
April 30, 1997, Alexion has granted options to purchase an aggregate of
approximately 1,332,334 shares of the Company's Common Stock under certain stock
option plans. Warrants to purchase an aggregate of approximately 945,669 shares
of the Company's Common Stock, including the Warrants, are also outstanding
under previous financing arrangements and other transactions. Many of these
options and warrants have exercise prices below the current market price of the
Company's Common Stock. In addition, the Company may issue additional stock,
warrants and/or options to raise capital in the future. The Company regularly
examines opportunities to expand its technology base through means such as
licenses, joint ventures and acquisition of assets or ongoing businesses and may
issue securities in connection with such transactions. The Company may also
issue additional securities in connection with its stock option plans. During
the terms of such options and warrants, the holders thereof are given the
opportunity to profit from a rise in the market price of the Company's Common
Stock. The exercise of such options and warrants may have an adverse effect on
the market value of the Company's Common Stock. The existence of such options
and warrants may adversely affect the terms on which the Company can obtain
additional equity financing. To the extent the exercise prices of such options
and warrants are less than the net tangible book value of the Company's Common
Stock at the time such options and warrants are exercised, the Company's
stockholders will experience an immediate dilution in the net tangible book
value of their investment.
No Dividends. The Company has not paid dividends on any of its capital
stock since its inception and does not expect to pay cash or stock dividends on
its Common Stock in the foreseeable future.
Possible Adverse Impact on Holders of Common Stock; Anti-takeover
Provisions; Rights Plan. The Board of Directors may issue one or more series of
Preferred Stock, without any action on the part of the stockholders of the
Company, the terms of which may adversely affect the rights of holders of Common
Stock. Issuance of Preferred Stock, which may be accomplished through a public
offering or a private placement, may dilute the voting power of holders of
Common Stock (such as by issuing Preferred Stock with super voting rights) and
may render more difficult the removal of current management, even if such
removal may be in the stockholders' best interests. Further, the issuance of
Preferred Stock may be used as an "anti-takeover" device without further action
on the part of the stockholders. On February 14, 1997, the Board of Directors of
Alexion declared a dividend distribution of one preferred stock purchase right
(a "Right") for each outstanding share of Common Stock of the Company. The
Rights are not exercisable until the date of the earlier to occur of (i) ten
business days following the time of a public announcement or notice to the
Company that a person or group of affiliated or associated persons has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock of
the Company (such 20% beneficial owner, an "Acquiring Person"), or (ii) ten
business days, or such later date as may be determined by the Board of Directors
of the Company, after the date of the commencement or announcement by a person
of an intention to make a tender offer or exchange offer for an amount of Common
Stock which, together with the shares of such stock already owned by such
person, constitutes 20% or more of the outstanding shares of such Common Stock.
The Rights and the Rights Agreement, as well as certain provisions of Delaware
law are designed to prevent any unsolicited acquisitions of the Company's Common
Stock. These provisions and any issuance of Preferred Stock could prevent the
holders of Common Stock from realizing a premium on their shares.
Ownership by Management and Principal Stockholders. On April 30, 1997,
directors and officers of the Company and certain principal stockholders and
their affiliates beneficially owned in the aggregate 2,087,084 shares of Common
Stock, representing 26.5% of the outstanding shares of Common Stock.
Accordingly, they have the ability to influence significantly the affairs of the
Company and matters requiring a stockholder vote, including the election of the
Company's directors, the amendment of the Company's charter documents, the
merger or dissolution of the Company and the sale of all or substantially all of
the Company's assets. The voting power of these holders may also discourage or
prevent any proposed takeover of the Company pursuant to a tender offer.
-12-
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
Common Stock by the Selling Stockholders. The proceeds, if any, received by the
Company upon the exercise of the Warrants will be utilized by the Company for
working capital purposes.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of each Selling Stockholder and as adjusted
to give effect to the sale of the Shares offered hereby. The Shares are being
registered to permit public secondary trading of the Shares, and the Selling
Stockholders may offer the Shares for resale from time to time. See "Plan of
Distribution."
Of the 1,974,744 shares of Common Stock being offered by the Selling
Stockholders, 1,450,000 were acquired, subject to the effectiveness of the
Registration Statement of which this Prospectus is a part, from the Company in a
private placement transaction pursuant to Stock Purchase Agreements dated as of
June 12, 1997 at a purchase price per share of $7.75. Each Selling Stockholder
that purchased Common Stock pursuant to a Stock Purchase Agreement represented
to the Company that it was acquiring the shares for investment and with no
present intention of distributing any of such shares.
The Company is registering 126,310 shares of Common Stock issued to
Selling Stockholders upon the conversion of Series A Preferred Stock, pursuant
to the exercise of piggy-back registration rights which were granted to such
Selling Stockholders in connection with their purchase of the Series A Preferred
Stock in December 1994, 312,498 shares acquired by Selling Stockholders in a
private placement of securities in December 1993, and 85,936 shares issuable
upon the exercise of the Warrants which were issued by the Company in connection
with the December 1993 private placement.
-13-
Amount of Amount of
Beneficial Beneficial
Ownership Ownership
Prior to Offering After Offering
---------------------------- ---------------------------
Number of
Name of Number Percent Shares Being Number Percent
Selling Shareholder (1) of Shares (2) of Class Offered of Shares of Shares
----------------------- ------------- -------- ------- --------- ---------
Caduceus Capital Ltd.(3) 30,000 * 30,000 0 0
Caduceus Capital L.P.(3) 460,000 5.22 10,000 450,500 5.11
PHARMA/wHEALTH(3) 590,500 6.69 140,000 450,500 5.11
Eaton Vance Worldwide Health
Science Fund(3) 120,000 1.36 120,000 0 0
Harpel Partners, L.P.(4) 30,100 * 30,100 0 0
Harpel International(4) 4,400 * 4,400 0 0
Harpel Select(4) 4,000 * 4,000 0 0
Harpel Family Partnership(4) 4,500 * 4,500 0 0
Reisen Family Partnership(4) 7,000 * 7,000 0 0
Jason M. Aryeh 17,500 * 17,500 0 0
Framlington Health Fund(5) 65,000 * 65,000 0 0
Heisen & Co. A/C Framlington
Munder Health Fund 5,000 * 5,000 0 0
Sigler & Co. A/C Gespral(5) 10,000 * 10,000 0 0
Sigler & Co. A/C Seleution Sante(5) 20,000 * 20,000 0 0
Investor International (US) Inc. 50,000 * 50,000 0 0
Bear Stearns Securities Corp.
FBO Closefire Ltd.(6) 6,500 * 6,500 0 0
Bear Stearns Securities Corp.
FBO Pogue Capital
International Ltd.(6) 10,000 * 10,000 0 0
NMB Investment Group 90,000 1.02 90,000 0 0
Bayboat & Co. 400,000 4.53 400,000 0 0
The Medical Response Fund,
L.P.(7) 22,000 * 22,000 0 0
The Bio-Tech Equity Fund, L.P.(7) 5,500 * 5,500 0 0
Mellon Bank NA Custodian for
PERSI - Zesiger Capital 64,000 * 64,000 0 0
Westcoast & Co. 316,000 3.58 316,000 0 0
Essex Special Growth
Opportunities Fund, L.P. 18,500 * 18,500 0 0
Oak Investment Partners V,
Limited Partnership(8) 507,862 5.69 484,977 22,885 *
-14-
Amount of Amount of
Beneficial Beneficial
Ownership Ownership
Prior to Offering After Offering
---------------------------- ---------------------------
Number of
Name of Number Percent Shares Being Number Percent
Selling Shareholder (1) of Shares (2) of Class Offered of Shares of Shares
----------------------- ------------- -------- ------- --------- ---------
Oak V Affiliates Fund,
Limited Partnership (9) 11,422 * 10,907 515 *
S. L. Hammerman Grantor
Trust dated 6/12/86 (10) 5,262 * 5,262 0 0
Amy Hammerman Cahn
Grantor Trust dated
6/12/86 (10) 5,262 * 5,262 0 0
Sandye Hammerman Nast
Grantor Trust dated
6/12/86 (10) 5,262 * 5,262 0 0
I. H. Hammerman, II,
Trustee for Mark Lee
Hammerman (10) 5,262 * 5,262 0 0
Schroders Incorporated (11) 28,864 * 7,812 21,052 *
- --------
* Less than one percent
(1) Except as otherwise indicated, each Selling Stockholder acquired its shares
from the Company in private placement transactions pursuant to Stock
Purchase Agreements dated as of June 12, 1997 at a purchase price per share
of $7.75.
(2) The number of shares beneficially owned is determined by assuming that
options or warrants held by such person (but not those held by any other
person) which are exercisable or convertible within 60 days have been
exercised or converted.
(3) Viren Mehta and Samuel D. Isaly are sole shareholders of (i) M and I
Investors, Inc., which serves as financial advisor to Caduceus Capital
Ltd., (ii) Carduceus Capital Management, Inc., which serves as financial
advisor to Caduceus Capital, L.P. and (iii) Mehta and Isaly Asset
Management, Inc., which serves as financial advisor to Eaton Vance
Worldwide Health Science Fund. Messrs. Mehta and Isaly are general partners
of Caduceus Capital, L.P. M and I Investors, Inc. is also the manager and
financial advisor of PHARMA/wHEALTH. As such, Messrs. Mehta and Isaly may
be deemed to be the beneficial owners of these shares.
(4) James Harpel is general partner of Harpel Family, L.P., which is the
general partner of Harpel Partners, L.P. and Harpel Select. In addition,
Mr. Harpel is a majority shareholder in Harpel Advisory Company which
serves as investment manager to Harpel International and Reisen Family
Partnership. Mr. Harpel is general partner and a majority owner of Harpel
Family Partnership. As such, Mr. Harpel may be deemed to be the beneficial
owner of these shares.
(5) These Funds are managed by Framlington Investment Management of which
Mr. Anthony Milford is a director and fund manager. As such, Mr. Milford
may be deemed the beneficial owner of the shares. However, Mr. Milford
disclaims beneficial ownership of these shares.
(6) Pogue Capital Management, Inc. is the manager and investment advisor of
Closefire Ltd. and Pogue Capital International Ltd. Mai Pogue serves as
the President and as a director of Pogue Capital Management, Inc. As such,
Ms. Pogue may be deemed to be the beneficial owner of these shares.
However, Ms. Pogue disclaims any beneficial ownership of these shares.
(7) Brad Daniel and Daniel Hipp are General Partners in the Medical
Response Fund, L.P. and the Bio-Tech Equity Fund, L.P. As such, Messrs.
Daniel and Hipp may be deemed to be the beneficial owners of the shares.
(8) Of the 507,862 shares beneficially owned by this Selling Stockholder,
22,885 shares are issuable upon the exercise of options which are
exercisable within 60 days of June 6, 1997. The 484,977 shares registered
herein do not include the shares issuable upon the exercise of options,
but do include 76,406 shares issuable upon the exercise of warrants to
purchase Common Stock at an exercise price of $7.50 per share and 102,947
shares issued upon conversion of Series A Preferred Stock. Eileen M.
More, a director of the Company, is the General Partner of this Selling
Stockholder.
(9) Of the 11,422 shares beneficially owned by this Selling Stockholder, 515
shares are issuable upon the exercise of options which are exercisable
within 60 days of June 6, 1997. The 10,907 shares registered herein do
not include the shares issuable upon exercise of options, but do include
1,718 shares issuable upon the exercise of warrants to purchase Common
Stock at an exercise price of $7.50 per share and 2,315 shares issued
upon conversion of Series A Preferred Stock. Eileen M. More, a director
of the Company, is a General Partner of this Selling Stockholder.
(10) The shares beneficially owned and registered by this Selling Stockholder
were issued upon the conversion of Series A Preferred Stock.
(11) Of the 28,864 shares beneficially owned by this Selling Stockholder, the
7,812 shares registered herein are issuable upon the exercise of warrants
to purchase Common Stock at an exercise price of $7.50 per share.
Timothy F. Howe, a director of the Company, is Vice President and a
stockholder of Collinson Howe Venture Partners, Inc. ("CHVP"). CHVP is a
venture capital investment management firm which is the investment
advisor to this Selling Stockholder.
-15-
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock by the Selling
Stockholders may be effected from time to time in one or more transactions
(which may involve block transactions) in the over-the-counter market or on
NASDAQ (or any exchange on which the Common Stock may then be listed) in
negotiated transactions, through the writing of options (whether such options
are listed on an options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealer may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
and/or purchasers of shares for whom they may act as agent (which compensation
may be in excess of customary commissions). The Selling Stockholders may also
sell such shares pursuant to Rule 144 promulgated under the Securities Act, or
may pledge shares as collateral for margin accounts and such shares could be
resold pursuant to the terms of such accounts. The Selling Stockholders and any
broker-dealers that act in connection with the sale of the Common Stock might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act and any commission received by them and any profit on the resale
of the shares of Common Stock as principal might be deemed to be underwriting
discounts and commissions under the Securities Act. The Selling Stockholders may
agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.
Because the Selling Stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the Selling
Stockholders will be subject to prospectus delivery requirements under the
Securities Act. Furthermore, in the event of a "distribution" of the shares,
such Selling Stockholders, any selling broker or dealer and any "affiliated
purchasers" may be subject to Rule 10b-6 under the Exchange Act or Regulation M
promulgated thereunder, which prohibits, with certain exceptions, any such
person from bidding for or purchasing any security which is the subject of such
distribution until his participation in that distribution is completed. In
addition, Rule 10b-7 under the Exchange Actor Regulation M promulgated
thereunder, prohibits any "stabilizing bid" or "stabilizing purchase" for the
purpose of pegging, fixing or stabilizing the price of Common Stock in
connection with this offering.
In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders. The proceeds, if any, from the exercise of
the Warrants will be received by the Company; no brokerage commissions or
discounts will be paid in connection therewith.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Fulbright & Jaworski L.L.P., New York,
New York.
EXPERTS
The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and is incorporated herein in reliance upon the
authority of said firm as experts in giving said report.
-16-
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates (other than the
SEC registration fee) of the expenses in connection with the issuance and
distribution of the shares of Common Stock being registered. None of the
following expenses are being paid by the Selling Stockholders.
SEC registration fee $ 5,461
Legal fees and expenses $ 15,000
Accounting fees and expenses $ 3,000
-------
Miscellaneous expenses $ 6,539
-------
Total: $ 30,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending such action, provided that the director or officer undertake to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action
by or in the right of the corporation to procure a judgment in its favor under
the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses (including attorneys' fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be exclusive of any other rights to which an officer or director
may be entitled under any corporation's by-law, agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Section EIGHTH of the
Company's Certificate of Incorporation, as amended (the "Certificate") provides
that the Company shall indemnify each person who is or was a director, officer,
employee or agent of the Company (including the heirs, executors, administrators
or estate of such person) or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, to the fullest extent permitted. The
indemnification provided by the Certificate shall not be deemed exclusive of any
other rights to which any of those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. Expenses (including attorneys' fees) incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Company in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Company. Section NINTH of the
II-1
Certificate provides that a director of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
II-2
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
4.1 Form of Stock Purchase Agreement between the Registrant and the
investors in the June 1997 private placement.*
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality.*
10.1 See Exhibit 4.1.
10.2 Form of Investor Rights Agreement, dated December 23, 1994, between the
Company and the purchasers of the Company's Series A Preferred Stock
(incorporated by reference to Exhibit 10.15 to the Company's
Registration Statement on Form S-1 (Registration No. 33-00202)).
10.3 Form of Warrant (incorporated by reference to Exhibit 10.19 to the
Company's Registration Statement on Form S-1 (Registration
No. 33-00202)).
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on signature page)
- ---------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment of this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement of
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions
II-3
described under Item 15 above, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW HAVEN
AND STATE OF CONNECTICUT ON THE 7th DAY OF JULY, 1997.
ALEXION PHARMACEUTICALS, INC.
By: /s/ LEONARD BELL
-----------------------------------
Leonard Bell, M.D.
President, Chief Executive Officer,
Secretary and Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints LEONARD BELL, M.D. and DAVID W. KEISER,
or either of them, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ LEONARD BELL President, Chief Executive Officer, July 7, 1997
- ----------------------------- Secretary, Treasurer and Director
Leonard Bell, M.D. (principal executive officer)
/s/ DAVID W. KEISER Executive Vice President and July 7, 1997
- ----------------------------- Chief Operating Officer
David W. Keiser (principal financial officer)
/s/ BARRY P. LUKE Senior Director of Finance July 7, 1997
- ----------------------------- and Administration (principal
Barry P. Luke accounting officer)
/s/ JOHN H. FRIED Chairman of the Board of Directors July 7, 1997
- -----------------------------
John H. Fried, Ph.D.
/s/ JOSEPH A. MADRI Director July 7, 1997
- -----------------------------
Joseph A. Madri, Ph.D., M.D.
/s/ LEONARD MARKS Director July 7, 1997
- -----------------------------
Leonard Marks, Jr., Ph.D.
/s/ MAX LINK Director July 7, 1997
- -----------------------------
Max Link, Ph.D.
Director July _, 1997
- -----------------------------
Eileen M. More
/s/ TIMOTHY F. HOWE Director July 7, 1997
- -----------------------------
Timothy F. Howe
II-5
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
4.1 Form of Stock Purchase Agreement between the Registrant and the
investors in the June 1997 private placement.*
5.1 Opinion of Fulbright & Jaworski L.L.P.*
10.1 See Exhibit 4.1
10.2 Form of Investor Rights Agreement, dated December 23, 1994, between the
Company and the purchasers of the Company's Series A Preferred Stock
(incorporated by reference to Exhibit 10.15 to the Company's
Registration Statement on Form S-1 (Registration No. 33-00202)).
10.3 Form of Warrant (incorporated by reference to Exhibit 10.19 to the
Company's Registration Statement on Form S-1 (Registration
No. 33-00202)).
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP, Independent Auditors.
24.1 Power of Attorney (included in signature page).
- ----------
* Previously filed.
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated August 30, 1996
included in Alexion Pharmaceuticals, Inc.'s Form 10-K for the year ended July
31, 1996 and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
Hartford, Connecticut
July 7, 1997
