AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 2004
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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KERYX BIOPHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 13-4087132
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
750 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 531-5965
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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RON BENTSUR
VICE PRESIDENT FINANCE AND INVESTOR RELATIONS
KERYX BIOPHARMACEUTICALS, INC.
750 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 531-5965
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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The Commission is requested to send copies of all communications to:
MARK F. MCELREATH
ALSTON & BIRD LLP
90 PARK AVENUE
NEW YORK, NEW YORK 10016-1387
(212) 922-3995
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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, 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 state offering. [ ] ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
=====================================================================================================================
TITLE OF PROPOSED PROPOSED
EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO TO BE OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED REGISTERED (1) PER UNIT OFFERING PRICE FEE
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Common Stock, $0.001 par value per share 3,200,000 shares $ 12.55(2) $ 40,160,000(2) $ 5,088
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, such
number of shares of common stock registered hereby shall include an
indeterminate number of shares of common stock that may be issued in
connection with a stock split, stock dividend, recapitalization or similar
event.
(2) Estimated solely for purposes of determining the registration fee. This
amount, calculated pursuant to Rule 457(c), was based on the average of
the high and low prices of the Registrant's common stock on March 11,
2004, as reported on the Nasdaq Stock Market.
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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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS ARE NOT
SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION -- DATED MARCH 16, 2004
PROSPECTUS
3,200,000 SHARES
KERYX BIOPHARMACEUTICALS, INC.
COMMON STOCK
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This prospectus relates to the offer and sale by the selling stockholders
named herein of up to an aggregate of 3,200,000 shares of common stock of Keryx
Biopharmaceuticals, Inc. The selling stockholders may, from time to time, sell
any or all of their shares of common stock on the Nasdaq Stock Market or in
private transactions using any of the methods described in the section of this
prospectus entitled "Plan of Distribution." We will not receive any proceeds
from the sale of the shares of our common stock by the selling stockholders. We
issued these shares of our common stock to the selling stockholders in a private
placement transaction on or about February 17, 2004.
Our common stock is traded on the Nasdaq Stock Market under the symbol
"KERX." On March 11, 2004, the last sales price for the shares of our common
stock as reported on the Nasdaq Stock Market was $12.50 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR CERTAIN CONSIDERATIONS
RELEVANT TO AN INVESTMENT IN OUR COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is March __, 2004
TABLE OF CONTENTS
Page
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Prospectus Summary............................................ 1
Recent Developments........................................... 2
Risk Factors.................................................. 3
Forward Looking Statements ................................... 11
Use of Proceeds............................................... 12
Selling Stockholders.......................................... 13
Plan of Distribution.......................................... 14
Legal Matters................................................. 15
Where You Can Find More Information........................... 15
Incorporation of Certain Information by Reference............. 15
i
PROSPECTUS SUMMARY
OUR COMPANY
We are a biopharmaceutical company focused on the acquisition, development
and commercialization of novel pharmaceutical products for the treatment of
life-threatening diseases, including diabetes and cancer. To date, we have not
received approval for the sale of any of our drug candidates in any market and,
therefore, have not generated any revenues from our drug candidates. We have two
product candidates in late-stage clinical development: Sulodexide, or KRX-101,
for the treatment of diabetic nephropathy, a life-threatening kidney disease
caused by diabetes, and Perifosine, or KRX-0401, for the treatment of multiple
forms of cancer.
Our lead compound under development is KRX-101, to which we have an
exclusive license in North America, Japan and other markets. Between 1996 and
1999, a randomized, double-blind, placebo-controlled, Phase II study of the use
of Sulodexide for treatment of diabetic nephropathy in 223 patients was
conducted in Europe. The results of this Phase II study showed a dose-dependent
reduction in proteinuria or pathological urinary albumin excretion rates. This
study was published in the June 2002 issue of the Journal of the American
Society of Nephrology. In 2001, KRX-101 was granted Fast-Track designation for
the treatment of diabetic nephropathy and, in 2002, we announced that the Food
and Drug Administration, or FDA, had agreed, in principle, to permit us to avail
ourselves of the accelerated approval process under subpart H of the FDA's
regulations governing applications for the approval to market a new drug.
In the third quarter of 2003, we announced that we had initiated the
Sulodexide Open Access Research, or S.O.A.R., program to expand the knowledge
and understanding of the potential clinical applications of Sulodexide in
scientific and medical communities. Under the S.O.A.R. program, we collaborate
with top academic investigators who wish to explore the potential utility of
KRX-101 in a wide variety of indications, including diabetic nephropathy. To
date, we have signed collaborations with the National Institutes of Health, or
NIH, University of Michigan (Ann Arbor), University of Texas, Baylor University,
Vanderbilt University, University of British Columbia and Thomas Jefferson
University.
In addition, in the third quarter of 2003, we announced that the
Collaborative Study Group, or CSG, the largest standing renal clinical trial
group in the United States comprised of academic and tertiary nephrology care
centers, will conduct the U.S.-based Phase II/III clinical program for KRX-101
for the treatment of diabetic nephropathy. The CSG has conducted multiple
large-scale clinical trials resulting in over 40 publications in peer-reviewed
journals. The CSG conducted the pivotal studies for two of the three drugs that
are currently approved for treatment of diabetic nephropathy.
In the fourth quarter of 2003, we initiated a multi-center, Phase II/III
clinical program for our diabetic nephropathy drug candidate, KRX-101.
In the first quarter of 2004, we announced that we had acquired ACCESS
Oncology, Inc., or ACCESS Oncology, a privately-held cancer-focused
biotechnology company. The acquired drug portfolio includes three clinical stage
compounds, designated as KRX-0401, KRX-0402, and KRX-0403. KRX-0401 is a novel,
first-in-class, oral AKT-inhibitor that has demonstrated preliminary single
agent anti-tumor activity in Phase I studies and is currently in a broad Phase
II clinical program evaluating KRX-0401 as a single agent in the treatment of
multiple forms of cancer. The current Phase II program is being conducted and
funded by the National Cancer Institute, or NCI, a department of the NIH, under
a Collaborative Research and Development Agreement, or CRADA, arrangement.
Additionally, we are planning to conduct a series of additional Phase II
clinical trials for KRX-0401 both as a single agent and in combination with
other anti-cancer therapies. The acquired cancer portfolio also includes
KRX-0402, an inhibitor of DNA repair, which is also being studied by the NCI
under a CRADA arrangement in multiple clinical trials. In addition, the
portfolio includes KRX-0403, which is a novel spindle poison in the same general
class as Navelbine(R), Taxol(R) and Taxotere(R). KRX-0403 has completed a Phase
I study. In addition, as a part of the acquisition of ACCESS Oncology, we
acquired a division of ACCESS Oncology referred to as OCOG, which provides
clinical trial services to other biotechnology and pharmaceuticals companies.
To date, we have not received approval for the sale of any of our drug
candidates in any market.
We were incorporated in Delaware in October 1998. We commenced operations
in November 1999, following our acquisition of substantially all of the assets
and certain of the liabilities of Partec Ltd., our predecessor company that
began its operations in January 1997. Since commencing operations, our
activities have been primarily devoted to developing our technologies and drug
candidates, raising capital, purchasing assets for our former corporate offices
and laboratory facilities and recruiting personnel. We are a development stage
company and have no product sales to date. Our major sources of working capital
have been proceeds from various private placements of equity securities and from
our initial public offering.
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Our principal executive offices are located at 750 Lexington Avenue, New
York, New York 10022, and our telephone number is (212) 531-5965. We maintain a
website on the Internet at www.keryx.com and our e-mail address is
info@keryx.com. Our Internet website, and the information contained on it, are
not to be considered part of this prospectus.
RECENT DEVELOPMENTS
On February 17, 2004, we completed a private placement in which 3,200,000
shares of our common stock were sold for $10.00 per share to institutional
investors.
We entered into a registration rights agreement with the selling
stockholders on or about February 17, 2004. The registration rights agreement
provides that we must file a registration statement on or prior to the 30th day
following February 17, 2004, covering the resale of all of the shares of our
common stock sold by us in the private placement. This prospectus is part of the
registration statement filed to meet our obligations under the registration
rights agreement.
We must cause this registration statement to become effective as soon as
practicable, but in no event later than the 60th calendar day, or 75th calendar
day in the event of a full review by the Securities and Exchange Commission,
following February 17, 2004. If this registration statement is not declared
effective by the Securities and Exchange Commission on or before the 60th day,
or 75th day, if applicable, registration deadline, or if after this registration
statement has been declared effective by the Securities and Exchange Commission,
sales of the shares of common stock covered by the registration statement cannot
be made pursuant to this registration statement for any reason, then at the time
of the event, we are required to make payments to the selling stockholders in
the amount of 2.0% per month of the aggregate purchase price paid in the private
placement by the selling stockholders for the shares of our common stock held by
the selling stockholders. If we fail to make this payment within seven days
after the date payable, we will pay interest at a rate of 15% per annum (or such
lesser maximum amount that is permitted to be paid by applicable law) to the
holder until such payment and the interest thereon is paid in full.
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RISK FACTORS
RISKS RELATING TO OUR BUSINESS
WE HAVE A LIMITED OPERATING HISTORY AND HAVE INCURRED SUBSTANTIAL OPERATING
LOSSES SINCE OUR INCEPTION. WE EXPECT TO CONTINUE TO INCUR LOSSES IN THE FUTURE
AND MAY NEVER BECOME PROFITABLE.
We have a limited operating history. You should consider our prospects in
light of the risks and difficulties frequently encountered by early stage
companies. In addition, we have incurred operating losses since our inception,
expect to continue to incur operating losses for the foreseeable future and may
never become profitable. As of September 30, 2003, we had an accumulated deficit
of approximately $52.4 million. As we expand our research and development
efforts, we will incur increasing losses. We may continue to incur substantial
operating losses even if we begin to generate revenues from our drug candidates
or technologies.
We have not yet commercialized any products or technologies and cannot be
sure we will ever be able to do so. Even if we commercialize one or more of our
drug candidates or technologies, we may not become profitable. Our ability to
achieve profitability depends on a number of factors, including our ability to
complete our development efforts, obtain regulatory approval for our drug
candidates and successfully commercialize our drug candidates and technologies.
IF WE ARE UNABLE TO SUCCESSFULLY COMPLETE OUR CLINICAL TRIAL PROGRAMS FOR
KRX-101 OR OUR RECENTLY ACQUIRED CANCER COMPOUNDS, OR IF SUCH CLINICAL TRIALS
TAKE LONGER TO COMPLETE THAN WE PROJECT, OUR ABILITY TO ACHIEVE OUR CURRENT
BUSINESS STRATEGY WILL BE ADVERSELY AFFECTED.
Whether or not and how quickly we complete clinical trials is dependent in
part upon the rate at which we are able to engage clinical trial sites and,
thereafter, the rate of enrollment of patients. Patient enrollment is a function
of many factors, including the size of the patient population, the proximity of
patients to clinical sites, the eligibility criteria for the study and the
existence of competitive clinical trials. If we experience delays in identifying
and contracting with sites and/or in patient enrollment in our clinical trial
programs, we may incur additional costs and delays in our development programs,
and may not be able to complete our clinical trials on a cost-effective basis.
Additionally, we have submitted a subpart H clinical development plan to
the FDA for the clinical development of KRX-101 for diabetic nephropathy. A
final agreement on the specifics of our clinical program for that development
plan has not been agreed to with the FDA and we cannot give any assurance that
an acceptable final agreement on the specifics of such clinical program will
ever be reached with the FDA. In fact, based on the FDA's comments to our most
recent submission, we believe that additional discussions with the FDA will be
required prior to final agreement on the specifics of our subpart H accelerated
approval clinical program. We cannot assure you as to when those discussions
will take place or that the results of such discussions will be satisfactory to
us. Additionally, the FDA has stated that based on the novelty of the approach
that we have discussed with them, they may want to refer our proposed approach
to the Cardio-Renal Advisory Committee.
Moreover, even if we are able to reach final agreement with the FDA
regarding the specifics of an accelerated approval approach, no assurance can be
given that we will be able to meet the requirements set forth in such agreement.
The subpart H process is complex and requires precise execution. Many companies
who have been granted the right to utilize an accelerated approval approach have
failed to obtain approval. The clinical timeline, scope and consequent cost for
the development of KRX-101 will depend, in part, on the final outcome of our
discussions with the FDA. Moreover, negative or inconclusive results from the
clinical trials we hope to conduct or adverse medical events could cause us to
have to repeat or terminate the clinical trials. Accordingly, we may not be able
to complete the clinical trials within an acceptable time frame, if at all.
IF OUR DRUG CANDIDATES DO NOT RECEIVE THE NECESSARY REGULATORY APPROVALS, WE
WILL BE UNABLE TO COMMERCIALIZE OUR DRUG CANDIDATES.
We have not received, and may never receive, regulatory approval for
commercial sale for any of our drug candidates. We will need to conduct
significant additional research and human testing before we can apply for
product approval with the FDA or with regulatory authorities of other countries.
Preclinical testing and clinical development are long, expensive and uncertain
processes. Satisfaction of regulatory requirements typically depends on the
nature, complexity and novelty of the product and requires the expenditure of
substantial resources. Data obtained from preclinical and clinical tests can be
interpreted in different ways, which could delay, limit or prevent
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regulatory approval. It may take us many years to complete the testing of our
drug candidates and failure can occur at any stage of this process. Negative or
inconclusive results or medical events during a clinical trial could cause us to
delay or terminate our development efforts.
Clinical trials also have a high risk of failure. A number of companies in
the pharmaceutical industry, including biotechnology companies, have suffered
significant setbacks in advanced clinical trials, even after achieving promising
results in earlier trials. If we experience delays in the testing or approval
process or if we need to perform more or larger clinical trials than originally
planned, our financial results and the commercial prospects for our drug
candidates may be materially impaired. In addition, we have limited experience
in conducting and managing the clinical trials necessary to obtain regulatory
approval in the United States and abroad and, accordingly, may encounter
unforeseen problems and delays in the approval process.
BECAUSE WE LICENSE OUR PROPRIETARY TECHNOLOGIES, TERMINATION OF THESE AGREEMENTS
WOULD PREVENT US FROM DEVELOPING OUR DRUG CANDIDATES.
We do not own any of our drug candidates. We have licensed these drugs
from others. These license agreements require us to meet development or
financing milestones and impose development and commercialization due diligence
on us. In addition, under these agreements we must pay royalties on sales of
products resulting from licensed technologies and pay the patent filing,
prosecution and maintenance costs related to the licenses. If we do not meet our
obligations in a timely manner or if we otherwise breach the terms of our
agreements, our licensors could terminate the agreements and we would lose the
rights to our drug candidates.
BECAUSE OUR BUSINESS MODEL IS BASED, IN PART, ON THE ACQUISITION OR IN-LICENSING
OF ADDITIONAL CLINICAL PRODUCT CANDIDATES, IF WE FAIL TO ACQUIRE OR IN-LICENSE
SUCH CLINICAL PRODUCT CANDIDATES, OUR FUTURE GROWTH PROSPECTS MAY BE
SUBSTANTIALLY IMPAIRED.
As a major part of our business strategy, we plan to continue to acquire
or in-license clinical stage product candidates. If we fail to acquire or
in-license such product candidates, we may not achieve expectations of our
future performance. Because we do not intend to engage in significant discovery
research, we must rely on third parties to sell or license new product
opportunities to us. Other companies, including some with substantially greater
financial, development, marketing and sales resources, are competing with us to
acquire or in-license such products or product candidates. We may not be able to
acquire or in-license rights to additional products or product candidates on
acceptable terms, if at all.
IF WE DO NOT ESTABLISH OR MAINTAIN DRUG DEVELOPMENT AND MARKETING ARRANGEMENTS
WITH THIRD PARTIES, WE MAY BE UNABLE TO COMMERCIALIZE OUR TECHNOLOGIES INTO
PRODUCTS.
We are an emerging company and do not possess all of the capabilities to
fully commercialize our product candidates on our own. From time to time, we may
need to contract with third parties to:
- assist us in developing, testing and obtaining regulatory approval
for and commercializing some of our compounds and technologies; and
- market and distribute our drug candidates.
There can be no assurance that we will be able to successfully enter into
agreements with such partners on terms that are acceptable to us. If we are
unable to successfully contract with third parties for these services when
needed, or if existing arrangements for these services are terminated, whether
or not through our actions, or if such third parties do not fully perform under
these arrangements, we may have to delay, scale back or end one or more of our
drug development programs or seek to develop or commercialize our technologies
independently, which could result in delays. Further, such failure could result
in the termination of license rights to one or more of our technologies.
Moreover, if these development or marketing agreements take the form of a
partnership or strategic alliance, such arrangements may provide our
collaborators with significant discretion in determining the efforts and
resources that they will apply to the development and commercialization of
products based on our technologies. Accordingly, to the extent that we rely on
third parties to research, develop or commercialize products based on our
technologies, we are unable to control whether such products will be
scientifically or commercially successful.
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EVEN IF WE OBTAIN FDA APPROVAL TO MARKET OUR PRODUCT CANDIDATES, IF OUR PRODUCTS
FAIL TO ACHIEVE MARKET ACCEPTANCE, WE WILL NEVER RECORD MEANINGFUL REVENUES.
Even if our products are approved for sale, they may not be commercially
successful in the marketplace. Market acceptance of our product candidates will
depend on a number of factors, including:
- perceptions by members of the health care community, including
physicians, of the safety and efficacy of our product candidates;
- the rates of adoption of our products by medical practitioners and
the target populations for our products;
- the potential advantages that our product candidates offer over
existing treatment methods;
- the cost-effectiveness of our product candidates relative to
competing products;
- the availability of government or third-party payor reimbursement
for our product candidates;
- the side effects or unfavorable publicity concerning our products or
similar products; and
- the effectiveness of our sales, marketing and distribution efforts.
Because we expect sales of our product candidates, if approved, to
generate substantially all of our revenues in the long-term, the failure of our
drugs to find market acceptance would harm our business and could require us to
seek additional financing or other sources of revenue.
WE RELY ON THIRD PARTIES TO MANUFACTURE OUR PRODUCTS. IF THESE THIRD PARTIES DO
NOT SUCCESSFULLY MANUFACTURE OUR PRODUCTS, OUR BUSINESS WILL BE HARMED.
We have no experience in manufacturing products for clinical or commercial
purposes and do not have any manufacturing facilities. We intend to continue to
use third parties to manufacture our products for use in clinical trials and for
future sales. We may not be able to enter into future third-party contract
manufacturing agreements on acceptable terms, if at all.
Contract manufacturers often encounter difficulties in scaling up
production, including problems involving production yields, quality control and
assurance, shortage of qualified personnel, compliance with FDA and foreign
regulations, production costs and development of advanced manufacturing
techniques and process controls. Our third-party manufacturers may not perform
as agreed or may not remain in the contract manufacturing business for the time
required by us to successfully produce and market our drug candidates. In
addition, our contract manufacturers will be subject to ongoing periodic,
unannounced inspections by the FDA and corresponding foreign governmental
agencies to ensure strict compliance with, among other things, current good
manufacturing practices, in addition to other governmental regulations and
corresponding foreign standards. We will not have control over, other than by
contract, third-party manufacturers' compliance with these regulations and
standards. Switching or engaging multiple manufacturers may be difficult because
the number of potential manufacturers is limited and, particularly in the case
of KRX-101, the process by which multiple manufacturers make the drug substance
must be identical at each manufacturing facility. It may be difficult for us to
find and engage replacement or multiple manufacturers quickly and on terms
acceptable to us, if at all. Moreover, if we need to change manufacturers, the
FDA and corresponding foreign regulatory agencies must approve these
manufacturers in advance, which will involve testing and additional inspections
to ensure compliance with FDA and foreign regulations and standards.
If third-party manufacturers fail to deliver the required quantities of
our drug candidates on a timely basis and at commercially reasonable prices, and
if we fail to find replacement or multiple manufacturers on acceptable terms,
our ability to develop and deliver products on a timely and competitive basis
may be adversely impacted and our business, financial condition or results of
operations will be materially harmed.
In the event that we are unable to obtain or retain third-party
manufacturers, we will not be able to commercialize our products as planned. The
manufacture of our products for clinical trials and commercial
5
purposes is subject to FDA and foreign regulations. No assurance can be given
that our third-party manufacturers will comply with these regulations or other
regulatory requirements now or in the future.
We recently entered into a contract manufacturing relationship with a
U.S.-based contract manufacturer for KRX-101 which we believe will be adequate
to satisfy our current clinical and commercial supply needs. However, as we seek
to transition our manufacturing of KRX-101 to our new contract manufacturer, we
will need to create a reproducible manufacturing process that will ensure
consistent manufacture of KRX-101 across multiple batches and sources. As with
all heparin-like compounds, the end product is highly sensitive to the
manufacturing process utilized. Accordingly, the creation of a reproducible
process will be required for the successful commercialization of KRX-101. There
can be no assurance that we will be successful in this endeavor.
IF WE ARE NOT ABLE TO OBTAIN THE RAW MATERIAL REQUIRED FOR THE MANUFACTURE OF
OUR LEAD PRODUCT CANDIDATE, KRX-101, OUR ABILITY TO DEVELOP AND MARKET THIS
PRODUCT CANDIDATE WILL BE SUBSTANTIALLY HARMED.
Source materials for KRX-101, our lead product candidate, are derived from
porcine intestines. Long-term supplies for KRX-101 could be affected by
limitations in the supply of porcine intestines, over which we will have no
control. Additionally, diseases affecting the world supply of pigs could have an
actual or perceived negative impact on our ability, or the ability of our
contract manufacturers, to source, make and/or sell KRX-101. Such negative
impact could materially adversely affect the commercial success of KRX-101.
IF OUR COMPETITORS DEVELOP AND MARKET PRODUCTS THAT ARE LESS EXPENSIVE, MORE
EFFECTIVE OR SAFER THAN OUR PRODUCT CANDIDATES, OUR COMMERCIAL OPPORTUNITY MAY
BE REDUCED OR ELIMINATED.
The pharmaceutical industry is highly competitive. Our commercial
opportunity may be reduced or eliminated if our competitors develop and market
products that are less expensive, more effective or safer than our drug
candidates. Other companies have products or drug candidates in various stages
of pre-clinical or clinical development to treat diseases for which we are also
seeking to discover and develop drug candidates. Some of these potential
competing drugs are further advanced in development than our drug candidates and
may be commercialized earlier. Even if we are successful in developing effective
drugs, our products may not compete successfully with products produced by our
competitors.
Our competitors include pharmaceutical companies and biotechnology
companies, as well as universities and public and private research institutions.
In addition, companies that are active in different but related fields represent
substantial competition for us. Many of our competitors have significantly
greater capital resources, larger research and development staffs and facilities
and greater experience in drug development, regulation, manufacturing and
marketing than we do. These organizations also compete with us to recruit
qualified personnel, attract partners for joint ventures or other
collaborations, and license technologies that are competitive with ours. As a
result, our competitors may be able to more easily develop technologies and
products that could render our technologies or our drug candidates obsolete or
noncompetitive.
IF WE LOSE OUR KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL
PERSONNEL, OUR OPERATIONS COULD BE DISRUPTED AND OUR BUSINESS COULD BE HARMED.
We currently have 18 full and part-time employees and several other
persons working under research agreements or consulting agreements. To
successfully develop our drug candidates, we must be able to attract and retain
highly skilled personnel. In addition, if we lose the services of our current
personnel, in particular, Michael S. Weiss, our Chairman and Chief Executive
Officer, our ability to continue to execute our business plan could be
materially impaired. In addition, while we have an employment agreement with Mr.
Weiss, this agreement would not prevent him from terminating his employment with
us.
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ANY ACQUISITIONS WE MAKE MAY NOT BE SCIENTIFICALLY OR COMMERCIALLY SUCCESSFUL.
As part of our business strategy, we may effect acquisitions to obtain
additional businesses, products, technologies, capabilities and personnel. If we
make one or more significant acquisitions in which the consideration includes
stock or other securities, your equity in us may be significantly diluted. If we
make one or more significant acquisitions in which the consideration includes
cash, we may be required to use a substantial portion of our available cash.
Acquisitions involve a number of operational risks, including:
- difficulty and expense of assimilating the operations, technology
and personnel of the acquired business;
- inability to retain the management, key personnel and other
employees of the acquired business;
- inability to maintain the acquired company's relationship with key
third parties, such as alliance partners;
- exposure to legal claims for activities of the acquired business
prior to acquisition;
- diversion of management attention; and
- potential impairment of substantial goodwill and write-off of
in-process research and development costs, adversely affecting our
reported results of operations.
WE FACE PRODUCT LIABILITY RISKS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
INSURANCE.
The use of our drug candidates in clinical trials, and the sale of any
approved products, exposes us to liability claims. Although we are not aware of
any historical or anticipated product liability claims against us, if we cannot
successfully defend ourselves against product liability claims, we may incur
substantial liabilities or be required to cease clinical trials of our drug
candidates or limit commercialization of any approved products.
We believe that we have obtained reasonably adequate product liability
insurance coverage for our clinical trials. We intend to expand our insurance
coverage to include the commercial sale of any approved products if marketing
approval is obtained. However, insurance coverage is becoming increasingly
expensive. We may not be able to maintain insurance coverage at a reasonable
cost. We may not be able to obtain additional insurance coverage that will be
adequate to cover product liability risks that may arise. Regardless of merit or
eventual outcome, product liability claims may result in:
- decreased demand for a product;
- injury to our reputation;
- inability to continue to develop a drug candidate;
- withdrawal of clinical trial volunteers; and
- loss of revenues.
Consequently, a product liability claim or product recall may result in
losses that could be material.
IN CONNECTION WITH PROVIDING OUR SERVICES, WE MAY BE EXPOSED TO LIABILITY THAT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
In conducting the activities of OCOG, any failure on our part to comply
with applicable governmental regulations or contractual obligations could expose
us to liability to our clients and could have a material adverse effect on us.
We also could be held liable for errors or omissions in connection with the
services we perform. In addition, the wrongful or erroneous delivery of health
care information or services may expose us to liability. We could be materially
and adversely affected if we are required to pay damages or bear the costs of
defending any such claims.
7
RISKS RELATED TO OUR FINANCIAL CONDITION
IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDS ON TERMS FAVORABLE TO US, OR AT ALL,
OUR BUSINESS WOULD BE HARMED.
We expect to use rather than generate funds from operations for the
foreseeable future. Based on our current plans, we believe our existing cash and
cash equivalents will be sufficient to fund our operating expenses and capital
requirements for at least the next 36 months. However, the actual amount of
funds that we will need prior to or after that date will be determined by many
factors, some of which are beyond our control. As a result, we may need funds
sooner or in different amounts than we currently anticipate. These factors
include:
- the progress of our development activities;
- the progress of our research activities;
- the number and scope of our development programs;
- our ability to establish and maintain current and new licensing or
acquisition arrangements;
- our ability to achieve our milestones under our licensing
arrangements;
- the costs involved in enforcing patent claims and other intellectual
property rights; and
- the costs and timing of regulatory approvals.
If our capital resources are insufficient to meet future capital requirements,
we will have to raise additional funds. If we are unable to obtain additional
funds on terms favorable to us or at all, we may be required to cease or reduce
our operating activities or sell or license to third parties some or all of our
technology. If we raise additional funds by selling additional shares of our
capital stock, the ownership interests of our stockholders will be diluted. If
we raise additional funds through the sale or license of our technology, we may
be unable to do so on terms favorable to us.
RISKS RELATED TO OUR INTELLECTUAL PROPERTY
IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, THIRD PARTIES
MAY BE ABLE TO USE OUR TECHNOLOGY, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO
COMPETE IN THE MARKET.
Our commercial success will depend in part on our ability and the ability
of our licensors to obtain and maintain patent protection on our drug products
and technologies and successfully defend these patents and technologies against
third-party challenges. The patent positions of pharmaceutical and biotechnology
companies can be highly uncertain and involve complex legal and factual
questions. No consistent policy regarding the breadth of claims allowed in
biotechnology patents has emerged to date. Accordingly, the patents we use may
not be sufficiently broad to prevent others from practicing our technologies or
from developing competing products. Furthermore, others may independently
develop similar or alternative technologies or design around our patented
technologies. The patents we use may be challenged or invalidated or may fail to
provide us with any competitive advantage.
Moreover, we rely on trade secrets to protect technology where we believe
patent protection is not appropriate or obtainable. However, trade secrets are
difficult to protect. While we require our employees, collaborators and
consultants to enter into confidentiality agreements, this may not be sufficient
to adequately protect our trade secrets or other proprietary information. In
addition, we share ownership and publication rights to data relating to some of
our drug candidates with our research collaborators and scientific advisors. If
we cannot maintain the confidentiality of this information, our ability to
receive patent protection or protect our proprietary information will be at
risk.
LITIGATION OR THIRD-PARTY CLAIMS OF INTELLECTUAL PROPERTY INFRINGEMENT COULD
REQUIRE US TO SPEND SUBSTANTIAL TIME AND MONEY DEFENDING SUCH CLAIMS AND
ADVERSELY AFFECT OUR ABILITY TO DEVELOP AND COMMERCIALIZE OUR PRODUCTS.
Third parties may assert that we are using their proprietary technology
without authorization. In addition, third parties may have or obtain patents in
the future and claim that our technologies infringe their patents. If we are
required to defend against patent suits brought by third parties, or if we sue
third parties to protect our patent rights,
8
we may be required to pay substantial litigation costs, and our management's
attention may be diverted from operating our business. In addition, any legal
action against our licensors or us that seeks damages or an injunction of our
commercial activities relating to the affected technologies could subject us to
monetary liability and require our licensors or us to obtain a license to
continue to use the affected technologies. We cannot predict whether our
licensors or we would prevail in any of these types of actions or that any
required license would be made available on commercially acceptable terms, if at
all.
RISKS RELATED TO OUR COMMON STOCK
CONCENTRATION OF OWNERSHIP OF OUR COMMON STOCK AMONG OUR EXISTING EXECUTIVE
OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS MAY PREVENT NEW INVESTORS FROM
INFLUENCING SIGNIFICANT CORPORATE DECISIONS.
As of December 31, 2003, our executive officers, directors and principal
stockholders (including their affiliates) beneficially own, in the aggregate,
approximately 23.85% of our outstanding common stock, including, for this
purpose, currently exercisable options and warrants held by our executive
officers, directors and principal stockholders. As a result, these persons,
acting together, may have the ability to effectively determine the outcome of
all matters submitted to our stockholders for approval, including the election
and removal of directors and any merger, consolidation or sale of all or
substantially all of our assets. In addition, such persons, acting together, may
have the ability to effectively control our management and affairs. Accordingly,
this concentration of ownership may harm the market price of our common stock by
discouraging a potential acquirer from attempting to acquire us.
OUR STOCK PRICE COULD BE VOLATILE AND YOUR INVESTMENT COULD DECLINE IN VALUE.
The trading price of our common stock is likely to be highly volatile and
subject to wide fluctuations in price in response to various factors, many of
which are beyond our control. These factors include:
- developments concerning our drug candidates;
- announcements of technological innovations by us or our competitors;
- introductions or announcements of new products by us or our
competitors;
- announcements by us of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
- changes in financial estimates by securities analysts;
- actual or anticipated variations in quarterly operating results;
- expiration or termination of licenses, research contracts or other
collaboration agreements;
- conditions or trends in the regulatory climate and the biotechnology
and pharmaceutical industries;
- changes in the market valuations of similar companies; and
- additions or departures of key personnel.
In addition, equity markets in general, and the market for biotechnology and
life sciences companies in particular, have experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating
performance of companies traded in those markets. These broad market and
industry factors may materially affect the market price of our common stock,
regardless of our development and operating performance. In the past, following
periods of volatility in the market price of a company's securities, securities
class-action litigation has often been instituted against that company. Such
litigation, if instituted against us, could cause us to incur substantial costs
to defend such claims and divert management's attention and resources, which
could seriously harm our business.
9
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD MAKE A
THIRD-PARTY ACQUISITION OF US DIFFICULT. THIS COULD LIMIT THE PRICE INVESTORS
MIGHT BE WILLING TO PAY IN THE FUTURE FOR OUR COMMON STOCK.
Provisions in our amended and restated certificate of incorporation and
bylaws could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, or control
us. These provisions could limit the price that certain investors might be
willing to pay in the future for shares of our common stock. Our amended and
restated certificate of incorporation allows us to issue preferred stock with
rights senior to those of the common stock without any further vote or action by
the stockholders and our amended and restated bylaws eliminate the right of
stockholders to call a special meeting of stockholders, which could make it more
difficult for stockholders to effect certain corporate actions. These provisions
could also have the effect of delaying or preventing a change in control. The
issuance of preferred stock could decrease the amount of earnings and assets
available for distribution to the holders of our common stock or could adversely
affect the rights and powers, including voting rights, of such holders. In
certain circumstances, such issuance could have the effect of decreasing the
market price of our common stock.
10
FORWARD LOOKING STATEMENTS
When used in this prospectus and elsewhere by management or us from time
to time, the words "anticipate," "believe," "estimate," "may," "expect" and
similar expressions are generally intended to identify forward-looking
statements. These forward-looking statements include, but are not limited to,
statements about our:
- expectations for increases or decreases in expenses;
- expectations for increases or decreases in research and development
and general and administrative expenses in order to develop and
in-license new products and manufacture commercial quantities of
products;
- expectations for the development, manufacturing, and approval of
KRX-101, KRX-0401, KRX-0402, KRX-0403 or any other products we may
acquire or in-license;
- expectations for incurring additional capital expenditures to expand
our research and development capabilities;
- expectations for generating revenue or becoming profitable on a
sustained basis;
- ability to enter into marketing and other partnership agreements;
- ability to enter into product acquisition and in-licensing
transactions;
- estimate of the sufficiency of our existing cash and cash
equivalents and investments to finance our operating and capital
requirements;
- expected losses; and
- expectations for future capital requirements.
Our actual results could differ materially from those results expressed
in, or implied by, these forward-looking statements. Potential risks and
uncertainties that could affect our actual results include those discussed in
this prospectus under the heading "Risk Factors." Such risks and uncertainties
also include the possibility that we may fail to establish and correctly apply
our critical accounting policies and estimates to our financial statements. The
list of factors that may affect future performance and the accuracy of
forward-looking statements is illustrative, but by no means exhaustive.
Accordingly, all forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements.
We do not intend to update any of the forward-looking statements after the
date of this prospectus to conform them to actual results.
11
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the selling stockholders. All net proceeds from the sale of shares of
common stock covered by this prospectus will go to the selling stockholders upon
the offer and sale of their shares. See "Selling Stockholders" and "Plan of
Distribution" described below.
12
SELLING STOCKHOLDERS
We issued shares of our common stock in a private placement transaction
on February 17, 2004. Selling stockholders, including any non-sale transferees,
pledgees, donees, assignees or their successors-in-interest, may from time to
time offer and sell any or all of the common stock pursuant to this prospectus.
Because the selling stockholders may offer all or some portion of the common
stock, no estimate can be given as to the amount of the common stock that will
be held by the selling stockholders upon consummation or termination of any
sales.
Information about the selling stockholders may change over time. Any
changed information given to us by the selling stockholders will be set forth in
prospectus supplements or amendments to this prospectus if and when necessary.
The table below sets forth information as of March 1, 2004 with respect to the
number of shares of common stock beneficially owned by each of the selling
stockholders and the number of shares being offered for sale by each selling
stockholder.
NUMBER OF SHARES OF NUMBER OF SHARES OF
COMMON STOCK NUMBER OF SHARES COMMON STOCK
BENEFICIALLY OWNED OF COMMON STOCK BENEFICIALLY OWNED AFTER
NAME OF SELLING STOCKHOLDER PRIOR TO OFFERING REGISTERED HEREIN THIS OFFERING (1)
--------------------------- ------------------ ----------------- ------------------------
Adage Capital Management, L.P..................... 550,000 250,000 300,000
Atlas Equity I, Ltd............................... 527,482 200,000 327,482
Deerfield International Limited................... 490,000 490,000 0
Deerfield Partners, L.P........................... 510,000 510,000 0
Maverick Fund II, Ltd. (2)........................ 172,700 172,700 0
Maverick Fund, L.D.C. (2)......................... 569,700 569,700 0
Maverick Fund USA, Ltd. (2)....................... 257,600 257,600 0
S.A.C. Capital Associates, LLC.................... 200,000 200,000 0
Sonostar Ventures, LLC (3)........................ 249,750 50,000 199,750
T. Rowe Price Health Sciences Fund, Inc. (4)...... 305,000 130,000 175,000
T. Rowe Price Health Sciences Portfolio, Inc. (4). 1,400 600 800
TD Mutual Funds - TD Health Sciences Fund (4)..... 79,100 39,000 40,100
VALIC Company I - Health Sciences Fund (4)........ 34,100 11,000 23,100
Manufacturers Investment Trust - Health Sciences
Trust (4)...................................... 47,500 25,000 22,500
IDEX Mutual Funds - IDEX - T. Rowe Price Health
Sciences (4)................................... 24,100 8,000 16,100
Raytheon Company Combined DB/DC Master Trust -
Health Sciences (4)............................ 9,000 4,400 4,600
Raytheon Master Pension Trust - Health
Sciences (4)................................... 14,400 7,000 7,400
T. Rowe Price New Horizons Fund, Inc. (4)......... 275,000 275,000 0
--------- --------- ---------
TOTAL ............................................ 4,316,832 3,200,000 1,116,832
========= ========= =========
----------
(1) Assumes sale of all of the shares of common stock offered hereby.
(2) Based on the most recent information available to the company. This
information was not confirmed by the selling stockholder prior to the
filing of this registration statement.
(3) Number includes 83,250 shares held in the Kiernan Family Trust, an
irrevocable trust for family members of Greg Kiernan, the President and
CEO of Sonostar Ventures. For purposes of the reporting requirements of
the Securities Exchange Act of 1934, as amended, Sonostar Ventures or
Greg Kiernan may be deemed to be the beneficial owner of all of the
shares listed above; however, Sonostar Ventures and Greg Kiernan
expressly disclaim that they are, in fact, the beneficial owners of
such securities.
(4) T. Rowe Price Associates, Inc., or T. Rowe Price Associates, serves as
investment adviser with power to direct investments and/or sole power
to vote the shares owned by the funds listed under its name in the
table above, as well as shares owned by certain other individual and
institutional investors. For purposes of the reporting requirements of
the Securities Exchange Act of 1934, as amended, T. Rowe Price
Associates may be deemed to be the beneficial owner of all of the
shares listed above; however, T. Rowe Price Associates expressly
disclaims
13
that it is, in fact, the beneficial owner of such securities. T. Rowe
Price Associates is a wholly owned subsidiary of T. Rowe Price Group,
Inc., which is a publicly traded financial services holding company.
PLAN OF DISTRIBUTION
The selling stockholders and any of their transferees, pledgees,
donees, assignees and successors-in-interest may, from time to time, sell any or
all of their shares of common stock on any stock exchange, market or trading
facility on which the shares are then listed, admitted to unlisted trading
privileges or included for quotation or in private transactions. These sales may
be at fixed or negotiated prices. The selling stockholders may use any one or
more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- one or more block trades in which the broker-dealer will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- settlement of short sales created after the date of the
private placement;
- broker-dealers may agree with the selling stockholders to sell
a specified number of such shares at a stipulated price per
share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions, discounts or concessions from the selling stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling stockholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The selling stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock or warrants owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus, or under an amendment to this
prospectus under the applicable provision of the Securities Act of 1933, as
amended, amending the list of selling stockholders to include the transferees,
pledgees, donees, assignees and successors-in-interest as selling stockholders
under this prospectus.
The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees, donees,
assignees and successors-in-interest will be the selling beneficial owners for
purposes of this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The selling stockholders have
informed us that none of them has any agreement or understanding, directly or
indirectly, with any person to distribute the common stock.
14
We are required to pay all fees and expenses that we incur incident to
the registration of the shares. We have agreed to indemnify the selling
stockholders, with respect to this registration statement, against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
The anti-manipulation rules under the Securities Exchange Act of 1934,
as amended, may apply to sales of the shares of common stock in the market and
to the activities of the selling stockholders and their affiliates.
We have agreed to use our best efforts to keep this registration
statement continuously effective under the Securities Act until the date which
is two years after the date that this registration statement is declared
effective by the Securities and Exchange Commission or such earlier date when
all shares of the common stock covered by this registration statement have been
sold or may be sold without volume restrictions pursuant to Rule 144(k) as
determined by our counsel pursuant to a written opinion letter to such effect,
addressed and acceptable to our transfer agent and the affected selling
stockholders.
LEGAL MATTERS
The validity of the shares of common stock offered from time to time
under this prospectus will be passed upon by Alston & Bird LLP, New York, New
York.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy, at prescribed rates, any
documents we have filed with the Securities and Exchange Commission at its
Public Reference Room located at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the Securities and Exchange Commission at 1-800-SEC-0330. We also file
these documents with the Securities and Exchange Commission electronically. You
can access the electronic versions of these filings on the SEC's Internet
website found at http://www.sec.gov. You can also obtain copies of materials we
file with the Securities and Exchange Commission from our Internet website found
at www.keryx.com. Our stock is quoted on The Nasdaq Stock Market under the
symbol "KERX."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" into this prospectus the information we file with the Securities and
Exchange Commission. This means that we can disclose important information to
you by referring you to those documents without restating that information in
this document. The information incorporated by reference into this prospectus is
considered to be part of this prospectus, and information we file with the
Securities and Exchange Commission from the date of this prospectus will
automatically update and supersede the information contained in this prospectus
and documents listed below. We incorporate by reference into this prospectus the
documents listed below and any future filings made by us with the Securities and
Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, including exhibits, until the termination of
the offering by the selling stockholders pursuant to this prospectus:
(a) Our Annual Report on Form 10-K for the year ended December 31,
2002;
(b) Our quarterly reports on Forms 10-Q for the quarters ended
March 31, 2003, June 30, 2003, and September 30, 2003;
(c) Our current reports on Forms 8-K dated March 31, 2003, May 14,
2003, August 13, 2003, November 13, 2003, November 19, 2003
and February 20, 2004; and
(d) The description of our capital stock and accompanying rights
contained in our registration statement on Form 8-A dated June
28, 2000 (File No. 000-30929).
We will provide to each person, including any beneficial owner, to whom
a copy of this prospectus is delivered, a copy of any or all of the information
that we have incorporated by reference into this prospectus. We will provide
this information upon written or oral request at no cost to the requester. You
may request this information by contacting our corporate headquarters at the
following address: 750 Lexington Avenue, New York, New York 10022, Attn: Vice
President Finance and Investor Relations.
You should rely only on the information contained in or incorporated by
reference into this prospectus. We have not authorized any dealer, salesperson
or other person to give you different information. This prospectus is not an
offer to sell nor is it seeking an offer to buy the securities referred to in
this prospectus in any jurisdiction where
15
the offer or sale is not permitted. The information contained in this prospectus
is correct only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of the securities referred to in this
prospectus.
16
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The table below itemizes the expenses payable by the Registrant in
connection with the registration and issuance of the securities being registered
hereunder, other than underwriting discounts and commissions. All amounts except
the Securities and Exchange Commission registration fee are estimated.
Securities and Exchange Commission Registration Fee....................................... $ 5,088
Legal Fees and Expenses................................................................... 20,000
Accountants' Fees and Expenses............................................................ 15,000
Printing and Duplicating Expenses......................................................... 5,000
Miscellaneous Expenses.................................................................... 4,300
--------
Total..................................................................................... $ 49,388
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the General Corporation Law of the State of Delaware, or DGCL, a
corporation may include provisions in its certificate of incorporation that will
relieve its directors of monetary liability for breaches of their fiduciary duty
to the corporation, except under certain circumstances, including a breach of
the director's duty of loyalty, acts or omissions of the director not in good
faith or which involve intentional misconduct or a knowing violation of law, the
approval of an improper payment of a dividend or an improper purchase by the
corporation of stock or any transaction from which the director derived an
improper personal benefit. The Registrant's Amended and Restated Certificate of
Incorporation, as amended, eliminates the personal liability of directors to the
Registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director with certain limited exceptions set forth in the DGCL.
Section 145 of the DGCL grants to corporations the power to indemnify
each officer and director against liabilities and expenses incurred by reason of
the fact that he or she is or was an officer or director of the corporation if
he or she acted in good faith and in a manner he or she 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 or
her conduct was unlawful. The Registrant's Amended and Restated Certificate of
Incorporation, as amended, and Amended and Restated Bylaws provide for
indemnification of each officer and director of the Registrant to the fullest
extent permitted by the DGCL. Section 145 of the DGCL also empowers corporations
to purchase and maintain insurance on behalf of any person who is or was an
officer or director of the corporation against liability asserted against or
incurred by him in any such capacity, whether or not the corporation would have
the power to indemnify such officer or director against such liability under the
provisions of Section 145 of the DGCL.
II-1
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------ -----------
5.1 Opinion of Alston & Bird LLP.*
10.1 Securities Purchase Agreement dated as of February 12, 2004, by
and between Keryx Biopharmaceuticals, Inc. and the purchasers
named therein.
10.2 Registration Rights Agreement dated as of February 17, 2004, by
and between Keryx Biopharmaceuticals, Inc. and the purchasers
named therein.
23.1 Consent of KPMG LLP.*
----------
* To be filed by amendment.
II-2
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 to 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. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b)) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above shall
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission 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 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
(h) 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 foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as 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 Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, State of New York, on March 16, 2004.
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ MICHAEL S. WEISS
-----------------------------------
Michael S. Weiss
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Michael S. Weiss and Ron Bentsur,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the SEC, granting unto said
attorney-in-fact and agent, 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 might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or any of his 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 indicated as of March 16, 2004.
Signatures Title
----------------------------- -----------------------------------------------
/s/ Michael S. Weiss Chairman and Chief Executive Officer (principal
----------------------------- executive officer)
Michael S. Weiss
/s/ Ron Bentsur Vice President Finance and Investor Relations
----------------------------- (principal financial and accounting officer)
Ron Bentsur
-----------------------------
Malcolm Hoenlein Director
/s/ Peter Morgan Kash
-----------------------------
Peter Morgan Kash Vice Chairman
/s/ Lawrence Jay Kessel, M.D.
-----------------------------
Lawrence Jay Kessel, M.D. Director
-----------------------------
Peter Salomon, M.D. Director
-----------------------------
Lindsay A. Rosenwald, M.D. Director
/s/ I. Craig Henderson, M.D.
-----------------------------
I. Craig Henderson, M.D. Director
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------ -----------
5.1 Opinion of Alston & Bird LLP.*
10.1 Securities Purchase Agreement dated as of February 12, 2004, by
and between Keryx Biopharmaceuticals, Inc. and the purchasers
named therein.
10.2 Registration Rights Agreement dated as of February 17, 2004, by
and between Keryx Biopharmaceuticals, Inc. and the purchasers
named therein.
23.1 Consent of KPMG LLP.*
----------
* To be filed by amendment.