As filed with the Securities and Exchange Commission on August 27, 2001
Registration No. 333-_______
============================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
EXELIXIS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 8731 04-3257395
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
170 HARBOR WAY
P.O. BOX 511
SOUTH SAN FRANCISCO, CA 94083
(650) 837-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________
GEORGE A. SCANGOS, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
EXELIXIS, INC.
170 HARBOR WAY
P.O. BOX 511
SOUTH SAN FRANCISCO, CALIFORNIA 94083
(650) 837-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
____________________
Copies to:
ROBERT L. JONES, ESQ.
GIANNA M. BOSKO, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306-2155
(650) 843-5000
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this 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 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
=======================================================================================================================
PROPOSED MAXIMUM
TITLE OF CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PRICE PER SHARE (2) PRICE (2) REGISTRATION FEE
------------------------------ ----------------- --------------------------- -------------------- -----------------
------------------------------ ----------------- --------------------------- -------------------- -----------------
Common Stock, $0.001 par value 600,600 shares $ 9,387,378 $ 15.63 $ 2,347
=======================================================================================================================
(1) Also includes additional shares of common stock that may be issued as a
result of stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act. The price per share
and aggregate offering price are based on the average of the high and
low prices of the registrant's common stock on August 22, 2001 as
reported on the Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE 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 A DATE THAT THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
======
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS 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 IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 27, 2001
600,600 SHARES
EXELIXIS, INC.
COMMON STOCK
The selling stockholder listed on page 13 is offering up to 600,600 shares of
Exelixis, Inc. common stock. We will not receive any proceeds from the sale of
the shares by the selling stockholder.
Our common stock trades on the Nasdaq National Market under the symbol EXEL. On
August 24, 2001, the last reported sale price of our common stock was $17.09 per
share.
The selling stockholder may sell the shares described in this prospectus in a
number of different ways and at varying prices. See "Plan of Distribution" on
page 14 for more information about how it may sell its shares.
We will not be paying any underwriting discounts or commissions in this
offering.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
__________ __, 2001.
TABLE OF CONTENTS
PAGE
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EXELIXIS 3
RISK FACTORS 4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 13
USE OF PROCEEDS 13
SELLING STOCKHOLDER 13
PLAN OF DISTRIBUTION 14
LEGAL MATTERS 16
EXPERTS 16
WHERE YOU CAN FIND MORE INFORMATION ABOUT EXELIXIS AND THIS OFFERING 16
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. You should rely only on the information
contained or incorporated by reference in this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus. The selling stockholder is offering to sell, and seeking
offers to buy, shares of our common stock only in jurisdictions where such
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of our common stock.
Exelixis, Artemis Pharmaceuticals, ACTTAG, the Exelixis, Inc. logos and all
other Exelixis product and service names are registered trademarks or trademarks
of Exelixis, Inc. in the U.S. and in other selected countries. All other brand
names or trademarks appearing in this prospectus are the property of their
respective holders.
EXELIXIS
We believe that we are a leader in the discovery and validation of
high-quality novel targets for several major human diseases, and a leader in the
discovery of potential new drug therapies, specifically for cancer and other
proliferative diseases. Our mission is to develop proprietary products by
leveraging our integrated discovery platform to increase the speed, efficiency
and quality of pharmaceutical and agricultural product discovery and
development.
Through our expertise in biology and drug discovery, built upon a
foundation of comparative genomics and model system genetics, we are able to
find new drug targets that we believe would be difficult or impossible to
uncover using other experimental approaches. Our pharmaceutical research
identifies novel genes and proteins expressed by those genes that, when changed,
either decrease or increase the activity in a specific disease pathway in a
therapeutically relevant manner. These genes and proteins represent either
potential product targets or drugs that may treat disease, or prevent disease
initiation or progression.
Specifically in cancer, the remarkable evolutionary conservation of the
biochemical pathways between humans and "lower" organisms strongly supports the
use of simple model systems, such as fruit flies, nematode worms, zebrafish and
mice to identify key members of critical cancer pathways that can then be
targeted for drug discovery. We expect to develop new cancer drugs by exploiting
the underlying "genetic liabilities" of tumor cells to provide specificity in
targeting these cells for destruction, while leaving normal cells unharmed. We
have discovered and are further developing a number of small molecule drug
targets in addition to monoclonal antibody drug targets. Molecules developed
against these targets may selectively kill cancer cells while leaving normal
cells unharmed, and may provide alternatives to current cancer therapies.
While our proprietary programs focus on drug discovery and development, we
believe that our proprietary technologies are valuable to all other industries
whose products can be enhanced by an understanding of DNA or proteins, including
the agrochemical, agricultural and diagnostic industries. Many of these
industries have shorter product development cycles and lower risk than the
pharmaceutical industry, while at the same time generating significant sales
with double-digit product margins. By partnering with leading companies in
multiple industries, we are able to diversify our business risk, while at the
same time maximizing our future revenue stream.
We are a Delaware corporation. Our principal executive offices are located
at 170 Harbor Way, South San Francisco, California 94080, and our telephone
number is (650) 837-7000. In this prospectus, "Exelixis," "we," "us" and "our"
refer to Exelixis, Inc., unless the context otherwise requires.
RISK FACTORS
You should carefully consider the following risk factors, in addition to
other information included or incorporated by reference in this prospectus,
before making an investment decision. The risks described below are not the only
risks we face. Additional risks that we do not yet know of or that we currently
think are immaterial may also impair our business operations. If any of the
events or circumstances described in the following risks actually occurs, our
business may suffer, the trading price of our common stock could decline and you
may lose all or part of your investment.
WE HAVE A HISTORY OF NET LOSSES. WE EXPECT TO CONTINUE TO INCUR NET LOSSES, AND
WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY.
We have incurred net losses each year since our inception, including a net
loss of approximately $36.4 million for the six months ended June 30, 2001. As
of that date, we had an accumulated deficit of approximately $166.5 million. We
expect these losses to continue and anticipate negative cash flow for the
foreseeable future. The size of these net losses will depend, in part, on the
rate of growth, if any, in our license and contract revenues and on the level of
our expenses. Our research and development expenditures and general and
administrative costs have exceeded our revenues to date, and we expect to spend
significant additional amounts to fund research and development in order to
enhance our core technologies and undertake product development. As a result, we
expect that our operating expenses will increase significantly in the near term
and, consequently, we will need to generate significant additional revenues to
achieve profitability. Even if we do increase our revenues and achieve
profitability, we may not be able to sustain or increase profitability.
WE WILL NEED ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY NOT BE AVAILABLE TO US.
Our future capital requirements will be substantial, and will depend on
many factors including:
- payments received under collaborative agreements;
- the progress and scope of our collaborative and independent research and
development projects;
- our ability to successfully continue development of a recently acquired
cancer compound;
- our need to expand our other proprietary product development efforts as
well as develop manufacturing and marketing capabilities to
commercialize products; and
- the filing, prosecution and enforcement of patent claims.
We anticipate that our current cash and cash equivalents, short-term
investments and funding to be received from collaborators will enable us to
maintain our currently planned operations for at least the next two years.
Changes to our current operating plan may require us to consume available
capital resources significantly sooner than we expect. For example, our newly
acquired cancer product from our recent relationship with Bristol-Myers Squibb
will require significant resources for development that were not in our
operational plans prior to acquiring the cancer product. We may be unable to
raise sufficient additional capital when we need it, on favorable terms, or at
all. If our capital resources are insufficient to meet future capital
requirements, we will have to raise additional funds. The sale of equity or
convertible debt securities in the future may be dilutive to our stockholders,
and debt financing arrangements may require us to pledge certain assets and
enter into covenants that would restrict our ability to incur further
indebtedness. If we are unable to obtain adequate funds on reasonable terms, we
may be required to curtail operations significantly or to obtain funds by
entering into financing, supply or collaboration agreements on unattractive
terms.
DIFFICULTIES WE MAY ENCOUNTER MANAGING OUR GROWTH MAY DIVERT RESOURCES AND LIMIT
OUR ABILITY TO SUCCESSFULLY EXPAND OUR OPERATIONS.
We have experienced a period of rapid and substantial growth that has
placed, and our anticipated growth in the future will continue to place, a
strain on our administrative and operational infrastructure. As our operations
expand, we expect that we will need to manage multiple locations, including
additional locations outside of the United States, and additional relationships
with various collaborative partners, suppliers and other third parties. Our
ability to manage our operations and growth effectively requires us to continue
to improve our operational, financial and management controls, reporting systems
and procedures. We may not be able to successfully implement improvements to our
management information and control systems in an efficient or timely manner and
may discover deficiencies in existing systems and controls. In addition,
acquisitions involve the integration of different financial and management
reporting systems. We may not be able to successfully integrate the
administrative and operational infrastructure without significant additional
improvements and investments in management systems and procedures.
WE ARE DEPENDENT ON OUR COLLABORATIONS WITH MAJOR COMPANIES. IF WE ARE UNABLE TO
ACHIEVE MILESTONES, DEVELOP PRODUCTS OR RENEW OR ENTER INTO NEW COLLABORATIONS,
OUR REVENUES MAY DECREASE AND OUR ACTIVITIES MAY FAIL TO LEAD TO COMMERCIALIZED
PRODUCTS.
Substantially all of our revenues to date have been derived from
collaborative research and development agreements. Revenues from research and
development collaborations depend upon continuation of the collaborations, the
achievement of milestones and royalties derived from future products developed
from our research. If we are unable to successfully achieve milestones or our
collaborators fail to develop successful products, we will not earn the revenues
contemplated under such collaborative agreements. In addition, some of our
collaborations are exclusive and preclude us from entering into additional
collaborative arrangements with other parties in the area or field of
exclusivity.
We currently have continuing collaborative research agreements with Bayer,
Bristol-Myers Squibb (two agreements), Dow AgroSciences, Aventis and Protein
Design Labs. Our current collaborative agreement with Bayer is scheduled to
expire in 2008, after which it will automatically be extended for one-year terms
unless terminated by either party upon 12-month written notice. Our agreement
permits Bayer to terminate our collaborative activities prior to 2008 upon the
occurrence of specified conditions, such as the failure to agree on key
strategic issues after a period of years or the acquisition of Exelixis by
certain specified third parties. In addition, our agreements with Bayer are
subject to termination at an earlier date if two or more of our Chief Executive
Officer, Chief Scientific Officer, Agricultural Biotechnology Program Leader and
Chief Informatics Officer cease to have a relationship with us within six months
of each other and we are unable to find replacements acceptable to Bayer. The
first of our collaborative agreements with Bristol-Myers Squibb expires in
September 2002. The funded research term of the second collaborative
arrangement, entered into in July 2002, expires in July 2005. Our collaborative
agreement with Dow AgroSciences is scheduled to expire in July 2003, after which
Dow AgroSciences has the option to renew on an annual basis. Our collaborative
research arrangement with Aventis is scheduled to expire in June 2004. Aventis
has the right to terminate the research arrangement prior to the expiration
date, provided that it pays the annual research funding amount due for the year
following termination. Thereafter, the arrangement renews annually unless
Aventis terminates automatic renewal prior to the scheduled date of renewal. The
Aventis arrangement is conducted through a limited liability company,
Agrinomics, which is owned equally by Aventis and Exelixis. Aventis may
surrender its interest in Agrinomics and terminate the related research
collaboration prior to the scheduled expiration upon the payment of the
subsequent year's funding commitment. Bayer and Aventis recently announced an
exclusive negotiation period for the purchase of Aventis by Bayer. We have not
been advised of the status of those discussions nor are we able to predict the
impact of such an acquisition of Aventis, if the acquisition were to occur. Our
agreement with Protein Design Labs is scheduled to expire in May 2003. Protein
Design Labs has a unilateral right to renew for additional 12 and six month
periods thereafter. The five-year term of the convertible promissory note
entered into as part of this arrangement is unaffected by whether or not Protein
Design Labs renews. If these existing agreements are not renewed or if we are
unable to enter into new collaborative agreements on commercially acceptable
terms, our revenues and product development efforts may be adversely affected.
We recently announced the reacquisition, effective February 2002, of future
rights to research programs in metabolism and Alzheimer's disease previously
licensed exclusively to Pharmacia Corporation. The existing agreement with
Pharmacia will terminate as of that date. Pharmacia will retain rights to
targets under the existing agreement selected prior to the reacquisition date,
subject to the payment of milestones for certain of those targets selected and
royalties for future development of products against or using those targets but
will have no other obligations to make payments to the Company, including
approximately $9.0 million in annual funding that would otherwise be payable for
two years if the Company had not elected to reacquire rights to the research at
this time. Although we anticipate entering into future collaborations involving
either or both of these programs, there can be no assurance that we will be able
to enter into new collaborative agreements or that such collaborations will
provide revenues equal to or exceeding those otherwise obtainable under the
Pharmacia collaboration.
CONFLICTS WITH OUR COLLABORATORS COULD JEOPARDIZE THE OUTCOME OF OUR
COLLABORATIVE AGREEMENTS AND OUR ABILITY TO COMMERCIALIZE PRODUCTS.
We intend to conduct proprietary research programs in specific disease and
agricultural product areas that are not covered by our collaborative agreements.
Our pursuit of opportunities in agricultural and pharmaceutical markets could,
however, result in conflicts with our collaborators in the event that any of our
collaborators takes the position that our internal activities overlap with those
areas that are exclusive to our collaborative agreements, and we should be
precluded from such internal activities. Moreover, disagreements with our
collaborators could develop over rights to our intellectual property. In
addition, our collaborative agreements may have provisions that give rise to
disputes regarding the rights and obligations of the parties. Any conflict with
our collaborators could lead to the termination of our collaborative agreements,
delay collaborative activities, reduce our ability to renew agreements or obtain
future collaboration agreements or result in litigation or arbitration and would
negatively impact our relationship with existing collaborators.
We have limited or no control over the resources that our collaborators may
choose to devote to our joint efforts. Our collaborators may breach or terminate
their agreements with us or fail to perform their obligations thereunder.
Further, our collaborators may elect not to develop products arising out of our
collaborative arrangements or may fail to devote sufficient resources to the
development, manufacture, market or sale of such products. Certain of our
collaborators could also become our competitors in the future. If our
collaborators develop competing products, preclude us from entering into
collaborations with their competitors, fail to obtain necessary regulatory
approvals, terminate their agreements with us prematurely or fail to devote
sufficient resources to the development and commercialization of our products,
our product development efforts could be delayed and may fail to lead to
commercialized products.
WE ARE DEPLOYING UNPROVEN TECHNOLOGIES, AND WE MAY NOT BE ABLE TO DEVELOP
COMMERCIALLY SUCCESSFUL PRODUCTS.
You must evaluate us in light of the uncertainties and complexities
affecting a biotechnology company. Our technologies are still in the early
stages of development. Our research and operations thus far have allowed us to
identify a number of product targets for use by our collaborators and our own
internal development programs. We are not certain, however, of the commercial
value of any of our current or future targets, and we may not be successful in
expanding the scope of our research into new fields of pharmaceutical or
pesticide research, or other agricultural applications such as enhancing plant
traits to produce superior crop yields, disease resistance or increased
nutritional content. Significant research and development, financial resources
and personnel will be required to capitalize on our technology, develop
commercially viable products and obtain regulatory approval for such products.
WE HAVE NO EXPERIENCE IN DEVELOPING, MANUFACTURING AND MARKETING PRODUCTS AND
MAY BE UNABLE TO COMMERCIALIZE PROPRIETARY PRODUCTS.
We recently acquired a development compound, an analog to rebeccamycin
("Rebeccamycin"), directed against cancer under our recent collaborative
arrangement with Bristol-Myers Squibb. Clinical development of Rebeccamycin to
date has been conducted by the National Cancer Institute, or the NCI, and
manufacturing of this product has been the responsibility of Bristol-Myers
Squibb. Rebeccamycin has recently completed Phase I clinical studies and is in
Phase I and early Phase II clinical trials being conducted by the NCI. We are
currently in negotiations with the NCI to use the results of the clinical
studies they have conducted and are conducting in order to determine what
additional studies, if any, will be conducted by the NCI or us. There can be no
assurance that we will successfully agree upon further development plans, the
respective rights and obligations of the parties to conduct additional clinical
studies or the timing of such studies. In addition, there can be no assurance
that the clinical studies conducted to date will support further clinical
development or be accepted by the Food and Drug Administration, or FDA, in
conjunction with any application for product approval submitted to the FDA for
Rebeccamycin. Moreover, although Bristol-Myers Squibb has provided the NCI with
sufficient quantities of Rebeccamycin to complete the existing Phase I and II
clinical studies, development necessary for further clinical studies and product
approval will require us to either develop internal manufacturing capabilities
or retain a third party to manufacture the product. In addition, we have
recently hired a new Senior Vice President responsible for clinical development
of this product, as well as any new potential products that we may develop. As
a result, we have limited experience in clinical development and no experience
in manufacturing potential drug products. Accordingly, the development of
Rebeccamycin is subject to significant risk and uncertainty, particularly with
respect to our ability to successfully develop, manufacture and market
Rebeccamycin as a product.
With respect to products developed against our proprietary drug targets, we
will rely on our collaborators to develop and commercialize products based on
our research and development efforts. We have limited or no experience in using
the targets that we identify to develop our own proprietary products. Our recent
success in applying our drug development capabilities to our proprietary targets
in cancer are subject to significant risk and uncertainty, particularly with
respect to our ability to meet currently estimated timelines and goals for
completing preclinical development efforts and filing an Investigational New
Drug Application, or IND, for compounds developed. In order for us to
commercialize products, we would need to significantly enhance our capabilities
with respect to product development, and establish manufacturing and marketing
capabilities, either directly or through outsourcing or licensing arrangements.
We may not be able to enter into such outsourcing or licensing agreements on
commercially reasonable terms, or at all.
SINCE OUR TECHNOLOGIES HAVE MANY POTENTIAL APPLICATIONS AND WE HAVE LIMITED
RESOURCES, OUR FOCUS ON A PARTICULAR AREA MAY RESULT IN OUR FAILURE TO
CAPITALIZE ON MORE PROFITABLE AREAS.
We have limited financial and managerial resources. This requires us to
focus on product candidates in specific industries and forego opportunities with
regard to other products and industries. For example, depending on our ability
to allocate resources, a decision to concentrate on a particular agricultural
program may mean that we will not have resources available to apply the same
technology to a pharmaceutical project. While our technologies may permit us to
work in both areas, resource commitments may require trade-offs resulting in
delays in the development of certain programs or research areas, which may place
us at a competitive disadvantage. Our decisions impacting resource allocation
may not lead to the development of viable commercial products and may divert
resources from more profitable market opportunities. Moreover, our recent
acquisition of Rebeccamycin will require that resources and management time be
directed to clinical development and manufacturing of this potential product.
There can be no assurance that allocating resources and time to these efforts
will allow us to remain competitive in existing programs and potential areas of
future research. The resources dedicated to the development of Rebeccamycin may
limit or hinder our ability to meet currently estimated timelines and goals for
completing preclinical development efforts and filing an IND for our proprietary
compounds.
OUR COMPETITORS MAY DEVELOP PRODUCTS AND TECHNOLOGIES THAT MAKE OURS OBSOLETE.
The biotechnology industry is highly fragmented and is characterized by
rapid technological change. In particular, the area of gene research is a
rapidly evolving field. We face, and will continue to face, intense competition
from large biotechnology and pharmaceutical companies, as well as academic
research institutions, clinical reference laboratories and government agencies
that are pursuing research activities similar to ours. Some of our competitors
have entered into collaborations with leading companies within our target
markets, including some of our existing collaborators. Our future success will
depend on our ability to maintain a competitive position with respect to
technological advances.
Any products that are developed through our technologies will compete in
highly competitive markets. Further, our competitors may be more effective at
using their technologies to develop commercial products. Many of the
organizations competing with us have greater capital resources, larger research
and development staffs and facilities, more experience in obtaining regulatory
approvals and more extensive product manufacturing and marketing capabilities.
As a result, our competitors may be able to more easily develop technologies and
products that would render our technologies and products, and those of our
collaborators, obsolete and noncompetitive.
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 success will depend in part on our ability to obtain patents and
maintain adequate protection of the intellectual property related to our
technologies and products. The patent positions of biotechnology companies,
including our patent position, are generally uncertain and involve complex legal
and factual questions. We will be able to protect our intellectual property
rights from unauthorized use by third parties only to the extent that our
technologies are covered by valid and enforceable patents or are effectively
maintained as trade secrets. The laws of some foreign countries do not protect
intellectual property rights to the same extent as the laws of the U.S., and
many companies have encountered significant problems in protecting and defending
such rights in foreign jurisdictions. We will continue to apply for patents
covering our technologies and products as and when we deem appropriate. However,
these applications may be challenged or may fail to result in issued patents.
Our existing patents and any future patents we obtain 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 patents. In addition, our patents
may be challenged, invalidated or fail to provide us with any competitive
advantages.
We rely on trade secret protection for our confidential and proprietary
information. We have taken security measures to protect our proprietary
information and trade secrets, but these measures may not provide adequate
protection. While we seek to protect our proprietary information by entering
into confidentiality agreements with employees, collaborators and consultants,
we cannot assure you that our proprietary information will not be disclosed, or
that we can meaningfully protect our trade secrets. In addition, our competitors
may independently develop substantially equivalent proprietary information or
may otherwise gain access to our trade secrets.
LITIGATION OR THIRD PARTY CLAIMS OF INTELLECTUAL PROPERTY INFRINGEMENT COULD
REQUIRE US TO SPEND SUBSTANTIAL TIME AND MONEY AND ADVERSELY AFFECT OUR ABILITY
TO DEVELOP AND COMMERCIALIZE PRODUCTS.
Our commercial success depends in part on our ability to avoid infringing
patents and proprietary rights of third parties, and not breaching any licenses
that we have entered into with regard to our technologies. Other parties have
filed, and in the future are likely to file, patent applications covering genes
and gene fragments, techniques and methodologies relating to model systems, and
products and technologies that we have developed or intend to develop. If
patents covering technologies required by our operations are issued to others,
we may have to rely on licenses from third parties, which may not be available
on commercially reasonable terms, or at all.
Third parties may accuse us of employing their proprietary technology
without authorization. In addition, third parties may obtain patents that relate
to our technologies and claim that use of such technologies infringes these
patents. Regardless of their merit, such claims could require us to incur
substantial costs, including the diversion of management and technical
personnel, in defending ourselves against any such claims or enforcing our
patents. In the event that a successful claim of infringement is brought against
us, we may be required to pay damages and obtain one or more licenses from third
parties. We may not be able to obtain these licenses at a reasonable cost, or at
all. Defense of any lawsuit or failure to obtain any of these licenses could
adversely affect our ability to develop and commercialize products.
THE LOSS OF KEY PERSONNEL OR THE INABILITY TO ATTRACT AND RETAIN ADDITIONAL
PERSONNEL COULD IMPAIR OUR ABILITY TO EXPAND OUR OPERATIONS.
We are highly dependent on the principal members of our management and
scientific staff, the loss of whose services might adversely impact the
achievement of our objectives and the continuation of existing collaborations.
In addition, recruiting and retaining qualified scientific personnel to perform
future research and development work will be critical to our success. We do not
currently have sufficient executive management and technical personnel to fully
execute our business plan. There is currently a shortage of skilled executives
and employees with technical expertise, and this shortage is likely to continue.
As a result, competition for skilled personnel is intense and turnover rates are
high. Although we believe we will be successful in attracting and retaining
qualified personnel, competition for experienced scientists from numerous
companies, academic and other research institutions may limit our ability to do
so.
Our business operations will require additional expertise in specific
industries and areas applicable to products identified and developed through our
technologies. These activities will require the addition of new personnel,
including management and technical personnel and the development of additional
expertise by existing employees. The inability to attract such personnel or to
develop this expertise could prevent us from expanding our operations in a
timely manner, or at all.
OUR COLLABORATIONS WITH OUTSIDE SCIENTISTS MAY BE SUBJECT TO RESTRICTION AND
CHANGE.
We work with scientific advisors and collaborators at academic and other
institutions that assist us in our research and development efforts. These
scientists are not our employees and may have other commitments that would limit
their availability to us. Although our scientific advisors and collaborators
generally agree not to do competing work, if a conflict of interest between
their work for us and their work for another entity arises, we may lose their
services. In addition, although our scientific advisors and collaborators sign
agreements not to disclose our confidential information, it is possible that
valuable proprietary knowledge may become publicly known through them.
OUR POTENTIAL THERAPEUTIC PRODUCTS ARE SUBJECT TO A LENGTHY AND UNCERTAIN
REGULATORY PROCESS THAT MAY NOT RESULT IN THE NECESSARY REGULATORY APPROVALS,
WHICH COULD ADVERSELY AFFECT OUR ABILITY TO COMMERCIALIZE PRODUCTS.
The FDA must approve any drug or biologic product before it can be marketed
in the U.S. Any products resulting from our research and development efforts
must also be approved by the regulatory agencies of foreign governments before
the product can be sold outside the U.S. Before a new drug application or
biologics license application can be filed with the FDA, the product candidate
must undergo extensive clinical trials, which can take many years and may
require substantial expenditures. The regulatory process also requires
preclinical testing. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations, which could delay, limit or prevent
regulatory approval. In addition, delays or rejections may be encountered based
upon changes in regulatory policy for product approval during the period of
product development and regulatory agency review. The clinical development and
regulatory approval process is expensive and time consuming. Any failure to
obtain regulatory approval could delay or prevent us from commercializing
products.
Our efforts to date have been primarily limited to identifying targets.
Significant research and development efforts will be necessary before any
products resulting from such targets can be commercialized. If regulatory
approval is granted to any of our products, this approval may impose limitations
on the uses for which a product may be marketed. Further, once regulatory
approval is obtained, a marketed product and its manufacturer are subject to
continual review, and discovery of previously unknown problems with a product or
manufacturer may result in restrictions and sanctions with respect to the
product, manufacturer and relevant manufacturing facility, including withdrawal
of the product from the market.
SOCIAL ISSUES MAY LIMIT THE PUBLIC ACCEPTANCE OF GENETICALLY ENGINEERED
PRODUCTS, WHICH COULD REDUCE DEMAND FOR OUR PRODUCTS.
Although our technology is not dependent on genetic engineering, genetic
engineering plays a prominent role in our approach to product development. For
example, research efforts focusing on plant traits may involve either selective
breeding or modification of existing genes in the plant under study. Public
attitudes may be influenced by claims that genetically engineered products are
unsafe for consumption or pose a danger to the environment. Such claims may
prevent our genetically engineered products from gaining public acceptance. The
commercial success of our future products will depend, in part, on public
acceptance of the use of genetically engineered products including drugs and
plant and animal products.
The subject of genetically modified organisms has received negative
publicity, which has aroused public debate. For example, certain countries in
Europe are considering regulations that may ban products or require express
labeling of products that contain genetic modifications or are "genetically
modified." Adverse publicity has resulted in greater regulation internationally
and trade restrictions on imports of genetically altered products. If similar
action is taken in the U.S., genetic research and genetically engineered
products could be subject to greater domestic regulation, including stricter
labeling requirements. To date, our business has not been hampered by these
activities. However, such publicity in the future may prevent any products
resulting from our research from gaining market acceptance and reduce demand for
our products.
LAWS AND REGULATIONS MAY REDUCE OUR ABILITY TO SELL GENETICALLY ENGINEERED
PRODUCTS THAT OUR COLLABORATORS OR WE DEVELOP IN THE FUTURE.
Our collaborators or we may develop genetically engineered agricultural and
animal products. The field-testing, production and marketing of genetically
engineered products are subject to regulation by federal, state, local and
foreign governments. Regulatory agencies administering existing or future
regulations or legislation may prevent us from producing and marketing
genetically engineered products in a timely manner or under technically or
commercially feasible conditions. In addition, regulatory action or private
litigation could result in expenses, delays or other impediments to our product
development programs and the commercialization of products.
The FDA has released a policy statement stating that it will apply the same
regulatory standards to foods developed through genetic engineering as it
applies to foods developed through traditional plant breeding. Genetically
engineered food products will be subject to premarket review, however, if these
products raise safety questions or are deemed to be food additives. Our products
may be subject to lengthy FDA reviews and unfavorable FDA determinations if they
raise questions regarding safety or our products are deemed to be food
additives.
The FDA has also announced that it will not require genetically engineered
agricultural products to be labeled as such, provided that these products are as
safe and have the same nutritional characteristics as conventionally developed
products. The FDA may reconsider or change its policies, and local or state
authorities may enact labeling requirements, either of which could have a
material adverse effect on our ability or the ability of our collaborators to
develop and market products resulting from our efforts.
WE USE HAZARDOUS CHEMICALS AND RADIOACTIVE AND BIOLOGICAL MATERIALS IN OUR
BUSINESS. ANY CLAIMS RELATING TO IMPROPER HANDLING, STORAGE OR DISPOSAL OF THESE
MATERIALS COULD BE TIME CONSUMING AND COSTLY.
Our research and development processes involve the controlled use of
hazardous materials, including chemicals, radioactive and biological materials.
Our operations produce hazardous waste products. We cannot eliminate the risk of
accidental contamination or discharge and any resultant injury from these
materials. Federal, state and local laws and regulations govern the use,
manufacture, storage, handling and disposal of hazardous materials. We may be
sued for any injury or contamination that results from our use or the use by
third parties of these materials, and our liability may exceed our insurance
coverage and our total assets. Compliance with environmental laws and
regulations may be expensive, and current or future environmental regulations
may impair our research, development and production efforts.
In addition, our collaborators may use hazardous materials in connection
with our collaborative efforts. To our knowledge, their work is performed in
accordance with applicable biosafety regulations. In the event of a lawsuit or
investigation, however, we could be held responsible for any injury caused to
persons or property by exposure to, or release of, these hazardous materials use
by these parties. Further, we may be required to indemnify our collaborators
against all damages and other liabilities arising out of our development
activities or products produced in connection with these collaborations.
WE EXPECT THAT OUR QUARTERLY RESULTS OF OPERATIONS WILL FLUCTUATE, AND THIS
FLUCTUATION COULD CAUSE OUR STOCK PRICE TO DECLINE, CAUSING INVESTOR LOSSES.
Our quarterly operating results have fluctuated in the past and are likely
to fluctuate in the future. A number of factors, many of which we cannot
control, could subject our operating results and stock price to volatility,
including:
- recognition of license, milestone or other fees;
- payments of licensing fees to third parties;
- acceptance of our technologies and platforms;
- the success rate of our discovery efforts leading to milestones and
royalties;
- the introduction of new technologies or products by our competitors;
- the timing and willingness of collaborators to commercialize our
products;
- our ability to enter into new collaborative relationships;
- the termination or non-renewal of existing collaborations;
- general and industry-specific economic conditions that may affect our
collaborators' research and development expenditures; and
- exposure to fluctuations in foreign currency.
A large portion of our expenses, including expenses for facilities,
equipment and personnel, are relatively fixed in the short term. In addition, we
expect operating expenses to increase significantly during the next year.
Accordingly, if our revenues decline or do not grow as anticipated due to the
expiration of existing contracts or our failure to obtain new contracts, our
inability to meet milestones or other factors, we may not be able to
correspondingly reduce our operating expenses. Failure to achieve anticipated
levels of revenues could therefore significantly harm our operating results for
a particular fiscal period.
Due to the possibility of fluctuations in our revenues and expenses, we
believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance. As a result, in some future quarters,
our operating results may not meet the expectations of stock market analysts and
investors, which could result in a decline in the price of our stock.
OUR STOCK PRICE MAY BE EXTREMELY VOLATILE
.
We believe the trading price of our common stock will remain highly
volatile and may fluctuate substantially due to factors such as the following:
- the announcement of new products or services by us or our competitors;
- quarterly variations in our or our competitors' results of operations;
- failure to achieve operating results projected by securities analysts;
- changes in earnings estimates or recommendations by securities analysts;
- developments in the biotechnology industry;
- acquisitions of other companies or technologies; and
- general market conditions and other factors, including factors unrelated
to our operating performance or the operating performance of our
competitors. These factors and fluctuations, as well as general
economic, political and market conditions, may materially adversely
affect the market price of our common stock.
In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted. A securities class action suit against us could result in
substantial costs and divert management's attention and resources, which could
have a material and adverse effect on our business.
WE ARE EXPOSED TO RISKS ASSOCIATED WITH ACQUISITIONS.
We have made, and may in the future make, acquisitions of, or significant
investments in, businesses with complementary products, services and/or
technologies. Acquisitions involve numerous risks, including, but not limited
to:
- difficulties and increased costs in connection with integration of the
personnel, operations, technologies and products of acquired companies;
- diversion of management's attention from other operational matters;
- the potential loss of key employees of acquired companies;
- the potential loss of key collaborators of the acquired companies;
- lack of synergy, or the inability to realize expected synergies,
resulting from the acquisition;
- exposure to fluctuations in foreign currency;
- differences in foreign laws, business practices, statutes, regulations
and tax provisions; and
- acquired intangible assets becoming impaired as a result of
technological advancements or worse-than-expected performance of the
acquired company.
Mergers and acquisitions are inherently risky, and the inability to effectively
manage these risks could materially and adversely affect our business, financial
condition and results of operations.
IF PRODUCT LIABILITY LAWSUITS ARE SUCCESSFULLY BROUGHT AGAINST US, WE COULD FACE
SUBSTANTIAL LIABILITIES THAT EXCEED OUR RESOURCES.
We may be held liable if any product our collaborators or we develop causes
injury or is found otherwise unsuitable during product testing, manufacturing,
marketing or sale. Although we intend to obtain general liability and product
liability insurance, this insurance may be prohibitively expensive, or may not
fully cover our potential liabilities. Inability to obtain sufficient insurance
coverage at an acceptable cost or to otherwise protect ourselves against
potential product liability claims could prevent or inhibit the
commercialization of products developed by our collaborators or us.
OUR FACILITIES ARE LOCATED NEAR KNOWN EARTHQUAKE FAULT ZONES, AND THE OCCURRENCE
OF AN EARTHQUAKE OR OTHER CATASTROPHIC DISASTER COULD CAUSE DAMAGE TO OUR
FACILITIES AND EQUIPMENT, WHICH COULD REQUIRE US TO CEASE OR CURTAIL OPERATIONS.
Given our location, our facilities are vulnerable to damage from
earthquakes. We are also vulnerable to damage from other types of disasters,
including fire, floods, power loss, communications failures and similar events.
If any disaster were to occur, our ability to operate our business at our
facilities would be seriously, or potentially completely, impaired. In addition,
the unique nature of our research activities could cause significant delays in
our programs and make it difficult for us to recover from a disaster. The
insurance we maintain may not be adequate to cover our losses resulting from
disasters or other business interruptions. Accordingly, an earthquake or other
disaster could materially and adversely harm our ability to conduct business.
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE.
If our stockholders sell substantial amounts of our common stock (including
shares issued upon the exercise of outstanding options and warrants) in the
public market, the market price of our common stock could fall. These sales
also might make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deemed appropriate. In
October 2000, a significant number of shares of our common stock held by
existing stockholders became freely tradable, subject in some instances to the
volume and other limitations of Rule 144. Sales of these shares and other
shares of common stock held by existing stockholders could cause the market
price of our common stock to decline.
SOME OF OUR EXISTING STOCKHOLDERS CAN EXERT CONTROL OVER US, AND MAY NOT MAKE
DECISIONS THAT ARE IN THE BEST INTERESTS OF ALL STOCKHOLDERS.
Due to their combined stock holdings, our officers, directors and principal
stockholders (stockholders holding more than 5% of our common stock) acting
together, may be able to exert significant influence over all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions. In addition, this concentration of ownership
may delay or prevent a change in control of our company, even when a change may
be in the best interests of our stockholders. In addition, the interests of
these stockholders may not always coincide with our interests as a company or
the interests of other stockholders. Accordingly, these stockholders could cause
us to enter into transactions or agreements that you would not approve.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and the documents incorporated by
reference are forward-looking statements. These statements are based on our
current expectations, assumptions, estimates and projections about our business
and our industry, and involve known and unknown risks, uncertainties and other
factors that may cause our or our industry's results, levels of activity,
performance or achievement to be materially different from any future results,
levels of activity, performance or achievements expressed or implied in or
contemplated by the forward-looking statements. Words such as "believe,"
"anticipate," "expect," "intend," "plan," "will," "may," "should," "estimate,"
"predict," "potential," "continue" or the negative of such terms or other
similar expressions, identify forward-looking statements. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Our actual
results could differ materially from those anticipated in such forward-looking
statements as a result of several factors more fully described under the caption
"Risk Factors" and in the documents incorporated by reference. The
forward-looking statements made in this prospectus relate only to events as of
the date on which the statements are made.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling stockholder. We will not
receive any proceeds from the sale of these shares of common stock.
SELLING STOCKHOLDER
We are registering the shares covered by this prospectus on behalf of the
selling stockholder named in the table below. We issued all of the shares to the
selling stockholder in a private placement transaction. We have registered the
shares to permit the selling stockholder and its pledgees, donees, transferees
or other successors-in-interest that receive their shares from the selling
stockholder as a gift, partnership distribution or other non-sale related
transfer after the date of this prospectus to resell the shares. The selling
stockholder has agreed not to offer, sell, contract to sell, pledge, grant any
option to purchase, make any short sale or otherwise dispose of the shares
covered by this prospectus without our consent until July 17, 2002.
The following table sets forth the name of the selling stockholder, the
number of shares owned by it, the number of shares that may be offered under
this prospectus, the number of shares of our common stock owned by the selling
stockholder as of July 31, 2001, and the number of shares of our common stock
owned by the selling stockholder after this offering is completed. On July 17,
2001, in connection with the issuance of the shares covered by this prospectus,
the selling stockholder entered into a cancer research collaboration and license
agreement with us, and thus is one of our corporate partners. The number of
shares in the column "Number of Shares Being Offered" represents all of the
shares that the selling stockholder may offer under this prospectus. The selling
stockholder may sell some, all or none of the shares registered hereunder.
Except for the lockup described above, we do not know how long the selling
stockholder will hold the shares before selling them. The shares offered by this
prospectus may be offered from time to time by the selling stockholder.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the SEC under the Securities Exchange Act of 1934. Unless
otherwise noted, none of the share amounts set forth below represent more than
1% of our outstanding stock as of July 31, 2001, adjusted as required by rules
promulgated by the SEC. The percentages of shares owned prior to the offering
are based on 49,161,649 shares of our common stock outstanding on July 31, 2001,
giving effect to the sale of 600,600 shares to the selling stockholder in the
private placement.
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING NUMBER OF OFFERING (1)
----------------- SHARES BEING ---------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---------------------------- ------- -------- ------------ ------ -------
Bristol-Myers Squibb Company . . . . . 600,600 1.22% 600,600 0 *
(1) Does not constitute a commitment to sell any or all of the stated number of
shares of common stock. The number of shares offered shall be determined from
time to time by the selling stockholder at its sole discretion. The number of
shares to be owned by the selling stockholder after the offering, assuming the
sale of all of the stated number of shares of common stock, will be less than
one percent of its outstanding shares after the offering.
PLAN OF DISTRIBUTION
The selling stockholder may sell the shares from time to time. The selling
stockholder will act independently of us in making decisions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at terms
then prevailing or at prices related to the then current market price, or in
privately negotiated transactions. The selling stockholder may effect these
transactions by selling the shares to or through broker-dealers. The selling
stockholder may sell its shares in one or more of, or a combination of:
- a block trade 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 a broker-dealer
for its account under this prospectus;
- an exchange distribution in accordance with the rules of an exchange; -
ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, the amendment or supplement
will disclose:
- the name of the selling stockholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which the shares were sold;
- the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
- that a broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
- other facts material to the transaction.
The selling stockholder has agreed not to offer, sell, contract to sell,
pledge, grant any option to purchase, make any short sale or otherwise dispose
of the shares covered by this prospectus without our consent until July 17,
2002. From time to time, the selling stockholder may transfer, pledge, donate or
assign its shares of common stock to lenders or others and each of such persons
will be deemed to be a "selling stockholder" for purposes of this prospectus.
The number of shares of common stock beneficially owned by the selling
stockholder will decrease as and when it takes such actions. The plan of
distribution for the selling stockholder's shares of common stock sold under
this prospectus will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be selling stockholders hereunder.
Upon being notified by a selling stockholder that a donee or pledgee intends to
sell more than 500 shares, we will file a supplement to this prospectus.
The selling stockholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with the selling stockholder.
The selling stockholder also may sell shares short and redeliver the shares to
close out short positions. The selling stockholder may enter into option or
other transactions with broker-dealers that require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer the shares under this prospectus. The selling stockholder also may loan
or pledge the shares to a broker-dealer. The broker-dealer may sell the loaned
shares, or upon a default the broker-dealer may sell the pledged shares under
this prospectus.
In effecting sales, broker-dealers engaged by the selling stockholder may
arrange for other broker-dealers to participate in the resales. Broker-dealers
or agents may receive compensation in the form of commissions, discounts or
concessions from the selling stockholder. Broker-dealers or agents may also
receive compensation from the purchasers of the shares for whom they act as
agents or to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will be
in amounts to be negotiated in connection with the sale. A broker-dealer or
agent and any other participating broker-dealer or the selling stockholder may
be deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act in connection with sales of the shares. Accordingly, any
commission, discount or concession received by them and any profit on the resale
of the shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. Because the selling stockholder may be
deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act, the selling stockholder will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus that qualify for sale under Rule 144 promulgated under the
Securities Act may be sold under Rule 144 rather than under this prospectus. The
selling stockholder has advised that it has not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of the shares. There is no underwriter or coordinating broker acting in
connection with the proposed sale of shares by the selling stockholder.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in some
states the shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of the distribution. In addition, the
selling stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholder. We will make copies of
this prospectus available to the selling stockholder and have informed the
selling stockholder of the need to deliver copies of this prospectus to
purchasers at or prior to the time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholder will pay all commissions and
discounts, if any, attributable to the sales of the shares. The selling
stockholder may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against specific liabilities,
including liabilities arising under the Securities Act. We have agreed to
indemnify the selling stockholder against specific liabilities in connection
with the offering of the shares, including liabilities arising under the
Securities Act.
We have agreed to maintain the effectiveness of this registration statement
until the earlier of such time as all the shares have been sold by the selling
stockholder or such time as all of the shares may be sold pursuant to Rule
144(k) under the Securities Act. The selling stockholder may sell all, some or
none of the shares offered by this prospectus.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
2000, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION ABOUT EXELIXIS
You should rely only on the information provided or incorporated by
reference in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of the document.
We have filed with the SEC a resale registration statement on Form S-3 to
register the common stock offered by this prospectus. However, this prospectus
does not contain all of the information contained in the registration statement
and the exhibits and schedules to the registration statement. We strongly
encourage you to carefully read the registration statement and the exhibits and
schedules to the registration statement.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, DC 20549 or
at the SEC's other public reference rooms located in New York, New York and
Chicago, Illinois. You can request copies of these documents by contacting the
SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-
0330 for further information on the public reference rooms. Our SEC filings are
also available to the public from the SEC's website at www.sec.gov.
-----------
The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them, which means that we can disclose important
information to you by referring to those documents. The information incorporated
by reference is considered to be part of this prospectus. Information in this
prospectus supersedes information incorporated by reference that we filed with
the SEC prior to the date of this prospectus, while information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934.
The following documents filed with the SEC are incorporated by reference in
this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31, 2000;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
4. Our Current Reports on Form 8-K, filed on May 15, 2001 pursuant to Item
2 of such report, and filed on July 18, 2001 and July 26, 2001 pursuant
to Item 5 of such report; and
5. The description of our common stock set forth in our registration
statement on Form 8-A, filed with the SEC on April 6, 2000.
We will furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference, including exhibits to
these documents. You should direct any requests for documents to Exelixis, Inc.,
Attention: Investor Relations, 170 Harbor Way, P.O. Box 511, South San
Francisco, California 94083, telephone: (650) 837-7000.
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. YOU SHOULD NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS
DOES NOT OFFER TO SELL OR BUY ANY SHARES IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE
COVER.
600,600 SHARES
EXELIXIS, INC.
COMMON STOCK
_________________________________
---------------------------------
PROSPECTUS
_________________________________
________ ___, 2001
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the amounts shown are estimates except the SEC registration fee.
SEC registration fee $ 2,347
Legal fees and expenses 75,000
Accounting fees and expenses 10,000
Miscellaneous expenses 27,653
________
Total $115,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, Exelixis has
broad powers to indemnify its directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act.
Exelixis' bylaws also provide that Exelixis will indemnify its directors and
executive officers and may indemnify its other officers, employees and other
agents to the fullest extent permitted by Delaware law.
As permitted by Delaware law, Exelixis' amended and restated certificate of
incorporation provides that no director of Exelixis will be personally liable to
Exelixis or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability:
- for any breach of duty of loyalty to Exelixis or to its stockholders;
- for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
- for unlawful payment of dividends or unlawful stock repurchases or
redemptions under Section 174 of the Delaware General Corporation Law;
or
- for any transaction from which the director derived an improper personal
benefit.
Exelixis' amended and restated certificate of incorporation further
provides that Exelixis must indemnify its directors and executive officers and
may indemnify its other officers, employees and agents to the fullest extent
permitted by Delaware law. Exelixis believes that indemnification under its
amended and restated certificate of incorporation covers negligence and gross
negligence on the part of indemnified parties.
Exelixis has entered into indemnification agreements with each of its directors
and certain officers. These agreements, among other things, require Exelixis to
indemnify each director and officer for certain expenses including attorneys'
fees, judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of Exelixis,
arising out of the person's services as a director or officer to Exelixis, any
subsidiary of Exelixis or to any other company or enterprise for which the
person provides services at Exelixis' request.
At present, there is no pending litigation or proceeding involving a director or
officer of Exelixis as to which indemnification is being sought nor is Exelixis
aware of any threatened litigation that may result in claims for indemnification
by any officer or director.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Amended and Restated Certificate of Incorporation (1)
4.2 Restated Bylaws (1)
4.3 Specimen Stock Certificate (1)
5.1 Opinion of Cooley Godward LLP
10.29 Form of Stock Purchase Agreement, dated as of July 17, 2001, by and
between Exelixis, Inc. and Bristol-Myers Squibb Company
23.1 Consent of Independent Accountants
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
___________________
(1) Incorporated by reference to Exelixis' Registration Statement on Form
S-1, as amended (File No. 333-96335), originally filed with the SEC on February
7, 2000.
ITEM 17. UNDERTAKINGS.
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 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.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities it offers, and the offering of the
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 that remain unsold at the termination of this
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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 the securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
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 SEC this form of indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against these
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 a 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 and will be governed by the final
adjudication of this issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Exelixis, Inc.
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 South San Francisco, State of California, on August
27, 2001.
EXELIXIS, INC.
By: /s/ George A. Scangos
--------------------------------------
George A. Scangos, Ph.D.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints GEORGE A. SCANGOS and GLEN Y. SATO and
each or any one 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 and registration statements filed pursuant to Rule
462) to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, 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 connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ George A. Scangos President, Chief Executive Officer August 27, 2001
-------------------------- and Director
George A. Scangos,Ph.D. (Principal Executive Officer)
/s/ Glen Y. Sato Chief Financial Officer August 27, 2001
-------------------------- (Principal Financial and Accounting
Glen Y. Sato Officer)
/s/Stelios Papadopoulos Chairman of the Board of Directors August 27, 2001
--------------------------
Stelios Papadopoulos, Ph.D.
-------------------------- Director
Charles Cohen, Ph.D.
-------------------------- Director
Jurgen Drews, M.D.
/s/ Geoffrey Duyk Director August 27, 2001
--------------------------
Geoffrey Duyk, M.D., Ph.D.
/s/ Jason S. Fisherman Director August 27, 2001
--------------------------
Jason S. Fisherman, M.D.
/s/ Jean-Francois Formela Director August 27, 2001
--------------------------
Jean-Francois Formela, M.D.
/s/ Vincent T. Marchesi Director August 27, 2001
--------------------------
Vincent T. Marchesi,
M.D., Ph.D.
/s/ Peter Stadler Director August 27, 2001
--------------------------
Peter Stadler, Ph.D.
-------------------------- Director
Lance Willsey, M.D.
INDEX TO EXHIBITS
EXHIBIT NUMBER
-------
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Amended and Restated Certificate of Incorporation (1)
4.2 Restated Bylaws (1)
4.3 Specimen Stock Certificate (1)
5.1 Opinion of Cooley Godward LLP
10.29 Form of Stock Purchase Agreement, dated as of July 17, 2001, by and
between Exelixis, Inc. and Bristol-Myers Squibb Company
23.1 Consent of Independent Accountants
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
___________________
(1) Incorporated by reference to Exelixis' Registration Statement on Form
S-1, as amended (File No. 333-96335), originally filed with the SEC on
February 7, 2000.