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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No._______)*
NOVAVAX, INC.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class Of Securities)
670002104
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(CUSIP Number)
LINDA M. CROUCH
BAKER, DONELSON, BEARMAN & CALDWELL
207 MOCKINGBIRD LANE
JOHNSON CITY, TENNESSEE 37604
(423) 975-7623
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(Name, Address and Telephone Numbers of Person Authorized to
Receive Notices and Communications)
December 19, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 670002104 PAGE 2
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1. Names of Reporting Persons. S.S. or King Pharmaceuticals, Inc.
I.R.S. Identification Nos. of Above 54-1684963
Persons
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2. Check the Appropriate Box if a Member (a)
of a Group (See Instructions) --------------------------
(b)
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3. SEC Use Only
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4. Source of Funds (See Instructions) WC
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5. Check if Disclosure of Legal
Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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6. Citizenship or Place of Organization Tennessee
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Number of Shares 7. Sole Voting Power 2,000,000
Beneficially ----------------------------------------------------------
Owned by Each 8. Shared Voting
Reporting Person Power 0
with ----------------------------------------------------------
9. Sole Dispositive 2,000,000
Power
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10. Shared Dispositive
Power 0
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11. Aggregate Amount Beneficially Owned 2,000,000
by Each Reporting Person
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12. Check if the Aggregate Amount is
Row (11) Excludes Certain Shares (See
Instructions)
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13. Percent of Class Represented by Amount 9.26%
in Row (11)
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14. Type of Reporting Person (See CO
Instructions)
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ITEM 1. SECURITY AND ISSUER.
The title and class of equity securities to which this statement relates
is the common stock, $.01 par value (the "Common Stock"), of Novavax, Inc., a
Delaware corporation (the "Issuer"), which is issuable upon conversion of the
Issuer's 4% Convertible Senior Note (the "First Note"). The Issuer's principal
executive offices are located at 8320 Guilford Road, Suite C, Columbia, Maryland
21046.
The First Note is presently convertible into 2,000,000 shares of
the Common Stock (the "Conversion Shares") by King Pharmaceuticals, Inc., a
Tennessee corporation ("King"), subject to adjustment under certain
circumstances as provided in the Investor Rights Agreement between the Issuer
and King dated as of December 19, 2000 (the "Investor Rights Agreement").
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f). King is the entity filing this Schedule 13D and its
principal business address and principal office address is 501 Fifth Street,
Bristol, Tennessee 37620. King is a vertically integrated pharmaceutical company
that manufactures, markets and sells primarily branded prescription
pharmaceutical products.
Each executive officer and each director of King is a citizen of the
United States. The name, business address and present principal occupation of
each executive officer and director is set forth in Annex A to this Schedule
13D and incorporated herein by reference.
Other than executive officers and directors, there are no persons or
corporations controlling or ultimately in control of King.
(d) and (e). King has not, during the last five years, (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds from this transaction were provided and
will be provided from King's working capital.
ITEM 4. PURPOSE OF TRANSACTION.
King purchased the First Note, in the principal amount of $20 million,
from the Issuer pursuant to a Note Purchase Agreement between the Issuer and
King dated as of December 19, 2000 (the "Note Purchase Agreement") in a private
transaction for investment purposes. The maturity date of the First Note is
December 19, 2007. The First Note is convertible at any time into the Conversion
Shares.
Pursuant to the Note Purchase Agreement, King has also agreed to
purchase a second senior convertible note (the "Second Note" and collectively
with the First Note, the "Convertible Notes"). The Second Note will be in the
principal amount of $5 million and, except as described in this Schedule 13D,
will have substantially the same terms as the First Note. Based on the
Conversion Price currently in effect with respect to the First Note, the Second
Note will initially be convertible into 500,000 shares of the Common Stock. King
will have the right to purchase the Second Note at any time upon 20 days notice
to the Issuer. King is required to purchase the Second Note when the United
States Food and Drug Administration (the "FDA") has accepted for filing the
Issuer's New Drug Application for its topical transdermal estrogen replacement
therapy, ESTRASORB(TM), all subject to the terms and conditions of the Note
Purchase Agreement. The Issuer has advised King that it expects to file the New
Drug Application for ESTRASORB(TM) sometime in
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in the first half of 2001.
Pursuant to the Investor Rights Agreement, the Convertible Notes are
subject to mandatory redemption upon 30 days notice by the Issuer at any time
after January 1, 2005 at 102%, 101% and 100% of the principal amount thereof,
plus accrued and unpaid interest in years 2005, 2006 and 2007, respectively. The
Issuer must also offer to purchase the Convertible Notes from the holder in the
event of a change in control of the Issuer at 101% of the principal amount
thereof plus accrued and unpaid interest.
Pursuant to the Investor Rights Agreement, the Issuer has granted to the
holder of the Convertible Notes certain anti-dilution rights. At the closing of
the purchase of the First Note, the initial conversion price (the "Conversion
Price") was $10.00. The initial Conversion Price of the Second Note will be the
Conversion Price of the First Note on the date the Second Note is issued to
King. The Conversion Price will be adjusted whenever the Issuer is deemed to
have issued or sold any shares of the Common Stock for a consideration per share
that is less than the Conversion Price that is in effect immediately prior to
any such issuance or sale. Other events which may result in changes to the
Conversion Price include the issuance of rights or options, the issuance of
convertible securities, changes in option prices or conversion rates of
convertible securities, the expiration of options and the failure to exercise
convertible securities, among other things. If at any time between January 1,
2002 and December 31, 2004, the closing price of the Common Stock exceeds 180%
of the Conversion Price then in effect for at least 30 trading days in any
period of 45 consecutive trading days, the Issuer may, within 20 business days
after the end of such 45 day period, require the holder to convert the
Convertible Notes into Common Stock at the Conversion Price in effect on the day
of the conversion.
Subject to the terms and conditions set forth in the Convertible Notes,
if the average closing price of the Convertible Notes exceeds the initial
Conversion Price, the Issuer will have the option of paying one-half of the
interest due under the Convertible Notes in the form of Common Stock.
King has no current plans to dispose of the shares of Common Stock
issuable upon the conversion of or as interest payments on the Convertible
Notes. However, King in the future may dispose of such shares or other shares of
Common Stock in the market, in privately negotiated transactions or otherwise.
Pursuant to the Investor Rights Agreement, if at any time the Issuer
grants, issues or sells any options, convertible securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of Common Stock, then each holder of the Convertible Notes will have the
same rights on an as-if-converted basis. The Issuer has also agreed that, prior
to the consummation of any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Issuer's assets
or other transaction in which holders of the Common Stock are entitled to
receive stock, securities or assets with respect to or in exchange for their
Common Stock (an "Organic Change"), the Issuer will take whatever action is
necessary to insure that the holders of the Convertible Notes shall thereafter
have the right to acquire or receive such shares of stock, securities or assets
as such holder would have received in connection with such Organic Change if
such holder had converted its Convertible Notes immediately prior to such
Organic Change.
Pursuant to the Investor Rights Agreement, if the FDA shall not have
accepted for filing the Issuer's New Drug Application for ESTRASORB(TM) prior to
June 1, 2002, then the holder of the Convertible Notes may accelerate the
maturity of up to $5 million of the outstanding principal amount under the
Convertible Notes. Without the prior consent of the holders of a majority of the
Convertible Notes, the Common Stock issued or issuable upon the conversion of
the Convertible Notes and any securities issued with respect to the foregoing
securities (collectively, the "Purchaser Securities"), the Issuer is restricted
under the Investor Rights Agreement from taking certain actions. These actions
include, without limitation and subject to specified exceptions, the incurrence
of indebtedness in excess of $1.5 million; the creation of certain liens; the
acquisition of any business; the acquisition of assets in excess of $5 million;
the entering into the active management or operation of any business that is
unrelated to the current business of the Issuer; election to make certain
payments in cash rather than Common Stock; the liquidation, dissolution or
winding up of the Issuer; the filing of a voluntary petition in bankruptcy or
certain other types of reorganization; the adoption of amendments to the
certificate of incorporation or bylaws of the Issuer or otherwise take action
which could reasonably be expected to affect adversely the rights of holders of
the Convertible Notes.
Under the Investor Rights Agreement, King has certain rights relating to
the Issuer's board of directors for so long as King and its affiliates
collectively hold a majority of the Purchaser Securities. King is entitled to
designate a board observer who shall be entitled to receive notice of any
meeting or any proposed action by written consent of the Issuer's board of
directors and shall be entitled to attend any meeting of the Issuer's board of
directors.
The Convertible Notes contain customary events of default. In the event
of a default on the Convertible Notes, the Issuer will take action to increase
the size of its board of directors by one (1) member and to have a designee of
King
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appointed to the Issuer's board of directors for so long as the event of
default is continuing. King's rights relating to the Issuer's board terminate
upon a change of control of King.
Pursuant to the Investor Rights Agreement, King also has certain
information and inspection rights. Among other things, the Issuer is required to
deliver to King annual audited financial reports, quarterly unaudited financial
reports, certain budgets and business plans, copies of all filings with the
Securities and Exchange Commission or any stock exchange, copies of press
releases and copies of all financial statements, proxy statements, reports and
any other general written communications sent by the Issuer to its stockholders.
King will be permitted to send a designee to inspect the properties of the
Issuer and its subsidiaries. The designee will be permitted to inspect and copy
the corporate and financial records of the Issuer and discuss the affairs,
finances and accounts of the Issuer with the directors and executive officers of
the Issuer and its independent public accountants. King has agreed to maintain
the confidentiality of all information obtained by it pursuant to these rights.
King also obtained an exclusive license from the Issuer to use its
proprietary cell line to develop and potentially commercialize recombinant human
papillomavirus (HPV) virus-like particle (VLP) vaccines. The Issuer and King
are currently working together on manufacturing HPV-16 VLP vaccines being
evaluated by the National Cancer Institute in clinical trials.
Pursuant to the license agreement, King has an exclusive worldwide
license to develop, manufacture and market HPV-16 VLP vaccines for the
prevention and/or treatment of HPV infection, except that the Issuer retains the
right to co-market any such product in the United States, including Puerto Rico.
King will pay the Issuer during the term of the license a royalty based on 17%
of any net sales, less cost of goods, of any HPV product successfully developed
under the license agreement. The term of King's license will continue for so
long as the Issuer's related cell line technology remains proprietary to the
Issuer, including pursuant to any existing patent or patent protection that must
be sought under the terms of the license agreement.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) The calculations in this Item are based upon 21,590,573 shares of
Common Stock issued and outstanding as of December 12, 2000 (based on
disclosures made by the Issuer in the Note Purchase Agreement and including the
2,000,000 Conversion Shares. For purposes hereof, King is now the beneficial
owner of 2,000,000 Conversion Shares, issuable upon the exercise of the First
Note, comprising 9.26% of the issued and outstanding shares of Common Stock of
the Issuer. The foregoing calculation is made pursuant to Rule 13d-3 promulgated
under the Securities Exchange Act of 1934.
(b) King is the sole owner of the First Note and, upon any
exercise of the First Note, King will also have the sole power to vote or
to direct the vote, and the sole power to dispose or to direct the disposition,
of all of the underlying Conversion Shares.
(c) Neither King nor, to King's knowledge, any of its directors or
executive officers has effected any transactions in shares of the Issuer's
Common Stock or in any options or warrants to purchase such Common Stock in the
past 60 days.
(d) King affirms that no other person has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of the Issuer's Common Stock beneficially owned by King.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Reference is made hereby to Item 4 hereof which is incorporated by
reference in this Item 6.
Pursuant to a Registration Rights Agreement between the Issuer and King
dated as of December 19, 2000 (the "Registration Rights Agreement"), the Issuer
has agreed to file an initial shelf registration statement with the Securities
and Exchange Commission (the "Commission") within ten business days of the
closing of the sale of each of the Convertible Notes (the "Initial Shelf
Registration Statements"). The Initial Shelf Registration Statement to be filed
after the closing of the First Note will cover the public offer and sale of the
Conversion Shares issued or issuable upon the conversion of the First Note and
any additional shares of Common Stock received by the holders with respect to
such shares pursuant to a subsequent stock split, stock dividend or other
recapitalization of the Issuer. The Initial Shelf Registration Statement to be
filed after the closing of the Second Note will cover the public offer and sale
of the Conversion Shares issued or issuable upon the conversion of the Second
Note and any additional shares of Common Stock received by the holders with
respect to such shares pursuant to a subsequent stock split, stock dividend or
other recapitalization of the Issuer. Failure to have an Initial Shelf
Registration Statement declared effective by the Commission within 180 days
after the issuance of the applicable Convertible Note constitutes an event of
default under such Convertible Note.
Pursuant to Registration Rights Agreement, at any time following the
payment of interest in the form of Common Stock, the holders of a majority of
the Convertible Notes then outstanding may request that the Issuer file a shelf
registration statement with the Commission (the "Top-up Shelf Registration
Statements"). The Top-up Registration Statements will cover the public offer and
sale of all Common Stock issued or issuable as interest payments on the
Convertible Notes and any shares of Common Stock received by the holders with
respect to such shares pursuant to a subsequent stock split, stock dividend or
other recapitalization of the Issuer.
Pursuant to the Registration Rights Agreement, the Issuer has also
agreed to provide notice to the holders of the Common Stock issued or issuable
under Convertible Notes of any proposed filing of a registration statement
relating to a public offering of Common Stock for the Issuer's own account or
for the account of any other common stockholder. Subject to the terms and
limitations set forth in the Registration Rights Agreement, if the Issuer files
such registration statement, the Issuer will register any such Common Stock
requested to be included in such registration by the holders thereof.
Pursuant to the Registration Rights Agreement, the Issuer will maintain
the effectiveness of each Initial Shelf Registration Statement and each Top-up
Shelf Registration Statement until the earlier of the date on which the Common
Stock registered thereunder has been sold pursuant to such registration
statement or the date such Common Stock may be sold by the holders thereof
pursuant to Rule 144(k) under the Securities Act of 1933.
Except as set forth in this Schedule 13D, neither King, nor to King's
knowledge, any of its directors or executive officers have any contract,
arrangement, understanding or relationship (legal or otherwise) with any person
with respect to any securities of the Issuer.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
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1 Convertible Note of Novavax, Inc., dated December 19, 2000
2 Note Purchase Agreement by and between Novavax, Inc. and King
Pharmaceuticals, Inc., dated as of December 19, 2000
3 Investor Rights Agreement by and between Novavax, Inc. and King
Pharmaceuticals, Inc., dated as of December 19, 2000
4 Registration Rights Agreement by and between Novavax, Inc. and
King Pharmaceuticals, Inc., dated as of December 19, 2000
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 2000
KING PHARMACEUTICALS, INC.
By: /s/ John M. Gregory
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John M. Gregory
Chairman of the Board and
Chief Executive Officer
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ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS
KING PHARMACEUTICALS, INC.
The names, business addresses and present principal occupations of the directors
and executive officers of King Pharmaceuticals, Inc. ("King") are set forth
below. If no business address is given, the director's or executive officer's
business address is 501 Fifth Street, Bristol, Tennessee, 37620. All directors
and executive officers listed below are citizens of the United States.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment and
Name Business Address
--------- ----------------------------------------------
<S> <C>
John M. Gregory Chairman of the Board and Chief Executive Officer
Jefferson J. Gregory Director of King and President of King Pharmaceuticals
and President of both Parkedale Pharmaceuticals, Inc. and
Jones Pharma Incorporated, wholly owned subsidiaries of King
Joseph R. Gregory Vice Chairman of Operations of the Board and President of Monarch
Pharmaceuticals, Inc., a wholly owned subsidiary of King
James R. Lattanzi Chief Financial Officer
Ernest C. Bourne Director of King and President of King's International
Division
Earnest W. Deavenport Director of King;
Chairman of the Board and Chief Executive Officer of
Eastman Chemical Company
Eastman Road
Kingsport, TN 37660
Frank W. DeFriece, Jr. Director of King;
Serves in various capacities with the Massengill DeFriece
Foundation
113 Landmark Lane
Bristol, TN 37620
</TABLE>
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<TABLE>
<S> <C>
R. Charles Moyer Director of King
Dean of Babcock Graduate School of Management
Wake Forest University - Worrell Center
7659 Reynolda Station
Winston-Salem, NC 27109
D. Greg Rooker Director of King;
Former President of
Family Community Newspapers of Southwest Virginia
Richard C. Williams Vice Chairman of Strategic Planning of the Board
</TABLE>
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EXHIBIT INDEX
Exhibit Description
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1 Convertible Note of Novavax, Inc., dated December 19, 2000
2 Note Purchase Agreement by and between Novavax, Inc. and King
Pharmaceuticals, Inc., dated as of December 19, 2000
3 Investor Rights Agreement by and between Novavax, Inc. and
King Pharmaceuticals, Inc., dated as of December 19, 2000
4 Registration Rights Agreement by and between Novavax, Inc. and
King Pharmaceuticals, Inc., dated as of December 19, 2000
