<PAGE> 1
As filed with the Securities and Exchange Commission on July 22, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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GELTEX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 04-3136767
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.)
</TABLE>
303 BEAR HILL ROAD, WALTHAM, MASSACHUSETTS 02154 (617) 290-5888
(Address and telephone number of registrant's principal executive offices)
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1992 EQUITY INCENTIVE PLAN
(Full Title of the Plan)
MARK SKALETSKY, PRESIDENT AND CHIEF EXECUTIVE OFFICER
GelTex Pharmaceuticals, Inc.
303 Bear Hill Road
Waltham, Massachusetts 02154
(617) 290-5888
(Name, address and telephone number of agent for service)
with copies to:
PETER WIRTH, ESQUIRE
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
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<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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Title of each class of securities to Amount to be Proposed Proposed maximum Amount of
be registered registered maximum offering aggregate offering registration fee
price per share price
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 778,251 shares (1) (2) $ 3,848,731.94(3) $1,324.00
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Common Stock, $0.01 par value 927,334 shares $14.00(4) $12,982,676.00(4) $4,477.00
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<FN>
(1) Shares subject to currently outstanding options.
(2) The price per share at which currently outstanding options may be exercised ranges from $.125 to $24.25 per share.
(3) Computed in accordance with Rule 457(h)(1) based on the price per share at which currently outstanding options may be
exercised.
(4) Estimated solely for the purpose of determining the registration fee and computed pursuant to Rule 457(h) based upon the
average of the high and low sale prices on July 17, 1996 as reported by the Nasdaq National Market System.
</TABLE>
Page 1 of 32
Exhibit Index Appears at Page 22
<PAGE> 2
PROSPECTUS
490,300 Shares
GELTEX PHARMACEUTICALS, INC.
Common Stock
----------------------
This Prospectus relates to the offer and sale (the "Offering") of up to
490,300 shares (the "Shares") of Common Stock, $.01 par value per share (the
"Common Stock"), of GelTex Pharmaceuticals, Inc. ("GelTex" or the "Company").
The Shares may be offered by certain stockholders of the Company identified
herein and their pledgees, donees, transferees or other successors in interest
(the "Selling Stockholders") from time to time in transactions on the Nasdaq
National Market System, in privately negotiated transactions, or by a
combination of such methods of sale, at fixed prices that maybe changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions form the Selling Stockholders or the purchasers of
the Shares for whom such broker-dealer may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). See "Selling Stockholders" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company will bear certain
expenses (other than fees and expenses, if any, of more than one counsel or
advisors to the Selling Stockholders) in connection with the registration and
sale of the Shares being offered by the Selling Stockholders.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"GELX." On July 18, 1996, the last sale price of the Company's Common Stock was
$14.50 per share. See "Price Range of Common Stock."
----------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS IS NOT
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
The date of this Prospectus is July 19, 1996.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as
amended, with respect to the shares of Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and the Common Stock offered hereby, reference is made to
such Registration Statement and the exhibits and schedules thereto. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document filed as an exhibit to the Registration Statement are not necessarily
complete, and in each such instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement, each such statement
being deemed qualified in its entirety by such reference. A copy of the
Registration Statement may be inspected without charge at the offices of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or
any part thereof may be obtained from the Commission upon the payment of certain
fees prescribed by the Commission.
----------------------
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 0-26872) filed with the Commission on March 29,
1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996 (File No. 0-26872) filed with the Commission on May 13,
1996.
(c) The Registrant's Current Reports on Form 8-K dated March 1, 1996 and
June 26, 1996 (File No. 0-26872) filed with the Commission on March 4, 1996 and
June 28, 1996, respectively.
(d) The Registrant's report on Form 10-C dated May 14, 1996 (File No.
0-26872) filed with the Commission on May 17, 1996.
(e) All other reports of the Registrant filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the annual report referred to in (a)
above.
(f) The description of the Registrant's Common Stock contained in its
Registration Statement on Form 8-A (File No. 0-26872) filed with the Commission
on September 26, 1995, as amended on October 12, 1995, including any amendment
or report filed hereafter for the purpose of updating such description.
All documents filed after the date of this Registration Statement by the
Registrant pursuant to Section 13(a), 13(d), 14 and 15(d) of the Exchange Act
and prior to the filing of a post-effective amendment that indicates that all
shares of Common Stock offered hereunder have been sold or which deregisters all
shares of Common Stock remaining unsold shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
The Company will furnish without charge to each person, including
beneficial owners, to whom this Prospectus is delivered, on written or oral
request, copies of the documents incorporated in this Prospectus by reference,
other than exhibits to such documents. Requests should be directed to Sarah P.
Cecil, Attorney, GelTex Pharmaceuticals, Inc., 303 Bear Hill Road, Waltham,
Massachusetts 02154 (telephone: 617-290-5888).
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<PAGE> 4
TABLE OF CONTENTS
Page
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The Company................................................... 5
Risk Factors.................................................. 6
Selling Stockholders.......................................... 12
Plan of Distribution.......................................... 15
Legal Matters................................................. 15
Experts....................................................... 15
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THE COMPANY
GelTex Pharmaceuticals, Inc. ("GelTex" or the "Company") is developing
non-absorbed, polymer-based pharmaceuticals that selectively bind to and
eliminate target substances from the intestinal tract. In March 1996, GelTex
successfully completed a Phase IIa clinical trial of CholestaGel[Registered
Trademark] non-absorbed cholesterol reducer, for the treatment of elevated
cholesterol levels. This double-blind, placebo-controlled, dose ranging trial
demonstrated a clinically and statistically significant reduction in LDL
cholesterol levels in patients with hyperchlosteralemia (elevated cholesterol).
The preliminary results indicate that CholestaGel may be four to five times
more potent than cholestyramine, the most widely prescribed non-absorbed
cholesterol-reducing drug, and appears to be well tolerated. The Company
initiated a Phase IIb clinical trial in subjects with elevated LDL cholesterol
in June 1996, and additional Phase II trials investigating dose scheduling and
combination therapies are planned. Also, the Company completed, in April 1996,
a Phase IIb clinical trial of RenaGel[Registered Trademark] phosphate binder,
for the control of elevated phosphorus levels in chronic kidney failure
patients. The Company initiated Phase III clinical trials for RenaGel in June
1996. The Company is also conducting research to develop non-absorbed,
polymer-based pharmaceuticals for the treatment of certain infections of the
intestinal tract, such as those caused by Cryptosporidium parvum and human
rotavirus.
GelTex's pharmaceuticals act in the intestinal tract without absorption
into the bloodstream, thereby minimizing the potential for adverse effects. The
Company's product development approach represents an advance in the use of
polymer hydrogels as pharmaceuticals. The Company's technology combines an
understanding of chemical interactions necessary for molecular recognition with
the ability to design and synthesize polymer hydrogels. The Company's technology
enables it to combine commercially available monomers that have distinct
structural qualities to create proprietary, non-absorbed polymers that
selectively bind target molecules. The Company designs its polymers to carry a
high density of selective binding sites for the targeted molecules, making them
potent at low dosage levels and permitting oral administration in a convenient
capsule form.
GelTex is developing CholestaGel, an orally administered, non-absorbed
hydrogel intended to reduce elevated LDL cholesterol levels in patients with
hypercholesterolemia. The Company believes that the structural design of
CholestaGel represents a significant advance over existing bile acid
sequestrants in that its high density of bile acid binding sites makes it more
potent at lower doses than currently marketed agents. The Company expects
CholestaGel to address the need for a non-absorbed cholesterol-reducing drug
that is safe and well tolerated in long term use, effective at low doses and
available in a convenient capsule form.
GelTex is developing RenaGel, an orally administered, non-absorbed hydrogel
intended to control elevated blood phosphorus levels in patients with chronic
kidney failure. RenaGel is designed to provide significant advantages over
currently available calcium- and aluminum-based phosphate binders. RenaGel binds
dietary phosphate without the use of either calcium or aluminum and, therefore,
will not cause dangerous elevated blood calcium levels or aluminum toxicities.
The Company intends to supply RenaGel in a convenient capsule form that is more
palatable than the chalky chewable and acidic uncoated tablet forms of currently
available phosphate binders. [In a Phase IIa clinical trial completed in August
1995, designed to show equivalent potency to currently available calcium-based
phosphate binders, RenaGel demonstrated such potency and was shown to be safe
and well tolerated by dialysis patients. The Phase IIb clinical trial completed
in April 1996 demonstrated that RenaGel significantly decreased serum phosphorus
without increasing serum calcium.] In December 1994, GelTex granted Chugai
Pharmaceutical Co., Ltd. an exclusive license to develop and commercialize
RenaGel in Japan and other Pacific Rim countries.
The Company's infectious disease program is directed toward developing
non-absorbed polymers that bind, inactivate and remove specific pathogens from
the intestinal tract. GelTex is initially focusing on two pathogens that cause
debilitating diarrhea and for which no drug treatment currently exists:
Cryptosporidium parvum, a parasite which causes chronic diarrhea in
immunocompromised patients; and human rotavirus, which causes diarrhea in
children.
The Company believes its enabling technology is applicable to a broad range
of diseases and conditions treatable through the intestinal tract. Specifically,
the Company believes that conditions such as ulcers and inflammatory bowel
diseases, including Crohn's disease and ulcerative colitis, could be treated
with non-absorbed, polymer-based products developed using the Company's
technology.
GelTex was incorporated in Delaware in November 1991. The Company's
executive offices are located at 303 Bear Hill Road, Waltham, Massachusetts
02154 and its telephone number is (617) 290-5888.
CholestaGel[Registered Trademark] and RenaGel[Registered Trademark] are a
registered trademarks of the Company.
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<PAGE> 6
RISK FACTORS
An investment in the shares of Common Stock offered hereby involves a high
degree of risk. The following factors, in addition to the other information in
this Prospectus, should be carefully considered in evaluating the Company and
its business before purchasing the shares of Common Stock offered hereby.
EARLY STAGE OF DEVELOPMENT; NO PRODUCT SALES TO DATE
GelTex is a development stage company, and there can be no assurance that
its approach to the development of non-absorbed, polymer-based pharmaceuticals
will be successful. The Company's potential products are in various stages of
research or development and will require substantial additional development,
preclinical and clinical testing and investment prior to commercialization.
There can be no assurance that the Company's research and development efforts
will be successful or that any of its potential products will be demonstrated to
be safe, efficacious or marketable. The Company's revenues to date have
consisted primarily of licensing fees and research revenues from corporate
partners in connection with two development and marketing agreements. No
revenues have been generated from product sales, and products resulting from the
Company's research and development efforts, if any, are not expected to be
commercially available for a number of years. No assurance can be given that the
Company's product development efforts will be successful, that required
regulatory approvals can be obtained, that its products can be manufactured at
acceptable cost and with appropriate quality or that any approved products can
be successfully marketed.
CONTINUING OPERATING LOSSES
As of March 31, 1996, the Company had accumulated net losses of
approximately $13.1 million. The continuing development of the Company's
potential products will require the commitment of substantial resources to
conduct research, preclinical studies and clinical trials and to establish
effective commercial manufacturing processes. The Company expects to incur
substantial operating losses for at least the next several years as it continues
to develop its potential products. The amount of net losses and the time
required to reach sustained profitability are highly uncertain. To achieve
sustained profitable operations, the Company, alone or with corporate partners,
must successfully develop, manufacture and market its products. No assurance can
be given that the Company will be able to achieve or sustain profitability.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
Since inception, the Company has funded its operations primarily through
the issuance of equity securities. The Company anticipates that it will need to
raise substantial additional funds for research, development and other expenses,
through equity or debt financings, research and development financings,
collaborative relationships or otherwise, prior to the commercialization of any
of its products. There can be no assurance that any such additional funding will
be available to the Company or, if available, that it will be on reasonable
terms. Any such additional financing may result in dilution to existing
stockholders. If adequate funds are not available, the Company may be required
to significantly curtail its research and development programs, including
clinical trials, or enter into arrangements that may require the Company to
relinquish certain material rights to its products on terms that it might
otherwise find unacceptable.
UNCERTAINTY ASSOCIATED WITH PRECLINICAL AND CLINICAL TESTING
Before obtaining regulatory approvals for the commercial sale of any of its
potential products, the products will be subjected to extensive preclinical and
clinical testing to demonstrate their safety and efficacy in humans. To date,
the Company has tested CholestaGel and RenaGel in limited numbers of subjects in
Phase I and Phase II clinical trials. The results of initial preclinical and
clinical testing of these products under development by the Company are not
necessarily predictive of results that will be obtained from subsequent or more
extensive preclinical and clinical testing. Furthermore, there can be no
assurance that clinical trials of products under development will demonstrate
the safety and efficacy of such products at all or to the extent necessary to
obtain regulatory approvals. Companies in the biotechnology industry have
suffered significant setbacks in advanced clinical trials, even after
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<PAGE> 7
promising results in earlier trials. The failure to adequately demonstrate the
safety and efficacy of a therapeutic product under development could delay or
prevent regulatory approval of the product and would have a material adverse
effect on the Company.
The rate of completion of clinical trials is dependent upon, among other
factors, the enrollment of patients. Patient accrual is a function of many
factors, including the size of the patient population, the proximity of patients
to clinical sites, the eligibility criteria for the study and the existence of
competitive clinical trials. Delays in planned patient enrollment in the
Company's current trials or future clinical trials may result in increased
costs, program delays or both, which could have a material adverse effect on the
Company. There can be no assurance that if clinical trials are completed the
Company will be able to submit a New Drug Application ("NDA") as scheduled or
that any such application will be reviewed and approved by the United States
Food and Drug Administration ("FDA") in a timely manner, or at all.
DEPENDENCE ON CORPORATE ALLIANCES
The Company expects to develop and market its potential products through
alliances with corporate partners. The Company is currently engaged in one such
collaboration to develop and commercialize RenaGel phosphate binder in Japan and
other Pacific Rim countries. The Company is relying upon its partner to conduct
clinical trials, obtain regulatory approval for the sale of the products in the
territory covered by the agreement and manufacture and market the products in
the territory. There can be no assurance that its partner will devote the
resources necessary to complete development of and commence marketing for the
products in the territory. The agreement is subject to termination without cause
on short notice under certain circumstances and there is no assurance that in
the future the Company's partner will not exercise its termination rights.
The Company expects to enter into other development and marketing
agreements in other territories for its potential products, and in connection
with such agreements will rely upon corporate partners to conduct clinical
trials, obtain regulatory approval for and manufacture and market its potential
products. There can be no assurance that the Company will be able to establish
agreements for the commercialization of RenaGel in other parts of the world or
for the commercialization of the Company's other products. The termination of
its existing agreements and the failure to secure additional development and
marketing agreements with other corporate partners would have a material adverse
effect on the Company's operations.
DEPENDENCE ON SINGLE SOURCE OF SUPPLY; NO SUPPLY AGREEMENT
The Company uses a single supplier to provide a certain raw material
necessary for the manufacture of CholestaGel and RenaGel. The supplier has a
composition of matter patent covering the material, and the Company believes
that currently there are no alternative suppliers of this material. The Company
does not have a long term, fixed price supply agreement for this raw material
but rather obtains the raw material by issuing purchase orders to the supplier
on an as needed basis. To date, the Company has not experienced any difficulty
in obtaining adequate supplies of the raw material. However, no assurance can be
given that the raw material will remain available to the Company or to its
corporate partners in commercial quantities at acceptable costs. Should the
Company or its corporate partners be unable to obtain an adequate supply of the
material at commercially reasonable rates, the operations of the Company would
be adversely affected.
NO ASSURANCE OF FDA APPROVAL; COMPREHENSIVE GOVERNMENT REGULATION
The Company's research, development and clinical programs, as well as the
operations of its third party manufacturers and the marketing operations of its
corporate partners, are subject to extensive regulation by numerous governmental
authorities in the United States and other countries. The Company's potential
products require governmental approvals for commercialization, which have not
yet been obtained and are not expected to be obtained for several years. The
regulatory process, which includes preclinical, clinical and, in certain
instances, post-marketing testing to establish safety and efficacy, can take
many years and require the expenditure of substantial resources. The Company has
had only limited experience in conducting preclinical testing and human clinical
trials and obtaining FDA and other regulatory approvals. Data obtained from
preclinical and clinical activities are susceptible to varying interpretations,
which could delay, limit or prevent regulatory approval. In addition, delays or
rejection may be encountered based upon changes in, or additions to, regulatory
policies for drug approval during
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<PAGE> 8
the period of product development and regulatory review. Delays in obtaining
such approvals could adversely affect the marketing of products developed by the
Company and the Company's ability to generate commercial product revenues. There
can be no assurance that requisite regulatory approvals will be obtained within
a reasonable period of time, if at all. Moreover, if regulatory approval of a
product is granted, such approval may impose limitations on the indicated uses
for which such product may be marketed. Further, even if such regulatory
approval is obtained, a marketed product, its manufacturer and its manufacturing
facilities are subject to continual review and periodic inspections, and later
discovery of previously unknown problems with a product, manufacturer or
facility may result in restrictions on such product or manufacturer, including
withdrawal of the product from the market. Failure to comply with the applicable
regulatory requirements can, among other things, result in fines, suspensions of
regulatory approvals, product recalls, operating restrictions and criminal
prosecution. The Company is also subject to numerous environmental, health and
workplace safety laws and regulations, including those governing laboratory
procedures and the handling of biohazardous materials. Any violation of, and
cost of compliance with, these laws and regulations could adversely affect the
Company's operations.
TECHNOLOGICAL CHANGE; COMPETITION
The biotechnology and pharmaceutical industries are subject to rapid and
significant technological change. Competitors of GelTex in the United States and
abroad are numerous and include, among others, pharmaceutical and biotechnology
companies, universities and other research institutions. The Company's success
depends upon developing and maintaining a competitive position in the
development of products and technologies in its areas of focus. There can be no
assurance that the Company's competitors will not succeed in developing
technologies and products that are more effective than any which are being
developed by the Company or which would render the Company's technology and
products obsolete or noncompetitive. Many of these competitors have
substantially greater financial and technical resources and production and
marketing capabilities than the Company, and certain of these competitors may
compete with the Company in establishing development and marketing agreements
with pharmaceutical companies. In addition, many of the Company's competitors
have greater experience than the Company in conducting preclinical testing and
human clinical trials and obtaining FDA and other regulatory approvals. The
Company's competitors may succeed in obtaining FDA approval for products more
rapidly than the Company.
The pharmaceutical industry is intensely competitive. Many companies,
including biotechnology, chemical and pharmaceutical companies, are actively
engaged in activities similar to those of the Company, including research and
development of products for hypercholesterolemia, hyperphosphatemia,
cryptosporidiosis and human rotavirus infection. In the cholesterol-reduction
field, products are currently available that address some of the needs of the
market. These products include other bile acid sequestrants, HMG-CoA reductase
inhibitors, fibric acid derivatives and niacin. In 1994, sales of HMG-CoA
reductase inhibitors represented approximately 68% of the market for
cholesterol-reducing drugs sold in the United States. Worldwide sales of the
three leading HMG-CoA reductase inhibitors each exceeded $1 billion in 1995.
Several phosphate binders are also currently available. A prescription calcium
acetate preparation is currently the only product approved in the United States
for the control of elevated phosphorus levels in patients with chronic kidney
failure. Other products used as phosphate binders include over-the-counter
calcium- and aluminum-based antacids and dietary calcium supplements. While the
Company believes that its products will offer significant advantages over
available agents, currently marketed products often have a significant
competitive advantage over new entrants. There can be no assurance that the
Company's products under development will be able to compete successfully with
existing therapies or with products under development by other companies,
universities and other institutions.
DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY
The biotechnology and pharmaceutical industries place considerable
importance on obtaining patent and trade secret protection for new technologies,
products and processes. The Company's success will depend, in part, on its
ability to obtain patent protection for its products and manufacturing
processes, preserve its trade secrets and operate without infringing the
proprietary rights of third parties. The Company has ongoing research efforts
and expects to seek additional patents covering this research in the future.
There can be no assurance of its success or timeliness in obtaining any patents,
or of the breadth or degree of protection that any such patents will afford the
Company. The patent position of biotechnology and pharmaceutical products is
often highly uncertain and usually involves complex legal and factual questions.
There can be no assurance that patent applications relating to the
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<PAGE> 9
Company's potential products or technology will result in patents being issued
or that any current or future patents will afford adequate protection to the
Company or not be challenged, invalidated or infringed. Furthermore, there can
be no assurance that others will not independently develop similar products and
processes, duplicate any of the Company's products or, if patents are issued to
the Company, design around such patents. In addition, the Company could incur
substantial costs in defending itself in suits brought against it or in suits in
which the Company may assert its patents against others. If the outcome of any
such litigation is unfavorable to the Company, the Company's business could be
adversely affected. To determine the priority of inventions, the Company may
also have to participate in interference proceedings declared by the United
States Patent and Trademark Office, which could result in substantial cost to
the Company.
In addition, the Company may be required to obtain licenses to patents or
other proprietary rights of third parties. No assurance can be given that any
licenses required under any such patents or proprietary rights would be made
available on terms acceptable to the Company, if at all. If the Company does not
obtain such licenses, it could encounter delays in product market introductions
while it attempts to design around such patents or other rights, or it may be
unable to develop, manufacture or sell such products.
The Company also seeks to protect its proprietary technology, including
technology which may not be patented nor patentable, in part by confidentiality
agreements and, if applicable, inventors' rights agreement with its
collaborators, advisors, employees and consultants. There can be no assurance
that these agreements will not be breached, that the Company will have adequate
remedies for any breach or that the Company's trade secrets will not otherwise
be disclosed to, or discovered by, competitors. There can be no assurance that
such persons or institutions will not assert rights to intellectual property
arising out of such research.
DEPENDENCE ON OTHERS FOR MANUFACTURING; PROCESS DEVELOPMENT RISKS
The Company has chosen not to develop the capability to manufacture its
potential products in clinical or commercial quantities and, therefore, must
rely upon third party manufacturers for the production of its compounds for
preclinical and clinical trial purposes. The Company expects to rely upon third
party manufacturers for commercial production. In the event that the Company is
unable to obtain contract manufacturing on commercially reasonable terms, it may
not be able to commercialize its potential products as planned. The Company's
dependence on third parties for the manufacture of its potential products may
adversely affect the Company's profit margins, its ability to develop and
manufacture products on a timely and competitive basis, the progress of clinical
trials, the timing of market introductions and subsequent sales of such
products.
The Company has not yet established effective processes for the manufacture
of commercial quantities of its potential products. Significant process
development work will be required to establish such processes. There can be no
assurance that such process development work will be successful or that the
Company will obtain rights to use, or license its corporate partners to use,
such commercial processes.
ABSENCE OF SALES AND MARKETING EXPERIENCE
The Company has no experience in sales, marketing or distribution. The
Company plans to establish marketing arrangements with pharmaceutical companies
with large distribution capabilities in order to market its products. As a
result, sales of the Company's products will depend upon the efforts of third
parties and there can be no assurance that such efforts will be successful.
PRODUCT LIABILITY AND LIMITED INSURANCE
The Company's business exposes it to potential product liability claims,
which are inherent in the testing, manufacturing, marketing and sale of human
therapeutics. The use of the Company's product candidates in clinical trials
also exposes the Company to product liability claims and possible adverse
publicity. These risks increase with respect to the Company's product
candidates, if any, that receive regulatory approval for commercialization. The
Company currently has limited product liability insurance coverage for the
clinical research use of its product candidates. The Company does not have
product liability coverage for the commercial sale of its products but intends
to obtain such coverage if and when its products are commercialized. However,
there can be no assurance
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<PAGE> 10
that the Company will be able to obtain additional insurance coverage on
acceptable terms, if at all, or that a product liability claim would not
materially adversely affect the business of the Company.
DEPENDENCE ON REIMBURSEMENT
In both domestic and foreign markets, the ability of the Company to
commercialize its products will depend, in part, on the availability of
reimbursement from third-party payors, such as government health administration
authorities, private health insurers and other organizations. Third-party payors
are increasingly challenging the price and cost effectiveness of medical
products. There can be no assurance that the Company's potential products will
be considered cost effective. If adequate coverage and reimbursement levels are
not provided by the government and third-party payors for uses of the Company's
therapeutic products, the market acceptance of these products would be adversely
affected. This is particularly true with the respect to the Company's RenaGel
product, which the Company anticipates will compete with certain low priced
over-the-counter products.
DEPENDENCE UPON KEY PERSONNEL
The Company is highly dependent on the members of its management and
scientific staff, the loss of one or more of whom could have a material adverse
effect on the Company. In addition, the Company believes that its future success
will depend in large part upon its ability to attract and retain highly skilled
scientific and managerial personnel, particularly as the Company expands its
activities in clinical trials and the regulatory approval process. The Company
faces significant competition for such personnel from other companies, research
and academic institutions, government entities and other organizations. There
can be no assurance that the Company will be successful in hiring or retaining
the personnel it requires for continued growth. The failure to hire and retain
such personnel could materially and adversely affect the Company.
ABSENCE OF DIVIDENDS
The Company has never paid dividends and does not intend to pay any cash
dividends in the foreseeable future.
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of the shares of Common Stock, like that of the common
stock of many other development stage biotechnology companies, may be highly
volatile. Factors such as announcements of technological innovations or new
commercial products by the Company or its competitors, disclosure of results of
clinical testing or regulatory proceedings, governmental regulation and
approvals, developments in patent or other proprietary rights, public concern as
to the safety of products developed by the Company and general market conditions
may have a significant effect on the market price of the Common Stock. In
addition, the stock market has experienced extreme price and volume
fluctuations. This volatility has significantly affected the market prices of
securities of many biotechnology and pharmaceutical companies for reasons
frequently unrelated to or disproportionate to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of the Company's Common Stock.
CONTROL BY EXISTING STOCKHOLDERS
As of June 30, 1996, the Company's directors, executive officers and 5%
stockholders and certain of their affiliates beneficially own approximately 49%
of the outstanding shares of the Common Stock. Accordingly, they have the
ability to control the election of the Company's directors and significantly
influence or control other stockholder actions.
ANTI-TAKEOVER PROVISIONS
The Company's Restated Certificate of Incorporation, and Amended and
Restated By-laws of the Company contain provisions that could discourage
potential takeover attempts and prevent stockholders from changing the Company's
management. The Company's Restated Certificate of Incorporation authorizes the
Board to issue shares of preferred stock without further action by the
stockholders. The Company's Restated Certificate of Incorporation
- 10 -
<PAGE> 11
also includes provisions (i) classifying the Board of Directors into three
classes with staggered three-year terms, (ii) prohibiting stockholder action by
written consent except as otherwise provided by law and (iii) requiring the
approval of the holders of two-thirds of the Company's capital stock for certain
transactions. The Company's Bylaws also provide that special meetings of the
Company's stockholders may be called only by the President or the directors and
require advance notice of business to be brought by a stockholder before the
annual meeting. The Company has also adopted a stockholders rights plan. The
stockholders rights plan together with the aforementioned charter and by-law
provisions may discourage certain types of transactions involving an actual or
potential change in control of the Company, including transactions in which the
stockholders might otherwise receive a premium for their shares over then
current prices, and may limit the ability of the stockholders to approve
transactions they may deem to be in their best interest. In addition, the Board
of Directors has the authority, without action by the stockholders, to fix the
rights and preferences of and to issue shares of preferred stock which also may
have the effect of delaying or preventing a change in control of the Company.
- 11 -
<PAGE> 12
SELLING STOCKHOLDERS
<TABLE>
The Shares being offered hereby were acquired by the persons listed in the
table below pursuant to stock option exercises under the Company's 1992 Equity
Incentive Plan. The table below sets forth the number of Shares held as of July
10, 1996 by affiliates and non-affiliates of the Company. All of the Shares are
being registered for resale pursuant to a Registration Statement on Form S-8, of
which this Prospectus is a part. Selling Stockholders may offer the Shares for
resale from time to time. See "Plan of Distribution."
<CAPTION>
Shares Owned Prior Shares Owned After
to Offering(1) Offering(1)
-------------------- Number of Shares ------------------
Selling Stockholder Number Percent Being Offered Number Percent
- ------------------- ------ ------- ---------------- ------ -------
<S> <C> <C> <C> <C> <C>
Peter M. Ahern 500 * 500 -- --
Robert C. Blanks 14,000 (2) * 14,000 (2) -- --
Suanne Bodenrader 1,000 (3) * 1,000 (3) -- --
Charles H. Boyd 3,000 (4) * 3,000 (4) -- --
Steven K. Burke 50,000 (5) * 50,000 (5) -- --
Xi Chen 3,000 (6) * 3,000 (6) -- --
Lisa A. D'Attanasio 3,000 (7) * 3,000 (7) -- --
Eileen M. Doyle 3,000 (8) * 3,000 (8) -- --
Leslie Fay-Warris 1,516 * 1,516 -- --
Venkata Garigpati 15,000 (9) * 15,000 (9) -- --
Dennis I. Goldberg 75,000 (10) * 75,000 (10) -- --
Alan Hofmann 7,000 * 7,000 -- --
Stephen R. Holmes-Farley 22,400 (11) * 22,400 (11) -- --
Cynthia R. Maloney 300 * 300 -- --
W. Harry Mandeville 80,000 (12) * 40,000 (12) 40,000 *
Salvatore Marchese 7,500 * 7,500 -- --
Karen L. Miller 3,000 (13) * 3,000 (13) -- --
Robert J. Nicolosi 5,000 * 5,000 -- --
Kenneth A. Norton 10,850 (14) * 10,850 (14) -- --
John S. Peterson 29,000 (15) * 29,000 (15) -- --
Mary C. Pitruzello 4,000 (16) * 4,000 (16) -- --
David P. Rosenbaum 25,000 (17) * 25,000 (17) -- --
Robert J. Sacchiero 1,600 * 1,600 -- --
Ken Setchell 15,000 * 15,000 -- --
Mark Skaletsky 80,000 (18) * 80,000 (18) -- --
Edwin E. Sopp 2,300 (19) * 2,300 (19) -- --
Joseph E. Tyler 30,000 (20) * 30,000 (20) -- --
James L. Ward 3,000 (21) * 3,000 (21) -- --
Amy K. Wilson 25,000 (22) * 25,000 (22) -- --
Leslie A. Wyche 834 (23) * 834 (23) -- --
Yevgeniy Zhorov 9,500 (24) * 9,500 (24) -- --
<FN>
- --------------------
* Indicates less than 1%
(1) Unless otherwise indicated in these footnotes, each Selling Stockholder has
sole voting and investment power with respect to the shares listed in the table.
(2) Includes 7,917 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(3) Includes 450 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(4) Includes 1,950 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
</TABLE>
- 12 -
<PAGE> 13
(5) Includes 32,500 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(6) Includes 1,700 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(7) Includes 2,050 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(8) Includes 1,550 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(9) Includes 7,500 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(10) Includes 37,500 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(11) Includes 5,917 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(12) Includes 18,750 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(13) Includes 1,101 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(14) Includes 6,850 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(15) Includes 17,234 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(16) Includes 2,217 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(17) Includes 14,167 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(18) Includes 10,000 Shares held by Mr. Skaletsky's wife and 6,000 Shares held
by his children.
(19) Includes 1,600 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(20) Includes 18,334 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(21) Includes 1,500 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(22) Includes 12,250 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
(23) Includes 767 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
- 13 -
<PAGE> 14
(24) Includes 6,834 Shares subject to a right of repurchase granted to the
Company, which will terminate as such Shares vest.
The following Selling Stockholders are officers of the Company: Mark B.
Skaletsky, President, Chief Financial Officer and Treasurer; Dennis Goldberg,
Vice President, Product Development and Regulatory Affairs; W. Harry Mandeville,
Vice President, Chemical Technology; and Joseph Tyler, Vice President,
Manufacturing.
- 14 -
<PAGE> 15
PLAN OF DISTRIBUTION
The Company has filed with the Commission under the Securities Act of 1933,
as amended (the "Securities Act"), a Registration Statement on Form S-8, of
which this Prospectus forms a part, with respect to the resale of the Shares
from time to time on the Nasdaq National Market System or in
privately-negotiated transactions.
The Company has been advised that the Selling Stockholders may sell the
Shares from time to time in transactions on the Nasdaq National Market System,
in privately negotiated transactions, or by a combination of such methods of
sale, at fixed prices that maybe changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the Shares for whom such
broker-dealer may act as agent or to whom they sell as principal or both (which
compensation to a particular broker-dealer might be in excess of customary
commissions). The amount of Shares to be sold hereunder by each Selling
Stockholder and any other person with whom he or she is acting in concert for
the purpose of selling securities of the Company may not exceed, during any
three-month period, the amount specified in Rule 144(e) under the Securities
Act.
The Selling Stockholders and any broker-dealer who acts in connection with
the sale of Shares hereunder may be deemed to be "underwriters" as that term is
defined in the Securities Act, and any commissions received by them and profit
on any resale of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act.
The Selling Stockholders may also sell Shares from time to time in
accordance with Rule 144 or Rule 701 under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Palmer & Dodge LLP, Boston, Massachusetts. Peter Wirth,
a partner of Palmer & Dodge LLP, is Secretary of the Company.
EXPERTS
The financial statements of GelTex Pharmaceuticals, Inc. appearing in
GelTex Pharmaceuticals, Inc.'s Annual Report (Form 10-K) for the year ended
December 31, 1995 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
- 15 -
<PAGE> 16
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------------------------------------------------
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 0-26872) filed with the Commission on March 29,
1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996 (File No. 0-26872) filed with the Commission on May 13,
1996.
(c) The Registrant's Current Reports on Form 8-K dated March 1, 1996 and
June 26, 1996 (File No. 0-26872) filed with the Commission on March 4, 1996 and
June 28, 1996, respectively.
(d) The Registrant's report on Form 10-C dated May 14, 1996 (File No.
0-26872) filed with the Commission on May 17, 1996.
(e) All other reports of the registrant filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the annual report referred to in (a)
above.
(f) The description of the Registrant's Common Stock contained in its
Registration Statement on Form 8-A (File No. 0-26872) filed with the Commission
on September 26, 1995, as amended on October 12, 1995, including any amendment
or report filed hereafter for the purpose of updating such description.
All documents filed after the date of this Registration Statement by the
Registrant pursuant to Section 13(a), 13(d), 14 and 15(d) of the Exchange Act
and prior to the filing of a post-effective amendment that indicates that all
shares of Common Stock offered hereunder have been sold or which deregisters all
shares of Common Stock remaining unsold shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
The validity of the Common Stock offered hereby will be passed upon for the
Registrant by Palmer & Dodge LLP, Boston, Massachusetts. Peter Wirth, a partner
of Palmer & Dodge LLP, is Secretary of the Registrant.
- 16 -
<PAGE> 17
Item 6. Indemnification of Directors and Officers
- -------------------------------------------------
Section 145 of the Delaware General Corporation Law permits the Registrant
to indemnify directors, officers, employees and agents of the Registrant against
actual and reasonable expenses (including attorneys' fees) incurred by them in
connection with any action, suit or proceeding brought against them by reason of
their status or service as a director, officer, employee or agent by or on
behalf of the Registrant, and against expenses (including attorneys' fees),
judgments, fines and settlements actually and reasonably incurred by him in
connection with any such action, suit or proceeding, if (i) he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Registrant, and (ii) in the case of a criminal proceeding, he
had no reasonable cause to believe his conduct was unlawful. Except as ordered
by a court, no indemnification shall be made in connection with any proceeding
brought by or in the right of the corporation where the person involved is
adjudged to be liable to the Registrant.
Article EIGHTH of the Registrant's Restated Certificate of Incorporation
provides that a director shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent that elimination or limitation of liability is not
permitted under the Delaware General Corporation Law as in effect when such
liability is determined.
Article NINTH of the Registrant's Restated Certificate of Incorporation
provides that the Registrant shall, to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as amended from time to time,
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was, or has agreed to become a director or officer of the Registrant, or
is or was serving, or has agreed to serve at the request of the Registrant as a
director, officer or trustee of, or in a similar capacity with, another
corporation, partnership, joint venture, trust or other enterprise. The
indemnification provided for in Article NINTH is expressly not exclusive of any
other rights to which those seeking indemnification may be entitled under any
law, agreement or vote of stockholders or disinterested directors or otherwise,
and shall inure to the benefit of the heirs, executors and administrators of
such persons. Article NINTH further permits the Board of Directors to authorize
the grant of indemnification rights to other employees and agents of the
Registrant and such rights may be equivalent to, or greater or less than, those
set forth in Article NINTH.
Article V, Section 1 of the Registrant's By-Laws provides that the
Registrant shall have the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against such person and
incurred by such person in any such capacity or arising out of such person's
status as such.
The Registrant maintains insurance for directors and officers and expects
to enter into agreements with certain officers and directors affirming the
Registrant's obligation to indemnify them to the fullest extent permitted by law
and providing various other protections.
Item 7. Exemption from Registration Claimed.
- -------------------------------------------
Not applicable.
- 17 -
<PAGE> 18
Item 8. Exhibits.
- ----------------
Exhibit Number Description
-------------- -----------
4.1 Restated Certificate of Incorporation of the Registrant.
Filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-8 (File No. 333-6779) and incorporated herein by
reference.
4.2 Amended and Restated By-laws of the Registrant. Filed as
Exhibit 3.3 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 and incorporated
herein by reference.
4.3 Rights Agreement dated as of March 1, 1996 between the
Company and American Stock Transfer & Trust Company. Filed
as Exhibit 1 to the Company's Registration Statement on Form
8-A dated March 1, 1996 and incorporated herein by
reference.
5.1 Opinion of Palmer & Dodge LLP as to the legality of the
securities registered hereunder.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Palmer & Dodge LLP (contained in Opinion of
Palmer & Dodge LLP, filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (set forth on the signature page to this
Registration Statement).
24.2 Certified resolution of the Board of Directors authorizing
Power of Attorney.
99.1 1992 Equity Incentive Plan, as amended through May 20, 1996.
Item 9. Undertakings.
- ---------------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
- 18 -
<PAGE> 19
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to in Item 6 hereof, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
- 19 -
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Waltham, State of Massachusetts, on this 19th day of
July, 1996.
GELTEX PHARMACEUTICALS, INC.
By: /s/ Mark Skaletsky
-------------------------------------
Mark Skaletsky
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of GelTex Pharmaceuticals, Inc.
hereby severally constitute and appoint Mark Skaletsky and Peter Wirth, and each
of them singly, our true and lawful attorneys-in-fact, with full power to them
in any and all capacities, to sign any and all amendments to this Registration
Statement on Form S-8 including any post-effective amendments thereto, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact may 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/ Mark Skaletsky President, Chief Executive July 19, 1996
- -------------------------- Officer and Treasurer
Mark Skaletsky (Principal Executive
Officer, Principal Financial Officer
and Principal Accounting Officer)
/s/ Robert J. Carpenter Chairman of the Board July 19, 1996
- -------------------------- and Director
Robert J. Carpenter
/s/ Ernest Parizeau Director July 19, 1996
- --------------------------
Ernest Parizeau
- 20 -
<PAGE> 21
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Barbara A. Piette Director July 19, 1996
- --------------------------
Barbara A. Piette
/s/ James Tananbaum Director July 19, 1996
- --------------------------
James Tananbaum
/s/ Henri A. Termeer Director July 19, 1996
- --------------------------
Henri A. Termeer
/s/ Jesse Treu Director July 19, 1996
- --------------------------
Jesse Treu
/s/ George Whitesides Director July 19, 1996
- --------------------------
George Whitesides
- 21 -
<PAGE> 22
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit Number Description Page Number
- -------------- ----------- -----------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Registrant. *
Filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (File No. 333-6779).
4.2 Amended and Restated By-laws of the Registrant. *
Filed as Exhibit 3.3 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31,
1995.
4.3 Rights Agreement dated as of March 1, 1996 between *
the Company and American Stock Transfer & Trust
Company. Filed as Exhibit 1 to the Company's
Registration Statement on Form 8-A dated March 1,
1996.
5.1 Opinion of Palmer & Dodge LLP as to the legality of 23
the securities registered hereunder.
23.1 Consent of Ernst & Young LLP, independent auditors. 24
23.2 Consent of Palmer & Dodge LLP (contained in --
Opinion of Palmer & Dodge LLP, filed as Exhibit 5.1
hereto).
24.1 Power of Attorney (set forth on the signature page to --
this Registration Statement).
24.2 Certified resolution of the Board of Directors 25
authorizing Power of Attorney.
99.1 1992 Equity Incentive Plan, as amended through 26
May 20, 1996.
<FN>
- ----------------------------
* Incorporated herein by reference.
</TABLE>
- 22 -
<PAGE> 1
EXHIBIT 5.1
PALMER & DODGE LLP
One Beacon Street
Boston, Massachusetts 02108
Telephone: (617) 573-0100 Facsimile: (617) 227-4420
July 19, 1996
GelTex Pharmaceuticals, Inc.
303 Bear Hill Road
Waltham, MA 02154
Ladies and Gentlemen:
We are rendering this opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") filed by GelTex
Pharmaceuticals, Inc. (the "Company") with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), on or about the date hereof. The Registration Statement relates to
1,705,585 shares (the "Shares") of the Company's Common Stock, $0.01 par value,
offered pursuant to the provisions of the Company's 1992 Equity Incentive Plan
(the "Plan").
We have acted as your counsel in connection with the preparation of the
Registration Statement and are familiar with the proceedings taken by the
Company in connection with the authorization of the issuance and sale of the
Shares. We have examined all such documents as we consider necessary to enable
us to render this opinion.
Based upon the foregoing, we are of the opinion that when issued in
accordance with the terms of the Plan, the Shares will be duly authorized,
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as a part of the
Registration Statement and to the reference to our firm under Item 5 thereof.
Very truly yours,
/s/ Palmer & Dodge LLP
PALMER & DODGE LLP
- 23 -
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1992 Equity Incentive Plan
of GelTex Pharmaceuticals, Inc. and to the incorporation by reference therein of
our report dated February 23, 1996, with respect to the financial statements of
GelTex Pharmaceuticals, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
July 17, 1996
- 24 -
<PAGE> 1
EXHIBIT 24.2
GELTEX PHARMACEUTICALS, INC.
Certificate of Secretary
------------------------
I, Peter Wirth, being the duly elected and acting Secretary of GelTex
Pharmaceuticals, Inc. (the "Company"), a Delaware corporation, hereby certify
that the following is a true, correct and complete copy of a resolution duly
adopted by the Board of Directors of the Company by unanimous written consent
dated July 19, 1996; and that said resolution has not been amended or rescinded
and is now in full force and effect.
VOTED: That any officer of the Company executing, on behalf of the
Company or in any other capacity, the Registration Statement
and any and all amendments to such Registration Statement and
other documents to be filed with the Commission in connection
therewith is hereby authorized to execute the same through or
by Mark Skaletsky or Peter Wirth, as attorney-in-fact,
pursuant to a power of attorney reflecting such authorization.
WITNESS my signature and the seal of the Company affixed this 19th day
of July, 1996.
[CORPORATE SEAL] /s/ Peter Wirth
-----------------------------
Peter Wirth, Secretary
- 25 -
<PAGE> 1
EXHIBIT 99.1
GELTEX, INC.
1992 Equity Incentive Plan
--------------------------
(as amended through May 20, 1996)
Section (1) Purpose
-------
The purpose of the Geltex, Inc. 1992 Equity Incentive Plan (the "Plan")
is to attract and retain key employees and consultants, to provide an incentive
for them to achieve long-range performance goals, and to enable them to
participate in the long-term growth of the Company.
Section (2) Definitions
-----------
"Affiliate" means any business entity in which the Company owns
directly or indirectly 50% or more of the total combined voting power or has a
significant financial interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock, Stock Unit or Other Stock-Based Award awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor to such Code.
"Committee" means a committee of not less than two members of the Board
appointed by the Board to administer the Plan; provided, however, that until
such committee is appointed, "Committee" means the Board.
"Common Stock" or "Stock" means the Common Stock, $0.01 par value, of
the Company.
"Company" means Geltex, Inc.
"Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, "Designated
Beneficiary" shall mean the Participant's estate.
"Effective Date" means June 1, 1992.
"Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the Committee
in good faith or in the manner established by the Committee from time to time.
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<PAGE> 2
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 that is intended to meet the
requirements of Section 422 of the Code or any successor provision.
"Nonstatutory Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under Section 6 that is not intended to be
an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonstatutory Stock
Option.
"Other Stock-Based Award" means an Award, other than an Option, Stock
Appreciation Right, Performance Share, Restricted Stock or Stock Unit, having a
Common Stock element and awarded to a Participant under Section 11.
"Participant" means a person selected by the Committee to receive an
Award under the Plan.
"Performance Cycle" or "Cycle" means the period of time selected by the
Committee during which performance is measured for the purpose of determining
the extent to which an award of Performance Shares has been earned.
"Performance Shares" mean shares of Common Stock, which may be earned
by the achievement of performance goals, awarded to a Participant under Section
8.
"Reporting Person" means a person subject to Section 16 of the
Securities Exchange Act of 1934 or any successor provision.
"Restricted Period" means the period of time during which an Award may
be forfeited to the Company pursuant to the terms and conditions of such Award.
"Restricted Stock" means shares of Common Stock subject to forfeiture
awarded to a Participant under Section 9.
"Stock Appreciation Right" or "SAR" means a right to receive any excess
in value of shares of Common Stock over the exercise price awarded to a
Participant under Section 7.
"Stock Unit" means an award of Common Stock or units that are valued in
whole or in part by reference to, or otherwise based on, the value of Common
Stock, awarded to a Participant under Section 10.
Section (3) Administration
--------------
The Plan shall be administered by the Committee. The Committee shall
have authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the operation of the Plan as it shall from time to time
consider advisable, and to interpret the provisions of the Plan. The Committee's
decisions shall be final and binding. To the extent permitted by applicable law,
the Committee may delegate to one or more executive officers of the Company the
power to make Awards to Participants who are not Reporting Persons and all
determinations under the Plan with respect thereto, provided that the Committee
shall fix the maximum amount of such Awards for the group and a maximum for any
one Participant.
Section (4) Eligibility
-----------
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<PAGE> 3
All employees and, in the case of Awards other than Incentive Stock
Options, consultants of the Company or any Affiliate capable of contributing
significantly to the successful performance of the Company, other than a person
who has irrevocably elected not to be eligible, are eligible to be Participants
in the Plan. Incentive Stock Options may be awarded only to persons eligible to
receive such Options under the Code.
Section (5) Stock Available for Awards
--------------------------
(a) Subject to adjustment under subsection (c), Awards may be made
under the Plan for up to 1,725,000 shares of Common Stock. If any Award in
respect of shares of Common Stock expires or is terminated unexercised or is
forfeited without the Participant having had the benefits of ownership (other
than voting rights), the shares subject to such Award, to the extent of such
expiration, termination or forfeiture, shall again be available for award under
the Plan. Common Stock issued through the assumption or substitution of
outstanding grants from an acquired company shall not reduce the shares
available for Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
(b) Subject to adjustment under subsection (c), no Participant may
receive an Award which would result in such Participant having received, during
the fiscal year of the Company in which the Award is made, Awards for more than
an aggregate of 250,000 shares of Common Stock.
(c) In the event that the Committee in its discretion determines that
any stock dividend, extraordinary cash dividend, creation of a class of equity
securities, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value, or other
similar transaction affects the Common Stock such that an adjustment is required
in order to preserve the benefits or potential benefits intended to be made
available under the Plan, then the Committee (subject, in the case of Incentive
Stock Options, to any limitation required under the Code) shall equitably adjust
any or all of (i) the number and kind of shares in respect of which Awards may
be made under the Plan, (ii) the number and kind of shares subject to
outstanding Awards, and (iii) the award, exercise or conversion price with
respect to any of the foregoing, and if considered appropriate, the Committee
may make provision for a cash payment with respect to an outstanding Award,
provided that the number of shares subject to any Award shall always be a whole
number.
Section (6) Stock Options
-------------
(a) Subject to the provisions of the Plan, the Committee may award
Incentive Stock Options and Nonstatutory Stock Options and determine the number
of shares to be covered by each Option, the option price therefor and the
conditions and limitations applicable to the exercise of the Option. The terms
and conditions of Incentive Stock Options shall be subject to and comply with
Section 422 of the Code, or any successor provision, and any regulations
thereunder, and no Incentive Stock Option may be granted hereunder more than ten
years after the Effective Date.
(b) The Committee shall establish the option price at the time each
Option is awarded, which price shall not be less than 100% of the Fair Market
Value of the Common Stock on the date of award with respect to Incentive Stock
Options. Nonstatutory Stock Options may be granted at such prices as the
Committee may determine.
(c) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Committee may specify in the applicable Award or
thereafter. The Committee may impose such
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<PAGE> 4
conditions with respect to the exercise of Options, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.
(d) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company.
Such payment may be made in whole or in part in cash or, to the extent permitted
by the Committee at or after the award of the Option, by delivery of a note or
shares of Common Stock owned by the optionee, including Restricted Stock, valued
at their Fair Market Value on the date of delivery, or such other lawful
consideration as the Committee may determine.
(e) The Committee may provide that, subject to such conditions as it
considers appropriate, upon the delivery of shares to the Company in payment of
an Option, the Participant shall automatically be awarded an Option for up to
the number of shares so delivered.
Section (7) Stock Appreciation Rights
-------------------------
(a) Subject to the provisions of the Plan, the Committee may award SARs
in tandem with an Option (at or after the award of the Option), or alone and
unrelated to an Option. SARs in tandem with an Option shall terminate to the
extent that the related Option is exercised, and the related Option shall
terminate to the extent that the tandem SARs are exercised. SARs granted in
tandem with Options shall have an exercise price not less than the exercise
price of the related Option. SARs granted alone and unrelated to an Option may
be granted at such exercise prices as the Committee may determine.
(b) An SAR related to an Option that can only be exercised during
limited periods following a change in control of the Company may entitle the
Participant to receive an amount based upon the highest price paid or offered
for Common Stock in any transaction relating to the change in control or paid
during the thirty-day period immediately preceding the occurrence of the change
in control in any transaction reported in the stock market in which the Common
Stock is normally traded.
Section (8) Performance Shares
------------------
(a) Subject to the provisions of the Plan, the Committee may award
Performance Shares and determine the number of such shares for each Performance
Cycle and the duration of each Performance Cycle. There may be more than one
Performance Cycle in existence at any one time, and the duration of Performance
Cycles may differ from each other. The payment value of Performance Shares shall
be equal to the Fair Market Value of the Common Stock on the date the
Performance Shares are earned or, in the discretion of the Committee, on the
date the Committee determines that the Performance Shares have been earned.
(b) The Committee shall establish performance goals for each Cycle, for
the purpose of determining the extent to which Performance Shares awarded for
such Cycle are earned, on the basis of such criteria and to accomplish such
objectives as the Committee may from time to time select. During any Cycle, the
Committee may adjust the performance goals for such Cycle as it deems equitable
in recognition of unusual or non-recurring events affecting the Company, changes
in applicable tax laws or accounting principles, or such other factors as the
Committee may determine.
(c) As soon as practicable after the end of a Performance Cycle, the
Committee shall determine the number of Performance Shares that have been earned
on the basis of performance in relation to the established performance goals.
The payment values of earned Performance Shares shall be distributed to the
Participant or, if the Participant has died, to the Participant's Designated
Beneficiary,
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<PAGE> 5
as soon as practicable thereafter. The Committee shall determine, at or after
the time of award, whether payment values will be settled in whole or in part in
cash or other property, including Common Stock or Awards.
Section (9) Restricted Stock
----------------
(a) Subject to the provisions of the Plan, the Committee may award
shares of Restricted Stock and determine the duration of the Restricted Period
during which, and the conditions under which, the shares may be forfeited to the
Company and the other terms and conditions of such Awards. Shares of Restricted
Stock shall be issued for no cash consideration or such minimum consideration as
may be required by applicable law.
(b) Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as permitted by the Committee, during
the Restricted Period. Shares of Restricted Stock shall be evidenced in such
manner as the Committee may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the Participant
and unless otherwise determined by the Committee, deposited by the Participant,
together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver such certificates
to the Participant or if the Participant has died, to the Participant's
Designated Beneficiary.
Section (10) Stock Units
-----------
(a) Subject to the provisions of the Plan, the Committee may award
Stock Units subject to such terms, restrictions, conditions, performance
criteria, vesting requirements and payment rules as the Committee shall
determine.
(b) Shares of Common Stock awarded in connection with a Stock Unit
Award shall be issued for no cash consideration or such minimum consideration as
may be required by applicable law.
Section (11) Other Stock-Based Awards
------------------------
(a) Subject to the provisions of the Plan, the Committee may make other
awards of Common Stock and other awards that are valued in whole or in part by
reference to, or are otherwise based on, Common Stock, including without
limitation convertible preferred stock, convertible debentures, exchangeable
securities and Common Stock awards or options. Other Stock-Based Awards may be
granted either alone or in tandem with other Awards granted under the Plan
and/or cash awards made outside of the Plan.
(b) The Committee may establish performance goals, which may be based
on performance goals related to book value, subsidiary performance or such other
criteria as the Committee may determine, Restricted Periods, Performance Cycles,
conversion prices, maturities and security, if any, for any Other Stock-Based
Award. Other Stock-Based Awards may be sold to Participants at the face value
thereof or any discount therefrom or awarded for no consideration or such
minimum consideration as may be required by applicable law.
Section (12) General Provisions Applicable to Awards
---------------------------------------
(a) Reporting Person Limitations. Notwithstanding any other provision
of the Plan, to the extent required to qualify for the exemption provided by
Rule 16b-3 under the Securities Exchange Act
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<PAGE> 6
of 1934 and any successor provision, Awards made to a Reporting Person shall not
be transferable by such person other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order, as defined in
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder.
(b) Documentation. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable tax and regulatory
laws and accounting principles.
(c) Committee Discretion. Each type of Award may be made alone, in
addition to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Committee need not treat Participants
uniformly. Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of award or at any time thereafter.
(d) Settlement. The Committee shall determine whether Awards are
settled in whole or in part in cash, Common Stock, other securities of the
Company, Awards or other property. The Committee may permit a Participant to
defer all or any portion of a payment under the Plan, including the crediting of
interest on deferred amounts denominated in cash and dividend equivalents on
amounts denominated in Common Stock.
(e) Dividends and Cash Awards. In the discretion of the Committee, any
Award under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable currently or deferred with or without interest, and (ii)
cash payments in lieu of or in addition to an Award.
(f) Termination of Employment. The Committee shall determine the effect
on an Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may receive payment of an Award or exercise rights thereunder.
(g) Change in Control. In order to preserve a Participant's rights
under an Award in the event of a change in control of the Company, the Committee
in its discretion may, at the time an Award is made or at any time thereafter,
take one or more of the following actions: (i) provide for the acceleration of
any time period relating to the exercise or realization of the Award, (ii)
provide for the purchase of the Award upon the Participant's request for an
amount of cash or other property that could have been received upon the exercise
or realization of the Award had the Award been currently exercisable or payable,
(iii) adjust the terms of the Award in a manner determined by the Committee to
reflect the change in control, (iv) cause the Award to be assumed, or new rights
substituted therefor, by another entity, or (v) make such other provision as the
Committee may consider equitable and in the best interests of the Company.
(h) Loans. The Committee may authorize the making of loans or cash
payments to Participants in connection with any Award under the Plan, which
loans may be secured by any security, including Common Stock, underlying or
related to such Award (provided that such Loan shall not exceed the Fair Market
Value of the security subject to such Award), and which may be forgiven upon
such terms and conditions as the Committee may establish at the time of such
loan or at any time thereafter.
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<PAGE> 7
(i) Withholding. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value on the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
(j) Foreign Nationals. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or comply with
applicable laws.
(k) Amendment of Award. The Committee may amend, modify or terminate
any outstanding Award, including substituting therefor another Award of the same
or a different type, changing the date of exercise or realization and converting
an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
Section (13) Miscellaneous
-------------
(a) No Right To Employment. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving
a Participant the right to continued employment. The Company expressly reserves
the right at any time to dismiss a Participant free from any liability or claim
under the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Shareholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a shareholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the holder thereof. A Participant to whom
Common Stock is awarded shall be considered the holder of the Stock at the time
of the Award except as otherwise provided in the applicable Award.
(c) Effective Date. Subject to the approval of the shareholders of the
Company, the Plan shall be effective on the Effective Date. Prior to such
approval, Awards may be made under the Plan expressly subject to such approval.
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, subject to any shareholder approval
that the Board determines to be necessary or advisable.
(e) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of Delaware.
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