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As filed with the Securities and Exchange Commission on June 11, 1997
Registration Statement No. 333-28239
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO.1 TO
FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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MILLENNIUM PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 04-3177038
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
640 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
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MARK J. LEVIN
CHIEF EXECUTIVE OFFICER
MILLENNIUM PHARMACEUTICALS, INC.
640 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(617) 679-7000
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
COPY TO:
DAVID E. REDLICK, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________.
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
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PROSPECTUS
MILLENNIUM PHARMACEUTICALS, INC.
5,301,571 Shares
Common Stock
($0.001 par value per share)
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The 5,301,571 shares of common stock, $0.001 par value (the "Common
Stock"), of Millennium Pharmaceuticals, Inc. (the "Company"), covered by this
Prospectus are issued and outstanding shares which may be offered and sold,
from time to time, by or on behalf of certain stockholders of the Company (the
"Selling Stockholders"). Of the shares of Common Stock covered by this
Prospectus, 4,783,688 shares (the "Acquisition Shares") were issued to certain
of the Selling Stockholders on February 10, 1997 in connection with the
acquisition by the Company of ChemGenics Pharmaceuticals Inc. ("ChemGenics"),
17,883 shares are issuable upon exercise of a warrant and are being registered
by a Selling Stockholder pursuant to the exercise of registration rights by
such Selling Stockholder (the "Warrant Shares") and 500,000 shares are being
registered for certain Selling Stockholders pursuant to the exercise of
registration rights by such Selling Stockholders (the "Registrable Shares" and
with the Warrant Shares and the Acquisition Shares, the "Shares"). The Shares
may be offered by the Selling Stockholders, or by their pledgees, donees,
transferees or other successors in interest, from time to time on the Nasdaq
National Market, in ordinary brokerage transactions, in negotiated
transactions, or otherwise, at market prices prevailing at the time of sale, at
prices related to such market prices or at negotiated prices. See "SELLING
STOCKHOLDERS" and "PLAN OF DISTRIBUTION."
The Company will not receive any of the proceeds from the sale of Shares
covered by this Prospectus. The Company will bear certain expenses incurred in
effecting the registration of the Shares. The Company and the Selling
Stockholders have agreed to certain indemnification arrangements with respect to
the Offering. See "PLAN OF DISTRIBUTION."
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "MLNM." On June 10, 1997, the closing sale price of the Common Stock
on the Nasdaq National Market was $16.25 per share.
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THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is __________ __, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
Commission's regional offices located at Seven World Trade Center, Suite 1300,
New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials also may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the Company is required
to file electronic versions of these documents through the Commission's
Electronic Data Gathering, Analysis and Retrieval system (EDGAR). The Commission
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The Common Stock of the Company is
traded on the Nasdaq National Market. Reports and other information concerning
the Company may be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, supplements, exhibits and schedules thereto,
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act") 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, as certain items are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the Company
and the Shares, reference is made to the Registration Statement. Statements
contained in this Prospectus regarding the contents of any agreement or other
document are not necessarily complete, and in each instance reference is made to
the copy of such agreement or document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. The Registration Statement, including all exhibits and schedules
thereto, may be inspected without charge at the office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year
ended December 31, 1996 and filed with the Commission
on March 31, 1997;
(ii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997 and filed with the
Commission on May 15, 1997;
(iii) The Company's Current Report on Form 8-K, dated
February 10, 1997 and filed with the Commission on
February 20, 1997 (as amended by a Form 8-K/A dated
February 10, 1997 and filed with the Commission on
April 18, 1997);
(iv) The Company's Current Report on Form 8-K, dated
May 29, 1997 and filed with the Commission on June 5,
1997; and
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(v) The Company's Registration Statement on Form 8-A, as
filed with the Commission on April 26, 1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Common Stock registered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). All such requests shall be
directed to: Millennium Pharmaceuticals, Inc., 640 Memorial Drive, Cambridge,
Massachusetts 02139, Attention: Investor Relations Department, Telephone: (617)
679-7000.
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SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Act and Section 2B of the Exchange Act. For this purpose, any statements
contained herein or incorporated herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "plans," "expects" and similar expressions are
intended to identify forward-looking statements. There are a number of important
factors that could cause the results of the Company to differ materially from
those indicated by such forward-looking statements. These factors include those
set forth in "Risk Factors" herein.
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THE COMPANY
Millennium Pharmaceuticals, Inc. ("Millennium" or the "Company") is engaged
in the commercial application of genetics, genomics and bioinformatics to
discover and develop a broad range of novel therapeutic and diagnostic products.
Independently and in strategic alliances with leading pharmaceutical companies,
the Company has focused its research efforts on identifying and elucidating the
function of genes responsible for conditions and diseases (disease genes) that
affect millions of individuals and that are underserved by current therapeutic
alternatives. These efforts include obesity, type II diabetes, atherosclerosis,
asthma, cancer, antibacterial and antifungal treatments, and diseases of the
central nervous system. The Company's principal objective is to use its
technology platform to enable and accelerate the discovery and development of
new, proprietary therapeutic and diagnostic products capable of addressing these
diseases at their root causes, rather than simply identifying and treating their
symptoms.
The Company is distinctive in the genomics industry in employing a
comprehensive technology platform that couples multiple synergistic approaches
for identifying disease genes with a broad set of bench and computational
biology technologies for elucidating the function of these genes and their role
in disease initiation and progression. This highly automated, computer-enhanced
technology platform is designed to enable the Company and its strategic partners
to rapidly convert the Company's gene discoveries into useful targets for drug
discovery and pharmaceutical intervention. The Company believes that its
discoveries will be valuable for the development of therapeutic products
(including orally available small molecule drugs, therapeutic proteins, gene
therapy and antisense drugs), diagnostic products and services and disease
management programs for a wide range of diseases.
In February 1997, the Company acquired ChemGenics Pharmaceuticals Inc.
("ChemGenics"), for 4,783,688 shares of Millennium's Common Stock. In addition,
a principal shareholder of ChemGenics received $4.0 million in settlement of a
promissory note and repurchase of warrants previously issued by ChemGenics. Upon
such acquisition, ChemGenics became a wholly-owned subsidiary of Millennium. In
May 1997, ChemGenics was merged into Millennium and ceased to be a separate
Company. ChemGenics was a drug discovery company that applied two complementary
technologies, Drug Discovery Genomics and Advanced Drug Selection Technologies,
to key rate limiting steps in identifying new drugs.
The Company has secured strategic partners for its most advanced
disease research programs: Hoffmann-La Roche Inc. ("Roche") in obesity and type
II diabetes; Eli Lilly and Company ("Lilly") in cardiovascular disease and
select areas within oncology; Astra AB ("Astra") in inflammatory respiratory
diseases; American Home Products ("AHP") in certain disorders of the central
nervous system and human antibacterial infections; Pfizer, Inc. ("Pfizer") in
human fungal infections; and with PerSeptive Biosystems, Inc. ("PerSeptive")
where a substantial equity interest was exchanged for certain present and future
rights to patents, technology and prototype equipment. The Company intends to
pursue further strategic alliances as appropriate. The Company has retained
substantial rights to develop and market certain diagnostic and therapeutic
applications of the discoveries it makes in its funded strategic alliance
research programs.
Millennium is a Delaware corporation. The Company's principal executive
offices are located at 640 Memorial Drive, Cambridge, Massachusetts, and its
telephone number is (617) 679-7000.
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RISK FACTORS
The Shares of Common Stock offered hereby include a high degree of risk.
The following risk factors should be considered carefully in addition to the
other information included or incorporated by reference in this Prospectus
before purchasing the Shares offered hereby.
UNCERTAINTIES RELATING TO TECHNOLOGICAL APPROACHES OF THE COMPANY
To date, the Company has not developed or commercialized any products based
on its technological approaches. There can be no assurance that these approaches
will enable the Company to successfully identify and characterize genes that
predispose individuals to the diseases that are the principal focus of its
disease research programs or to use any resulting information to develop
molecular targets of utility for pharmaceutical product development. The
Company's lead programs and development focus are primarily directed to complex
polygenic and multifactorial diseases. There is limited scientific understanding
generally relating to the role of genes in these diseases and relatively few
products based on gene discoveries have been developed and commercialized.
Accordingly, even if the Company is successful in identifying genes associated
with specific diseases, there can be no assurance that its gene discoveries will
lead to the development of therapeutic and diagnostic products. The Company's
success will depend, in part, upon its ability to focus its research efforts on
diseases that are suitable candidates for diagnostic and therapeutic products.
The development of diagnostic and therapeutic products based on the
Company's gene discoveries also will be subject to the risks of failure inherent
in the development of products based on new technologies. These risks include
the possibilities that any products based on these technologies will be found to
be ineffective or toxic, or otherwise fail to receive necessary regulatory
approvals; the products, if safe and effective, will be difficult to manufacture
on a large scale or will be uneconomical to market; proprietary rights of third
parties will preclude the Company or its strategic partners from marketing
products; or third parties will market superior or equivalent products. As a
result, there can be no assurance that the Company's research and development
activities will result in any commercially viable products.
Genomics, biotechnology and pharmaceutical technologies have undergone and
are expected to continue to undergo rapid and significant change. The Company's
future success will depend in large part on its ability to maintain a
competitive position with respect to these technologies. Rapid technological
developments by the Company or others may result in compounds, products or
processes becoming obsolete before the Company recovers any expenses it incurs
in connection with the development of such products.
HISTORY OF OPERATING LOSSES; ANTICIPATION OF FUTURE LOSSES
Substantially all of the Company's resources have been, and will for the
foreseeable future continue to be, dedicated to the development of the Company's
technology and its application to discovering and elucidating the function of
genes associated with major common diseases. To date, all of the Company's
revenues have resulted from payments from strategic partners. The Company has
not yet identified any lead compounds nor generated any products which have
entered preclinical studies or generated any revenue. All of the Company's
potential products and services will require significant research and
development expenditures. It will be a number of years, if ever, before the
Company recognizes revenue from sales or royalties.
As of March 31, 1997, the Company had an accumulated deficit of
approximately $105,562,000 (including a non-recurring charge of $83,800,000 for
acquired in-process research and development related to the acquisition of
ChemGenics). Even if the Company succeeds in developing a commercial
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product, the Company expects to incur losses for at least the next several years
and that such losses will increase as the Company expands its research and
development activities. To achieve profitability, the Company, alone or with
others, must successfully discover genes associated with particular diseases
and, thereafter, utilize such discoveries to develop products, conduct clinical
trials, obtain required regulatory approvals and successfully manufacture,
introduce and market such products. The time required to reach commercial
revenue and profitability is highly uncertain and there can be no assurance that
the Company will be able to achieve any such revenue and profitability on a
sustained basis, if at all.
FUTURE CAPITAL REQUIREMENTS; UNCERTAINTY OF ADDITIONAL FUNDING
The Company's comprehensive technological approach to developing products
through the application of genomics has required that Millennium establish a
substantial scientific infrastructure. The Company has consumed substantial
amounts of cash to date and expects capital and operating expenditures to
increase over the next several years as it expands its infrastructure and its
research and development activities. The Company believes that existing cash and
investment securities and anticipated cash flow from existing strategic
alliances will be sufficient to support the Company's operations for at least
the next 24 months. The Company's actual future capital requirements, however,
will depend on many factors, including progress of its disease research
programs, the number and breadth of these programs, achievement of milestones
under strategic alliance arrangements, the ability of the Company to establish
and maintain additional strategic alliance and licensing arrangements, and the
progress of the development efforts of the Company's strategic partners. These
factors also include the level of the Company's activities relating to
commercialization rights it has retained in its strategic alliance arrangements,
competing technological and market developments, the costs associated with
collection of patient information and DNA samples, the costs involved in
enforcing patent claims and other intellectual property rights and the costs and
timing of regulatory approvals. The Company expects that it will require
significant additional financing in the future, which it may seek to raise
through public or private equity offerings, debt financings or additional
strategic alliance and licensing arrangements. No assurance can be given that
additional financing will be available when needed, or that, if available, such
financing will be obtained on terms favorable to the Company or its
stockholders. To the extent the Company raises additional capital by issuing
equity securities, ownership dilution to stockholders will result. To the extent
that the Company raises additional funds through strategic alliance and
licensing arrangements, the Company may be required to relinquish rights to
certain of its technologies or product candidates, or to grant licenses on terms
that are not favorable to the Company, either of which could have a material
adverse effect on the Company's business, financial condition and results of
operations. In the event that adequate funds are not available, the Company's
business would be adversely affected.
RELIANCE ON STRATEGIC PARTNERS
The Company's strategy for development and commercialization of diagnostic
and therapeutic products based upon its gene discoveries depends upon the
formation of various strategic alliances and licensing arrangements. The Company
has entered into strategic alliances with Roche, Lilly, Astra, Pfizer and PBIO.
There can be no assurance that the Company will be able to establish additional
strategic alliance or licensing arrangements necessary to develop and
commercialize products based upon the Company's disease research programs, that
any such arrangements or licenses will be on terms favorable to the Company, or
that the current or any future strategic alliances or licensing arrangements
ultimately will be successful. The Company is dependent on its strategic
partners for the preclinical study, clinical development, regulatory approval,
manufacturing and marketing of products based on the results of these
collaborative research programs. The agreements with these strategic partners
allow them significant discretion in electing whether to pursue any of these
activities. The Company cannot control the amount and timing of resources its
strategic partners
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devote to the Company's programs or potential products. If any of the Company's
strategic partners were to breach or terminate its agreement with the Company or
otherwise fail to conduct its collaborative activities successfully in a timely
manner, the preclinical or clinical development or commercialization of product
candidates or research programs would be delayed or terminated. Any such delay
or termination could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company relies on its strategic partners for significant funding in
support of its research operations. The Company would be required to devote
additional internal resources to product development, or scale back or terminate
certain development programs or seek alternative collaborative partners, if
funding from one or more of its collaborative programs were reduced or
terminated.
Disputes may arise in the future with respect to the ownership of rights to
any technology developed with strategic partners. These and other possible
disagreements between strategic partners and the Company could lead to delays in
the collaborative research, development or commercialization of certain product
candidates, or could require or result in litigation or arbitration, which could
be time consuming and expensive, in which case it would have a material adverse
effect on the Company's business, financial condition and results of operations.
Generally, in each of its strategic alliances, the Company agrees not to
conduct certain research, independently or with any commercial third party, that
is in the same field as the research conducted under the alliance agreement.
Consequently, these arrangements may have the effect of limiting the areas of
research the Company may pursue, either alone or with others. The Company's
strategic partners, however, may develop, either alone or with others, products
that are similar to or competitive with the products that are the subject of the
Company's collaborations with such partners. Competing products, either
developed by a strategic partner or to which the strategic partner has rights,
may result in the partner withdrawing financial and related support for the
Company's product candidates, which could have a material adverse effect on the
Company's business, financial condition and results of operations.
All of the Company's strategic alliance agreements are subject to
termination under various circumstances. Each strategic partner has the right to
terminate the research program it is funding (while maintaining rights and
licenses to certain Company discoveries) should the Company fail to meet certain
performance criteria specified in the relevant strategic alliance agreement.
Certain of the Company's strategic alliance agreements provide that, upon
expiration of a specified period after commencement of the agreement, its
strategic partner has the right to terminate the agreement on short notice
without cause. The termination of any strategic alliance could have a material
adverse effect on the Company's business, financial condition and results of
operations.
POTENTIAL CONFLICTS OF INTEREST
The Company has established relationships with strategic partners, research
collaborators and scientific advisors. Conflicts of interest could arise between
the Company and these third parties which, depending upon the nature of such
conflicts, could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company relies on its strategic partners for support in its disease
research programs and intends to rely on its strategic partners for preclinical
evaluation and clinical development of its potential products and manufacturing
and marketing of any products. Each of the Company's strategic partners is
conducting multiple product development efforts within each disease area that is
the subject of its strategic alliance with the Company. Generally, in each of
its strategic alliances, the
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Company's strategic partners may develop, either alone or with others, products
that are similar to or competitive with the products that are the subject of the
Company's collaborations with such partners. Competing products, either
developed by a strategic partner or to which the strategic partner has rights,
may result in the partner withdrawing financial and related support for the
Company's product candidates, which could have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company has relationships with collaborators and scientific advisors at
academic and other institutions, some of whom conduct research at the Company's
request, particularly with respect to the Company's human genetics programs.
These collaborators and scientific advisors are not employees of the Company and
may have commitments to, or consulting or advisory contracts with, other
entities that may limit their availability to the Company. As a result, the
Company has limited control over their activities and, except as otherwise
required by its collaboration and consulting agreements, can expect only limited
amounts of their time to be dedicated to the Company's activities.
INTENSE COMPETITION
Millennium faces, and will continue to face, intense competition from
organizations such as large pharmaceutical, biotechnology and diagnostic
companies, as well as academic and research institutions and government
agencies. The Company is subject to significant competition from organizations
that are pursuing the same or similar technologies as those which constitute the
Company's technology platform and from organizations that are pursuing
pharmaceutical or diagnostic products that are competitive with the Company's
potential products. Most of the organizations competing with the Company have
greater capital resources, research and development staffs and facilities, and
greater experience in drug discovery and development, obtaining regulatory
approvals and pharmaceutical product manufacturing and greater marketing
capabilities than the Company.
In addition, research in the field of genomics is highly competitive.
Competitors of the Company in the genomics area include, among others, public
companies such as Genome Therapeutics Corporation, Human Genome Sciences, Inc.,
Incyte Pharmaceuticals, Inc., Myriad Genetics, Inc. and Sequana Therapeutics,
Inc., as well as private companies and major pharmaceutical companies.
Universities and other research institutions, including those receiving funding
from the federally funded Human Genome Project, also compete with Millennium. A
number of entities are attempting to rapidly identify and patent randomly
sequenced genes and gene fragments, typically without specific knowledge of the
function of such genes or gene fragments. In addition, certain other entities
are pursuing a gene identification, characterization and product development
strategy based on positional cloning. The Company's competitors may discover,
characterize or develop important genes in advance of Millennium, which could
have a material adverse effect on any related Millennium disease research
program. The Company also faces competition from these and other entities in
gaining access to DNA samples used in its research and development projects. The
Company expects competition to intensify in genomics research as technical
advances in the field are made and become more widely known.
The Company relies on its strategic partners for support in its disease
research programs and intends to rely on its strategic partners for preclinical
evaluation and clinical development of its potential products and manufacturing
and marketing of any products. Each of the Company's strategic partners is
conducting multiple product development efforts within each disease area that is
the subject of its strategic alliance with the Company. For example, Roche, with
whom the Company is collaborating in the field of obesity, currently has a
product for the treatment of obesity in late stage clinical trials. Generally,
the Company's strategic alliance agreements do not restrict the strategic
partner from pursuing competing development efforts. Any product candidate of
the Company,
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therefore, may be subject to competition with a potential product under
development by a strategic partner.
PATENTS AND PROPRIETARY RIGHTS; THIRD PARTY RIGHTS
The Company's commercial success will depend in part on obtaining patent
protection on gene discoveries and on products, methods and services based on
such discoveries. The Company has more than 100 pending United States and
foreign patent applications and has two issued United States patents. The patent
positions of pharmaceutical, biopharmaceutical and biotechnology companies,
including Millennium, are generally uncertain and involve complex legal and
factual questions. There can be no assurance that any of the Company's pending
patent applications will result in issued patents, that the Company will develop
additional proprietary technologies that are patentable, that any patents issued
to the Company or its strategic partners will provide a basis for commercially
viable products or will provide the Company with any competitive advantages or
will not be challenged by third parties, or that the patents of others will not
have an adverse effect on the ability of the Company to do business. In
addition, patent law relating to the scope of claims in the technology fields in
which the Company operates is still evolving. The degree of future protection
for the Company's proprietary rights, therefore, is uncertain. Furthermore,
there can be no assurance that others will not independently develop similar or
alternative technologies, duplicate any of the Company's technologies, or, if
patents are issued to the Company, design around the patented technologies
developed by the Company. In addition, the Company could incur substantial costs
in litigation if it is required to defend itself in patent suits brought by
third parties or if it initiates such suits.
The Company has applied for patent protection for novel genes, partial gene
sequences ("ESTs") of novel genes and novel uses for known genes identified
through its research programs. There is substantial uncertainty regarding the
patentability of ESTs or full-length genes absent data demonstrating functional
relevance. Based on recent technological advances in gene sequencing technology,
a number of groups other than the Company are attempting to rapidly identify
ESTs and full-length genes, the functions of which have not been characterized.
Washington University, for example, is currently identifying ESTs through
partial sequencing pursuant to funding provided by Merck & Co., Inc., and
depositing the ESTs identified in a public database. The public availability of
EST information prior to the time the Company applies for patent protection on a
corresponding full-length gene could adversely affect the Company's ability to
obtain patent protection with respect to such gene. To the extent any patents
issue to other parties on such partial or full-length genes, the risk increases
that the potential products and processes of the Company or its strategic
partners may give rise to claims of patent infringement.
Others may have filed and in the future are likely to file patent
applications covering genes or gene products that are similar or identical to
those of the Company. No assurance can be given that any such patent application
will not have priority over patent applications filed by the Company. Any legal
action against the Company or its strategic partners claiming damages and
seeking to enjoin commercial activities relating to the affected products and
processes could, in addition to subjecting the Company to potential liability
for damages, require the Company or its strategic partner to obtain a license in
order to continue to manufacture or market the affected products and processes.
There can be no assurance that the Company or its strategic partners would
prevail in any such action or that any license required under any such patent
would be made available on commercially acceptable terms, if at all. The Company
believes that there may be significant litigation in the industry regarding
patent and other intellectual property rights. If the Company becomes involved
in such litigation, it could consume a substantial portion of the Company's
managerial and financial resources.
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There is substantial uncertainty concerning whether human clinical data
will be required for issuance of patents for human therapeutics. If such data is
required, the Company's ability to obtain patent protection could be delayed or
otherwise adversely affected. Although the United States Patent and Trademark
Office ("USPTO") issued new utility guidelines in July 1995 that address the
requirements for demonstrating utility for biotechnology inventions,
particularly for inventions relating to human therapeutics, there can be no
assurance that USPTO examiners will follow such guidelines or that the USPTO's
position will not change with respect to what is required to establish utility
for gene sequences and products and methods based on such sequences.
Furthermore, the enactment of the legislation implementing the General Agreement
on Trade and Tariffs has resulted in certain changes to United States patent
laws that became effective on June 8, 1995. Most notably, the term of patent
protection for patent applications filed on or after June 8, 1995 is no longer a
period of seventeen years from the date of grant. The new term of United States
patents will commence on the date of issuance and terminate twenty years from
the earliest effective filing date of the application. Because the time from
filing to issuance of biotechnology patent applications is often more than three
years, a twenty-year term from the effective date of filing may result in a
substantially shortened term of patent protection, which may adversely impact
the Company's patent position. If this change results in a shorter period of
patent coverage, the Company's business could be adversely affected to the
extent that the duration and level of the royalties it is entitled to receive
from its strategic partners is based on the existence of a valid patent.
The Company relies upon trade secret protection for its confidential and
proprietary information. The Company believes that it has developed proprietary
technology for use in gene discovery, including proprietary genetic marker sets,
proprietary software (including proprietary software for DNA sequence analysis
and laboratory automation) and an integrated bioinformatics system. The Company
has not sought patent protection for these technologies. In addition, the
Company has developed a database of proprietary gene sequences which it updates
on an ongoing basis. The Company has taken security measures to protect its data
and continues to explore ways to further enhance the security for its data.
There can be no assurance, however, that such measures will provide adequate
protection for the Company's trade secrets or other proprietary information.
While the Company requires employees, academic collaborators and consultants to
enter into confidentiality agreements, there can be no assurance that
proprietary information will not be disclosed, that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to the Company's trade secrets or disclose
such technology, or that the Company can meaningfully protect its trade secrets.
The Company's academic collaborators have certain rights to publish data
and information in which the Company has rights. While the Company believes that
the limitations on publication of data developed by its collaborators pursuant
to its collaboration agreements will be sufficient to permit the Company to
apply for patent protection on genes in which it is interested in pursuing
further research, there is considerable pressure on academic institutions to
publish discoveries in the genetics and genomics fields. There can be no
assurance that such publication would not affect the Company's ability to obtain
patent protection for some genes in which it may have an interest.
The Company is party to various license agreements which give it rights to
use certain technologies in its research and development processes. There can be
no assurance that the Company will be able to continue to license such
technology on commercially reasonable terms, if at all. Failure by the Company
to maintain rights to such technology could have a material adverse effect on
the Company's business, financial condition and results of operations.
-10-
<PAGE> 13
UNCERTAINTIES RELATING TO RETAINED COMMERCIALIZATION RIGHTS
In each of its strategic alliances, Millennium has retained
commercialization rights for the development and marketing of certain
pharmaceutical and diagnostic products and services. The Company may seek to
exploit these retained rights directly or may seek to develop certain retained
rights through collaborations with others. To date, the Company has not
initiated significant activities with respect to the exploitation of these
retained commercialization rights. The value of these rights, if any, will be
largely derived from the Company's gene identification and target validation
efforts, the success of which is also uncertain. Even if the Company identifies
and characterizes relevant disease genes, the exploitation of retained
commercialization rights requires, in addition to capital resources,
technological, product development, manufacturing, regulatory, marketing and
sales resources that the Company does not currently possess. There can be no
assurance that the Company will be able to develop or obtain such resources. To
the extent that the Company is required to rely on third parties for these
resources, such as Lilly for access to combinational chemistry libraries and
high-throughput screening technology, failure to establish and maintain such
relationships could have a material adverse effect on the Company's ability to
realize value from its retained commercialization rights. If the Company seeks
to exploit retained commercialization rights through joint ventures or strategic
alliances, it may be required to relinquish material rights on terms that may
not be favorable to the Company. No agreements concerning any such arrangements
currently exist, and there can be no assurance that the Company will be able to
enter into any such agreements on acceptable terms, if at all, or that the
Company will be able to realize any value from its retained commercialization
rights.
GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL
Prior to marketing, any new drug developed by the Company and its strategic
partners must undergo an extensive regulatory approval process in the United
States and other countries. This regulatory process, which includes preclinical
studies and clinical trials, and may include post-marketing surveillance, of
each compound to establish its safety and efficacy, can take many years and
require the expenditure of substantial resources. Data obtained from preclinical
studies and clinical trials are susceptible to varying interpretations that
could delay, limit or prevent regulatory approval. 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 clinical trials may result in
increased costs, program delays or both, which could have a material adverse
effect on the Company. Delays or rejections may also be encountered based upon
changes in United States Food and Drug Administration ("FDA") policies for drug
approval during the period of product development and FDA regulatory review of
each submitted new drug application ("NDA") in the case of new pharmaceutical
agents, or product license application ("PLA") in the case of biologics. Similar
delays also may be encountered in the regulatory approval of any diagnostic
product and in obtaining regulatory approvals in foreign countries. Under
current guidelines, proposals to conduct clinical research involving gene
therapy at institutions supported by the National Institutes of Health ("NIH")
must be approved by the Recombinant DNA Advisory Committee ("RAC") and the NIH.
There can be no assurance that regulatory approval will be obtained for any
drugs or diagnostic products developed by the Company or its strategic partners.
Furthermore, regulatory approval may entail limitations on the indicated use of
a drug. Because certain of the products likely to result from the Company's
disease research programs involve the application of new technologies and may be
based upon a new therapeutic approach, such products may be subject to
substantial additional review by various government regulatory authorities and,
as a result, regulatory approvals may be obtained more slowly than for products
using more conventional technologies.
-11-
<PAGE> 14
Even if regulatory approval is obtained, a marketed product and its
manufacturer are subject to continuing review. Discovery of previously unknown
problems with a product may have adverse effects on the Company's business,
financial condition and results of operations, including withdrawal of the
product from the market. Violations of regulatory requirements at any stage,
including preclinical studies and clinical trials, the approval process or
post-approval, may result in various adverse consequences to the Company,
including the FDA's delay in approval or refusal to approve a product,
withdrawal of an approved product from the market or the imposition of criminal
penalties against the manufacturer and NDA or PLA holder. The Company has not
submitted an investigational new drug application ("IND") for any product
candidate, and no product candidate has been approved for commercialization in
the United States or elsewhere. The Company intends to rely primarily on its
strategic partners to file INDs and generally direct the regulatory approval
process. No assurance can be given that the Company or any of its strategic
partners will be able to conduct clinical testing or obtain the necessary
approvals from the FDA or other regulatory authorities for any products. Failure
to obtain required governmental approvals will delay or preclude the Company's
strategic partners from marketing drugs or diagnostic products developed by the
Company or limit the commercial use of such products and could have a material
adverse effect on the Company's business, financial condition and results of
operations.
The Company's research and development activities involve the controlled
use of hazardous materials, chemicals and various radioactive materials. The
Company is subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of such materials and certain waste
products. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by federal,
state and local laws and regulations, the risk of accidental contamination or
injury from these materials cannot be completely eliminated. In the event of
such an accident, the Company could be held liable for any damages that result
and any liability could exceed the resources of the Company.
ETHICAL, LEGAL AND SOCIAL IMPLICATIONS OF GENETIC DIAGNOSTIC TESTING
The prospect of broadly available diagnostic tests which evaluate genetic
predisposition to disease has raised issues regarding the appropriate
utilization and the confidentiality of information provided by such testing. It
is possible that discrimination by third party payors could occur through the
raising of premiums by such payors to prohibitive levels, outright cancellation
of insurance or unwillingness to provide coverage to patients shown to have a
genetic predisposition to a particular disease. If insurance discrimination were
to become a significant barrier to the acceptance of such diagnostic tests, the
Company could experience a delay in diagnostic market penetration or a reduction
in the size of the potential serviceable market. Similarly, employers could
discriminate against employees with a genetic predisposition due to the
increased risk of developing disease resulting in possible cost increases for
health insurance and the potential for lost employment time. Finally,
governmental authorities could, for social or other purposes, limit the use of
genetic testing or prohibit testing for genetic predispositions to certain
conditions. If efforts by the Company and others to mitigate potential
discrimination are not successful, the Company could experience a delay or
reduction in test acceptance, which could have a material adverse effect on the
Company's or its strategic partners' ability to commercialize certain potential
diagnostic products.
ATTRACTION AND RETENTION OF KEY EMPLOYEES
The Company is highly dependent on the principal members of its management
and scientific staff. The loss of services of any of these personnel could
impede significantly the achievement of the Company's development objectives.
Furthermore, recruiting and retaining qualified scientific personnel to perform
research and development work in the future will also be critical to the
Company's success. There is intense competition among pharmaceutical and health
care companies,
-12-
<PAGE> 15
universities and nonprofit research institutions for experienced scientists, and
there can be no assurance that the Company will be able to attract and retain
personnel on acceptable terms. Pursuant to the Lilly strategic alliance
agreements in the atherosclerosis and oncology fields, Lilly has the right to
suspend funded research programs under these agreements upon the termination of
the employment of two or more specified employees of the Company without
replacement reasonably acceptable to Lilly.
EXPANSION OF OPERATIONS; MANAGEMENT OF GROWTH
The Company recently has significantly increased the scale of its
operations to support the expansion of its disease research programs and its
strategic alliances, including expansion due to the acquisition of ChemGenics in
February 1997. The increase has included the hiring of a significant number of
additional personnel. The Company currently employs 400 persons and plans to
hire approximately 100 additional employees by the end of 1997. The resulting
growth in personnel and facilities could place significant strains on the
Company's management, operations and systems.
DEPENDENCE ON RESEARCH COLLABORATORS AND SCIENTIFIC ADVISORS
The Company has relationships with collaborators at academic and other
institutions who conduct research at the Company's request, particularly with
respect to the Company's human genetics programs. Such collaborators are not
employees of the Company. All of Millennium's consultants are employed by
employers other than the Company and may have commitments to, or consulting or
advisory contracts with, other entities that may limit their availability to the
Company. As a result, the Company has limited control over their activities and,
except as otherwise required by its collaboration and consulting agreements, can
expect only limited amounts of their time to be dedicated to the Company's
activities. The Company's ability to discover genes involved in human disease
and commercialize products based on those discoveries may depend in part on
continued collaborations with researchers at academic and other institutions.
There can be no assurance that the Company will be able to negotiate additional
acceptable collaborations with collaborators at academic and other institutions
or that its existing collaborations will be successful.
The Company's research collaborators and scientific advisors sign
agreements which provide for confidentiality of the Company's proprietary
information and results of studies. There can be no assurance, however, that the
Company will be able to maintain the confidentiality of its technology and other
confidential information in connection with every collaboration, and any
unauthorized dissemination of the Company's confidential information could have
an adverse effect on the Company's business.
UNCERTAINTY OF PHARMACEUTICAL PRICING, REIMBURSEMENT AND RELATED MATTERS
The Company's business, financial condition and results of operations may
be materially adversely affected by the continuing efforts of government and
third party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets pricing and profitability of
prescription pharmaceuticals are subject to government control. In the United
States, the Company expects that there will continue to be a number of federal
and state proposals to implement similar government control. In addition,
increasing emphasis on managed care in the United States will continue to put
pressure on the pricing of pharmaceutical products and diagnostic tests. Cost
control initiatives could decrease the price that the Company or any of its
strategic partners receives for any products in the future and have a material
adverse effect on the Company's business, financial condition and results of
operations. Further, to the extent that cost control initiatives have a material
adverse effect on the Company's strategic partners, the Company's ability to
commercialize its products and to realize royalties may be adversely affected.
-13-
<PAGE> 16
The ability of the Company and any strategic partner to commercialize
pharmaceutical or diagnostic products may depend in part on the extent to which
reimbursement for the products will be available from government and health
administration authorities, private health insurers and other third party
payors. Significant uncertainty exists as to the reimbursement status of newly
approved health care products. Third party payors, including Medicare,
increasingly are challenging the prices charged for medical products and
services. Government and other third party payors are increasingly attempting to
contain health care costs by limiting both coverage and the level of
reimbursement for new therapeutic products and by refusing in some cases to
provide coverage for uses of approved products for disease indications for which
the FDA has not granted labeling approval. There can be no assurance that any
third party insurance coverage will be available to patients for any products
discovered and developed by the Company or its strategic partners. If adequate
coverage and reimbursement levels are not provided by government and other third
party payors for the Company's products, the market acceptance of these products
may be reduced, which may have a material adverse effect on the Company's
business, financial condition and results of operations.
PRODUCT LIABILITY EXPOSURE
Clinical trials, manufacturing, marketing and sale of any of the Company's
or its strategic partners' potential pharmaceutical products may expose the
Company to liability claims from the use of such pharmaceutical products. The
Company currently does not carry product liability insurance. There can be no
assurance that the Company or its strategic partners will be able to obtain such
insurance or, if obtained, that sufficient coverage can be acquired at a
reasonable cost. An inability to obtain sufficient insurance coverage at an
acceptable cost or otherwise to protect against potential product liability
claims could prevent or inhibit the commercialization of pharmaceutical products
developed by the Company or its strategic partners. A product liability claim or
recall could have a material adverse effect on the business or financial
condition of the Company. While under certain circumstances the Company is
entitled to be indemnified against losses by its strategic partners, there can
be no assurance that this indemnification would be available or adequate should
any such claim arise.
POTENTIAL ADVERSE EFFECT OF ANTI-TAKEOVER PROVISIONS
Provisions of the Company's Restated Certificate of Incorporation (the
"Restated Certificate") require that any action required or permitted to be
taken by stockholders of the Company must be effected at a duly called annual or
special meeting of stockholders and may not be effected by any consent in
writing. Special meetings of stockholders may be called only by the Chief
Executive Officer or, if none, the President of the Company or by the Board of
Directors. The Restated Certificate provides for a classified Board of
Directors, and members of the Board of Directors may be removed only for cause
upon the affirmative vote of holders of at least two-thirds of the shares of
capital stock of the Company entitled to vote. The Company's Board of Directors
is authorized to issue up to 5,000,000 shares of Preferred Stock and to
determine the price, rights, preferences and privileges of those shares without
further vote or action by the Company's stockholders. The rights of the holders
of Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any shares of Preferred Stock that may be issued in the
future. While the Company has no current intention to issue shares of Preferred
Stock, any such issuance could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
Company. In addition, any such Preferred Stock may have other rights, including
economic rights senior to the Common Stock, and, as a result, the issuance
thereof could have a material adverse effect on the market value of the Common
Stock. Furthermore, the Company is subject to anti-takeover provisions of
Section 203 of the Delaware General Corporation Law, which prohibits the Company
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
first becomes an 'interested stockholder," unless the business
-14-
<PAGE> 17
combination is approved in a prescribed manner. The application of Section 203
also could have the effect of delaying or preventing changes of control or
management of the Company, which could adversely affect the market price of the
Company's Common Stock. These provisions, and other provisions of the Restated
Certificate, may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management of the Company, including
transactions in which stockholders might otherwise receive a premium for their
shares over then current market prices. In addition, these provisions may limit
the ability of stockholders to approve transactions that they may deem to be in
their best interests.
POSSIBLE VOLATILITY OF STOCK PRICE
The trading price of the Company's Common Stock could be subject to
significant fluctuations in response to announcements of results of research
activities, technological innovations or new commercial products by the Company
or its competitors, changes in government regulations, regulatory actions,
changes in patent laws, developments concerning proprietary rights, quarterly
variations in operating results, litigation or other events. The stock market
has from time to time experienced extreme price and volume fluctuations that
have affected particularly the market prices for biotechnology companies and
that often have been unrelated to the operating performance of such companies.
These broad market fluctuations may adversely affect the market price of the
Company's Common Stock.
ABSENCE OF DIVIDENDS
The Company has never paid dividends and does not intend to pay any
dividends for the foreseeable future.
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<PAGE> 18
USE OF PROCEEDS
All of the Shares are being sold by the Selling Stockholders or by their
pledgees, donees, transferees or other successors in interest, and the Company
will not receive any proceeds from the sale of such Shares.
THE SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares of Common
Stock beneficially owned by the Selling Stockholders as of the date of this
Prospectus, the number of the shares to be offered by the Selling Stockholders
or by their pledgees, donees, transferees or other successors in interest and
the number and percentage of shares to be owned beneficially by the Selling
Stockholders assuming that all of the shares offered hereby by the Selling
Stockholders or by their pledgees, donees, transferees or other successors in
interest are sold as described herein. The Selling Stockholders include former
officers and directors of ChemGenics, some of whom became employees of the
Company upon the acquisition of ChemGenics. Except as provided below, none of
the Selling Stockholders has had a material relationship with the Company
within the past three years.
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percentage of
Beneficially Number of Number of Shares Shares of
Owned Shares of of Common Stock Common
Name of Prior to Common Stock Beneficially Owned Stock Owned
Selling Stockholder Offering(1) Offered Hereby After Offering(1) After Offering
- ------------------- ----------- --------------- ----------------- --------------
<S> <C> <C> <C> <C>
Michael I. Barach 1,696 1,696 0 0%
Jeff Becker (2) 42,732 14,244 28,488 *
Geoffrey L. Berger 390 390 0 0
Brian Berkowitz 5,935 5,935 0 0
Lauren Berkowitz 5,935 5,935 0 0
Barry A. Berkowitz 280,818 280,818 0 0
Neill H. Brownstein 6,783 6,783 0 0
Robert H. Buescher 2,249 2,249 0 0
William T. Burgin 10,175 10,175 0 0
Earl Christopher 3,044 3,044 0 0
The Chvisuk Family
Limited Partnership,
A Massachusetts
Limited Partnership(3) 950 950 0 0
Richard R. Davis 2,595 2,595 0 0
Richard Diamond (4) 4,036 1,187 2,849 *
Jack E. Edwards (5) 7,240 1,187 6,053 *
Julia Feldman 2,374 2,374 0 0
</TABLE>
-16-
<PAGE> 19
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percentage of
Beneficially Number of Number of Shares Shares of
Owned Shares of of Common Stock Common
Name of Prior to Common Stock Beneficially Owned Stock Owned
Selling Stockholder Offering(1) Offered Hereby After Offering(1) After Offering
- ------------------- ----------- --------------- ----------------- --------------
<S> <C> <C> <C> <C>
Gerald Fink (6) 66,946 18,992 47,954 *
Jennifer Fink 2,374 2,374 0 0
Christopher Gabrieli 23,985 23,985 0 0
Rex. T. Gallagher, Ph.D. 2,374 2,374 0 0
Barbara M. Henagan 2,113 2,113 0 0
G. Felda Hardymon 7,780 7,780 0 0
Weidong Jiang 1,496 1,496 0 0
Yigal Koltin (7) 53,652 14,244 39,408 *
Robert D. Lindsay 1,556 1,556 0 0
David Q. Liu 357 357 0 0
Daniel S. Martin 1,357 1,357 0 0
Michael S. Mathews 1,357 1,357 0 0
R.W. Morgan (8) 15,824 1,221 14,603 *
N. Ron Morris (9) 4,629 1,187 3,442 *
Koji Nakanishi (10) 4,154 1,187 2,967 *
Spencer Olson 48 48 0 0
Barbara Perlo 48 48 0 0
Scott Reeves 48 48 0 0
Phillips Robbins (11) 14,244 4,748 9,496 *
Robert Morgan CPA
Profit Sharing Plan 2,849 2,849 0 *
David Rothstein (12) 4,370 2,707 1,663 *
Thomas F. Ruhm 584 584 0 0
J. Robert Scott, Inc. 3,168 3,168 0 0
Alexander Slutsky, Ph.D. 475 475 0 0
</TABLE>
-17-
<PAGE> 20
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percentage of
Beneficially Number of Number of Shares Shares of
Owned Shares of of Common Stock Common
Name of Prior to Common Stock Beneficially Owned Stock Owned
Selling Stockholder Offering(1) Offered Hereby After Offering(1) After Offering
- ------------------- ----------- --------------- ----------------- --------------
<S> <C> <C> <C> <C>
Gary Takata 4,070 4,070 0 0
Bill Timberlake (13) 90,686 4,748 85,938 *
Jerry Weisbach, Ph.D.
(14) 21,366 7,122 14,244 *
Ward W. Woods, Jr. 3,891 3,891 0 0
American Home
Products Corporation (15) 197,834 197,834 0 0
Bessemer Venture
Partners III L.P. (16) 701,254 701,254 0 0
Brimstone Island Co.
L.P. 10,175 10,175 0 0
Comdisco, Inc. (17) 244,525 36,421 208,104 *
Gilde Investment Fund
B.V. 3,538 3,538 0 0
Morgan Holland Fund
II, L.P. (18) 350,227 350,227 0 0
Pfizer, Inc. (19) 640,980 640,980 0 0
PerSeptive Biosystems,
Inc. (20) 1,612,582 1,612,582 0 0
Technology Leaders L.P. 361,795 361,795 0 0
Technology Leaders
Offshore C.V. 413,092 413,092 0 0
Hoffmann La Roche Ltd
(21) 2,271,645 500,000 1,771,645 6.2
Imperial Bancorp 17,883 17,883 0 0%
</TABLE>
- -----------------------
(1) The number of shares beneficially owned is determined under rules
promulgated by the Securities and Exchange Commission, and the information
is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to
which the individual has sole or shared voting power or investment power
and also
-18-
<PAGE> 21
any shares which the individual has the right to acquire within 60 days
after May 31, 1997 through the exercise of any stock option or other right.
The inclusion herein of such shares, however, does not constitute an
admission that such Selling Stockholder is a direct or indirect beneficial
owner of such shares. The Selling Stockholders have sole voting power and
investment power with respect to all shares of capital stock listed as
owned by the Selling Stockholders.
(2) Includes 28,488 shares of Common Stock which Mr. Becker has the right
to acquire within 60 days of May 31, 1997 upon exercise of stock options.
(3) Subsequent to the date of this Prospectus, the Shares held by the Chvisuk
Family Limited Partnership, a Massachusetts Limited Partnership, may be
distributed to Gregory S. Chvisuk, a general and limited partner, Theresa
A. Chvisuk, a limited partner and L. Michael Bogert as custodian for
Katherine Patricia Bogert under the Massachusetts Uniform Transfers to
Minors Act.
(4) Includes 2,849 shares of Common Stock which Mr. Diamond has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(5) Includes 6,053 shares of Common Stock which Mr. Edwards has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(6) Includes 47,954 shares of Common Stock which Dr. Fink has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(7) Includes 39,408 shares of Common Stock which Dr. Koltin has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(8) Includes 14,603 shares of Common Stock which Mr. Morgan has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
Subsequent to the date of this Prospectus, Mr. Morgan may transfer the
1,221 shares of Common Stock being registered hereunder to the Robert
Morgan CPA Profit Sharing Plan (the "Plan"), in which event the Plan shall
be deemed the Selling Stockholder with respect to such shares.
(9) Includes 3,442 shares of Common Stock which Mr. Morris has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(10) Includes 2,967 shares of Common Stock which Mr. Nakanishi has the right
to acquire within 60 days of May 31, 1997 upon exercise of stock options.
(11) Includes 9,496 shares of Common Stock which Mr. Robbins has the right to
acquire within 60 days of May 31, 1997 upon exercise of stock options.
(12) Includes 1,663 shares of Common Stock which Mr. Rothstein has the right
to acquire within 60 days of May 31, 1997 upon exercise of stock options.
(13) Includes 85,938 shares of Common Stock which Mr. Timberlake has the right
to acquire within 60 days of May 31, 1997 upon exercise of stock options.
(14) Includes 14,244 shares of Common Stock which Dr. Weisbach has the right
to acquire within 60 days of May 31, 1997 upon exercise of stock options.
(15) American Home Products Corporation and the Company are parties to two
strategic alliance agreements in certain of the Company's disease research
programs.
(16) Subsequent to the date of this Prospectus, the Shares held by Bessemer
Venture Partners III L.P. may be distributed to Deer III and Co. LLC and
Bessemer Ventures, Inc., the General Partners of Bessemer Venture Partners
III L.P.
(17) Includes 208,104 shares of Common Stock which CDC Realty, Inc.,a wholly-
owned subsidiary of Comdisco Inc.("Comdisco"), has the right to acquire
within 60 days of May 31, 1997 upon exercise of outstanding warrants.
Comdisco and the Company are parties to an equipment lease financing
agreement.
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<PAGE> 22
(18) Subsequent to the date of this Prospectus, the Shares held by Morgan
Holland Fund II, L.P. may be distributed to the following limited and
general partners of Morgan Holland Fund II, L.P.: Abbott Capital
Management, LP, as Investment Manager for Utah State Retirement Systems;
Center Corp.; Co-operative Insurance Society Limited; Colorado Public
Employees Retirement Association; Delaware State Employees Pension Fund;
FMC Corporation; HLM Partners III, LP; Honeywell, Inc.; Howard Hughes
Medical Institute; John Hancock Venture Capital Fund; Kansas Public
Employees Retirement Association; Metropolitan Life Insurance Co.;
Michigan Dept. of Treasury; Morgan, Holland Partners II, L.P.; PACUS (UK)
Ltd; Pension Reserves Investment Trust Capital Fund, MA; Testa, Hurwitz &
Thibeault; Travelers Indemnity Co.; Travelers Insurance Co.; Travelers
Life & Annuity Co.; University of Notre Dame; YMCA Retirement Fund; Daniel
J. Holland; Delaware State Employees Pension Fund; Edwin M. Kania, Jr,;
Foster L. Aborn; James F. Morgan; John A Delahanty; Joseph T. McCullen,
Jr.; Richard J. Testa; Robert C. Seamans, Jr.; Robert G. Stone, Jr.; and
Stephen J. Ricci.
(19) Pfizer, Inc. and the Company are parties to a strategic alliance agreement
in one of the Company's disease research programs.
(20) PerSeptive Biosystems Inc. ("PBIO") and the Company, as successor to
ChemGenics, are parties to certain agreements pursuant to which a
substantial equity interest in ChemGenics was exchanged for certain present
and future rights to PBIO's patents, technology and prototype equipment.
(21) Michael Steinmetz, Vice President, Preclinical Research and Development of
Hoffmann-La Roche, Inc. an affiliate of Hoffmann-La Roche Ltd., served as
a director of the Company from 1994 until May 1997.
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<PAGE> 23
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that the Shares covered
hereby may be offered and sold by the Selling Stockholders, or by their
pledgees, donees, transferees or other successors in interest, from time to time
in private or public transactions, in transactions involving principals, in
transactions involving brokers, or by any other lawful methods. Sales through
brokers may be made by any method of trading authorized by any stock exchange on
which the Shares may be listed, including block trading in negotiated
transactions. Without limiting the foregoing, such brokers may act as dealers by
purchasing any or all of the Shares covered by this Prospectus, either as agents
for others or as principals for their own accounts, and reselling such Shares
pursuant to this Prospectus. Sales of Shares are, in general, expected to be
made at the market price prevailing at the time of each such sale; however,
prices in negotiated transactions may differ considerably. The Selling
Stockholders have advised the Company that they do not anticipate paying any
consideration other than usual and customary broker's commissions in connection
with sales of the Shares. The Selling Stockholders and their pledgees, donees,
transferees and successors in interest are acting independently of the Company
in making decisions with respect to the timing, manner and size of each sale.
In offering the Shares covered by this Prospectus, the Selling Stockholders
and their pledgees, donees, transferees and successors in interest and any
broker-dealers who execute sales for such Selling Stockholders or their
pledgees, donees, transferees and successors in interest may be considered to be
"underwriters" within the meaning of the Securities Act, and any profits
realized by the Selling Stockholders or their pledgees, donees, transferees and
successors in interest and the compensation of such broker-dealers may be deemed
to be underwriting discounts and commissions.
The Company has agreed to indemnify in certain circumstances the Selling
Stockholders and any underwriter and certain control and other persons related
to the foregoing persons against certain liabilities, including liabilities
under the Securities Act. The Selling Stockholders have agreed to indemnify in
certain circumstances the Company and certain related persons against certain
liabilities, including liabilities under the Securities Act.
The Company has agreed with the holders of the Acquisition Shares to keep
the Registration Statement of which this Prospectus constitutes a part effective
until the earliest of (i) February 10, 1999; (ii) the date on which all of the
Acquisition Shares have been sold; or (iii) the first date on which all of the
Acquisition Shares may be sold without registration pursuant to Rule 144 under
the Securities Act of 1933, as amended (the "Act") within a three-month period.
The Company intends to de-register any of the Acquisition Shares not sold at the
end of such period.
-21-
<PAGE> 24
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Hale and Dorr LLP, a limited liability partnership including
professional corporations, 60 State Street, Boston, Massachusetts 02109.
EXPERTS
The financial statements of Millennium Pharmaceuticals, Inc. incorporated
by reference in Millennium Pharmaceuticals, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1996, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference 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.
The financial statements and schedules for ChemGenics Pharmaceuticals Inc.
incorporated by reference in the Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.
-22-
<PAGE> 25
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE 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 OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION OF AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE HEREOF.
---------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Available Information........................ 2
Incorporation of Certain Documents
By Reference............................... 2
Special Note Regarding Forward-Looking
Information................................ 3
The Company.................................. 4
Risk Factors................................. 5
Use of Proceeds.............................. 16
The Selling Stockholders..................... 16
Plan of Distribution......................... 21
Legal Matters................................ 22
Experts...................................... 22
</TABLE>
================================================================================
MILLENNIUM PHARMACEUTICALS, INC.
5,301,571 SHARES
COMMON STOCK
--------------
PROSPECTUS
--------------
________, 1997
================================================================================
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Company. All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
<S> <C>
Filing Fee - Securities and Exchange $24,400
Commission
Legal fees and expenses of the 25,000
Company
Accounting fees and expenses 10,000
Blue Sky fees and expenses --
Printing expenses --
Miscellaneous expenses 5,600
-------
Total Expenses $65,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Nine of the Registrant's Restated Certificate of Incorporation (the
"Restated Certificate of Incorporation") provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
Article Nine of the Registrant's Restated Certificate of Incorporation
provides that a director or officer of the Registrant (a) shall be indemnified
by the Registrant against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement incurred in connection with any litigation
or other legal proceeding (other than an action by or in the right of the
Registrant) brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (b) shall be
indemnified by the Registrant against all expenses (including attorneys' fees)
and amounts paid in settlement incurred in connection with any action by or in
the right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless a court determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. Notwithstanding the foregoing, to the extent that a
II-1
<PAGE> 27
director or officer has been successful, on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, he is required
to be indemnified by the Registrant against all expenses (including attorneys'
fees) incurred in connection therewith. Expenses shall be advanced to a Director
or officer at his request, provided that he undertakes to repay the amount
advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
The Company maintains a general liability insurance policy which covers
certain liabilities of directors and officers of the Company arising out of
claims based on acts or omissions in their capacities as directors or officers.
<TABLE>
<CAPTION>
ITEM 16. LIST OF EXHIBITS.
<S> <C>
4.1* Specimen stock certificate for shares of common stock, $.001 par value, of the Company
5** Opinion of Hale and Dorr LLP.
23.1** Consent of Hale and Dorr LLP, included in Exhibit 5 filed herewith.
23.2** Consent of Ernst & Young LLP.
23.3** Consent of Arthur Andersen LLP.
24** Power of Attorney (See page II-5 of this Registration Statement).
</TABLE>
- ------------------
* Incorporated by reference from the Company's Form S-1 Registration Statement
(File No. 333-2490).
** Previously filed.
II-2
<PAGE> 28
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(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,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
derivation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the Registration Statement; and
(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;
provided, however, that paragraphs (1)(i) and (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 Company pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are incorporated by reference in this
Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the 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.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) 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 the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Corporation pursuant to the indemnification provisions described herein, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
II-3
<PAGE> 29
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE> 30
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-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cambridge, Commonwealth of Massachusetts, on
this 10th day of June, 1997.
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ Steven H. Holtzman
---------------------------
Steven H. Holtzman
Chief Business Officer
II-5
<PAGE> 31
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Chief Executive Officer and Director June 10, 1997
- ------------------------ (Principal Executive Officer)
Mark J. Levin
/s/ Steven H. Holtzman Chief Business Officer (Principal) June 10, 1997
- ------------------------ Financial Officer)
Steven H. Holtzman
* Director of Finance (Principal June 10, 1997
- ------------------------ Accounting Officer)
Peter J. Courossi
* Director June 10, 1997
- ------------------------
Joshua Boger, Ph.D.
* Director June 10, 1997
- ------------------------
Eugene Cordes, Ph.D.
* Director June 10, 1997
- ------------------------
A. Grant Heidrich, III
* Director June 10, 1997
- ------------------------
William W. Helman
* Director June 10, 1997
- ------------------------
Raju Kucherlapati, Ph.D
* Director June 10, 1997
- ------------------------
Eric S. Lander, Ph.D
*By: /s/ Steven H. Holtzman June 10, 1997
-----------------------
As Attorney-in-fact
</TABLE>
II-6
