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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 5, 1999
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
MILLENNIUM PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
--------------------------
<TABLE>
<S> <C>
DELAWARE 04-3177038
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
75 SIDNEY STREET
CAMBRIDGE, MASSACHUSETTS 02139
617-679-7000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------------
MARK J. LEVIN
CHIEF EXECUTIVE OFFICER
MILLENNIUM PHARMACEUTICALS, INC.
75 SIDNEY STREET
CAMBRIDGE, MASSACHUSETTS 02139
617-679-7000
(Name, address, including zip code, and telephone number,
including area code, of Agent for Service)
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COPIES TO:
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<S> <C> <C>
DAVID E. REDLICK, ESQ. JOHN B. DOUGLAS III, ESQ. DAVID TRUMMEL, ESQ.
KENNETH A. HOXSIE, ESQ. MILLENNIUM PHARMACEUTICALS, ELI LILLY AND COMPANY
HALE AND DORR LLP INC. LILLY CORPORATE CENTER
60 STATE STREET 75 SIDNEY STREET INDIANAPOLIS, INDIANA 46286
BOSTON, MASSACHUSETTS 02109 CAMBRIDGE, MASSACHUSETTS 02139 317-276-5669
617-526-6000 617-679-7000
</TABLE>
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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. / /
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. / / 333- .
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. / / 333- .
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SHARES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share 500,000 $70.625 $35,312,500 $9,817
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices on the Nasdaq National Market on November 2, 1999.
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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<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 5, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
MILLENNIUM PHARMACEUTICALS, INC.
500,000 SHARES OF COMMON STOCK
------------------
This prospectus relates to resales of shares of common stock we issued and
sold to Eli Lilly and Company, the selling stockholder. We will not receive any
of the proceeds from the sale of the shares by the selling stockholder.
The selling stockholder, or its pledgees, donees, transferees or other
successors in interest, may offer the shares through public or private
transactions at prevailing market prices, at prices related to prevailing market
prices or at privately negotiated prices. Our common stock is traded on the
Nasdaq National Market under the symbol "MLNM." On November 4, 1999, the closing
sale price of the common stock on Nasdaq was $75.3125 per share.
---------------------
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Our principal executive offices are located at 75 Sidney Street, Cambridge,
Massachusetts 02139 and our telephone number is 617-679-7000.
---------------------
.
The date of this prospectus is , 1999
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TABLE OF CONTENTS
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PAGE
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<S> <C>
WHO WE ARE.................................................. 3
RISK FACTORS................................................ 6
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION.......... 17
USE OF PROCEEDS............................................. 18
SELLING STOCKHOLDER......................................... 18
PLAN OF DISTRIBUTION........................................ 19
LEGAL MATTERS............................................... 21
EXPERTS..................................................... 21
WHERE TO FIND MORE INFORMATION.............................. 21
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 21
</TABLE>
------------------------
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THE SELLING
STOCKHOLDER IS OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF OUR COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE
OF THE SHARES.
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WHO WE ARE
BUSINESS. Millennium Pharmaceuticals is seeking to discover and develop
proprietary therapeutic and diagnostic human healthcare products and services
based on the discovery and understanding of the medical usefulness of genes. We
employ genetics and genetic analysis, also called genomics, and use
computer-based information systems to assist in the identification, analysis and
elucidation of the biological function of genes. We are applying our technology
across the entire healthcare sector, from gene identification through patient
management.
We are pursuing business opportunities in small molecule drugs,
biotherapeutics and predictive medicine through operating divisions and our
subsidiaries, Millennium BioTherapeutics, Inc. and Millennium Predictive
Medicine, Inc. As part of our strategy, we have formed strategic alliances with
major companies in the pharmaceutical and life science industries. To date, we
have formed eleven alliances, nine by Millennium, one by Millennium
BioTherapeutics and one by Millennium Predictive Medicine. We use the term
"Millennium Pharmaceuticals" in this prospectus to mean Millennium
Pharmeceuticals and its subsidiaries, unless the context indicates otherwise.
PENDING MILLENNIUM BIOTHERAPEUTICS MERGER. On October 14, 1999, we signed a
merger agreement with Millennium BioTherapeutics. On that same date, we
purchased the 18% interest in Millennium BioTherapeutics owned by Eli Lilly and
Company. We paid Lilly $15.00 for each of its shares of Millennium
BioTherapeutics; the payment was in the form of 360,198 shares of Millennium
Pharmaceuticals common stock. We agreed to register these shares with the SEC
for resale by Lilly. We will issue additional shares to Lilly, or Lilly will
return to us some of the shares issued to it, depending upon whether the price
of our common stock over a five-day period prior to having the resale
registration statement of which this prospectus is a part declared effective, is
less than or exceeds $83.2876.
Under the merger agreement with Millennium BioTherapeutics, we will pay each
holder of Millennium BioTherapeutics Class B common stock $15.00 for his or her
shares; the payment will be in the form of our common stock. The number of
shares of our stock we will pay for each share of Millennium BioTherapeutics
will equal the average of (1) $15.00 divided by $62.536 and (2) $15.00 divided
by the average of the last reported sale prices of our stock on the Nasdaq
National Market over the 20-day period ending on the second trading day prior to
closing the merger. We expect to complete the merger on the 20(th) business day
after mailing a prospectus to Millennium BioTherapeutics shareholders relating
to the proposed merger.
PENDING LEUKOSITE MERGER. On October 14, 1999, we signed a merger agreement
with LeukoSite, Inc. If this merger is completed, LeukoSite will become a
wholly-owned subsidiary of Millennium Pharmaceuticals. Under the terms of the
merger agreement, LeukoSite shareholders will receive 0.4296 shares of our
common stock in exchange for each LeukoSite share. In connection with this
transaction, we expect to issue approximately 6,577,110 shares of our common
stock, and approximately 986,911 shares of our common stock issuable upon
exercise of LeukoSite options and warrants.
LeukoSite is a biotechnology company developing proprietary monoclonal
antibody and small molecule drugs to treat patients with cancer and
inflammatory, autoimmune and viral diseases. LeukoSite is preparing to complete
the filing of the biologics license application for its lead drug, the
CAMPATH-Registered Trademark- monoclonal antibody. LeukoSite is a party to a
joint venture with ILEX Oncology, Inc. for CAMPATH-Registered Trademark-, and
Schering AG and its U.S. affiliate, Berlex Laboratories, expect to market,
distribute and sell CAMPATH-Registered Trademark- in Europe and the United
States. Including CAMPATH-Registered Trademark-, LeukoSite has six drug
candidates in clinical development and nine partnered small molecule research
and development programs. LeukoSite's collaborators include Schering AG,
Warner-Lambert Company, Roche Bioscience, Kyowa Hakko Kogyo Co., Ltd.,
Genentech, Inc., Hoescht Marion Russel, ILEX Oncology, Inc., MorphoSys AG and
Medarex, Inc.
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The principal conditions to closing the LeukoSite acquisition are:
- Approval by the stockholders of LeukoSite;
- Termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976; and
- The registration statement registering the shares of our common stock to
be issued to the stockholders of LeukoSite must become effective under the
Securities Act of 1933 and must not be subject to any stop order or
proceedings seeking a stop order.
AMENDMENT OF RIGHTS EXCHANGE AGREEMENT. The Rights Exchange Agreement
between us and Millennium BioTherapeutics provided that we would transfer and
assign to each other existing and future rights for use in our respective core
fields. In particular, we and Millennium BioTherapeutics agreed:
- To transfer and assign to Millennium BioTherapeutics the retained rights
under our existing collaboration agreements that are in Millennium
BioTherapeutics' core field,
- To transfer, assign and/or license to each other all future product
development opportunities and technology rights developed or acquired
during the agreement term to the extent applicable to our respective core
fields, and
- To use reasonable efforts when negotiating third party collaboration
agreements to limit the licenses and rights granted to the third party in
the core field of the other party, except when such limitation of license
grant would have a material impact on either the willingness of the third
party to enter into the collaboration agreement or on the financial terms
of the collaboration agreement.
The agreement has a term which ends on the later of May 31, 2002 or the date
on which Millennium BioTherapeutics ceases to be an affiliate of Millennium
Pharmaceuticals.
In an October 14, 1999 amendment to this agreement, we agreed that we would
no longer be obligated to transfer future product development opportunities or
other technology rights that come into existence or under our control subsequent
to the date of the amendment and that we would no longer be required to use
reasonable efforts when negotiating third party collaboration agreements to
limit the licenses and rights granted to the third party in Millennium
BioTherapeutics' core field. In addition, should our proposed merger with
Millennium BioTherapeutics not have closed by December 31, 2000, then we and
Millennium BioTherapeutics agreed to execute on that date an amended and
restated Rights Exchange Agreement which would reinstate our obligations as
outlined above.
TECHNOLOGY TRANSFER AGREEMENT. The Technology Transfer and License Agreement
between us and Millennium BioTherapeutics provided that we would transfer
technology and grant licenses to each other for use in our respective core
fields. In particular, we and Millennium BioTherapeutics agreed:
- To transfer to each other product specific development opportunities and
technology rights, including, opportunities and rights that arise under
collaboration agreements with third parties,
- To grant to each other a royalty-free, non-exclusive license to technology
relating to the research and development of genes and proteins in our
respective core fields, and
- To grant to each other a royalty-free, exclusive license to technology
relating to the development, manufacture and/or commercialization of
products in our respective core fields.
The agreement has a term which ends on the later of May 31, 2002 or the date
on which Millennium BioTherapeutics ceases to be an affiliate of Millennium
Pharmaceuticals. In an October 14, 1999 amendment to this agreement, we agreed
that we would no longer be obligated to grant to
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Millennium BioTherapeutics a royalty-free, exclusive license to technology
relating to the development, manufacture and/or commercialization of products in
Millennium BioTherapeutics' core field that come into existence subsequent to
the date of the amendment. In addition, should our proposed merger with
Millennium BioTherapeutics not have closed by December 31, 2000, then we and
Millennium BioTherapeutics agreed to execute on that date an amended and
restated Technology Transfer and License Agreement which would reinstate this
obligation of Millennium Pharmaceuticals and would include a new obligation for
Millennium BioTherapeutics to share in the costs associated with licensing or
acquisition of product technology that has application to Millennium
BioTherapeutics' core field and that was licensed or acquired from third parties
subsequent to October 14, 1999.
LOCATION. We were organized as a Delaware corporation in 1993. Our
principal executive offices are located at 75 Sidney Street, Cambridge,
Massachusetts 02139 and our telephone number is 617-679-7000. Our World Wide Web
site address is www.mlnm.com. The information in our web site is not
incorporated by reference into this prospectus.
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RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISKS, ALONG WITH THE OTHER
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS BEFORE YOU
DECIDE TO PURCHASE ANY OF OUR COMMON STOCK. THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE NOT THE ONLY ONES AFFECTING OUR COMPANY. ADDITIONAL RISKS
AND UNCERTAINTIES MAY ALSO ADVERSELY AFFECT OUR BUSINESS AND OPERATIONS. IF ANY
OF THE FOLLOWING EVENTS ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS WOULD LIKELY SUFFER, POSSIBLY MATERIALLY.
RISKS RELATING TO OUR INDUSTRY, BUSINESS AND STRATEGY
THE GENOMICS INDUSTRY IS NEW; WE HAVE NOT DEVELOPED OR COMMERCIALIZED ANY
PRODUCTS
The genomics industry is new and evolving rapidly. To date, we have not
developed or commercialized any products based on our genomics and related
technologies. In addition, relatively few products based on gene discoveries
have been developed and commercialized by others. Rapid technological
development by us or others may result in compounds, products or processes
becoming obsolete before we recover our development expenses.
The products that we are developing will require additional research and
development, extensive preclinical studies and clinical trials and regulatory
approval prior to any commercial sales. We may need to successfully address a
number of technological challenges in order to complete development of any of
our products. Moreover, these products may not be effective in treating any
disease or may prove to have undesirable or unintended side effects, toxicities
or other characteristics that may prevent or limit commercial use.
WE PLAN TO EXPAND RAPIDLY; IF WE CANNOT MANAGE OUR GROWTH SUCCESSFULLY, OUR
GROWTH MAY SLOW OR STOP
We have rapidly expanded our operations and expect to continue to expand.
Our growth has placed, and will continue to place, a significant strain on our
management, operating and financial systems. If we cannot manage our expanding
operations, we may not be able to continue to grow or we may grow at a slower
pace. Furthermore, our operating costs may escalate faster than planned. In
order to manage our growth successfully, we must:
- Maintain close coordination among our executive, finance, operations,
research and development organizations;
- Improve our operating, financial and accounting systems, procedures and
controls;
- Expand, train and manage our employee base effectively; and
- Acquire and lease significant additional equipment and facilities.
ANY ACQUISITIONS WE MAKE MAY NOT BE SCIENTIFICALLY OR COMMERCIALLY SUCCESSFUL
We plan to effect acquisitions to obtain additional businesses, products,
technologies, capabilities and personnel. If we make one or more significant
acquisitions in which the consideration includes stock or other securities, your
equity in us may be significantly diluted. If we make one or more significant
acquisitions in which the consideration includes cash, we may be required to use
a substantial portion of our available cash.
Acquisitions involve a number of operational risks, including:
- Difficulty and expense of assimilating the operations, technology and
personnel of the acquired business;
- Inability to retain the management, key personnel and other employees of
the acquired business;
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- Inability to maintain the acquired company's relationships with key third
parties, such as alliance partners;
- Exposure to legal claims for activities of the acquired business prior to
acquisition;
- Diversion of management attention; and
- Amortization of substantial goodwill and write-off of in-process research
and development costs, adversely affecting our reported results of
operations.
OUR GROWTH COULD BE LIMITED IF WE ARE UNABLE TO ATTRACT AND RETAIN KEY PERSONNEL
Our success is substantially dependent on the ability, experience and
performance of our senior management and other key personnel. If we lose one or
more of the members of our senior management or other key employees, our
business and operating results could be seriously harmed. None of the members of
our senior management or other key employees is bound by a long-term employment
agreement with us.
In addition, our future success will depend heavily on our ability to
continue to hire, train, retain and motivate additional skilled managerial and
scientific personnel. The pool of personnel with the skills that we require is
limited. Competition to hire from this limited pool is intense.
WE FACE SUBSTANTIAL COMPETITION, WHICH MAY RESULT IN OTHERS DISCOVERING,
DEVELOPING OR COMMERCIALIZING PRODUCTS AND SERVICES BEFORE OR MORE
SUCCESSFULLY THAN WE DO
The fields of genomics and pharmaceuticals are highly competitive. We will
not succeed if we cannot compete effectively in these fields. Many of our
competitors are substantially larger than we are and have substantially greater
capital resources, research and development staffs and facilities than we have.
Furthermore, many of our competitors are more experienced than we are in drug
discovery, development and commercialization, obtaining regulatory approvals and
product manufacturing. As a result, our competitors may identify genes
associated with diseases or discover, develop and commercialize products or
services for such genes before we do. In addition, our competitors may discover,
develop and commercialize products or services which render non-competitive or
obsolete the products or services that we or our strategic alliance partners are
seeking to develop and commercialize.
RISKS RELATING TO FINANCING
WE HAVE INCURRED SUBSTANTIAL LOSSES, WE EXPECT TO CONTINUE TO INCUR LOSSES AND
WE WILL NOT BE SUCCESSFUL UNLESS WE REVERSE THIS TREND
We have incurred losses in three of the last five years. We expect to
continue to incur operating losses in future periods.
To date, substantially all of our revenues have resulted from payments from
strategic partners. We have not received any revenues from the sale of products.
We expect to increase our spending significantly as we continue to expand
our infrastructure, research and development programs and commercialization
activities. As a result, we will need to generate significant revenues to
achieve profitability. We cannot be certain whether or when this will occur
because of the significant uncertainties that affect our business.
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WE MAY NEED ADDITIONAL FINANCING, WHICH MAY BE DIFFICULT TO OBTAIN AND MAY
DILUTE YOUR OWNERSHIP INTEREST IN US
We will require substantial funds to conduct research and development,
including preclinical testing and clinical trials of our potential products,
meet our obligations to our strategic alliance partners and manufacture and
market any products and services that are approved for commercial sale. Our
future capital requirements will depend on many factors, including the
following:
- Continued progress in our discovery and development programs;
- The number and scope of our discovery and development programs;
- The progress of the development efforts of our strategic partners;
- The scope and results of clinical trials initiated by us;
- The time and costs involved in obtaining regulatory approvals;
- The cost of acquisitions of businesses, products and technologies;
- The cost of manufacturing and commercialization activities;
- The cost of continuing to build our infrastructure, including our
additional facilities requirements and costs of recruiting personnel;
- The timing, receipt, and amount of milestones and other payments from our
alliance partners;
- Our ability to establish and maintain strategic alliances;
- The timing, receipt and amount of sales and royalties from our potential
products and services in the market;
- The costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims and other patent-related costs, including
litigation costs and the costs of obtaining any required licenses to
technologies; and
- Competing technological and market developments.
We expect that we will require significant additional financing in the
future. We may seek to raise such financing through public or private equity
offerings, debt financings or additional strategic alliance and licensing
arrangements or other financing vehicles. Such additional financing may not be
available when we need it or may not be available on terms that are favorable to
us.
If we raise additional funds by issuing equity securities, further dilution
to our then existing stockholders will result. In addition, the terms of the
financing may adversely affect the holdings or the rights of such stockholders.
If we are unable to obtain adequate funding on a timely basis, we may be
required to significantly curtail one or more of our discovery or development
programs. We also could be required to seek funds through arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of our technologies, product candidates or products which we would
otherwise pursue on our own.
RISKS RELATING TO DEVELOPMENT OF TECHNOLOGY AND PRODUCTS
IF OUR TECHNOLOGICAL APPROACHES ARE NOT SUCCESSFUL, WE WILL NOT BE ABLE TO
DEVELOP AND COMMERCIALIZE ANY PRODUCTS AND SERVICES
We have directed our lead programs and development focus primarily to
diseases that may be linked to several or many genes working in combination.
Both we and the general scientific and medical communities have a limited
understanding relating to the role of genes in these diseases. Our technological
approaches to gene identification and target validation may not enable us to
successfully
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identify and characterize genes that predispose individuals to diseases. If we
do not identify such genes, we will not be able to successfully develop and
commercialize any products or services. Even if we do identify such genes, we
will have to do substantial additional work to translate these discoveries into
products.
WE MAY NOT BE ABLE TO OBTAIN DNA SAMPLES OF FAMILIES AND POPULATIONS REQUIRED
FOR OUR GENETIC STUDIES
Our gene identification strategy includes genetic studies of families and
populations prone to particular diseases. These studies require the collection
of large numbers of DNA samples from affected individuals, their families and
other suitable populations. The availability of DNA samples is important to our
ability to discover the genes responsible for human diseases through human
genetic approaches. Competition for these resources is intense, and access to
suitable populations could be limited by forces beyond our control, including
governmental actions. Our competitors may have obtained access to significantly
more family and population resources than we have obtained. As a result, we may
not be able to obtain access to DNA samples necessary to support our human gene
discovery programs.
RISKS RELATING TO STRATEGIC ALLIANCE PARTNERS
WE DEPEND ON OUR STRATEGIC ALLIANCE PARTNERS; OUR BUSINESS WILL SUFFER IF ANY OF
OUR STRATEGIC ALLIANCE PARTNERS BREACHES ITS AGREEMENT OR FAILS TO SUPPORT OR
TERMINATES ITS ALLIANCE WITH US
We conduct most of our the discovery and development activities through
strategic alliances. The success of these programs is heavily dependent on the
efforts and activities of our strategic alliance partners. Our agreements with
our alliance partners allow them significant discretion in determining the
efforts and resources that they will apply to the alliance. Our existing and any
future alliances may not be scientifically or commercially successful.
The risks that we face in connection with these alliances include:
- If any of our alliance partners were to breach or terminate its agreement
with us, reduce its funding or otherwise fail to conduct its collaborative
activities successfully, we could be required to devote additional
internal resources to the program that is the subject of the alliance,
scale back or terminate the program or seek an alternative partner.
- All of our strategic alliance agreements are subject to termination under
various circumstances, including in many cases on short notice without
cause. Some of our alliance agreements provide that if we fail to meet
specified performance criteria, our alliance partner may terminate the
agreement while maintaining rights and licenses to certain of our
discoveries. If an alliance partner terminates its alliance with us, it
may adversely affect the perception of us in the business and financial
communities.
- In our alliance agreements, we generally agree not to conduct certain
research and development in the field that is the subject of the alliance.
These agreements may have the effect of limiting the areas of research and
development we may pursue, either alone or in collaboration with third
parties.
- Our alliance partners may develop and commercialize, either alone or with
others, products and services that are similar to or competitive with the
products and services that are the subject of the alliance with us. Such
competing products and services may result in our alliance partner
withdrawing financial and related support for our product and service
candidates.
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- Reductions in marketing or sales efforts or a discontinuation of marketing
or sales efforts of our products or services by our alliance partners
would reduce our revenues, which in many cases will be based on a
percentage of net sales by our alliance partner.
- Our alliance partners may change the focus of their development and
commercialization efforts. Pharmaceutical and biotechnology companies
historically have re-evaluated their priorities following mergers and
consolidations, which have been common in recent years in these
industries.
WE MAY NOT BE SUCCESSFUL IN ESTABLISHING ADDITIONAL STRATEGIC ALLIANCES
An important element of our business strategy is entering into strategic
alliances for the development and commercialization of products and services
based on our gene discoveries. We face significant competition in seeking
appropriate alliance partners. We may not be successful in our efforts to
establish additional strategic alliances or other alternative arrangements. The
terms of any additional strategic alliances or other arrangements that we
establish may not be favorable to us. Moreover, such strategic alliances or
other arrangements may not be successful.
CONFLICTS MAY ARISE BETWEEN US AND OUR SUBSIDIARIES
We have two subsidiaries in which we have sold minority equity interests to
third parties. We may establish additional subsidiaries in the future in which
we sell minority equity interests to third parties. Conflicts may arise between
us and such subsidiaries, including with respect to:
- the allocation of business opportunities;
- the sharing of rights, technologies, facilities, personnel and other
resources; and
- the fiduciary duties owed by officers and directors who provide services
to both us and one or more of these subsidiaries.
RISKS RELATING TO INTELLECTUAL PROPERTY
WE MAY NOT BE ABLE TO OBTAIN PATENT PROTECTION FOR OUR DISCOVERIES AND WE MAY
INFRINGE PATENT RIGHTS OF THIRD PARTIES
The patent positions of pharmaceutical and biotechnology companies,
including us, are generally uncertain and involve complex legal, scientific and
factual questions.
Our success depends in significant part on our ability to:
- Obtain patents;
- Protect trade secrets;
- Operate without infringing upon the proprietary rights of others; and
- Prevent others from infringing on our proprietary rights.
The validity and permissible scope of claims covered in genomics patents
involve important unresolved legal principles. For example, there is significant
uncertainty regarding the patentability of partial gene sequences and
full-length genes in the absence of functional data and as to the scope of
patent protection available for full-length genes and partial gene sequences.
Moreover, certain groups have made certain gene sequences available in publicly
accessible databases. These and other similar disclosures may adversely affect
our ability to obtain patent protection for full-length genes claimed by us in
patent applications that we file subsequent to such disclosures. Finally, there
is substantial uncertainty as to whether human clinical data will be required
for issuance of patents for human
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therapeutics. If such data are required, our ability to obtain patent protection
could be delayed or otherwise adversely affected.
Patents may not issue from any patent applications that we own or license.
If patents do issue, the claims allowed may not be sufficiently broad to protect
our technology. In addition, issued patents that we own or license may be
challenged, invalidated or circumvented. Our patents also may not afford us
protection against competitors with similar technology. Because patent
applications in the United States are maintained in secrecy until patents issue,
third parties may have filed or maintained patent applications for technology
used by us or covered by our pending patent applications without our being aware
of these applications.
We may not hold proprietary rights to certain patents related to our
proposed products or services. In some cases, these patents may be owned or
controlled by third parties. As a result, we or our alliance partners may be
required to obtain licenses under third party patents to market certain of our
proposed products or services. If licenses are not available to us on acceptable
terms, we or our alliance partners will not be able to market these products or
services.
WE MAY NOT BE ABLE TO KEEP OUR TRADE SECRETS CONFIDENTIAL
We also rely significantly upon unpatented proprietary technology,
information, processes and know how, including proprietary software and
databases of proprietary gene sequences and biological information. We seek to
protect this information by confidentiality agreements with our employees,
consultants and other third party contractors as well as through other security
measures. These confidentiality agreements may be breached, and we may not have
adequate remedies for any such breach. In addition, our trade secrets may
otherwise become known or be independently developed by competitors.
WE MAY BECOME INVOLVED IN EXPENSIVE PATENT LITIGATION OR OTHER INTELLECTUAL
PROPERTY PROCEEDINGS WHICH COULD RESULT IN LIABILITY FOR DAMAGES OR STOP OUR
DEVELOPMENT AND COMMERCIALIZATION EFFORTS
There has been substantial litigation and other proceedings regarding the
complex patent and other intellectual property rights in the pharmaceutical and
biotechnology industries. We may become a party to patent litigation or other
proceedings regarding intellectual property rights. For example, we believe that
certain of our patent applications cover genes that are also claimed in patent
applications filed by others. Interference proceedings before the United States
Patent and Trademark Office may be necessary to establish which party was the
first to discover these genes.
Other types of situations in which we may become involved in patent
litigation or other intellectual property proceedings include:
- We may initiate litigation or other proceedings against third parties to
enforce our patent rights.
- We may initiate litigation or other proceedings against third parties to
seek to invalidate the patents held by such third parties or to obtain a
judgment that our products or services do not infringe such third parties'
patents.
- If our competitors file patent applications that claim technology also
claimed by us, we may participate in interference or opposition
proceedings to determine the priority of invention.
- If third parties initiate litigation claiming that our processes or
product infringe their patent or other intellectual property rights, we
will need to defend against such claims.
The cost to us of any patent litigation or other proceeding, even if
resolved in our favor, could be substantial. Some of our competitors may be able
to sustain the cost of such litigation or proceedings more effectively than we
can because of their substantially greater financial resources. If a patent
11
<PAGE>
litigation or other intellectual property proceeding is resolved unfavorably to
us, we or our alliance partners may be enjoined from manufacturing or selling
our products and services without a license from the other party and be held
liable for significant damages. We may not be able to obtain any required
license on commercially acceptable terms or at all.
Uncertainties resulting from the initiation and continuation of patent
litigation or other proceedings could have a material adverse effect on our
ability to compete in the marketplace. Patent litigation and other proceedings
may also absorb significant management time.
WE COULD LOSE IMPORTANT LICENSE RIGHTS IN CERTAIN CIRCUMSTANCES
We are a party to a number of technology in-licenses that are important to
our business and expect to enter into additional licenses in the future. These
licenses impose various commercialization, sublicensing, royalty, insurance and
other obligations on us. If we fail to comply with these requirements, the
licensor will have the right to terminate the license.
RISKS RELATING TO PRECLINICAL TESTING AND CLINICAL TRIALS
CLINICAL TRIALS OF OUR PRODUCT CANDIDATES MAY NOT BE SUCCESSFUL
In order to obtain regulatory approvals for the commercial sale of our
future products, we or our alliance partners will be required to demonstrate
through preclinical testing and clinical trials that the product is safe and
efficacious. Neither we nor any of our alliance partners has initiated human
clinical trials with respect to any product or service based upon our
discoveries or filed an investigational new drug application with the FDA to do
so.
The results from preclinical testing of a product that is under development
may not be predictive of results that will be obtained in human clinical trials.
In addition, the results of early human clinical trials may not be predictive of
results that will be obtained in larger scale, advanced stage clinical trials.
Furthermore, we, our collaborators or the FDA may suspend clinical trials at any
time if the subjects or patients participating in such trials are being exposed
to unacceptable health risks or for other reasons.
The rate of completion of any clinical trials that we conduct will be
dependent on the rate of patient enrollment. Patient enrollment is a function of
many factors, including the size of the patient population, the nature of the
protocol, the availability of alternative treatments, the proximity of patients
to clinical sites and the eligibility criteria for the study. Delays in planned
patient enrollment may cause us to incur increased costs and program delays.
We expect to rely on our strategic alliance partners and other third parties
to conduct clinical trials of our products in most circumstances. We will have
less control over such clinical trials than if we were conducting the trials
directly. As a result, these trials may not begin or be completed as planned.
REGULATORY RISKS
WE MAY NOT OBTAIN REGULATORY APPROVALS; THE APPROVAL PROCESS IS COSTLY AND
LENGTHY
We must obtain regulatory approval for our ongoing development activities
and before marketing or selling any of our future products or services. We may
not receive regulatory approvals to conduct clinical trials of our products or
to manufacture or market our products and services. In addition, regulatory
agencies may not grant such approvals on a timely basis or may revoke previously
granted approvals.
The process of obtaining United States Food and Drug Administration, or FDA,
and other required regulatory approvals is lengthy and expensive. The time
required for FDA and other clearances or approvals is uncertain and typically
takes a number of years, depending on the complexity and novelty of the product.
Any delay in obtaining or failure to obtain required clearance or approvals
12
<PAGE>
could materially adversely affect our ability to generate revenues from the
affected product or service. We have only limited experience in filing and
prosecuting applications necessary to gain regulatory approvals.
Certain of the products that are likely to result from our research and
development programs may be based on new technologies and new therapeutic
approaches that have not been extensively tested in humans. One example of such
a technology is gene therapy. The regulatory requirements governing these types
of products may be more rigorous than for conventional products. As a result, we
may experience a longer regulatory process in connection with any products that
we develop based on these new technologies or new therapeutic approaches.
Our analysis of data obtained from preclinical and clinical activities is
subject to confirmation and interpretation by regulatory authorities, which
could delay, limit or prevent regulatory approval. Any regulatory approval to
market a product may be subject to limitations on the indicated uses for which
we may market the product. These limitations may limit the size of the market
for the product.
We also are subject to numerous and varying foreign regulatory requirements
governing the design and conduct of clinical trials and the manufacturing and
marketing of our future products and services. The approval procedure varies
among countries. The time required to obtain foreign approvals often differs
from that required to obtain FDA approval. Approval by the FDA does not ensure
approval by regulatory authorities in other countries.
All of the foregoing regulatory risks also are applicable to development,
manufacturing and marketing undertaken by our alliance partners or other
collaborators.
EVEN IF WE OBTAIN MARKETING APPROVAL, OUR PRODUCTS WILL BE SUBJECT TO ONGOING
REGULATORY REVIEW
The manufacturer of products for which we obtain marketing approval and the
manufacturing facilities used to make such products will be subject to continual
review and periodic inspections by the FDA. The subsequent discovery of
previously unknown problems with the product, manufacturer or facility may
result in restrictions on the product or manufacturer, including withdrawal of
the product from the market.
If we fail to comply with applicable regulatory requirements, we may be
subject to fines, suspension or withdrawal of regulatory approvals, product
recalls, seizure of products, operating restrictions and criminal prosecutions.
RISKS RELATING TO PRODUCT MANUFACTURING, MARKETING AND SALES
THE MARKET MAY NOT BE RECEPTIVE TO OUR PRODUCTS AND SERVICES UPON THEIR
INTRODUCTION
The commercial success of our products and services that are approved for
marketing will depend upon their acceptance by the medical community and third
party payors as clinically useful, cost effective and safe. Many of the products
and services that we are developing are based upon new technologies or
therapeutic approaches. As a result, it may be more difficult for us to achieve
market acceptance of our products and services, particularly the first products
and services that we introduce to the market based on new technologies and
therapeutic approaches.
Other factors that we believe will materially affect market acceptance of
our products and services include:
- The timing of receipt of marketing approvals and the countries in which
such approvals are obtained;
- The safety, efficacy and ease of administration of the product; and
- The success of physician education programs.
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<PAGE>
WE HAVE NO SALES AND MARKETING EXPERIENCE AND CAPABILITIES
We have no sales, marketing and distribution experience and capabilities. We
plan to rely significantly on sales, marketing and distribution arrangements
with our strategic alliance partners and other third parties for the products
and services that we are developing. The terms of these arrangements may not be
favorable to us. In addition, we may have limited or no control over the sales,
marketing and distribution activities of these third parties. Our future
revenues will be materially dependent upon the success of the efforts of these
third parties.
If in the future we determine to perform sales, marketing and distribution
functions ourselves, we would face a number of additional risks, including:
- We may not be able to attract and build a sufficient marketing staff or
sales force;
- The cost of establishing a marketing staff or sales force may not be
justifiable in light of any product or service revenues; and
- Our direct sales and marketing efforts may not be successful.
WE HAVE LIMITED MANUFACTURING CAPABILITIES AND WILL BE DEPENDENT ON THIRD PARTY
MANUFACTURERS
We have limited manufacturing experience and no commercial or pilot scale
manufacturing capabilities. In order to continue to develop products and
services, apply for regulatory approvals and, ultimately, commercialize any
products and services, we will need to develop, contract for, or otherwise
arrange for the necessary manufacturing capabilities.
We currently rely upon third parties to produce material for preclinical
testing purposes and expect to continue to do so in the future. We also expect
to rely upon third parties, including our strategic alliance partners, to
produce materials required for clinical trials and for the commercial production
of certain of our products if we succeed in obtaining necessary regulatory
approvals. There are a limited number of manufacturers that operate under the
FDA's good manufacturing practices regulations capable of manufacturing for us.
If we are unable to arrange for third party manufacturing of our products, or to
do so on commercially reasonable terms, we may not be able to complete
development of our products or market them.
To the extent that we enter into manufacturing arrangements with third
parties, we are dependent upon these third parties to perform their obligations
in a timely manner. If such third party suppliers fail to perform their
obligations, we may be adversely affected in a number of ways, including:
- We may not be able to meet commercial demands for our products;
- We may not be able to initiate or continue clinical trials of products
that are under development; and
- We may be delayed in submitting applications for regulatory approvals for
our products.
We may in the future determine to manufacture certain of our products in our
own manufacturing facilities. We will require substantial additional funds and
need to recruit qualified personnel in order to build or lease and operate any
manufacturing facilities. We may not be able to successfully develop our own
manufacturing capabilities. Moreover, it may be very costly and time consuming
for us to develop such capabilities.
The manufacture of products by us and our alliance partners and suppliers is
subject to regulation by the FDA and comparable agencies in foreign countries.
Delay in complying or failure to comply with such manufacturing requirements
could materially adversely affect the marketing of our products.
14
<PAGE>
IF WE FAIL TO OBTAIN AN ADEQUATE LEVEL OF REIMBURSEMENT FOR OUR FUTURE PRODUCTS
OR SERVICES BY THIRD PARTY PAYORS, THERE MAY BE NO COMMERCIALLY VIABLE MARKETS
FOR OUR PRODUCTS OR SERVICES
The availability of reimbursement by governmental and other third party
payors affects the market for any pharmaceutical product or service. These third
party payors continually attempt to contain or reduce the costs of healthcare by
challenging the prices charged for medical products and services. In certain
foreign countries, particularly the countries of the European Union, the pricing
of prescription pharmaceuticals is subject to governmental control. We may not
be able to sell our products profitably if reimbursement is unavailable or
limited in scope or amount.
In both the United States and certain foreign jurisdictions, there have been
a number of legislative and regulatory proposals to change the healthcare
system. Further proposals are likely. The potential for adoption of these
proposals affects or will affect our ability to raise capital, obtain additional
collaborative partners and market our products.
If we or our collaborators obtain marketing approvals for our products, we
expect to experience pricing pressure due to the trend toward managed health
care, the increasing influence of health maintenance organizations and
additional legislative proposals.
ETHICAL, LEGAL AND SOCIAL ISSUED RELATED TO GENETIC TESTING MAY CAUSE OUR
DIAGNOSTIC PRODUCTS TO BE REJECTED BY CUSTOMERS OR PROHIBITED OR CURTAILED BY
GOVERNMENTAL AUTHORITIES
Diagnostic tests that evaluate genetic predisposition to disease raise
issues regarding the use and confidentiality of the information provided by such
tests. Insurance carriers and employers might discriminate on the basis of such
information, resulting in a significant barrier to the acceptance of such tests
by customers. Such discrimination could cause governmental authorities to
prohibit or limit the use of such tests.
RISKS RELATING TO ONGOING OPERATIONS
WE WILL BE EXPOSED TO PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
ADEQUATE PRODUCT LIABILITY INSURANCE
Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of human therapeutic
and diagnostic products. Product liability claims or product recalls, regardless
of the ultimate outcome, could require us to spend significant time and money in
litigation and to pay significant damages. We currently have no product
liability insurance coverage. We may not be able to obtain such product
liability insurance at a reasonable cost or in sufficient amounts to protect us
against losses due to liability claims.
WE COULD INCUR LIABILITIES RELATING TO HAZARDOUS MATERIALS THAT WE USE IN OUR
RESEARCH AND DEVELOPMENT ACTIVITIES
Our research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive materials. There is a
risk of accidental contamination or injury from these materials. In the event of
such an accident, we could be held liable for any damages that result. This type
of liability could exceed our resources.
RISKS RELATING TO THIS OFFERING
OUR STOCK PRICE COULD BE VOLATILE, WHICH COULD CAUSE YOU TO LOSE PART OR ALL OF
YOUR INVESTMENT
The trading price of our common stock is likely to be volatile. The stock
market in general, and the market for biotechnology companies in particular, has
experienced extreme volatility. This volatility has often been unrelated to the
operating performance of particular companies. Prices for our common
15
<PAGE>
stock will be determined in the marketplace and may be influenced by many
factors, including variations in our financial results, investors' perceptions
of us and general economic, industry and market conditions.
WE HAVE ANTITAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN ACQUISITION AND
COULD ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK
Provisions of our certificate of incorporation and bylaws and provisions of
Delaware law could delay, defer or prevent an acquisition or change of control
of Millennium or otherwise adversely affect the price of our common stock. For
example, our board of directors is staggered in three classes, so that only
one-third of the directors can be replaced at any annual meeting. Additionally,
our bylaws limit the ability of stockholders to call a special meeting. Our
certificate of incorporation also permits our board to issue shares of preferred
stock without stockholder approval. In addition to delaying or preventing an
acquisition, the issuance of a substantial number of preferred shares could
adversely affect the price of our common stock.
16
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains forward-looking statements that involve substantial
risks and uncertainties. In some cases you can identify these statements by
forward-looking words such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "should," "will," and "would" or similar words. You
should read statements that contain these words carefully because they discuss
future expectations, contain projections of future results of operations or of
financial position or state other "forward-looking" information. The important
factors listed above in the section captioned "Risk Factors," as well as any
cautionary language in this prospectus, provide examples of risks, uncertainties
and events that may cause our actual results to differ materially from the
expectations described in these forward-looking statements. You should be aware
that the occurrence of the events described in these risk factors and elsewhere
in this prospectus could have an adverse effect on our business, results of
operations and financial position.
Any forward-looking statements in this prospectus are not guarantees of
future performance, and actual results, developments and business decisions may
differ from those envisaged by such forward-looking statements, possibly
materially. We disclaim any duty to update any forward-looking statements, all
of which are expressly qualified by the statements in this section.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholder.
The selling stockholder will pay any underwriting discounts and commissions
and expenses incurred by it for brokerage, accounting, tax or legal services or
any other expenses incurred by the selling stockholder in disposing of the
shares. We will bear all other costs, fees and expenses incurred in effecting
the registration of the shares covered by this prospectus, including, without
limitation, all registration and filing fees, Nasdaq listing fees, fees and
expenses of our counsel, fees and expenses of our accountants, and blue sky fees
and expenses.
SELLING STOCKHOLDER
We issued the shares of common stock covered by this prospectus in a private
placement in connection with the acquisition of shares of our subsidiary,
Millennium BioTherapeutics, Inc. The following table sets forth, to our
knowledge, certain information about the selling stockholder as of November 3,
1999.
<TABLE>
<CAPTION>
PERCENTAGE NUMBER OF PERCENTAGE
NUMBER OF OF SHARES OF SHARES OF OF SHARES OF
SHARES OF COMMON COMMON COMMON
COMMON STOCK NUMBER OF STOCK STOCK
STOCK BENEFICIALLY SHARES OF BENEFICIALLY BENEFICIALLY
BENEFICIALLY OWNED COMMON OWNED OWNED
OWNED PRIOR STOCK AFTER AFTER
NAME OF SELLING PRIOR TO TO OFFERING OFFERED OFFERING OFFERING
STOCKHOLDER OFFERING(1) (1) HEREBY (1)(2) (1)(2)
- --------------------------------------- ------------ ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Eli Lilly and Company(3)............... 1,005,333 2.7% 500,000 505,333 1.4%
</TABLE>
- ------------------------
(1) Except as otherwise indicated, the number of shares beneficially owned is
determined under rules promulgated by the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose. The
selling stockholder has sole voting power and investment power with respect
to all shares listed as owned by the selling stockholder.
(2) We do not know when or in what amounts the selling stockholder may offer
shares for sale. The selling stockholder may not sell any or all of the
shares offered by this prospectus. Because the selling stockholder may offer
all or some of the shares pursuant to this offering, and because there are
currently no agreements, arrangements or understandings with respect to the
sale of any of the shares that will be held by the selling stockholder after
completion of the offering, we cannot estimate the number of the shares that
will be held by the selling stockholder after completion of the offering.
However, for purposes of this table, we have assumed that, after completion
of the offering, none of the shares covered by this prospectus will be held
by the selling stockholder.
(3) An employee of the selling stockholder previously served as a director of
our subsidiary, Millennium BioTherapeutics. In addition, we are party to two
strategic alliances with the selling stockholder and Millennium
BioTherapeutics is a party to one strategic alliance with the selling
stockholder, which was amended on October 14, 1999.
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<PAGE>
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholder. The term "selling stockholder" includes
pledgees, donees, transferees or other successors in interest selling shares
received after the date of this prospectus from the selling stockholder as a
pledge, gift or other non-sale related transfer. To the extent required, we may
amend and supplement this prospectus from time to time to describe a specific
plan of distribution.
The selling stockholder will act independently of Millennium Pharmaceuticals
in making decisions with respect to the timing, manner and size of each sale.
The selling stockholder may make these sales at prices and under terms then
prevailing or at prices related to the then current market price. The selling
stockholder may also make sales in negotiated transactions, including pursuant
to one or more of the following methods:
- Purchases by a broker-dealer as principal and resale by such broker-dealer
for its own account pursuant to this prospectus,
- Ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
- Block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction,
- An over-the-counter distribution in accordance with the rules of the
Nasdaq National Market, and
- In privately negotiated transactions.
In connection with distributions of the shares or otherwise, the selling
stockholder may:
- Enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares in the
course of hedging the positions they assume,
- Sell the shares short and redeliver the shares to close out such short
positions,
- Enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to them of shares
offered by this prospectus, which they may in turn resell, and
- Pledge shares to a broker-dealer or other financial institution, which,
upon a default, they may in turn resell.
In addition, the selling stockholder may sell any shares that qualify for
sale pursuant to Rule 144 under Rule 144 rather than pursuant to this
prospectus.
In effecting sales, broker-dealers or agents engaged by the selling
stockholder may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholder, in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling stockholder,
and any broker-dealers and any other participating broker-dealers who execute
sales for the selling stockholder may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with these sales. Any profits
realized by the selling stockholder and the compensation of such broker-dealer
may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, the shares
must be sold in those states only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
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<PAGE>
We have advised the selling stockholder that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholder and its affiliates. In
addition, we will make copies of this prospectus available to the selling
stockholder for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholder may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, we will
distribute a prospectus supplement that will set forth:
- The number of shares being offered,
- The terms of the offering, including the name of any underwriter, dealer
or agent,
- The purchase price paid by any underwriter,
- Any discount, commission and other underwriter compensation,
- Any discount, commission or concession allowed or reallowed or paid to any
dealer, and
- The proposed selling price to the public.
We have agreed to indemnify the selling stockholder against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholder to keep the Registration
Statement of which this prospectus constitutes a part effective until the
earlier of
- such time as all of the shares covered by this prospectus have been
disposed of pursuant to the registration statement or
- two years following the date of effectiveness of this registration
statement.
20
<PAGE>
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed upon
by Hale and Dorr LLP.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE TO FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the Securities and Exchange Commission. You may read and copy any
document we file at the SEC's public reference room at Judiciary Plaza Building,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You should call
1-800-SEC-0330 for more information on the public reference room. Our SEC
filings are also available to you on the SEC's Internet site at
http://www.sec.gov. Our common stock is quoted on Nasdaq under the trading
symbol "MLNM".
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding Millennium Pharmaceuticals, Inc. and the common stock, including
certain exhibits and schedules. You can obtain a copy of the registration
statement from the SEC at the address listed above or from its internet site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information that we file with the SEC in the future and
incorporate by reference will automatically update and may supersede the
information contained in this prospectus. We incorporate by reference the
documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior
to the sale of all the shares covered by this prospectus.
The following documents that we have filed with the SEC are incorporated
herein by reference:
- Our Annual Report on Form 10-K for the year ended December 31, 1998;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
- Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999;
- Our Current Report on Form 8-K dated March 11, 1999;
- Our Current Report on Form 8-K dated October 21, 1999, as amended by
Form 8-K/A filed on October 29, 1999;
- All of our filings pursuant to the Exchange Act after the date of filing
the initial registration statement and prior to effectiveness of the
registration statement; and
- The description of our common stock contained in our Registration
Statement on Form 8-A dated April 26, 1996, including any amendments or
reports filed for the purpose of updating such description.
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<PAGE>
You may request a copy of these documents, which will be provided to you at
no cost, by writing to:
Millennium Pharmaceuticals, Inc.
75 Sidney Street
Cambridge, MA 02139
Attention: General Counsel
Telephone: 617-679-7000
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<PAGE>
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 Registrant (except any underwriting
discounts and commissions and expenses incurred by the selling stockholder for
brokerage, accounting, tax or legal services or any other expenses incurred by
the selling stockholder in disposing of the shares). All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Filing Fee--Securities and Exchange Commission.............. $ 9,817
Legal fees and expenses..................................... $10,000
Accounting fees and expenses................................ $10,000
Miscellaneous expenses...................................... $ 5,000
-------
Total Expenses............................................ $34,817
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law allows a corporation to
eliminate the personal liability of directors of a corporation to the
corporation or its stockholders for monetary damages for a breach of fiduciary
duty as a director, except where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. The Registrant has included such a provision in its
Certificate of Incorporation.
Section 145 of the General Corporation Law of Delaware 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.
Article NINTH of the Registrant's Amended and 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),
judgements, 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 interest of the
Registrant, and, with respect to any criminal action or proceeding, has 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
II-1
<PAGE>
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 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 promptly unless the Registrant
determines that the applicable standard of conduct required for indemnification
has not been met. In the event the Registrant denies a request for
indemnification, or if the Registrant fails to dispose of a request for
indemnification within 60 days after such payment is claimed by the indemnitee,
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.
Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
4.1* Amended and Restated Certificate of Incorporation of the
Registrant.
4.2* Amended and Restated Bylaws of the Registrant.
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).
</TABLE>
- ------------------------
* Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q, filed June 20, 1996 [File no. 0-28494].
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
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if,
II-2
<PAGE>
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 effective 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 is 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 Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 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
Registrant pursuant to the indemnification provisions described herein, 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 Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on
November 5, 1999.
<TABLE>
<S> <C> <C>
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ MARK J. LEVIN
-----------------------------------------
Mark J. Levin
CHIEF EXECUTIVE OFFICER
</TABLE>
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Millennium
Pharmaceuticals, Inc., hereby severally constitute and appoint Mark J. Levin,
Kevin P. Starr and John B. Douglas III and each of them singly, our true and
lawful attorneys with full power to any of them, and to each of them singly, to
sign for us and in our names in the capacities indicated below the Registration
Statement on Form S-3 filed herewith and any and all pre-effective and
post-effective amendments to said Registration Statement and generally to do all
such things in our name and behalf in our capacities as officers and directors
to enable Millennium Pharmaceuticals, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration Statement
and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MARK J. LEVIN Chief Executive Officer and
------------------------------------------- Director (Principal November 5, 1999
Mark J. Levin Executive Officer)
/s/ KEVIN P. STARR Chief Financial Officer
------------------------------------------- (Principal Financial and November 5, 1999
Kevin P. Starr Accounting Officer)
/s/ JOSHUA BOGER Director
------------------------------------------- November 5, 1999
Joshua Boger, Ph.D.
/s/ EUGENE CORDES Director
------------------------------------------- November 5, 1999
Eugene Cordes, Ph.D.
/s/ A. GRANT HEIDRICH III Director
------------------------------------------- November 5, 1999
A. Grant Heidrich III
/s/ RAJU S. KUCHERLAPATI Director
------------------------------------------- November 5, 1999
Raju S. Kucherlapati
/s/ ERIC S. LANDER Director
------------------------------------------- November 5, 1999
Eric S. Lander
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<C> <S>
4.1* Amended and Restated Certificate of Incorporation of the
Registrant.
4.2* Amended and Restated Bylaws of the Registrant.
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of Ernst & Young, LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).
</TABLE>
- ------------------------
* Incorporated by reference to the Registrant's Quarterly Report on
Form 10-Q, filed June 20, 1996 [File no. 0-28494].
<PAGE>
EXHIBIT 5.1
HALE AND DORR LLP
COUNSELORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 / FAX 617-526-5000
November 5, 1999
Millennium Pharmaceuticals, Inc.
75 Sidney Street
Cambridge, MA 02139
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), for the registration of an aggregate
of 500,000 shares of Common Stock, $.001 par value per share (the "Shares"), of
Millennium Pharmaceuticals, Inc., a Delaware corporation (the "Company"). All of
the Shares are being registered on behalf of a stockholder of the Company.
We have acted as counsel for the Company in connection with the
registration for resale of the Shares. We have examined signed copies of the
Registration Statement to be filed with the Commission. We have also examined
and relied upon the minutes of meetings of the stockholders and the Board of
Directors of the Company as provided to us by the Company, stock record books of
the Company as provided to us by the Company, the Certificate of Incorporation
and By-Laws of the Company, each as restated and/or amended to date, and such
other documents as we have deemed necessary for purposes of rendering the
opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
WASHINGTON, D.C. BOSTON, MA LONDON, UK*
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
<PAGE>
Millennium Pharmaceuticals, Inc.
November 5, 1999
Page 2
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the Commonwealth of Massachusetts, the
Delaware General Corporation Law statute and the federal laws of the United
States of America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ HALE AND DORR LLP
HALE AND DORR LLP
<PAGE>
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-3) and related Prospectus of Millennium
Pharmaceuticals, Inc. for the registration of 500,000 shares of its common stock
and to the incorporation by reference therein of our report dated February 9,
1999, with respect to the consolidated financial statements of Millennium
Pharmaceuticals, Inc. incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Boston, Massachusetts
November 3, 1999
