<PAGE> 1
As filed with the Securities and Exchange Commission on June 12, 1997
Registration No. 333-24779
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
(Exact name of registrant as specified in its charter)
North Carolina
(State or other jurisdiction of incorporation or organization)
56-1640186
(I.R.S. Employer Identification No.)
3151 17th Street Extension
Wilmington, North Carolina 28412
(910) 251-0081
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
FREDRIC N. ESHELMAN
Chief Executive Officer
Pharmaceutical Development, Inc.
3151 17th Street Extension
Wilmington, North Carolina 28412
(910) 251-0081
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
Copies to:
DONALD R. REYNOLDS, ESQ.
Wyrick Robbins Yates & Ponton L.L.P.
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607
(919) 781-4000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price aggregate Amount of
registered registered per unit(1) offering price(1) registration fee(2)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value 160,000 shares $19.25 $3,080,000 $933.33
==========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee, based on the average of the high and low prices for
the Common Stock as reported on the Nasdaq National Market System on
April 3, 1997 pursuant to Rule 457(c)
(2) Previously paid.
The Registrant hereby amends this Registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that 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),
may determine.
================================================================================
<PAGE> 2
- -------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- -------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED JUNE 12, 1997
PROSPECTUS
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
160,000 Shares of Common Stock
The Common Stock, $.10 par value per share ("Common Stock"), of
Pharmaceutical Product Development, Inc. ("PPD" or the "Company") is traded on
the Nasdaq National Market System (the "NMS") under the symbol "PPDI". The
closing sales price of the Common Stock on the NMS on June 10, 1997 was $22.50
per share.
--------------------
The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" commencing on page 3 hereof.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The shares of Common Stock offered hereby (the "Shares") are to be sold
from time to time by the Selling Shareholders (see "Selling Shareholders") by
means of ordinary brokers' transactions, in transactions directly with market
makers or in certain privately negotiated transactions. See "Plan of
Distribution". Each Selling Stockholder has advised the Company that no sale or
distribution of the Shares other than as disclosed herein will be effected until
after this Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof. The Company will not receive any
proceeds from the sale of the Shares by the Selling Shareholders.
In making this offering, the Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). The Company has agreed to indemnify the Selling
Shareholders against certain civil liabilities, including liabilities under the
Securities Act.
The Selling Shareholders will receive all of the net proceeds from the
sale of the Shares. The expenses of this offering are estimated to be $17,500
and will be paid by the Company. Normal commission expenses and brokerage fees,
as well as any applicable transfer taxes, are payable individually by the
Selling Shareholders.
--------------------
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized. This Prospectus does not constitute an
offer of any securities other than the registered securities to which it relates
or an offer to any person in any jurisdiction where such offer would be
unlawful. The delivery of this Prospectus at any time does not imply that the
information herein is correct as of any time subsequent to its date.
--------------------
The date of this Prospectus is June 12, 1997.
<PAGE> 3
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 periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at certain of the Commission's
regional offices located as follows: Seven World Trade Center, Suite 1300, New
York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can also be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such reports, proxy statements and other information
concerning the Company may also be inspected at the offices of the Nasdaq Stock
Market, Inc. at the National Association of Securities Dealers, 1735 K Street,
N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein referred to, together with all amendments thereto, as the
"Registration Statement") under the Securities Act with respect to the offering
of the Shares made hereby. This Prospectus does not contain all of the
information contained in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other document are summaries that are not necessarily complete and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement herein being
qualified in all respects by such reference. Such documents may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates or may be examined without charge at
the public reference facilities of the Commission.
The Commission maintains a World Wide Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of the Commission's
web site is http:\\www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference: (a) the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996, filed pursuant to
Section 13 of the Exchange Act; (b) the description of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A (File No.
0-27570) filed pursuant to Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such description; (c) the
Company's definitive proxy solicitation materials, filed April 14, 1997
pursuant to Section 14 of the Exchange Act; and (d) the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997, filed pursuant to
Section 13 of the Exchange Act. All reports and other documents filed by the
Company pursuant to Section 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 Shares shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of the filing of such documents. Any
statement contained herein or 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 that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of 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 in this Prospectus (other than the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents). Requests for such copies should be directed to
the Corporate Secretary of Pharmaceutical Product Development, Inc., 3151 17th
Street Extension, Wilmington, North Carolina 28401 (telephone: 919-251-0081).
2
<PAGE> 4
THIS PROSPECTUS, INCLUDING THE INFORMATION INCORPORATED HEREIN BY
REFERENCE, CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS,
INCLUDING WITHOUT LIMITATION THOSE SET FORTH BELOW AND IN THE INFORMATION
INCORPORATED HEREIN BY REFERENCE.
RISK FACTORS
Dependence on and Effect of Government Regulation
PPD's business depends on the continued strict government regulation
of the drug development process and of hazards in the environment, especially
in the United States. Changes in regulation, including a relaxation in
regulatory requirements or the introduction of simplified drug approval
procedures, could materially and adversely affect the demand for the services
offered by PPD.
The failure on the part of PPD to comply with applicable regulations
could result in the termination of ongoing research or the disqualification of
data for submission to regulatory authorities. Furthermore, the issuance of a
notice of finding by the United States Food and Drug Administration (the "FDA")
to PPD or its clients based upon a material violation by PPD of Good Clinical
Practice ("GCP"), Good Laboratory Practice ("GLP") or Good Manufacturing
Practice ("GMP") requirements could materially and adversely affect PPD.
Dependence on Certain Industries and Clients
PPD provides services to the pharmaceutical, biotechnology and
chemical industries and its revenues are highly dependent on expenditures on
clients in these industries. Accordingly, PPD's operations could be materially
adversely affected by general economic downturns in these industries, the
current trend toward consolidation in these industries or other factors
resulting in a decrease in research and development expenditures. Furthermore,
PPD has benefited to date from the increasing tendency of pharmaceutical and
biotechnology companies to outsource large clinical research projects. Should
this trend be reversed, the revenues of PPD could be materially and adversely
affected.
PPD believes that concentration of business in the CRO industry is not
uncommon. PPD has experienced such concentration in the past and may experience
such concentration in the future. However, during 1995 and 1996, no single
client accounted for more than 10% of PPD's total net revenue. However, there
can be no assurance that PPD's business will not be dependent on a limited
number of major customers. The loss of business from a significant client could
have a material adverse effect on PPD.
Loss of Large Contracts
Most of PPD's contracts for the provision of its services, including
contracts with governmental agencies, are terminable by the client upon 30 to
90 days' notice under certain circumstances, including the client's unilateral
decision to terminate the development of the product or end the study.
Contracts may be terminated for a variety of reasons, including the failure of
products to satisfy safety requirements, unexpected or undesired results of the
product, the client's decision to forego a particular study, or insufficient
patient enrollment or investigator recruitment. The loss of a large contract or
the loss of multiple contracts could materially and adversely affect PPD.
Fixed Price Nature of Contracts
Many of PPD's contracts for the provision of its services are fixed
price, with some variable components. Since PPD's contracts are predominantly
fixed price, PPD bears the risk of cost overruns. Under-pricing of contracts or
significant cost overruns could have a material adverse effect on PPD.
Volatility of Quarterly Operating Results
PPD's quarterly operating results are subject to volatility due to
such factors as the commencement, completion or cancellation of large
contracts, progress of ongoing contracts, acquisitions, the timing of start-up
expenses for new offices, management of growth and changes in the mix of
services. Since a large percentage of PPD's operating costs are relatively
fixed, variations in the timing and progress of large contracts can materially
affect quarterly results. To the extent PPD's international business increases,
exchange rate fluctuations may also influence these results. PPD believes that
comparisons of its quarterly financial results are not necessarily meaningful
and should not be relied upon as an indication of future performance. However,
fluctuations in quarterly results or other factors beyond the Company's
control, such as changes in earnings estimates by analysts, market conditions
in the CRO, environmental, pharmaceutical or biotechnology industries or
general economic conditions, could affect the market price of the Common Stock
in a manner unrelated to the longer term operating performance of PPD.
Dependence on Personnel
The Company's performance depends on its ability to attract and retain
qualified professional, scientific and technical staff. The level of
competition among employers for such skilled personnel is high. The Company
believes that its employee benefit plans enhance employee morale, professional
commitment and work productivity and provide an incentive for employees to
remain with the Company. The Company, like many of its competitors, also relies
on a number of key executives. The loss of services of any of the Company's key
executives could have a material and adverse effect on the Company. While the
Company has not experienced any significant problems in attracting or retaining
qualified staff, there can be no assurance that the Company will be able to
avoid such problems in the future.
Management of Growth; Need for Improved Systems; Pressures to Attract and
Retain Personnel
PPD has experienced rapid growth over the past five years. PPD
believes that sustained growth places a strain on operations and on human and
financial resources. In order to manage its growth, PPD must continue to
improve its operating and administrative systems and attract and retain
qualified management and professional, scientific and technical personnel.
Failure to manage growth effectively could have a material adverse effect on
PPD's business.
Potential Liability and Insurance
Clinical research services involve the testing of new drugs on human
volunteers pursuant to a study protocol. Such testing exposes PPD to the risk
of liability for personal injury or death to patients resulting from, among
other things, possible unforeseen adverse side effects or improper
administration of the new drug. Many of these patients are already seriously
ill and are at risk of further illness or death. PPD could be materially and
adversely affected if it were required to pay damages or incur defense costs in
connection with a claim that is outside the scope of indemnification agreements
that may exist with clients, if any such indemnification agreement, although
applicable, is not performed in accordance with its terms or if PPD's liability
exceeds the amount of applicable insurance. Until September 1996, the Company
did not maintain liability insurance with respect to these risks. The Company
currently maintains liability insurance coverage of up to $5.0 million per
claim, with an annual aggregate policy limit of $5.0 million. However, there can
be no assurance that liability claims will not exceed the limits of such
coverage or that such insurance will continue to be available on commercially
reasonable terms or at all. Consequently, a product liability claim or other
claim with respect to uninsured liabilities or in excess of insured liabilities
could have a material adverse effect on the Company.
Competition; CRO Industry Consolidation; Few Barriers to Entry
The CRO industry is highly fragmented, with several hundred small,
limited-service providers, several medium-sized CROs and a few full-service CROs
with international capabilities. PPD primarily competes against in-house
research departments of pharmaceutical and biotechnology companies,
universities and teaching hospitals, and other full-service CROs, some of which
possess substantially greater capital, technical and other resources than PPD.
As a result of competitive pressures, the CRO industry is consolidating. This
trend is likely to produce competition among the larger CROs for both clients
and acquisition candidates. In addition, there are few barriers to entry for
small, limited-service entities considering entering the CRO industry. These
entities may compete against larger CROs for clients. Furthermore, the CRO
industry has attracted the attention of the investment community, which could
lead to increased competition by increasing the availability of financial
resources for CROs. Increased competition may lead to price and other forms of
competition that may adversely affect PPD's operating results.
Risks Associated with Acquisitions; Integration of Acquired Operations
PPD reviews many acquisition candidates in the ordinary course of its
business. Acquisitions involve numerous risks, including difficulties in the
assimilation of the operations and services of the acquired companies, the
expenses incurred in connection with the acquisition and subsequent
assimilation of operations and products, the diversion of management's
attention from other business concerns, and the potential loss of key employees
of the acquired company. Acquisitions of foreign companies also may involve the
additional risks of, among others, assimilating differences in foreign business
practices and overcoming language barriers. There can be no assurance that
acquisitions made, or to be made, by the Company will be successfully
integrated into PPD's operations.
Uncertainty in Healthcare Industry and Proposed Healthcare Reform
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the pharmaceutical and biotechnology
industries. During 1994, several comprehensive healthcare reform proposals were
introduced in the United States Congress. The intent of the proposals was,
generally, to expand healthcare coverage for the uninsured and reduce the
growth of total healthcare expenditures. While none of the proposals was
adopted, healthcare reform may again be addressed by the United States
Congress. Implementation of government healthcare reform may adversely affect
research and development expenditures by pharmaceutical and biotechnology
companies which could decrease the business opportunities available to PPD. PPD
is unable to predict the likelihood of such or similar legislation being
enacted into law or the effects such legislation would have on PPD.
Potential Adverse Effect of Exchange Rate Fluctuations on Results of Operations
PPD's business derived from operations outside the United States is
expected to grow in future years. Since the revenues of PPD's foreign
operations are generally denominated in local currencies, exchange rate
fluctuations between such local currencies and the United States dollar may
subject PPD to currency translation risk with respect to the reported results
of its foreign operations.
No Historical Market; Volatility of Stock Price
Prior to PPD's initial public offering in January 1996, there had been
no public market for PPD's Common Stock, and there can be no assurance that an
active public market will be sustained after the Merger. The market price of
PPD's Common Stock could be subject to wide fluctuations in response to
variations in operating results from quarter to quarter, changes in earnings
estimates by analysts and market conditions in the CRO, pharmaceutical and
biotechnology industries and general economic conditions. Furthermore, the
stock market has experienced significant price and volume fluctuation unrelated
to the operating performance of particular companies. These market
fluctuations may have an adverse effect on the market price of PPD's Common
Stock.
Certain Anti-Takeover Provisions; Possible Issuance of Preferred Stock
PPD's Restated Articles of Incorporation and Bylaws contain certain
provisions that may have the effect of deterring a future takeover of PPD. These
provisions could limit the price that certain investors might be willing to pay
in the future for shares of PPD's Common Stock. In addition, shares of PPD's
Preferred Stock may be issued in the future without further shareholder
approval and upon such terms and conditions, and having such rights, privileges
and preferences, as the Board of Directors of PPD may determine. The issuance
of Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could adversely affect the
market price of PPD Common Stock and could have the effect of making it more
difficult for a third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding voting stock of PPD.
ACQUISITION OF BELMONT RESEARCH, INC.
On February 11, 1997, the Company entered into an Agreement and Plan of
Reorganization (the "Reorganization Agreement") with the Company, Subsidiary No.
1, Inc., a North Carolina corporation and a wholly-owned subsidiary of the
Company ("Subsidiary"), Belmont Research, Inc., a Massachusetts corporation
("Belmont"), and Channing H. Russell, Paul Castleman and Jeremy Pool ("Founding
Shareholders"). Pursuant to the Reorganization Agreement, Subsidiary was merged
with and into Belmont (the "Merger") on or about February 28, 1997, and each
outstanding share of common stock of Belmont was converted automatically into
the right to receive shares of the Company's Common Stock and cash in lieu of
fractional shares based on the merger exchange ratio set forth in the
Reorganization Agreement (the "Exchange Ratio"). As a result, Belmont is a
wholly owned subsidiary of the Company. The 502,384 shares of the Company's
Common Stock issued in the Merger to holders of outstanding shares of Belmont
stock are referred to herein as the "Merger Shares".
PLAN OF DISTRIBUTION
The shares offered hereby consist of 160,000 of the Merger Shares
(the "Shares"). The Shares may be sold from time to time by the Selling
Shareholders, or by pledgees, donees, transferees or other
successors-in-interest. Such sales may be made on one or more exchanges or in
the over-the-counter market or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the
following: (a) a block trade in which the broker-dealer so engaged will attempt
to sell the Shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction; (b) purchases by a broker-dealer
as principal and resale by such broker-dealer for its account pursuant to this
prospectus; (c) an exchange distribution in accordance with the roles of such
exchanges; and (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In effecting sales, broker-dealers engaged by
the Selling Shareholder may arrange for other broker-dealers to participate in
the resales. The Selling Shareholders will pay any applicable transfer taxes
and brokerage commissions or discounts, if any, with respect to the sale of
Shares in amounts customary for the type of transaction effected.
In connection with distributions of the Shares or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers.
In connection with such transactions, broker-dealers may engage in short sales
of the Shares registered hereunder in the course of hedging the positions they
assume with Selling Shareholders. The Selling Shareholders may also sell Shares
short and redeliver the Shares to close out such short positions. The Selling
Shareholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder, which the broker-dealer may resell or otherwise transfer
pursuant to this prospectus. The Selling Shareholders may also loan or pledge
the Shares registered hereunder to a broker-dealer and the broker-dealer may
sell the Shares so loaned or upon a default the broker-dealer may effect sales
of the pledged Shares pursuant to this prospectus.
Each Selling Shareholder has advised the Company that during such time
as such Selling Shareholder may attempt to sell Shares registered hereunder,
such person will: (i) not engage in any stabilization activity in connection
with any of the Company's securities; (ii) cause to be furnished to each person
to whom Shares included herein may be offered, and/or to each broker-dealer, if
any, through whom Shares are offered, such copies of this Prospectus, as
supplemented or amended, as may be required by such person; and (iii) not bid
for or purchase any of the Company's securities (or any rights to acquire the
Company's securities), or attempt to induce any person to purchase any of the
Company's securities (or rights to acquire the Company's securities) other than
as permitted under the Exchange Act.
The Selling Shareholders, and any broker-dealers, agents or other
persons who participate in the sale of Shares, may be deemed to be
"underwriters" as defined in the Securities Act. Any commissions paid or any
discounts or concessions allowed to any such persons, and any profits received
on resale of Shares, may be deemed to be underwriting discounts and commissions
under the Securities Act.
All costs, expenses and fees (other than transfer taxes and brokerage
commissions or discounts) in connection with the registration of the Shares
will be borne by the Company. The Selling Shareholders may agree to indemnify
any broker-dealer or agent that participates in transactions involving sales of
the Shares against certain liabilities, including liabilities arising under the
Securities Act. The Company and the Selling Shareholders have agreed to
indemnify certain persons, including underwriters, against certain liabilities
in connection with the offering of the Shares, including certain liabilities
arising under the Securities Act.
The Company has agreed to maintain the effectiveness of this
Registration Statement until 60 days after the later of (i) the date on which
the Registration Statement is first declared effective by the Commission, or
(ii) the date the Selling Shareholders may sell Merger Shares without violating
applicable securities laws and regulations and without violating accounting
principles which permit the Company to account for the Merger as a "pooling of
interests". No sales may be made pursuant to this Prospectus after such date
unless the Company amends or supplements this Prospectus to indicate that it has
agreed to extend such period of effectiveness.
3
<PAGE> 5
SELLING SHAREHOLDERS
The following table sets forth certain information, as of March 31,
1997, with respect to the Selling Shareholders and the number of shares of
Company Common Stock held by such persons:
<TABLE>
<CAPTION>
Prior to Offering After Offering
--------------------------- ---------------------------
Shares Offered
Name of Selling Shareholder(1) Shares Held Percentage Hereby Shares Held Percentage
- ------------------------------ ----------- ---------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Channing H. Russell
315 Common Street
Belmont, Massachusetts 02178 263,323 1.2% 83,863 179,460 *
Paul Castleman
557 Union Street
San Francisco, California 94133 131,661 * 41,932 89,729 *
Jeremy Pool
14 Bowdoin Street
Cambridge, Massachusetts 02138 107,400 * 34,205 73,195 *
-------
TOTAL 160,000
</TABLE>
- ------------------------------
(1) None of the Selling Shareholders has had any position, office or other
material relationship with PPD or any of its predecessors or
affiliates within the past three years, except that all Selling
Shareholders are former stockholders of Belmont. Messrs. Russell and
Pool are employees of, and Mr. Castleman is a consultant to, Belmont.
* Less than one percent.
LEGAL MATTERS
The validity of the Shares offered hereby has been passed upon for the
Company by Wyrick Robbins Yates & Ponton L.L.P., Raleigh, North Carolina.
4
<PAGE> 6
PPD PHARMACEUTICAL CORPORATION
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered. All expenses of
registration of the Shares will be borne by the Company. All of the amounts
shown are estimates except the registration fee.
<TABLE>
<CAPTION>
Item Amount to be Paid
---- -----------------
<S> <C>
Registration fee $ 933.33
Legal fees and expenses 15,000.00
Accounting fees and expenses 10,000.00
Miscellaneous 1,566.67
-----------
TOTAL $ 27,500.00
===========
</TABLE>
Item 15. Indemnification of Directors and Officers
The Company's Articles of Incorporation eliminate, to the fullest
extent permitted by the North Carolina Business Corporation Act (the "Business
Corporation Act"), the personal liability of each director to the Company or it
shareholders for monetary damages for breach of duty as a director. This
provision in the Articles of Incorporation does not change a director's duty of
care, but it eliminates monetary liability for certain violations of that duty,
including violations based on grossly negligent business decisions that may
include decisions relating to attempts to change control of the Company. The
provision does not affect the availability of equitable remedies for a breach of
the duty of care, such as an action to enjoin or rescind a transaction involving
a breach of fiduciary duty; in certain circumstances, however, equitable
remedies may not be available as a practical matter. Under the Business
Corporation Act, the limitation of liability provision is ineffective against
liabilities for (i) acts or omissions that the director knew or believed at the
time of the breach to be clearly in conflict with the best interests of the
Company, (ii) unlawful distribution described in Business Corporation Act
Section 55-8-33, (iii) any transaction from which the director derived an
improper personal benefit, or (iv) acts or omissions occurring prior to the date
the provision became effective. The provision also in no way affects a
director's liability under the federal securities laws.
Also, to the fullest extent permitted by the Business Corporation Act,
the Company's Bylaws provide, in addition to the indemnification of directors
and officers otherwise provided by the Business Corporation Act, for
indemnification of the Company's current or former directors, officers and
employees against any all liability and litigation expense, including reasonable
attorneys' fees, arising out of their status or activities as directors,
officers and employees, except for liability or litigation expense incurred on
account of activities that were at the time known or believed by such director,
officer or employee to be clearly in conflict with the best interests of the
Company.
The Company intends to obtain officer and director liability insurance
with respect to liabilities arising out of certain matters, including matters
arising under the Securities Act.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
II-1
<PAGE> 7
Item 16. Exhibits
4.1* Registration Rights Agreement dated March 1, 1997, among the Registrant
and each former stockholder of Belmont Research, Inc. offering shares
for sale pursuant to this Registration Statement.
5.1* Opinion of Wyrick Robbins Yates & Ponton L.L.P.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Arthur Andersen LLP
23.3* Consent of Counsel (included in Exhibit 5.1).
25.1* Power of Attorney (see page II-4).
- --------------
* Previously filed.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) that, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(i) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions discussed in
Item 15 above, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
II-2
<PAGE> 8
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Wilmington,
State of North Carolina, on the 12th day of June 1997.
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
By: /s/ Fredric N. Eshelman*
----------------------------------
Fredric N. Eshelman,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Fredric N. Eshelman* Chief Executive Officer and June 12, 1997
- --------------------------------------- Director (Principal Executive
Fredric N. Eshelman, Officer)
Pharm.D.
/s/ Rudy C. Howard Chief Financial Officer, Vice June 12, 1997
- --------------------------------------- President Finance, Secretary
Rudy C. Howard and Treasurer (Principal
Financial Officer)
/s/ Linda Baddour* Director of Finance (Principal June 12, 1997
- --------------------------------------- Accounting Officer)
Linda Baddour
/s/ Ernest Mario, Ph.D.* Chairman of the Board of June 12, 1997
- --------------------------------------- Directors
Ernest Mario, Ph.D.
/s/ Stuart Bondurant, M.D.* Director June 12, 1997
- ---------------------------------------
Stuart Bondurant, M.D.
/s/ Kirby L. Cramer* Director June 12, 1997
- ---------------------------------------
Kirby L. Cramer
</TABLE>
II-4
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Thomas D'Alonzo* Director June 12, 1997
- ---------------------------------------
Thomas D'Alonzo
Director June __, 1997
- ---------------------------------------
Frederick Frank
/s/ Frank E. Loy* Director June 12, 1997
- ---------------------------------------
Frank E. Loy
/s/ John A. McNeill, Jr.* Director June 12, 1997
- ---------------------------------------
John A. McNeill, Jr.
*By: /s/ Rudy C. Howard June 12, 1997
---------------------------------
Rudy C. Howard,
Attorney-in-fact
</TABLE>
II-5
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Pharmaceutical Product Development, Inc. on Form S-3 (File number 333-24779) of
our reports (a) dated February 11, 1997, on our audit of the consolidated
financial statements of Pharmaceutical Product Development, Inc. and its
subsidiaries as of December 31, 1996 and for the year then ended appearing in
the Annual Report on Form 10-K for the year ended December 31, 1996, and (b)
dated February 22, 1996, on our audit of the combined balance sheet of
Pharmaceutical Product Development, Inc., its affiliates and its consolidated
subsidiaries as of December 31, 1995 and the related combined statements of
operations, shareholders' equity and cash flows for the two years in the period
then ended, prior to their restatement for the 1996 pooling of interests,
appearing in the Annual Report on Form 10-K for the year ended December 31,
1995.
/s/ Coopers & Lybrand LLP
Raleigh, North Carolina
June 9, 1997
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement.
/s/ Arthur Andersen LLP
-------------------------------
Arthur Andersen LLP
Washington, D.C.
June 9, 1997
