SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Amendment No. 2
Under the Securities Exchange Act of 1934
Connetics Corporation
-----------------------------------------------------------
(Name of Issuer)
Common Stock
-----------------------------------------------------------
(Title of Class of Securities)
0002078541
-----------------------------------------------------------
(CUSIP Number)
Eileen McCarthy
One Post Office Square, Suite 3800
Boston, MA 02109
(617) 482-8020
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 23, 1998
-----------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with this statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or otherwise subject to the
liabilities of that section of the Exchange Act but shall be subject to all
other provisions of the Exchange Act.
(Continued on following page(s))
Page 1 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 2 of 18 Pages
- -------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta Partners
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
California
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 2,537,163
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 2,537,163
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IA
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 2 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 3 of 18 Pages
- -------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta BioPharma Partners, L.P.
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 1,577,065
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 1,577,065
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
1,577,065
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
7.71%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
PN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 3 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 4 of 18 Pages
- -------------------------------------------------------------------------------------------------------------------
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta Embarcadero BioPharma, LLC
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 59,443
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 59,443
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
59,443
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
.29%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 4 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 5 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Connetics Partners (Alta Bio), LLC
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- ---------------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 900,655
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power -0-
(9) Sole Dispositive Power 900,655
(10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
900,655
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
4.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 5 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 6 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta BioPharma Management, LLC
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 1,577,065
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 960,098
(9) Sole Dispositive Power 1,577,065
(10) Shared Dispositive Power 960,098
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 6 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 7 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alta/Chase BioPharma Management, LLC
- ----------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
WC
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
Delaware
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power 900,655
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 1,636,508
(9) Sole Dispositive Power 900,655
(10) Shared Dispositive Power 1,636,508
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
CO
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 7 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 8 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Jean Deleage
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- ---------------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 8 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 9 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Garrett Gruener
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 9 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 10 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Daniel Janney
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 10 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 11 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Alix Marduel
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
PF, AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 11 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 12 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Guy Nohra
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 12 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP No. 0002078541 13D Page 13 of 18 Pages
(1) Names of Reporting Persons. SS or I.R.S. Identification Nos. of Above Persons
Marino Polestra
- -------------------------------------------------------------------------------------------------------------------
(2) Check The Appropriate Box If A Member Of A Group (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
(4) Source Of Funds*
AF
- -------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) Or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
(6) Citizenship Or Place Of Organization
U.S.A.
- -------------------------------------------------------------------------------------------------------------------
Number Of Shares (7) Sole Voting Power -0-
Beneficially Owned
By Each Reporting
Person With (8) Shared Voting Power 2,537,163
(9) Sole Dispositive Power -0-
(10) Shared Dispositive Power 2,537,163
(11) Aggregate Amount Beneficially Owned By Each Reporting Person
2,537,163
- -------------------------------------------------------------------------------------------------------------------
(12) Check If The Aggregate Amount In Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------------------------------------------
(13) Percent Of Class Represented By Amount In Row (11)
12.40%
- -------------------------------------------------------------------------------------------------------------------
(14) Type Of Reporting Person
IN
- -------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTION BEFORE FILLING OUT!
</FN>
</TABLE>
Page 13 of 29 Pages
<PAGE>
Item 1. Security and Issuer.
This Statement on Schedule D relates to the Common Stock, $0.001 par
value per share (the "Shares"), of Connetics Corporation, a Delaware corporation
(the "Company"). The principal executive offices of the Company are located at
3400 West Bayshore Road, Palo Alto, California 94303.
Item 2. Identity and Background.
(a) This Statement is filed by Alta BioPharma Partners, L.P., a
Delaware limited partnership ("Alta BioPharma"), and Alta Embarcadero BioPharma,
LLC, a Delaware limited liability company ("Embarcadero LLC"), and Connetics
Partners (Alta Bio), LLC, a Delaware LLC ("Connetics Alta Bio") by virtue of
their direct beneficial ownership of Shares, by Alta BioPharma Management
Partners, LLC, a Delaware limited liability company ("Alta Management"), by
virtue of being the sole general partner of Alta BioPharma, by Alta/Chase
BioPharma Management LLC, a Delaware limited liability company (Alta/Chase
Management) by virtue of being the sole managing director of Connetics Partners
(Alta Bio), LLC and by Alta Partners, a California corporation ("Alta
Partners"), by virtue of being the management advisory company of these
entities. Alta BioPharma, Embarcadero LLC, Connetics Alta Bio, Alta Management,
Alta/Chase Management and Alta Partners are collectively referred to as the
"Reporting Persons." Jean Deleage, Garrett Gruener, Dan Janney, Alix Marduel,
Guy Nohra and Marino Polestra (the "Partners") are the managing directors of
Alta Management, Alta/Chase Management and officers of Alta Partners. By virtue
of the relationships described above and their roles with Alta Partners, each of
the Partners may be deemed to control Alta Partners, Alta/Chase Management, Alta
Management, and, therefore, may be deemed to possess indirect beneficial
ownership of the Shares held by each entity. However, none of the Partners,
acting alone, has voting or investment power with respect to the Shares directly
beneficially held by the entities and, as a result, the Partners disclaim
beneficial ownership of the Shares directly beneficially owned by each entity,
except to the extent of their pecuniary interest in each entity. Embarcadero LLC
is a side company that makes all investments pro rata to the capital of Alta
BioPharma with all allocations made to its members based on paid-in capital.
Certain of the Partners are members of Embarcadero LLC and certain members of
Embarcadero LLC are affiliates of Alta Partners.
(b) The principal executive offices of Alta BioPharma, Embarcadero LLC,
Connetics Alta Bio, Alta Management, Alta/Chase Management and Alta Partners,
and the business address of each Partner, are located at One Embarcadero Center,
Suite 4050, San Francisco, California 94111.
(c) Alta Partners provides investment advisory services to venture
capital firms. Alta BioPharma, Connetics Alta Bio and Embarcadero LLC's
principal business is acting as venture capital investment vehicles. Alta/Chase
Management and Alta Management's principal business is acting as managing
director of Connetics Alta Bio and Alta BioPharma, respectively. Each of the
Partners' principal business is acting as a managing director of Alta Management
and Alta/Chase Management and as an officer of Alta Partners.
(d) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any of the Partners, has been convicted in a criminal proceeding in the
past five years (excluding traffic violations or similar misdemeanors).
(e) During the past five years, none of the Reporting Persons or, to
the knowledge of the Reporting Persons, and none of the Partners, was a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws of finding any
violation with respect to such laws.
Page 14 of 29 Pages
<PAGE>
(f) Alta Partners is a California corporation. Alta BioPharma is a
Delaware limited partnership. Embarcadero LLC is a Delaware limited liability
corporation. Connetics Alta Bio is a Delaware liability company. Alta Management
and Alta/Chase Management are Delaware limited liability companies. Each of the
Partners is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The total amount of funds required by Alta BioPharma to acquire the
1,577,065 shares of Common Stock reported in Item 5(a) was $7,196,802.50, the
total amount of funds required by Embarcadero LLC to acquire the 59,443 shares
of Common Stock reported in Item 5(a) was $271,263.26 and the total amount of
funds required by Connetics Alta Bio to acquire the 900,655 shares of Common
Stock reported in Item 5(a) was $4,110,063.13. Such funds were provided by each
entities' capital available for investment.
Item 4. Purpose of Transaction.
Alta BioPharma, Embarcadero LLC, and Connetics Alta Bio acquired the
Common Stock reported in Item 5(c) for investment only. Depending upon their
evaluation of the Company's investments and prospects, and upon future
developments (including, but not limited to, market for the Shares, the
effective yield on the Shares, availability of funds, alternative uses of funds,
and money, stock market and general economic conditions), each of the Reporting
Persons may from time to time purchase the Common Stock, dispose of all or a
portion of the Common Stock that it holds, or cease buying or selling Common
Stock. Any such additional purchases or sales of the Common Stock may be in open
market or privately-negotiated transactions or otherwise.
On April 10, 1998, Alta BioPharma, Embarcadero LLC and Connetics Alta
Bio entered into a Common Stock Purchase Agreement (the "Common Stock Purchase
Agreement") with the Company pursuant to which Alta BioPharma, Embarcadero LLC
and Connetics Alta Bio acquired, for an aggregate purchase price of
$10,000,003.88, a total of 2,162,163 Shares of Common Stock. The entities also
entered into a Registration Rights Agreement. On May 18, 1998, Alta BioPharma,
Embarcadero LLC and Connetics Alta Bio acquired, for an aggregate purchase price
of $578,125, a total of 125,000 Shares of Common Stock . On November 23, 1998,
Alta BioPharma, Embarcadero LLC and Connetics Alta Bio acquired, for an
aggregate purchase price of $1,000,000, a total of 250,000 Shares of Common
Stock. The entities also entered into a Registration Rights Agreement.
Item 5. Interest in Securities of the Issuer.
(a) Alta BioPharma is the direct beneficial owner of 1,577,065 shares
of Common Stock or approximately 7.71% of the shares deemed outstanding by the
Company (20,463,011) as of November 23, 1998. Connetics Alta Bio is the direct
beneficial owner of 900,655 shares of Common Stock or approximately 4.40% of the
shares deemed outstanding by the Company (20,463,011) as of November 23, 1998.
Embarcadero LLC is the direct beneficial owner of 59,443 shares of Common Stock
or approximately .29% of the shares deemed outstanding by the Company
(20,463,011) as of November 23, 1998.
(b) Each entity has the power to direct the disposition of and vote the
stock held by it. By virtue of the relationships previously reported under Item
2 of this Statement, Alta Management, Alta/Chase Management and Alta Partners
may be deemed to have indirect beneficial ownership of the shares owned by such
entities.
(c) On April 10, 1998 Alta BioPharma, Connetics Alta Bio, and
Embarcadero LLC acquired the Shares described in Item 3 of this Statement in a
privately negotiated transaction with the Company for aggregate consideration of
$6,325,668, $3,446,846 and $227,489.88, respectively.
Page 15 of 29 Pages
<PAGE>
On May 18, 1998 Alta BioPharma, Connetics Alta Bio, and Embarcadero LLC
acquired an additional 53,956, 66,645 and 4,399 Shares, respectively, in a
privately negotiated transaction with certain shareholders of the Company for
aggregate consideration of $249,546.50, $308,233.12 and $20,345.38,
respectively.
On November 23, 1998 Alta BioPharma, Connetics Alta Bio, and
Embarcadero LLC acquired an additional 155,397, 88,746 and 5,857 Shares,
respectively, in a privately negotiated transaction with certain shareholders of
the Company for aggregate consideration of $621,588, $354,984 and $23,428,
respectively.
Except as set forth above, neither the Reporting Persons nor the
Partners have effected any transaction in the Shares during the past 60 days.
(d) Alta BioPharma, Connetics Alta Bio and Embarcadero LLC each have
the right to receive dividends and proceeds from the sale of Common Stock held
by it. By virtue of the relationships reported in Item 2 of this Statement. Alta
Management, Alta/Chase Management and Alta Partners may be deemed to have the
power to direct the receipt of dividends and the proceeds from the sale of the
Common Stock held by each entity.
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The Connetics Corporation Common Stock Purchase Agreement dated April
10, 1998 and The Connetics Corporation Registration Rights Agreement dated April
10, 1998 are hereby incorporated in their entirety by this reference.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Joint Filing Statement.
Exhibit B: Connetics Corporation Common Stock Purchase
Agreement dated April 10, 1998, as previously submitted with
the Schedule D filed April 20, 1998 and incorporated herein by
reference.
Exhibit C: Connetics Corporation Registration Rights Agreement
dated April 10, 1998, as previously submitted with the
Schedule D filed April 20, 1998 and incorporated herein by
reference.
Exhibit D: Alta BioPharma Partners Limited Partnership
Management Rights Agreement dated April 10, 1998, as
previously submitted with the Schedule D filed April 20, 1998
and incorporated herein by reference.
Exhibit E: Form of Connetics Corporation Registration Rights
Agreement dated November 20, 1998.
Page 16 of 29 Pages
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: November 23, 1998
Alta Partners Alta BioPharma Partners, L.P.
By: /s/ /Eileen McCarthy By: Alta BioPharma Management, LLC
----------------------------------- Its General Partner
Eileen McCarthy, Vice President
Alta BioPharma Management, LLC By: /s/ Eileen McCarthy
------------------------------
Eileen McCarthy, Member
By: /s/ Eileen McCarthy Connetics Partners (Alta Bio), LLC
-----------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma
Alta/Chase BioPharma Management, LLC Management, LLC
Its Managing Member
By: /s/ Eileen McCarthy By: /s/ Eileen McCarthy
----------------------------------- ------------------------------
Eileen McCarthy, Member Eileen McCarthy, Member
Alta Embarcadero BioPharma, LLC
By: /s/ Eileen McCarthy
-----------------------------------
Eileen McCarthy, Member
/s/ Jean Deleage /s/ Guy Nohra
- ---------------------------------- ----------------------------------
Jean Deleage Guy Nohra
/s/ /Garrett Gruener /s/ Marino Polestra
- ---------------------------------- ----------------------------------
Garrett Gruener Marino Polestra
/s/ Daniel Janney /s/ Alix Marduel
- ---------------------------------- ----------------------------------
Daniel Janney Alix Marduel
Page 17 of 29 Pages
<PAGE>
EXHIBIT A
Joint Filing Statement
We, the undersigned, hereby express our agreement that the attached
Schedule 13D is filed on behalf of each of us.
Date: November 23, 1998
Alta Partners Alta BioPharma Partners, L.P.
By: /s/ /Eileen McCarthy By: Alta BioPharma Management, LLC
----------------------------------- Its General Partner
Eileen McCarthy, Vice President
Alta BioPharma Management, LLC By: /s/ Eileen McCarthy
------------------------------
Eileen McCarthy, Member
By: /s/ Eileen McCarthy Connetics Partners (Alta Bio), LLC
-----------------------------------
Eileen McCarthy, Member
By: Alta/Chase BioPharma
Alta/Chase BioPharma Management, LLC Management, LLC
Its Managing Member
By: /s/ Eileen McCarthy By: /s/ Eileen McCarthy
----------------------------------- ------------------------------
Eileen McCarthy, Member Eileen McCarthy, Member
Alta Embarcadero BioPharma, LLC
By: /s/ Eileen McCarthy
-----------------------------------
Eileen McCarthy, Member
/s/ Jean Deleage /s/ Guy Nohra
- ---------------------------------- ----------------------------------
Jean Deleage Guy Nohra
/s/ /Garrett Gruener /s/ Marino Polestra
- ---------------------------------- ----------------------------------
Garrett Gruener Marino Polestra
/s/ Daniel Janney /s/ Alix Marduel
- ---------------------------------- ----------------------------------
Daniel Janney Alix Marduel
Page 18 of 29 Pages
<PAGE>
EXHIBIT E
CONNETICS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the
20th day of November, 1998, by and among Connetics Corporation, a Delaware
corporation (the "Company") and each of the persons listed on Exhibit A to this
Agreement (each an "Investor" and together the "Investors").
R E C I T A L S
A. Effective as of the same date as this Agreement, the Company and the
Investors have entered into a Common Stock Purchase Agreement (the "Purchase
Agreement") pursuant to which the Company has agreed to sell to the Investors
and the Investors have agreed to purchase from the Company shares of the
Company's Common Stock (all terms not otherwise defined herein shall have the
meanings ascribed in the Purchase Agreement).
B. A condition to the Investors' obligations under the Purchase
Agreement is that the Company and the Investors enter into this Agreement in
order to provide the Investors with certain rights to register the Common Stock
acquired by the Investors pursuant to the Purchase Agreement. The Company
desires to induce the Investors to purchase the Common Stock pursuant to the
Purchase Agreement by agreeing to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
AGREEMENT
1. Registration Rights. The Company and the Investors covenant and
agree as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Securities Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the
shares of Common Stock issued or sold in connection with the Purchase Agreement
(such shares of Common Stock are collectively referred to as the "Shares" or
"Stock") and (ii) any other shares of common stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Stock; provided, that the foregoing
definition shall exclude in all cases any Registrable Securities sold by a
person in a transaction in which his or her rights under this Agreement are not
assigned. Notwithstanding the foregoing, shares of common stock shall only be
treated as Registrable Securities if and so long as they have not been (x) sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (y) sold in a transaction exempt from the
registration and prospectus delivery requirements under Section 4(1) of the
Securities Act so that all transfer restrictions, and restrictive legends with
respect thereto, if any, are removed upon the consummation of such sale;
Page 19 of 29 Pages
<PAGE>
(c) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of Common Stock
then outstanding which are Registrable Securities, plus the number of shares of
common stock issuable pursuant to then exercisable or convertible securities
which are Registrable Securities;
(d) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with this Agreement;
(e) The term "Form S-3" means such form under the
Securities Act as in effect on the date hereof or any successor form under the
Securities Act; and
(f) The term "SEC" means the Securities and Exchange
Commission.
1.2 Registration. The Company will use its reasonable best
efforts to effect a registration to permit the sale of the Registrable
Securities as described below, and pursuant thereto the Company will:
(a) prepare and file within 20 days and use its
reasonable best efforts to have declared effective by the SEC within 45 days
after the Closing, a registration statement on Form S-3 relating to resale of
all of the shares of the Registrable Securities and use its reasonable best
efforts to cause such registration statement to remain continuously effective
for a period which will terminate when all Registrable Securities covered by
such registration statement, as amended from time to time, have been sold or
when the Registrable Securities may be sold under Rule 144(k) under the
Securities Act;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the registration statement and any prospectus as
may be necessary to keep such registration statement effective for the period
specified in Section 1.2(a) and to comply with the provisions of the Securities
Act and the Exchange Act with respect to the distribution of all Registrable
Securities;
(c) notify each Investor promptly and confirm such
notice in writing (i) when the prospectus or any supplement or post-effective
amendment has been filed and, with respect to the registration statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to the registration statement
or prospectus or for additional information, (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose, and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(d) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement at the earliest possible moment;
(e) furnish to each Investor, without charge, at
least one copy of the registration statement and any post-effective amendment
thereto, including financial statements and schedules, and upon an Investor's
request, all documents incorporated therein by reference and all exhibits
thereto (including those incorporated by reference);
(f) deliver to each Investor, without charge, as many
copies of the prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities;
(g) cause all Registrable Securities covered by the
registration statement to be listed on each securities exchange or market on
which similar securities issued by the Company are then listed, and if the
securities are not so listed to use its reasonable best efforts promptly to
cause all such securities to be listed on either the New York Stock Exchange,
the American Stock Exchange or the Nasdaq Stock Market;
Page 20 of 29 Pages
<PAGE>
(h) use reasonable best efforts to qualify or
register the Registrable Securities for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as are applicable.
The Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to general service of process
or taxation as a foreign corporation in any jurisdiction where it is not now so
subject;
(i) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC under the Securities
Act and the Exchange Act and take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder; and
(j) expenses incurred in connection with a
registration requested pursuant to this Section 1.2 shall be borne by the
Company, including all registration, filing, qualification, printers' and
accounting fees but excluding any underwriters' discounts or commissions and any
fees and disbursements of any counsel for the selling Holders (such fees or
discounts, if any, to be borne pro rata by the Holders participating in the
registration).
1.3 Restrictions; Procedure For Sales Pursuant To A
Registration Statement.
(a) Each Holder agrees to the following restrictions
on and procedures for sales made pursuant to a registration statement:
(i) Notice to Company. If any Holder
proposes to sell any Shares, the Holder shall notify the Company of its intent
to do so at least three (3) business days prior to the date of such sale (the
"Notice of Sale"), by tendering a Notice of Sale in substantially the form
attached as Exhibit B. Alternatively, the Holder may give the Notice of Sale
verbally by telephoning and speaking directly with John L. Higgins or the then
current Chief Financial Officer at the Company at (650) 843-2800, and following
up by immediately sending a written Notice of Sale. Providing the Notice of Sale
to the Company shall conclusively be deemed to establish an agreement by such
Holder to comply with the registration provisions herein described, and the
Notice of Sale shall be deemed to constitute a representation that any
information previously supplied by such Holder is accurate as of the date of
such Notice of Sale.
(ii) Delay of Sale. The Company may refuse
to permit the Holder to resell any Shares for a specified period of time;
provided, however, that (a) in order to exercise this right, the Company must
deliver a certificate in writing to the Holder to the effect that the
registration statement in its then current form contains an untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, (b) in no event shall such delay exceed twenty (20) days,
(c) in no event shall this right of delay be exercised on more than two (2)
occasions in any twelve (12) month period, and (d) during any suspension as
contemplated by this Section 1.4 (a)(ii), the Company will not allow any of its
officers or directors to buy or sell shares of the Company's securities.
(b) Representations of Holders. Each Holder hereby
represents to and covenants with the Company that, during the period in which a
registration statement effected pursuant to Section 1.2 remains effective, such
Holder will:
(i) not engage in any stabilization activity
in connection with any of the Company's securities;
(ii) cause to be furnished to any purchaser
of the Shares and to the broker-dealer, if any, through whom Shares may be
offered, a copy of the Prospectus; and
Page 21 of 29 Pages
<PAGE>
(iii) not bid for or purchase any securities
of the Company or any rights to acquire the Company's securities, or attempt to
induce any person to purchase any of the Company's securities or any rights to
acquire the Company's securities other than as permitted under the Securities
Exchange Act of 1934, as amended ("Exchange Act").
(c) Information for Use in Registration Statement.
Each Holder represents and warrants to the Company that such Holder has
completed the information requested by the Selling Holder's Questionnaire
attached as Exhibit C to this Agreement (the "Questionnaire"), and further
represents and warrants to the Company that all information provided by such
Holder in the Questionnaire is true, accurate and complete. Each Holder
understands that the written information in the Questionnaire and all written
representations made in this Agreement are being provided to the Company
specifically for use in, or in connection with, the registration statement and
the Prospectus, and has executed this Agreement with such knowledge.
1.4 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.5 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any dispute that might arise with respect to the
interpretation or implementation of this Section 1.
1.6 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Securities) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities or the Exchange Act, against
any losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities,
the Exchange Act or any state securities law; and the Company will pay to each
such Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.6(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities, any underwriter,
any other
Page 22 of 29 Pages
<PAGE>
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Securities, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 1.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.6(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this subsection
1.6(b) exceed the net proceeds from the offering received by such Holder, except
in the case of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party
under this Section 1.6 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.6, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.6.
(d) If the indemnification provided for in this
Section 1.6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided that, in no event shall any contribution by a Holder
under this Subsection 1.6(d) exceed the net proceeds from the offering received
by such Holder, except in the case of willful fraud by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
(e) The obligations of the Company and Holders under
this Section 1.6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1.
1.7 Reports Under Securities Exchange Act Of 1934. With a view
to making available to the Holders the benefits of Rule 144 and any other rule
or regulation of the SEC that may at any time permit
Page 23 of 29 Pages
<PAGE>
a Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144, so long as the Company
remains subject to the periodic reporting requirements under Sections 13 or
15(d) of the Exchange Act;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities and the
Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of the Exchange
Act and the rules and regulations promulgated thereunder, or that it qualifies
as a registrant whose securities may be resold pursuant to Form S-3, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without registration
or pursuant to such form.
2. MISCELLANEOUS.
2.1 Successors and Assigns. Except as otherwise provided in
this Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including transferees of any of the Shares). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
2.2 Governing Law. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
2.3 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 Notices. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier and
addressed to the party to be notified at such party's address as set forth on
the signature page hereto or as subsequently modified by written notice. In the
event that any date provided for in this Agreement falls on a Saturday, Sunday
or legal holiday, such date shall be deemed extended to the next business day.
Notwithstanding the foregoing, any notice delivered pursuant to Section 1.3(e)
or Section 1.4 hereto must be made by personal delivery or confirmed facsimile
transmission.
Page 24 of 29 Pages
<PAGE>
2.6 Expenses. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
2.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(a) such provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
2.9 Entire Agreement. This Agreement, and the documents
referred to in this Agreement (with the exception of the registration statement)
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements existing
between the parties hereto are expressly canceled.
Page 25 of 29 Pages
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
"COMPANY"
Connetics Corporation Address:
3400 West Bayshore Road
Palo Alto, California 94303
By: ____________________________ Facsimile: (650) 843-2899
Thomas G. Wiggans
President and Chief Executive Officer
INVESTOR(S)
Alta BioPharma Partners, L.P.
By: Alta BioPharma Management Partners, L.P.
By: ____________________________
General Partner
Connetics Partners (AltaBio), LLC
By: ____________________________
Member
Alta Embarcadero BioPharma, LLC
By: ____________________________
Member
Address: Alta Partners
One Embarcadero Center
Suite 4050
San Francisco, CA 94111
Page 26 of 29 Pages
<PAGE>
EXHIBIT A
LIST OF INVESTORS
Name Number of Shares
- ---- ----------------
Page 27 of 29 Pages
<PAGE>
EXHIBIT B
CONNETICS CORPORATION
NOTICE OF SALE
Pursuant to the Registration Rights Agreement dated as of
_______________, 1998 among Connetics Corporation (the "Company"), the
undersigned and certain stockholders of the Company, the undersigned hereby
gives notice to the Company of the undersigned's intent to sell _______ shares
of the Company's Common Stock registered pursuant to the registration statement
(File No. _______) filed pursuant to such Agreement.
Dated: ___________________ By:_____________________________________
(signature)
Name:___________________________________
(print)
Title:__________________________________
(if applicable)
[NOTE: THIS NOTICE OF SALE MUST BE COMPLETED AND DELIVERED (BY PERSONAL DELIVERY
OR FACSIMILE) TO THE CHIEF FINANCIAL OFFICER OF THE COMPANY ON
_____________________. 19__, OR THREE (3) BUSINESS DAY BEFORE THE DATE OF SALE
OF THE SHARES OF THE COMPANY'S COMMON STOCK REGISTERED PURSUANT TO THE
REGISTRATION STATEMENT.]
Page 28 of 29 Pages
<PAGE>
EXHIBIT C
CONNETICS CORPORATION
SELLING STOCKHOLDER'S QUESTIONNAIRE
In connection with the Connetics Corporation (the "Company")
Registration Statement (File No. _______________) registering certain shares of
the Company's Common Stock, the undersigned represents and warrants that the
information set forth below is true, accurate and complete:
1. As of the date hereof, the undersigned beneficially owns ______
shares of the Company's Common Stock.
2. Except as described below, the undersigned has not had a material
relationship with the Company or any of its predecessors or affiliates within
the last three years.
The term "material relationship" has not been defined by the Securities
and Exchange Commission (the "SEC"). However, the SEC has indicated that it will
probably construe as a "material relationship" any relationship which tends to
prevent arms length bargaining in dealings with a company, whether arising from
a close business connection or family relationship, a relationship of control or
otherwise. It seems prudent, therefore, to consider that the undersigned would
have such a relationship, for example, with any organization of which the
undersigned is an officer, director, trustee or partner or in which the
undersigned owns, directly or indirectly, ten percent (10%) or more of the
outstanding voting stock, or in which the undersigned has some other substantial
interest, and with any person or organization with whom the undersigned has, or
with whom any relative or spouse (or any other person or organization as to
which the undersigned has any of the foregoing other relationships) has, a
contractual relationship.
If applicable, please describe the material relationship with the
Company:
Dated: ___________________ By:_____________________________________
(signature)
Name:___________________________________
(print)
Title:__________________________________
(if applicable)
Page 29 of 29 Pages
