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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 2000
REGISTRATION NO. 333-32204
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AURORA BIOSCIENCES CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 33-0669859
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification Number)
or organization)
11010 TORREYANA ROAD
SAN DIEGO, CA 92121
(858) 404-6600
(Address, including zip code, and
telephone number, including
area code, of Registrant's
principal executive
offices)
STUART J.M. COLLINSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AURORA BIOSCIENCES CORPORATION
11010 TORREYANA ROAD
SAN DIEGO, CA 92121
(858) 404-6600
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Copies to:
THOMAS A. COLL, ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121
(858) 550-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO
THE PUBLIC: From time to time 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 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. [ ]
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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED MARCH 22, 2000
PROSPECTUS
1,800,000 SHARES
AURORA BIOSCIENCES CORPORATION
COMMON STOCK
We are registering our common stock for resale by the selling stockholders
identified in this prospectus. We will not receive any of the proceeds from the
sale of shares by the selling stockholders. Our common stock is listed on the
Nasdaq National Market under the symbol "ABSC." On March 21, 2000, the last
reported sales price for our common stock, was $50.13 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is ____________, 2000.
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AURORA BIOSCIENCES CORPORATION
We design, develop and commercialize advanced drug discovery technologies,
services and instrumentation to accelerate the discovery of new medicines, the
principal components of which are our genomics, assay and automated system
technologies. Our technology platform provides an advanced way to identify
commercially useful targets, enable rapid assay development and rapidly test
compounds for use as potential new medicines that act upon those targets. Thus,
our technology is designed to address the most significant new bottlenecks in
the drug discovery process. We are launching a proprietary large-scale biology
program to identify proteins involved in disease, or targets, rapidly
incorporate these targets into tests, or assays, that measure activity in
targets and then rapidly screen hundreds of thousands of compounds against these
assays to identify potential drugs. Our ultra-high throughput screening system,
known as the UHTSS, is designed to screen over one hundred thousand compounds
per day against targets. We believe many of our technologies have been
commercially validated by over fifteen major pharmaceutical and
biotechnology companies in the form of commercialization agreements for
discovery services, licenses or instrumentation.
Our executive offices are located at 11010 Torreyana Road, San Diego,
California 92121, and our telephone number is (858) 404-6600.
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RISK FACTORS
You should carefully consider the risks described below, together with all
of the other information included or incorporated by reference in this
prospectus, before deciding whether to invest in our common stock. If any of the
following risks actually occurs, our business, financial condition or results of
operations could be harmed. In this case, the trading price of our common stock
could decline, and you may lose all or part of your investment.
WE MAY NOT BE ABLE TO COMMERCIALIZE SUCCESSFULLY OUR NEW TECHNOLOGIES OR
PRODUCTS, WHICH COULD CAUSE US TO BE UNPROFITABLE OR LEAD TO LOSS OF BUSINESS.
You should evaluate our business in light of the uncertainties and
complexities affecting a growing technology company. Our proprietary
technologies and products are new and in development. In particular, our
patented ultra-high throughput screening system, or UHTSS, our automated master
compound store, or AMCS, and our methods of assay development and screening
targets incorporate new and unproven approaches to the discovery of potential
medicines. For example:
- our fluorescent assay technologies and instruments have only recently
begun to be used in the drug discovery process and to our knowledge have
never been used in the discovery of any medicine that has been
commercialized;
- our UHTSS and AMCS technologies have yet to, and may never, be
implemented as fully operational systems;
- our UHTSS and AMCS will require significant additional investment and
development prior to commencement of full-scale commercial operation,
including software integration with complex instrumentation and testing
to validate performance; and
- some of the instrumentation and software expected to comprise our UHTSS
and AMCS have not yet been used in commercial applications.
Many of these technologies have not been validated or developed at levels
necessary to screen small volumes, and we cannot assure you that UHTSS and AMCS
technologies will achieve expected performance levels at these scales. If we are
unable to commercialize successfully the UHTSS or AMCS or if we are unable to
commercialize successfully our screening methods, we may not be able to achieve
our business objectives or build a sustainable or profitable business.
IF WE DO NOT TIMELY AND SUCCESSFULLY COMPLETE THE DEVELOPMENT OF OUR UHTSS OR
AMCS, OUR RELATIONSHIPS WITH OUR CUSTOMERS COULD BE HARMED, WE COULD BE SUBJECT
TO CONTRACTUAL DISPUTES AND WE COULD BE REQUIRED TO PAY FINANCIAL PENALTIES TO
OUR CUSTOMERS.
Complex instrumentation systems that appear to be promising at early stages
of development may not become fully operational for a number of reasons. These
systems may:
- be found ineffective;
- be impossible or uneconomical to produce;
- fail to achieve expected performance levels or industry acceptance; or
- be precluded from commercialization by the proprietary rights of third
parties.
The complexity of both the UHTSS and AMCS has led to unexpected delays in
their development that could lead to financial penalties and contractual
disputes regarding the delivery and acceptance of these instruments by our
customers. The successful implementation
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and operation of the UHTSS and AMCS will be a complex process requiring
integration and coordination of a number of factors, including integration of
and successful interface between complex advanced robotics, microfluidics,
automated storage and retrieval systems and software and information systems. We
may not be able to successfully integrate or implement all of the
instrumentation needed for the UHTSS and AMCS. In addition, because we are also
dependent in part on the performance of our customers and suppliers in order to
deliver these platforms, our ability to timely deliver these platforms may be
outside of our control.
Some of our agreements with our customers provide for penalties to be paid
by us if we do not meet development schedules contained in the agreements. Our
agreement with Bristol-Myers provides for penalty payments up to a maximum of
$1,000,000 if we fail to deliver the completed UHTSS by a specified time. In
addition, Bristol-Myers may be able to withdraw from further development of the
UHTSS without additional payment. Our agreement with Warner Lambert provides for
penalty payments up to a maximum of $888,300 if we fail to deliver the completed
AMCS according to a specified development schedule.
We are currently behind schedule in the delivery and integration of Module
3, the software component of the UHTSS, under our agreement with Bristol-Myers
and the delivery of the AMCS under our agreement with Warner Lambert. We
currently expect to complete delivery and integration of Module 3 and delivery
of the AMCS in the second half of 2000. Although we are currently negotiating
with Bristol-Myers and Warner Lambert to modify the development schedules
contained in those agreements, we are currently in the penalty phase under the
Warner Lambert agreement. If we are unable to renegotiate the development
schedules in these agreements, we could be required to pay penalties or enter
into contractual disputes which could have a material adverse effect on our
business, financial condition or results of operations.
EVEN IF WE SUCCESSFULLY COMPLETE THE DEVELOPMENT OF OUR UHTSS AND AMCS, OTHER
LIMITATIONS OR DEFECTS MAY EMERGE LATER THAT COULD LIMIT THEIR UTILITY AND
REDUCE OUR FUTURE ABILITY TO GENERATE REVENUES.
As the UHTSS and AMCS are individually developed, integrated and used, it
is possible that previously unanticipated limitations or defects may emerge. In
addition, operators using the system may require substantial new technical
skills and training. Unforeseen complications may arise in the development,
delivery and operation of the UHTSS and AMCS that could materially delay or
limit their use by us and our customers, substantially increase the anticipated
cost of development of the systems, result in our breach of contractual
obligations to our customers and others, or render the systems unable to perform
at the quality and capacity levels required for success. We may not be able to
successfully complete the development of the UHTSS and AMCS and achieve
anticipated throughputs, gain industry acceptance of our approach to the
identification of lead compounds or develop a sustainable profitable business.
Any complications or delays could subject us to contractual disputes or
litigation, limit our ability to use the UHTSS and AMCS for research and
development as currently expected, reduce our future expected revenues from
these instruments and have other material adverse effects on our business,
financial condition or results of operations.
WE DEPEND ON COMMERCIAL RELATIONSHIPS WITH OTHER COMPANIES, AND OUR FAILURE TO
SUCCESSFULLY MANAGE OUR EXISTING AND FUTURE RELATIONSHIPS COULD PREVENT US FROM
COMMERCIALIZING MANY OF OUR PRODUCTS AND SUSTAINING PROFITABILITY OR REVENUE
GROWTH.
We have collaborative agreements with Bristol-Myers, Eli Lilly, Warner
Lambert, Merck, and Pfizer to license our fluorescence assay technologies for
their internal discovery research and to provide services on assay development.
With the exception of Eli Lilly, these companies also
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participate in the co-development of the UHTSS for installation in their own
facilities. In addition, we have developed or are developing assays for and/or
implemented or implementing screening programs for Pharmacia & Upjohn, Inc.,
F.Hoffmann-LaRoche Ltd., American Home Products, Glaxo Wellcome, Roche
Bioscience, Becton Dickinson, Allelix Biopharmaceuticals, Inc., Cystic Fibrosis
Foundation, and Cytovia, Inc. Under these agreements, we have limited or no
control over the resources that any collaborator may devote to our products or
programs and we cannot assure you that our collaborators will continue to devote
the same resources to our collaboration in the future. Our agreements generally
may be terminated by the collaborator without cause upon short notice and in
many cases without payment to us, which would result in our loss of anticipated
revenue. In addition we cannot assure you that our collaborators will perform
their obligations as expected or that we will derive any additional revenue from
these agreements. Our present or future commercial relationships could be harmed
if:
- we do not deliver our services or systems when contractually specified;
- we do not achieve our research and development objectives under our
collaborative agreements;
- we develop products and processes or enter into additional collaborative
agreements that could conflict with the business objectives of our
existing collaborative partners;
- we disagree with our collaborative partners as to rights to intellectual
property we develop;
- we are unable to manage multiple simultaneous collaborative
relationships;
- our collaborative partners become competitors of ours or enter into
agreements with our competitors;
- consolidation in our target markets limits the number of potential
collaborative partners; or
- we are unable to negotiate additional agreements having terms
satisfactory to us.
Termination of our existing or future collaboration agreements, or the
failure to enter into a sufficient number of additional collaborative agreements
on favorable terms, could have a material adverse effect on our business,
financial condition or results of operations.
WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE.
We earned small profits in 1997 and 1999 but had an accumulated deficit of
$21.6 million as of December 31, 1999. Our ability to sustain profitability will
depend in part on our ability to:
- successfully complete our UHTSS and AMCS on a timely basis;
- successfully commercialize drug discovery services to pharmaceutical and
biotechnology companies; and
- gain industry acceptance of our systems, services and technologies.
We expect to spend significant amounts of money to fund the expansion of
our operations and the continued development of our products, systems and
fluorescence assay and genomics technologies. As a result, we expect that our
operating expenses will increase in the near term and, consequently, we will
need to generate additional revenue to sustain profitability. Future revenue is
uncertain because our ability to generate revenue will depend upon our ability
to enter into new collaborative, service and license agreements, and to meet
research, development and commercialization objectives under new and existing
agreements. Even if we
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do achieve profitability, we may not be able to sustain or increase
profitability on a quarterly or annual basis.
OUR BUSINESS MODEL IS NEW, WHICH MAY DISCOURAGE THIRD PARTIES FROM USING OUR
TECHNOLOGIES AND SERVICES.
We intend to use our UHTSS and fluorescence assay technologies to rapidly
identify for ourselves and our collaborators as many therapeutically relevant
targets and compounds with as much commercial potential as possible.
Historically, pharmaceutical and biotechnology companies have conducted
molecular target screening and lead compound identification within their own
internal research departments because of the highly proprietary nature of these
discovery activities, due to the importance of these activities to drug
discovery and development efforts and the desire to obtain maximum patent and
other proprietary protection on the results of their programs. Pharmaceutical
and biotechnology companies may choose not to outsource their drug discovery
services needs to us. Our ability to succeed will be dependent, in part, upon
the willingness of multiple pharmaceutical and biotechnology companies to accept
our business model and to use our systems, services and technologies as a tool
in the discovery and development of compounds with commercial potential.
Because of the potential overlap of compounds and targets provided to us by
our collaborators, conflicts may arise among collaborators as to rights to
particular products developed as a result of being identified through the use of
our technologies. Our failure to successfully manage existing and future
collaborator relationships, maintain confidentiality among such relationships or
prevent the occurrence of such conflicts could lead to disputes that result in,
among other things, a significant strain on management resources, legal claims
involving significant time and expense and loss of reputation, a loss of capital
or a loss of collaborators, any of which could have a material adverse effect on
our business, financial condition or results of operations.
WE MAY EXPEND SUBSTANTIAL FUNDS AND MANAGEMENT EFFORT TO PURSUE ADDITIONAL
COLLABORATIVE ARRANGEMENTS WITH NO ASSURANCE OF SUCCESSFULLY SELLING OUR
PRODUCTS OR SERVICES OR ENTERING INTO A COLLABORATIVE AGREEMENT.
Our ability to enter into agreements with additional collaborators or to
expand our agreements with existing collaborators depends in part upon our
ability to convince potential collaborators that our technologies can help
accelerate drug discovery efforts. This may require substantial time and effort
on our part to educate potential collaborators and other users of our services
and technologies on the efficiencies and potential benefits presented by our
services and technologies. In addition, many of the collaborations involve the
negotiation of customized terms regarding licensing, scope of agreement and
types of services required. We cannot assure you that the expenditure of
substantial funds and management effort to pursue collaborative opportunities
will result in a collaboration yielding significant revenues to us.
OUR CURRENT AND POTENTIAL CUSTOMERS ARE PRIMARILY FROM, AND ARE SUBJECT TO RISKS
FACED BY, THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES.
We derive a substantial portion of our revenue from fees paid by
pharmaceutical companies and larger biotechnology companies for our products and
services. We expect that pharmaceutical companies and larger biotechnology
companies will be our primary source of revenues for the foreseeable future. As
a result, we are, and we expect to be, subject to risks and uncertainties that
affect the pharmaceutical and biotechnology industries and to possible reduction
and delays in research and development expenditures by companies in these
industries. Our future revenues may also be adversely affected by mergers and
consolidation in
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the pharmaceutical and biotechnology industries, which will reduce the number of
our potential customers.
COMPETITION IN THE BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES MAY RESULT IN
COMPETING PRODUCTS AND TECHNOLOGIES THAT MAKE OUR PRODUCTS AND TECHNOLOGIES
OBSOLETE.
The pharmaceutical and biotechnology industry is characterized by rapid
technological change. Competition is intense among pharmaceutical and
biotechnology industries that attempt to identify compounds for development or
support drug discovery efforts. Because we provide many types of technology, and
the UHTSS instrumentation is designed to integrate different technologies, we
compete in many areas, including instrumentation, software, assay development,
high throughput screening and genomics. We compete with instrumentation and
screening companies, the research departments of pharmaceutical and
biotechnology companies and other commercial enterprises, as well as numerous
academic and research institutions. Another technology provider may develop a
product to compete with the UHTSS or AMCS or our fluorescence assay technology.
Pharmaceutical, biotechnology and instrumentation companies that currently
compete with us may merge or enter into alliances with other companies and
become substantial multi-point competitors. Our collaborators or potential
collaborators may assemble their own ultra-high throughput screening systems by
purchasing components or contracting for services from competitors. Genomics and
combinatorial chemistry companies may also expand their business to include
compound screening or screen development. Many of these pharmaceutical and
biotechnology companies, which represent the greatest potential market for our
systems, services and technologies, have developed or are developing internal
programs and other methodologies to improve productivity, including major
investments in robotics technology to permit the automated screening of
compounds. Our technological approaches, in particular the UHTSS, AMCS and our
fluorescence assay technology, may be rendered obsolete or uneconomical by
advances in existing technological approaches or the development of different
approaches by our current or future competitors.
WE MAY NEED TO INITIATE LAWSUITS TO PROTECT OR ENFORCE OUR PATENTS OR OTHER
PROPRIETARY RIGHTS, WHICH WOULD BE EXPENSIVE AND, IF WE LOSE, MAY CAUSE US TO
LOSE SOME OF OUR INTELLECTUAL PROPERTY RIGHTS, WOULD REDUCE OUR ABILITY TO
COMPETE IN THE MARKET AND MAY CAUSE OUR STOCK PRICE TO DECLINE.
We rely on patents to protect a large part of our intellectual property and
our competitive position. Our patents, which have been or may be issued, may not
afford meaningful protection for our technology and products. Our competitors
may develop products and technologies similar to ours that do not conflict with
our patents. In order to protect or enforce our patent rights, we may initiate
patent litigation or proceedings against third parties, such as infringement
suits or interference proceedings. Future lawsuits or proceedings could be
expensive, take significant time, and could divert management's attention from
other business concerns. They would put our patents at risk of being invalidated
or interpreted narrowly and our patent applications at risk of not issuing. We
may also provoke these third parties to assert claims against us. The patent
position of biotechnology firms generally is highly uncertain, involves complex
legal and factual questions, and has recently been the subject of much
litigation. We cannot assure you that we will prevail in any of these suits or
that the damages or other remedies awarded to us, if any, will be commercially
valuable. During the course of these suits, there may be public announcements of
the results of hearings, motions and other interim proceedings or developments
in the litigation. If securities analysts or others perceive any of these
results to be negative, it could cause our stock price to decline.
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OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING ON
OR MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS.
We may be sued for infringing on the patent rights of others. We may have
to pay substantial damages, including treble damages, for past infringement if
it is ultimately determined that our products infringe a third party's
proprietary rights. Because we produce many different technologies, there is the
potential for patent infringement suits by a wide-range of companies that
control patents for assay technologies, genomic technologies, software and
instrumentation. The drug discovery industry, including screening technology
companies, has a history of patent litigation and will likely continue to have
patent litigation suits concerning drug discovery technologies. A number of
patents have issued and may issue on certain fluorescence technologies, targets
or their use in screening assays that could prevent us and our collaborators
from developing assays using such technologies or targets, or relate to certain
other aspects of technology that we use or expect to use. From time to time we
receive invitations from third parties to license patents owned or controlled by
third parties. We evaluate these requests and attempt to obtain licenses if they
are compatible with our business objectives. We may not be able to obtain any
licenses on acceptable terms, if at all. Our inability to obtain or maintain
patent protection or necessary licenses could have a material adverse effect on
our business, financial condition or results of operations.
OTHER METHODS OF PROTECTING OUR TRADE SECRETS AND OTHER INTELLECTUAL PROPERTY,
INCLUDING CONFIDENTIALITY AGREEMENTS WITH EMPLOYEES AND OTHERS, MAY NOT
ADEQUATELY PREVENT DISCLOSURE OF PROPRIETARY INFORMATION.
In addition to patent protection, we rely on a combination of copyright and
trademark laws, trade secrets, know-how, and other contractual provisions and
technical measures to protect our intellectual property rights. In an effort to
maintain the confidentiality and ownership of trade secrets and proprietary
information, we require employees, consultants and collaborators to execute
confidentiality and invention assignment agreements upon commencement of a
relationship with us. These measures may not provide meaningful protection for
our trade secrets or other confidential information and technology. If these
measures do not protect our rights, third parties could use our technology, and
our ability to compete in our markets would be harmed. In the event of
unauthorized use or disclosure of our confidential and proprietary information,
we may not have adequate remedies. Despite our efforts, third parties may
independently discover trade secrets and proprietary information. Costly and
time-consuming litigation could be necessary to enforce and determine the scope
of our proprietary rights, and failure to obtain and maintain trade secret
protection could adversely affect our competitive position.
IF WE ENGAGE IN ANY MERGER OR ACQUISITION TRANSACTIONS, WE WILL INCUR A VARIETY
OF COSTS AND MAY POTENTIALLY FACE OTHER RISKS THAT COULD ADVERSELY AFFECT OUR
BUSINESS OPERATIONS.
If appropriate opportunities become available, we may consider acquiring
businesses, technologies or products that we believe are a strategic fit with
our business. We currently have no commitments or agreements with respect to any
material acquisitions. If we do pursue an acquisition strategy, we could:
- issue equity securities which could dilute current stockholders'
percentage ownership;
- incur substantial debt;
- incur substantial distraction from our current business objectives; or
- assume contingent liabilities.
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We may not be able to integrate successfully any businesses, products,
technologies or personnel that we might acquire in the future without a
significant expenditure of operating, financial and management resources, if at
all. In addition, future acquisitions might negatively impact our business
relations with our collaborators. Further, recent proposed accounting changes
could result in a negative impact on our net income (loss) or results of
operations from amortization of goodwill and/or other intangible assets related
to any acquisition. Any of these adverse consequences could harm our business.
BECAUSE OUR PRODUCTS AND SERVICES CURRENTLY DEPEND ON COMPONENTS AND
TECHNOLOGIES LICENSED FROM THIRD PARTIES, A BREACH BY US OF ANY OF THE TERMS OF
THESE LICENSES, OR SHOULD ANY OF OUR LICENSORS LOSE THEIR RIGHTS UNDERLYING ANY
OF OUR LICENSES, IT COULD RESULT IN OUR LOSS OF ACCESS TO THESE COMPONENTS AND
TECHNOLOGIES AND COULD DELAY OR SUSPEND SEVERAL OF OUR RESEARCH AND DEVELOPMENT
PLANS.
Some aspects of our technology and products have been licensed from third
parties. If we fail to maintain the right to use these components it could
seriously harm our business, financial condition and results of operation. In
particular, we are dependent, in part, on the patent rights licensed from third
parties with respect to our fluorescence assay and screening technologies.
Patent applications filed by us or our licensors may not result in patents
being issued with respect to intellectual property we have licensed, claims of
those patents may not offer sufficient protection, and any patents licensed by
us may be challenged, narrowed, invalidated, or circumvented. We may also be
subject to legal proceedings that result in the revocation of patent rights
previously licensed to us, as a result of which we may be required to obtain
licenses from others to continue to develop, test or commercialize our systems,
services or technologies. We may not be able to obtain such licenses on
acceptable terms, if at all, which would result in delays or a suspension of
several of our research, development or commercialization plans.
OUR STOCK PRICE MAY BE PARTICULARLY VOLATILE BECAUSE OF THE INDUSTRY IN WHICH WE
OPERATE.
The market prices for securities of comparable technology companies,
particularly life science companies, have been highly volatile and the market
has experienced significant price and volume fluctuations that are often
unrelated to the operating performance of particular companies. Factors that
could have a significant impact on the market price of our common stock include:
- announcements of technological innovations or new commercial products by
us or its competitors;
- disputes or other developments concerning proprietary rights, including
patents and litigation matters and the ability to patent genes and
targets;
- publicity regarding actual or potential results with respect to systems,
services or technologies under development by us, our collaborative
partners or our competitors;
- regulatory developments in both the United States and foreign countries;
- public concern as to the efficacy of new technologies;
- general market conditions; and
- quarterly fluctuations in our revenue and financial results.
In particular, the realization of any of the risks described in these "Risk
Factors" could have a dramatic and materially adverse impact on the market price
of our common stock. In the past,
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following periods of volatility in the market price of a company's securities,
securities class-action litigation has often been instituted against those
companies. This type of litigation, if instituted, could result in substantial
costs and a diversion of management's attention and resources, which could
materially affect our business, financial condition or results of operations.
OUR OPERATING RESULTS FLUCTUATE SIGNIFICANTLY AND ANY FAILURE TO MEET FINANCIAL
EXPECTATIONS MAY DISAPPOINT SECURITIES ANALYSTS OR INVESTORS AND RESULT IN A
DECLINE IN OUR STOCK PRICE.
Our quarterly operating results have fluctuated in the past and are likely
to do so in the future as a result of many factors, many of which are out of our
control. For example, our revenues have varied dramatically as a result of the
timing of fees we obtain under our various collaborative, technology licensing
and services agreements, as these payments are frequently comparatively large
and are recognized unevenly over time. It is possible that in some future
quarter or quarters, our operating results will be below the expectations of
securities analysts or investors. In this event, the market price of our common
stock may fall abruptly and significantly. Because our revenue and operating
results are difficult to predict, we believe that period-to-period comparisons
of our results of operations are not a good indication of our future
performance. Some of the factors that could cause our operating results to
fluctuate include:
- termination of collaborative agreements;
- our ability to enter into new agreements with collaborative partners or
technology licensees;
- our ability to complete delivery requirements under existing
collaborative agreements;
- our acquisition of complementary businesses or technologies; and
- general and industry specific economic conditions, which may affect our
customers' research and development expenditures.
If revenue declines in a quarter, whether due to a delay in recognizing
expected revenue or otherwise, our earnings will decline because many of our
expenses are relatively fixed.
IF OUR CONTRACTORS AND VENDORS FAIL TO PROVIDE US WITH ESSENTIAL COMPONENTS THAT
WE NEED TO CONTINUE RESEARCH AND DEVELOPMENT, WE WOULD EXPERIENCE DELAYS AND
ADDITIONAL EXPENSES.
We rely on a limited number of contractors, suppliers and vendors for the
development, manufacture and supply of certain components in our informatics,
robotics, automated storage and retrieval, liquid handling, microfluidics and
detection devices. Although we believe that alternative sources for these
components are available, any interruption in the development, manufacture or
supply of a single-sourced component could have a material adverse effect on our
ability to develop the UHTSS or other systems until a new source of supply is
qualified. Any delay due to an interruption of this type could subject us to
penalties for delays in delivery of the UHTSS and, as a result, could have a
material adverse effect on our business, financial condition or results of
operations. In addition, our current or future technology suppliers may not meet
our requirements for quality, quantity or timeliness. If any of our current or
future technology suppliers fails to deliver components, including mechanical
components of the UHTSS or AMCS, that meet required specifications in a timely
manner, or at all, it could significantly affect our ability to meet our
contractual obligations to our UHTSS syndicate members and expose us to
significant potential liabilities.
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IF WE LOSE OUR KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED
PERSONNEL AS NECESSARY, IT COULD HARM OUR RESEARCH AND DEVELOPMENT EFFORTS AND
WOULD IMPAIR OUR ABILITY TO COMPETE.
Our success depends to a significant degree upon the continued
contributions of our board of directors, executive officers, management and
staff. If we lose the services of one or more of these people, we may be unable
to achieve our business objectives, meet our commitments under existing
agreements and our stock price could decline. Dr. Timothy Rink, one of our
directors, currently does not anticipate that he will stand for re-election at
our 2000 annual meeting of stockholders. We may not be able to attract or retain
qualified employees or board members in the future due to intense competition
for qualified personnel among biotechnology and other technology-based
businesses, particularly in the San Diego area. If we are unable to attract and
retain the necessary personnel to accomplish our business objectives, we may
experience resource constraints that will adversely affect our ability to meet
the demands of our collaborative partners in a timely fashion or to support our
ability to attract and retain highly skilled scientists, including individuals
holding doctoral degrees in the basic sciences and engineers. All of our
employees are at-will employees, which means that either we or an employee may
terminate an employment relationship at any time.
WE MAY ENCOUNTER DIFFICULTIES MANAGING OUR GROWTH, WHICH COULD ADVERSELY AFFECT
OUR RESULTS OF OPERATIONS.
Our success will depend on our ability to expand and manage our operations
and facilities. To be cost-effective and timely in the development and
installation of our systems, services and technologies, we must coordinate the
integration of multiple technologies in complex systems, both internally and for
our collaborators. We may not be able to manage our growth, to meet the staffing
requirements of additional collaborative relationships or successfully
assimilate and train new employees. If we continue to grow, our existing
management skills and systems may not be adequate and we may not be able to
manage any additional growth effectively. If we fail to achieve any of these
goals, there could be a material adverse effect on our business, financial
condition or results of operations.
WE MAY BE UNABLE TO OBTAIN ADDITIONAL CAPITAL REQUIRED TO FUND OUR OPERATIONS,
OR WE MAY NEED TO ENTER INTO FINANCING ARRANGEMENTS WITH UNFAVORABLE TERMS WHICH
COULD ADVERSELY AFFECT YOUR OWNERSHIP INTEREST AND RIGHTS AS COMPARED TO OTHER
STOCKHOLDERS.
We may be required to raise additional capital over a period of several
years in order to expand our operations or acquire new technology. We may raise
this additional capital through additional public or private equity financings,
borrowings and other available sources. Our business or operations may change in
a manner that would consume available resources more rapidly than anticipated,
or substantial additional funding may be required before we can sustain
profitable operations. If additional financing is required to operate our
business, we cannot assure you that additional financing will be available on
terms favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, our ability to fund our operations, take
advantage of opportunities, develop products or technologies or otherwise
respond to competitive pressures could be significantly limited.
If we raise additional funds through the issuance of equity securities, the
percentage ownership of our stockholders will be reduced, stockholders may
experience additional dilution or such equity securities may provide for rights,
preferences or privileges senior to those of the holders of our common stock. If
we raise additional funds through the issuance of debt securities, the debt
securities would have rights, preferences and privileges senior to holders of
common stock and the terms of that debt could impose restrictions on our
operations.
10
<PAGE> 13
OUR TECHNOLOGIES AND PRODUCTS MAY NOT RESULT IN THE DISCOVERY AND
COMMERCIALIZATION OF DRUG PRODUCTS AND WE MAY NOT GENERATE REVENUES FROM
MILESTONES OR ROYALTIES IN THE FUTURE.
Many of our agreements with collaborators and technology licensees provide
that we may receive milestone payments or royalties based on future sales of
drug products discovered through the use of our services, technologies and
products. Use of our services, technologies or products may not result in the
discovery of potential drug candidates that will be safe or effective. If our
services, technologies and products assist in the development of commercialized
pharmaceutical products, milestone payments and royalties would be generated
only after:
- lengthy and costly pre-clinical and clinical development efforts;
- the receipt of necessary regulatory approvals, including approvals by the
FDA and equivalent foreign authorities; and
- the integration of manufacturing capabilities and successful marketing
efforts, all of which must be performed by our collaborators.
We do not currently intend to perform any of these activities. We cannot
assure you that our collaborators will decide to develop or commercialize
potential drug candidates identified through the use of our technologies.
Development and commercialization of potential drug candidates depend not only
on the achievement of research objectives by us and our collaborators, but also
on each collaborator's own financial, competitive, marketing and strategic
considerations, all of which are outside our control. If commercialization of
lead compounds is successful, disputes may arise over payments to us. We do not
expect to receive royalties or other revenues from commercial sales of products
based upon any compound identified using our technologies for at least several
years, if at all.
DRUG PRODUCTS DEVELOPED AND COMMERCIALIZED BY OUR COLLABORATIVE PARTNERS WILL
LIKELY REQUIRE REGULATORY APPROVALS, WHICH MAY REDUCE OUR POTENTIAL REVENUES
FROM MILESTONES OR ROYALTIES.
If a collaborator successfully identifies a drug product for development
and commercialization, it will likely be subject to extensive government
regulation. Regulation by the FDA and other governmental entities in the United
States and other countries will be a significant factor in the production and
marketing of any pharmaceutical products that may be developed by a
collaborator. We do not currently plan to develop our own pharmaceutical
products. Pharmaceutical products developed by our collaborators will require
lengthy and costly pre-clinical and clinical trials and regulatory approval by
governmental agencies prior to commercialization. Approvals may not be granted
despite the substantial time and resources required to obtain approvals and
comply with appropriate statutes and regulations. Delays in obtaining regulatory
approvals would adversely affect the marketing of any drugs developed by our
collaborators, diminish any competitive advantages that our collaborators may
attain and therefore adversely affect our ability to receive royalties or
milestone payments.
FUTURE SALES OF OUR COMMON STOCK BY EXISTING STOCKHOLDERS OR BY US COULD CAUSE
OUR STOCK PRICE TO DECLINE.
Sales by existing stockholders of a large number of shares of our common
stock in the public market or the perception that sales could occur could cause
the market price of our common stock to drop. Likewise, additional equity
financings or other share issuances by us could adversely affect the market
price of our common stock.
11
<PAGE> 14
WE MAY BE SUED FOR PRODUCT LIABILITY.
We may be held liable if any product we develop, or any product which is
made with the use of any of our technologies, causes injury or is found
otherwise unsuitable during product testing, manufacturing, marketing or sale.
Although we currently maintain product liability insurance, we may not have
sufficient insurance coverage against potential liabilities and we may not be
able to obtain sufficient coverage at a reasonable cost. Furthermore, product
liability insurance is becoming increasingly expensive. As a result, we may not
be able to maintain current amounts of insurance coverage, obtain additional
insurance, or obtain insurance at a reasonable cost, which could prevent or
inhibit the our commercialization of products or technologies. If we are sued
for any injury caused by our technology or products, our liability could exceed
our total assets.
OUR ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, WHICH SUBJECT US TO
REGULATION, RELATED COSTS AND DELAYS AND POTENTIAL LIABILITIES.
Our business involves the controlled storage, use and disposal of hazardous
materials, including chemical, biological and radioactive materials. We are
subject to federal, state and local regulations governing the use, manufacture,
storage, handling and disposal of materials and waste products. Although we
believe that our safety procedures for handling and disposing of these hazardous
materials comply with the standards prescribed by law and regulation, we cannot
completely eliminate the risk of accidental contamination or injury from those
hazardous materials. In the event of an accident, we could be held liable for
any damages that result, and any liability could exceed the limits or fall
outside the coverage of our insurance. We may not be able to maintain insurance
on acceptable terms, or at all. We could incur significant costs or impairment
of our research, development or production efforts in order to comply with
current or future environmental laws and regulations.
WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS IN OUR CERTIFICATE OF INCORPORATION,
BYLAWS AND DELAWARE LAW THAT COULD DELAY OR PREVENT AN ACQUISITION OF OUR
COMPANY, EVEN IF THE ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.
Provisions of our certificate of incorporation, our bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders. These provisions could discourage
potential take-over attempts and could adversely affect the market price for our
common stock. Because of these provisions, you may not be able to receive a
premium on your investment.
12
<PAGE> 15
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by
reference, contains forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. Any statements about
our expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or phrases
like "anticipate," "estimate," "plans," "projects," "continuing," "ongoing,"
"expects," "management believes," "the Company believes," "the Company intends,"
"we believe," "we intend" and similar words or phrases. Accordingly, these
statements involve estimates, assumptions and uncertainties which could cause
actual results to differ materially from those expressed in them. Any
forward-looking statements are qualified in their entirety by reference to the
factors discussed in this prospectus or incorporated by reference.
Because the factors discussed in this prospectus or incorporated by
reference could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements made by us or on behalf of the
company, you should not place undue reliance on any such forward-looking
statements. Further, any forward-looking statement speaks only as of the date on
which it is made, and we undertake no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to
predict which will arise. In addition, we cannot assess the impact of each
factor on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy these reports, proxy statements and other information at the SEC's public
reference rooms in Washington, D.C., New York, NY and Chicago, IL. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying cost. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference rooms. Our SEC filings are also available
at the SEC's Web site at "http://www.sec.gov."
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Section 13 (a), 13(c), 14 or 15 (d) of
the Securities Exchange Act of 1934:
- Annual Report on Form 10-K for the year ended December 31, 1999
as amended by Form 10-K/A filed on March 22, 2000;
- Notice of Annual Meeting and Proxy Statement for the 1999 Annual
Meeting of Stockholders held on May 4, 1999; and
- Registration statement on Form S-1, as amended, which includes a
description of our common stock.
You may request a copy of these filings at no cost, by writing or telephoning us
at the following address or telephone number:
Aurora Biosciences Corporation
11010 Torreyana Road
San Diego, CA 92121
Attn: Investor Relations
(858) 404-6600
13
<PAGE> 16
SELLING STOCKHOLDERS
We are registering for resale certain shares of our common stock held by
the selling stockholders identified below. The following table sets forth:
- the name of the selling stockholders;
- the number and percent of shares of our common stock that the
selling stockholders beneficially owned prior to the offering
for resale of any of the shares of our common stock being
registered by the registration statement of which this
prospectus is a part;
- the number of shares of our common stock that may be offered for
resale for the account of the selling stockholders pursuant to
this prospectus; and
- the number and percent of shares of our common stock to be held
by the selling stockholders after the offering of the resale
shares (assuming all of the resale shares are sold by the
Selling Securityholders).
This information is based upon information provided by each respective selling
stockholder, schedules 13G and other public documents filed with the SEC, and
assumes the sale of all of the resale shares by the selling stockholders. The
term "selling stockholders" includes the stockholders listed below and their
transferees, pledgees, donees or other successors. The applicable percentages of
ownership are based on an aggregate of 19,633,183 shares of common stock issued
and outstanding as of February 29, 2000.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING NUMBER OF AFTER OFFERING
---------------------------- SHARES BEING -------------------------
SELLING STOCKHOLDERS NUMBER PERCENT OFFERED NUMBER PERCENT
- ---------------- --------- ---- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
Funds Managed by 1,300,000 6.6% 1,300,000 -- *
Janus Capital Corporation (1)
100 Fillmore Street
Denver, CO 80206
Funds Managed by 539,200 2.8% 400,000 139,200 *
Blackrock Financial Management, Inc. (2)
1600 Market Street, 28th Floor
Philadelphia, PA
Funds Managed by 100,000 * 100,000 -- *
Tisch Financial Management (3)
655 Madison Avenue, 8th Floor
New York, New York 10021
</TABLE>
- -----------------------------
* Less than 1%
(1) Includes 919,050 shares held by Bouybreese & Co., a nominee for a
registered investment company managed by Janus Capital Corporation and
380,950 shares beneficially owned by Bookbend & Co., a nominee for a
registered investment company managed by Janus Capital Corporation.
(2) Includes 400,000 shares held by Barnett and Co. and beneficially owned by
BlackRock Funds, Small Cap Growth Equity Portfolio. Also includes 139,200
shares beneficially owned by BlackRock Funds, Micro-Cap Equity Portfolio.
(3) Includes 50,000 shares held by Baker Bros. Investments, LLC and 50,000
shares held by Four Partners.
14
<PAGE> 17
PLAN OF DISTRIBUTION
The resale shares of common stock may be sold from time to time by the
selling stockholders in one or more transactions at:
- fixed prices;
- market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices
The selling stockholders may offer their resale shares in one or more of
the following transactions:
- on any national securities exchange or quotation service at
which the Aurora common stock may be listed or quoted at the
time of sale, including the Nasdaq National Market;
- in the over-the-counter market;
- in private transactions;
- through options; and
- by pledge to secure debts and other obligations, or a
combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
The resale shares of common stock described in this prospectus may be
sold from time to time directly by the selling stockholders. Alternatively, the
selling stockholders may from time to time offer shares of common stock to or
through underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act. Any profits on the resale of shares of common stock and
any compensation received by any underwriter, broker/dealer or agent may be
deemed to be underwriting discounts and commissions under the Securities Act.
Any shares covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under rule 144 rather than
under the terms of this prospectus. The selling stockholders may transfer, will
or gift such shares by other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the common
stock must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the common stock may not be
offered or sold unless they have been registered or qualified for sale or an
exemption is available and complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the common stock may not simultaneously
engage in market-making activities with respect to the common stock for nine
business days prior to the start of the distribution. In addition, each selling
stockholder and any other person participating in a distribution will be subject
to applicable provisions of the Exchange Act which may limit the timing of
purchases and sales of common stock by the selling stockholders or any other
person. These factors may affect the marketability of the common stock and the
ability of brokers or dealers to engage in market-making activities.
We will pay all costs and expenses associated with the registration of
the resale shares. These expenses include the SEC's filing fees and fees under
state securities or "blue sky" laws. We estimate that our expenses in connection
with this offering will be approximately $153,694. All expenses for the issuance
of a supplement to this prospectus, when requested by selling stockholder(s),
will be paid by the requesting stockholder(s). The selling
15
<PAGE> 18
stockholders will pay all underwriting discounts, commissions, transfer taxes
and other expenses associated with the sale of the resale shares by them.
USE OF PROCEEDS
We will not receive any proceeds from the resale of the shares of common
stock offered by the selling stockholders.
LEGAL MATTERS
Cooley Godward LLP will pass upon the validity of the issuance of the
common stock offered by this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our annual report on Form 10-K/A for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and registration statement. Our financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
16
<PAGE> 19
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. THIS PROSPECTUS IS
1,800,000 SHARES NOT AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE AN
OFFER AND SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS COMMON STOCK PROSPECTUS, REGARDLESS OF THE
TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE OF OUR COMMON STOCK.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AURORA BIOSCIENCES CORPORATION ........................................ 1
RISK FACTORS .......................................................... 2
DISCLOSURE REGARDING FORWARD
LOOKING STATEMENTS .................................................... 13
WHERE YOU CAN GET MORE INFORMATION .................................... 13
SELLING STOCKHOLDERS .................................................. 14
PLAN OF DISTRIBUTION .................................................. 15
USE OF PROCEEDS ....................................................... 16
LEGAL MATTERS ......................................................... 16
EXPERTS ............................................................... 16
</TABLE>
-------------------
1,800,000 Shares
Common Stock
AURORA BIOSCIENCES
CORPORATION
-------------------
PROSPECTUS
-------------------
__________, 2000
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee and the listing fee are estimated):
<TABLE>
<S> <C>
SEC Registration Fee ................... 33,694
Nasdaq National Market Listing Fee ..... 17,500
Legal fees and expenses ................ 75,000
Accounting fees and expenses ........... 20,000
Printing and engraving expenses ........ 5,000
Transfer agent fees .................... 2,500
-------
Total ......................... 153,694
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Registrant's Certificate of Incorporation and Bylaws include
provisions to (i) eliminate the personal liability of its directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by Section 102(b)(7) of the DGCL and (ii) require the Registrant to indemnify
its directors and officers to the fullest extent permitted by applicable law,
including circumstances in which indemnification is otherwise discretionary.
Pursuant to Section 145 of the DGCL, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as directors and officers.
These provisions do not eliminate the directors' or officers' duty of care, and,
in appropriate circumstances, equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under the DGCL. In addition,
each director will continue to be subject to liability pursuant to Section 174
of the DGCL, for breach of the director's duty of loyalty to the Registrant, for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for acts or omissions that the director believes to
be contrary to the best interests of the Registrant or its stockholders, for any
transaction from which the director derived an improper personal benefit, for
acts or omissions involving a reckless disregard for the director's duty to the
Registrant or its stockholders when the director was aware or should have been
aware of a risk of serious injury to the Registrant or its stockholders, for
acts or omission that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the Registrant or its
stockholders, for improper transactions between the director and the Registrant
and for improper loans to directors and officers. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities law or state or federal environmental laws.
The Registrant has entered into indemnity agreements with each of its
directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a director or an
executive officer of the Registrant or any of its affiliated enterprises,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. The indemnification agreements also set forth certain
procedures that will apply in the event of a claim for indemnification
thereunder.
II-1
<PAGE> 21
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.
The Registrant has an insurance policy covering the officers and directors of
the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS.
(a) Exhibits.
EXHIBIT NO. DESCRIPTION
4.1* Form of Common Stock Purchase Agreement between the Registrant
and each selling stockholder dated February 4, 2000.
5.1* Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1* Power of Attorney.
- --------------
*Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period during 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) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or any decrease in volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low end or high end
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for purposes of determining 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 to be offered therein, and the
offering of such securities at that time shall be deemed to be an initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which shall remain unsold at the
termination of the offering.
II-2
<PAGE> 22
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 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on March 22, 2000.
AURORA BIOSCIENCES CORPORATION
By: /s/ Stuart J. M. Collinson
-------------------------------------
Stuart J. M. Collinson
Chief Executive Officer
and President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Stuart J. M. Collinson Chief Executive Officer, March 22, 2000
- -------------------------------- President and Director
Stuart J. M. Collinson (PRINCIPAL EXECUTIVE OFFICER)
/s/ John Pashkowsky* Senior Director, Finance and Treasurer March 22, 2000
- -------------------------------- (PRINCIPAL FINANCIAL AND
John Pashkowsky ACCOUNTING OFFICER)
/s/ James C. Blair* Director March 22, 2000
- --------------------------------
James C. Blair
/S/ Hugh Y. Rienhoff, Jr.* Director March 22, 2000
- --------------------------------
Hugh Y. Rienhoff, Jr.
/S/ Timothy J. Rink* Director March 22, 2000
- --------------------------------
Timothy J. Rink
/S/ Roy A. Whitfield* Director March 22, 2000
- --------------------------------
Roy A. Whitfield
/S/ Timothy J. Wollaeger* Director March 22, 2000
- --------------------------------
Timothy J. Wollaeger
*By: /s/ Stuart J. M. Collinson
----------------------------
Stuart J. M. Collinson
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 24
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1* Form of Common Stock Purchase Agreement between the Registrant
and each selling stockholder dated February 4, 2000.
5.1* Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1* Power of Attorney. Reference is made to page II-4.
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Aurora Biosciences Corporation for the registration of 1,800,000 shares of
its common stock and to the incorporation by reference therein of our report
dated February 10, 2000, with respect to the financial statements of Aurora
Biosciences Corporation included in its Annual Report (Form 10-K/A) for the year
ended December 31, 1999, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Diego, California
March 16, 2000
