<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 2, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ONYX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 2836 94-3154463
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) Number)
</TABLE>
3031 RESEARCH DRIVE
RICHMOND, CALIFORNIA
(510) 222-9700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
HOLLINGS C. RENTON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ONYX PHARMACEUTICALS, INC.
3031 RESEARCH DRIVE
RICHMOND, CA 94806
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
ROBERT L. JONES, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306
(415) 843-5000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /x/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering./ /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box./ /
------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 1,684,209 $7.5625 $12,736,831 $3,758
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- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee based on the average of the high and low sales prices on
the Nasdaq National Market on April 1, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
SUBJECT TO COMPLETION DATED APRIL 2, 1998
PROSPECTUS
1,684,209 SHARES
ONYX PHARMACEUTICALS, INC.
COMMON STOCK
-------------------
This Prospectus relates to 1,684,209 shares of Common Stock, $.001 par
value (the "Common Stock") which are being offered and sold by certain
stockholders (the "Selling Shareholders") of ONYX Pharmaceuticals, Inc. (the
"Company" or "Onyx"). The Selling Shareholders, directly or through agents,
broker-dealers or underwriters, may sell the Common Stock offered hereby from
time to time on terms to be determined at the time of sale, in transactions
on the Nasdaq National Market or in privately negotiated transactions. The
Selling Shareholders and any agents, broker-dealers or underwriters that
participate in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and any commission received by them and any profit on
the resale of the Common Stock purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. The Company
will not receive any proceeds from the sale of shares by the Selling
Shareholders. See "Selling Shareholders" and "Plan of Distribution."
The Common Stock of the Company is quoted on the Nasdaq National Market
under the symbol "ONXX." The last reported sales price of the Company's
Common Stock on the Nasdaq National Market on April 1, 1998 was $7.50
per share.
-------------------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 3.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $45,000. The aggregate proceeds to the
Selling Shareholders from the Common Stock will be the purchase price of the
Common Stock sold less the aggregate agents' commissions and underwriters'
discounts, if any. See "Plan of Distribution."
The Company has agreed to indemnify the Selling Shareholders, and the
Selling Shareholders have agreed to indemnify the Company against certain
liabilities, including liabilities under the Securities Act.
April __, 1998
1.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files annual and quarterly reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information may be
inspected and copied at the Commission's Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the following regional
offices of the Commission: the New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048; and the Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Common Stock of the Company is quoted on
the Nasdaq National Market. Reports and other information concerning the
Company may be inspected at the National Association of Securities Dealers,
Inc. at 1735 K Street, N.W. Washington, D.C. 20006.
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the
Commission under the Act. This Prospectus does not contain all of the
information contained in such Registration Statement and the exhibits and
schedules thereto, certain portions of which have been omitted pursuant to
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement and the exhibits and schedules thereto.
Statements contained in this Prospectus regarding the contents of any
contract or any other documents are not necessarily complete and, in each
instance, reference is hereby made to the copy of such contract or document
filed as an exhibit to the Registration Statement. The Registration
Statement, including exhibits thereto, may be inspected without charge at the
Commission's principal office in Washington, D.C., and copies of all or any
part thereof may be obtained from the Public Reference Section, the
Commission, at 450 Fifth Street, N.W., Washington, D.C., 20549, upon payment
of the prescribed fees.
The Commission maintains a World Wide Web site that contains reports,
proxy and information statements and other information filed electronically
with the Commission. The address of the site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed or to be filed with the Commission under
the Exchange Act are hereby incorporated by reference into this Prospectus:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(ii) The Company's Current Report on Form 8-K filed with the Commission
on January 26, 1998; and
(iii) The Description of Capital Stock contained in the Company's Form
SB-2 Registration Statement filed with the Commission on April 1,
1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents. Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
incorporated by reference herein (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference herein or
into such documents). Such request may be directed to ONYX Pharmaceuticals,
Inc., Attention: Treasurer, 3031 Research Drive, Richmond, CA 94806,
telephone (510) 222-9700.
2.
<PAGE>
THE COMPANY
The Company was incorporated in California in 1992 and reincorporated
in Delaware in 1996. The Company's executive offices are located at
3031 Research Drive, Richmond, California 94806, and its telephone number is
(510) 222-9700.
If the Company splits or combines the outstanding shares of Common Stock
or declares a dividend of shares of Common Stock on the outstanding shares of
Common Stock, the shares of Common Stock registered under this Registration
Statement shall be adjusted accordingly.
RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES,
INCLUDING THOSE SET FORTH BELOW. PROSPECTIVE INVESTORS SHOULD CONSIDER THE
FOLLOWING FACTORS IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE
PURCHASING ANY SHARES OF THE COMMON STOCK OFFERED HEREBY.
UNCERTAINTIES RELATED TO EARLY STAGE OF DEVELOPMENT
Onyx is at an early stage of development and must be evaluated in light
of the uncertainties present in an early stage biotechnology company. Since
its inception in 1992, the Company has devoted substantially all of its
resources to the research and development of potential products and no
revenue has been generated from product sales. If any products result from
the Company's research and development programs, they are not expected to be
commercially available for a number of years even if they are successfully
developed and proven to be safe and effective. There can be no assurance
that any of the Company's product development efforts will be successfully
completed, that any of the Company's products will be proven to be safe and
effective, that regulatory approvals will be obtained at all or be as broad
as sought, that the Company's products will be capable of being produced in
commercial quantities at reasonable cost or that any products, if introduced,
will achieve market acceptance.
TECHNOLOGICAL UNCERTAINTY
Drug discovery methods based upon the genetic basis of cancer are
relatively new, and there can be no assurance that the Company will be able
to employ these methods of drug discovery successfully or that these methods
will lead to the discovery of commercially viable pharmaceutical products.
Only one of the Company's compounds, the Company's lead product, ONYX-015, a
therapeutic virus ("ONYX-015"), has entered human clinical trials, and there
can be no assurance that any of the Company's other current or future
research and development programs will lead to additional compounds which
will be submitted for clinical testing or advance to human clinical trials.
Although the Company has demonstrated the safety of ONYX-O15 in human
clinical trials, the Company has not demonstrated the efficacy of any of the
Company's compounds, including ONYX-O15, in human clinical trials. The
effect of the human immune response on the ONYX-015 therapeutic virus cannot
be predicted and could cause significant delays in the development process.
The Company's ras and Cell Cycle Programs are also in the early stages of
research and development, and the Company does not expect that its
collaborative partners will commence clinical trials prior to the year 2000.
The Company currently does not expect that clinical trials of any potential
products arising from its BRCA1 or APC Programs will commence for at least
several years. Even if the Company's potential products are found to be safe
or efficacious, or otherwise to have utility, they will require significant
additional research and development efforts, preclinical and clinical
testing, regulatory approvals, and additional investment prior to their
commercialization, and there can be no assurance that any of these efforts
will be successful.
UNCERTAINTIES RELATED TO CLINICAL TRIALS
Before obtaining regulatory approvals for the commercial sale of any of
its products under development, the Company or its collaborative partners
must demonstrate through preclinical testing and clinical trials that the
product is safe and effective for use in each target indication. The results
from preclinical testing and early clinical trials may not be predictive of
results that will be obtained in later clinical trials and large-scale
testing, and there can be no assurance that clinical trials of products
identified by or developed in collaboration with the Company will demonstrate
sufficient safety and efficacy to obtain the requisite regulatory approvals
or will result in marketable
3.
<PAGE>
products. Clinical trials may require the enrollment of large numbers of
patients and suitable patients may be difficult to identify and recruit. A
number of companies in the pharmaceutical industry have suffered significant
setbacks in every stage of clinical trials, even in advanced clinical trials
after promising results in earlier trials. Any delays in, or termination of,
the clinical trial efforts of the Company or its collaborative partners would
have a material adverse effect on the Company's business, financial condition
and results of operations.
UNCERTAINTIES REGARDING CLINICAL TRIALS OF ONYX-015
The Company is currently engaged in three self-funded Phase II clinical
trials of ONYX-015 for the treatment of head and neck cancer. The ability of
the Company to obtain a corporate partner for the p53 program and to continue
to develop ONYX-015 as a potential product will depend materially on the
results of these trials. The Company expects to present the results of the
first trial in the second quarter of 1998 and the results of the other trials
later in the year. There is no assurance that such results will be positive
or, even if they are positive, that they will be sufficiently strong to
support the Company's corporate partnering or product development objectives.
In this regard, while the Phase I trials of ONYX-015 demonstrated a very
favorable safety profile and, in many patients, tumor necrosis, the
observation of viral replication was less pronounced than was the case in
animal studies. If the Phase II clinical trial results do not support the
commencement of a Phase III pivotal trial, the Company would be required to
conduct additional Phase I and Phase II clinical trials to determine an
appropriate indication and treatment regimen for ONYX-015, if it were to
continue development of such product.
NEED TO ATTRACT AND RETAIN KEY EMPLOYEES AND CONSULTANTS
The Company is highly dependent on its corporate officers and other
principal members of its scientific and management staff, the loss of any of
whose services might significantly delay or prevent the achievement of the
Company's research, development or business objectives. In addition, the
Company relies on consultants and advisors, including the members of its
Scientific Advisory Board, to assist the Company in formulating its research
and development strategy. None of the Company's consultants and advisors are
employees of the Company and all have commitments to, or consulting or
advisory contracts with, other entities that may limit their availability to
the Company. In order to pursue its product development plans, the Company
will be required to hire additional qualified scientific personnel to perform
research and development, as well as personnel with expertise in clinical
testing, government regulation and manufacturing. These requirements are also
expected to demand additional management personnel and the development of
additional expertise by existing management personnel. The Company faces
competition for qualified individuals from numerous pharmaceutical and
biotechnology companies, universities and other research institutions. There
can be no assurance that the Company will be able to attract and retain such
individuals on acceptable terms, if at all, and the failure to do so would
have a material adverse effect on the Company, including its ability to enter
into additional collaborative arrangements.
DEPENDENCE ON COLLABORATIVE AGREEMENTS
The Company's strategy for the development, clinical trials,
manufacturing and commercialization of its products includes maintaining and
entering into various collaborations with corporate partners, licensors,
licensees and others. To date, the Company has entered into collaborative
arrangements with Bayer Corporation with respect to the Company's ras
Program, Warner-Lambert Company with respect to the Company's Cell Cycle
Program and the Company's Inflammation Program, and Eli Lilly & Company with
respect to the Company's BRCA1 Program. The Company is currently seeking a
collaborative partner for its p53 program, including the development and
commercialization of ONYX-015. There can be no assurance that the Company
will be able to maintain existing collaborative agreements, negotiate
collaborative arrangements in the future on acceptable terms, if at all, or
that any such collaborative arrangements will be successful. To the extent
that the Company is not able to maintain or establish such arrangements, the
Company would be required to undertake such activities at its own expense,
which would significantly increase the Company's capital requirements and
limit the programs the Company is able to pursue. In addition, the Company
may encounter significant delays in introducing its products into certain
markets or find that the development, manufacture or sale of its products in
such markets is adversely affected by the absence of such collaborative
agreements.
4.
<PAGE>
The Company cannot control the amount and timing of resources which its
collaborative partners devote to the Company's programs or potential
products, which can vary because of factors unrelated to the potential
product. These relationships may in some cases be terminated at the
discretion of the Company's collaborative partners with only limited notice
to the Company and for reasons outside the Company's control. If any of the
Company's collaborative partners breach or terminate their agreements with
the Company or otherwise fail to conduct their collaborative activities in a
timely manner, the preclinical or clinical development or commercialization
of product candidates or research programs will be delayed, and the Company
will be required to devote additional resources to product development and
commercialization or terminate certain development programs. There also can
be no assurance that disputes will not arise in the future with respect to
the ownership of rights to any technology developed with third parties. These
and other possible disagreements between collaborators and the Company could
lead to delays in the collaborative research, development or
commercialization of certain product candidates or could require or result in
litigation or arbitration, which would be time consuming and expensive, and
would have a material adverse effect on the Company's business, financial
condition and results of operations.
In addition, the Company's collaborative partners may develop, either
alone or with others, products that compete with the development and
marketing of the Company's products. Competing products, either developed by
the collaborative partners or to which the collaborative partners have
rights, may result in their withdrawal of support with respect to all or a
portion of the Company's technology, which would have a material adverse
effect on the Company's business, financial condition and results of
operations.
UNCERTAINTY OF FUTURE PROFITABILITY; ACCUMULATED DEFICIT
The Company has generated no revenues from product sales and has
experienced significant operating losses since inception. As of December 31,
1997, the Company had an accumulated deficit of approximately $45.6 million.
The Company expects to incur significant and increasing operating losses over
at least the next several years as the Company's research and development
efforts and preclinical testing and clinical trial activities expand. The
Company does not expect to generate revenues from the sale of its potential
products, if any, for the foreseeable future. The Company's ability to
achieve profitability depends in part upon its ability, alone or with others,
to complete development of its potential products, to obtain required
regulatory approvals and to successfully manufacture and market such
potential products. The Company expects its operating expenses and operating
losses to increase in 1998 and beyond. There can be no assurance that Onyx,
or its collaborative partners, will successfully develop, manufacture,
commercialize and market any potential product, or that the Company will ever
achieve product revenues or profitability.
NEED FOR FUTURE FUNDING; UNCERTAINTY OF ACCESS TO CAPITAL
The development of the Company's technology and proposed products will
require a commitment of substantial funds to conduct the costly and
time-consuming research and preclinical testing and clinical trials necessary
to develop such technology and proposed products, and to establish
relationships with collaborative partners to bring any such products to
market. The Company's future capital requirements will depend upon a number
of factors, including continued scientific progress in the research and
development of the Company's technology programs, the size and complexity of
these programs, the ability of the Company to establish and maintain
collaborative arrangements, progress with preclinical testing and clinical
trials, the time and costs involved in obtaining regulatory approvals, the
cost involved in preparing, filing, prosecuting, maintaining and enforcing
patent claims, competing technological and market developments and product
commercialization activities.
The Company believes that its existing capital resources and interest
thereon, and anticipated revenues from existing collaborations will be
sufficient to fund its current and planned operations through 1999. There
can be no assurance, however, that changes in the Company's research and
development plans or other changes affecting the Company's operating expenses
will not result in the expenditure of such resources before such time, and in
any event, the Company will need to raise substantial additional capital to
fund its operations in future periods. The Company intends to seek such
additional funding through collaborative arrangements, public or private
equity or debt financings, capital lease transactions or other financing
sources that may be available. However, there can be no assurance that
additional financing will be available on acceptable terms or at all. If
additional funds are raised by issuing equity securities, substantial
dilution to existing stockholders may result. If adequate funds are not
available, the Company may be required to delay, reduce the scope of, or
eliminate one or more of its research or
5.
<PAGE>
development programs or to obtain funds through collaborative arrangements
with others that are on unfavorable terms or that may require the Company to
relinquish rights to certain of its technologies, product candidates or
products that the Company would otherwise seek to develop itself.
INTENSE COMPETITION AND RISK OF TECHNOLOGICAL OBSOLESCENCE
Onyx is engaged in a rapidly changing and highly competitive field.
Other products and therapies that will compete directly with the products
that the Company is seeking to develop and market currently exist or are
being developed. Many other companies are actively seeking to develop
products that have disease targets similar to those being pursued by the
Company. Some of these competitive products are in clinical trials. There
can be no assurance that the Company's competitors will not succeed in
developing cancer-specific therapies that are more effective than any that
are being developed or may be developed by the Company, or that would render
the Company's technologies obsolete and noncompetitive. Moreover, there are
currently commercially available products for the treatment of certain
disease targets being pursued by the Company.
Competition from fully integrated pharmaceutical companies and more
established biotechnology companies is intense and is expected to increase.
Substantially all of these companies have significantly greater financial
resources and expertise in research and development, manufacturing,
preclinical and clinical testing, obtaining regulatory approvals, and
marketing than the Company. Smaller companies may also prove to be
significant competitors, particularly through collaborative arrangements with
large pharmaceutical and established biotechnology companies. Many of these
competitors have significant products that have been approved or are in
development and operate large, well-funded research and development programs.
Academic institutions, governmental agencies and other public and private
research organizations also conduct research, seek patent protection and
establish collaborative arrangements for products and clinical development
and marketing that compete with the Company's programs. These companies and
institutions also compete with the Company in recruiting and retaining highly
qualified scientific and management personnel. In addition to the above
factors, Onyx will face competition based on product efficacy and safety, the
timing and scope of regulatory approvals, availability of supply, marketing
and sales capability, reimbursement coverage, price and patent position.
There is no assurance that the Company's competitors will not develop more
effective or more affordable products, or achieve earlier patent protection
or product commercialization than the Company.
UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY RIGHTS; DEPENDENCE UPON
TRADE SECRETS
The Company believes that patent and trade secret protection is crucial
to its business and that its future will depend in part on its ability to
obtain patents, maintain trade secret protection and operate without
infringing the proprietary rights of others, both in the United States and
other countries. In October 1997, the Company was awarded a United States
patent, No. 5,677,178 from the United States Patent and Trademark Office for
claims covering the use of ONYX-015 for the treatment of p53-deficient
cancers. Additionally, the Company has received two notices of allowance for
two United States patent applications, the first of which claims certain
adenoviral mutants that kill Rb- tumor cells and another that claims
compositions of matter that consist of ONYX-015 and a chemotherapeutic. As
of March 5, 1998, the Company owned or had licensed rights to 19 United
States patents and 42 United States patent applications, and generally,
foreign counterparts of these filings. These patents and patent applications
cover in most cases discoveries made with respect to biological materials and
interactions of biological materials, including research tools used by the
Company in its drug discovery programs. The Company's rights under five of
the United States patents and nine of the United States patent applications
are nonexclusive rights held under a license from Chiron Corporation that was
granted to the Company in connection with its formation. Additionally, the
Company has exclusive rights to one patent application under the Chiron
license. The Company also has nonexclusive rights under one United States
patent held under license from the State University of New York-Stony Brook.
The Company's existing patent rights may not have a deterrent effect on
competitors who are conducting or desiring to commence competitive research
programs with respect to the biological targets or fields of inquiry being
pursued by the Company. The Company's ultimate patent position will depend
on the success of its drug discovery program and its ability to obtain
effective patent coverage for the compositions of matter identified in such
drug discovery programs. Because the Company's drug discovery programs are
at an early stage and, except in the p53
6.
<PAGE>
Program, potential products have not yet been identified, it cannot be
determined whether potential products that may be derived from the Company's
drug discovery program may be subject to the patent rights of third parties.
Since patent applications in the United States are maintained in secrecy
until patents issue and since publication of discoveries in the scientific or
patent literature often lag behind actual discoveries, the Company cannot be
certain that it was the first to make the inventions covered by each of its
pending patent applications or that it was the first to file patent
applications for such inventions. The patent positions of biotechnology and
pharmaceutical companies are highly uncertain and involve complex legal and
factual questions. Therefore, the breadth of claims allowed in biotechnology
and pharmaceutical patents, or their enforceability, cannot be predicted.
To date there has emerged no consistent policy regarding the breadth of
claims allowed in biotechnology patents. There can be no assurance that any
of the Company's patents or patent applications, if issued, will not be
challenged, invalidated or circumvented, or that the rights granted
thereunder will provide proprietary protection or competitive advantages to
the Company against competitors with similar technology. Furthermore, there
can be no assurance that others will not independently develop similar
technologies or duplicate any technology developed by the Company. Because
of the extensive time required for development, testing and regulatory review
of a potential product, it is possible that before any of the Company's
products can be commercialized, any related patent may expire, or remain in
existence for only a short period following commercialization, thus reducing
any advantage of the patent.
The Company is aware of pending patent applications that have been filed
by others that may pertain to certain aspects of the Company's programs. If
patents are issued to others containing preclusive or conflicting claims and
such claims are ultimately determined to be valid, the Company may be
required to obtain licenses to these patents or to develop or obtain
alternative technology. The Company's breach of an existing license or
failure to obtain a license to technology required to commercialize its
products may have a material adverse effect on the company's business,
financial condition and results of operations. Litigation, which could
result in substantial costs to the Company, may also be necessary to enforce
any patents issued to the Company or to determine the scope and validity of
third-party proprietary rights. If competitors of the Company prepare and
file patent applications in the United States that claim technology also
claimed by the Company, the Company may have to participate in interference
proceedings declared by the United States Patent and Trademark Office to
determine priority of invention, which could result in substantial cost to
the Company, even if the eventual outcome is favorable to the Company. An
adverse outcome could subject the Company to significant liabilities to third
parties and require the company to seek licenses of the disputed rights from
third parties or to cease using such technology if such licenses are not
available, and could have a material adverse effect on the Company's
business, financial condition and results of operations.
In respect of the foregoing, the Company is aware of a patent
application filed in the United States, Europe, Japan and Canada by General
Hospital Corporation, an affiliate of Massachusetts General Hospital. This
patent application is related to research involving a modified herpes simplex
virus but it also includes broader claims that, if they were to issue, would
cover the p53 Program including ONYX-015. The Company believes, and has
received an opinion from outside counsel to the effect, that claims made in
the General Hospital patent application that may infringe on ONYX-015 and the
p53 Program are not patentable. However, there can be no assurance that
broad claims applicable to ONYX-015 or the p53 Program will not issue from
the General Hospital patent application in one or more countries, that the
Company would be successful in challenging any such claims, or that a license
would be available under any such patent if it were to issue.
In June 1997, ICT Pharmaceuticals, Inc. ("ICT") notified the Company of
two issued United States Patents, Nos. 4,980,281 and 5,266,464 that ICT
believes cover the use of a cell for the screening, testing or
pharmacological characterization of new drugs or other substances. Foreign
counterparts of the United States Patents are pending. ICT has offered the
Company a license to the patents. The Company has not determined whether to
negotiate a license. In any event, the Company does not believe that these
patents will have a material adverse effect on the Company's business,
assets, liabilities, financial condition, operations or prospects.
The Company has identified two issued United States Patents, Nos.
5,499,755 and 5,645,999 that cover recombinant cyclin E compositions, or
methods of using the same to identify possible drug candidates, respectively.
Foreign counterparts of the United States Patents are pending. Mitotix
Corporation ("Mitotix") either owns, or has licensed the rights to the two
patents. The Company may seek a license under the patents from Mitotix. If
such
7.
<PAGE>
license is not available at commercially reasonable terms, or at all, then
the Company would be required to develop assays that are not covered by the
patents. In any event, the Company does not believe that these patents will
have a material adverse effect on the Company's business, assets,
liabilities, financial condition, operations or prospects.
The Company has also identified an additional issued United States
Patent, No. 5,691,147, that covers an assay for screening test compounds for
an inhibitor of an interaction of a cyclin-dependant kinase with a
cyclin-dependent kinase 4 binding protein. Mitotix either owns or has
licensed the rights to the patent. A foreign counterpart of the United
States Patent is pending. The Company may seek a license under the patent
from Mitotix. If such license is not available on commercially reasonable
terms, or at all, then the Company would be required to develop assays that
are not covered by the patent.
The Company has further identified three issued United States Patents,
Nos. 5,441,880, 5,695,950 and 5,443,962 that cover assays and compositions
for identifying inhibitors of CDC25, respectively. Foreign counterparts of
the United States Patents are pending. Mitotix either owns, or has licensed
the rights to these patents. The Company has approached Mitotix for a
license and the request was denied. Consequently, should the Company wish to
use the methods and compositions covered in these patents to identify
inhibitors of CDC25, it will have to do so abroad, while the foreign
applications are still pending and before they are granted. Alternatively,
the Company may be required to develop methods and compositions that are not
covered by these patents if it wishes to identify inhibitors of CDC25.
The Company and its licensors also rely on trade secrets to protect
their technology, especially where patent protection is not believed to be
appropriate or obtainable. However, trade secrets are difficult to protect.
The Company protects its proprietary technology and processes, in part, by
confidentiality agreements with its employees, consultants, collaborative
partners and certain contractors. There can be no assurance that these
agreements will not be breached, that the Company would have adequate
remedies for any breach, or that the Company's trade secrets will not
otherwise become known or be independently discovered by competitors. To the
extent that Onyx or its consultants, or research collaborators use
intellectual property owned by others in their work for the Company, disputes
may also arise as to the rights in related or resulting know-how and
inventions.
SIGNIFICANT GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVALS
The Company's ongoing research and development activities and, if any
product is successfully developed and obtains regulatory approval, the
production and marketing of the Company's products are subject to extensive
regulation by numerous government authorities in the United States and other
countries. Prior to marketing in the United States, any product developed by
the Company must undergo rigorous preclinical testing and clinical trials and
an extensive regulatory approval process implemented by the Food and Drug
Administration (the "FDA") under the Food, Drug and Cosmetic Act and the
United States Public Health Service Act. Satisfaction of such regulatory
requirements, which includes demonstrating that the product is both safe and
effective, typically takes several years or more depending upon the type,
complexity and novelty of the product and requires the expenditure of
substantial resources. Because certain of the products that may result from
the Company's research and development programs involve the application of
new technologies and will be based on new therapeutic approaches, such
products may be subject to substantial additional review by various
governmental regulatory authorities and as a result, regulatory approvals may
be obtained more slowly than for products using more conventional
technologies. There can be no assurance that FDA and other regulatory
approvals will be obtained in a timely manner, or at all. Any delay in
obtaining, or the failure to obtain, such approvals would adversely affect
the Company's ability to generate product or royalty revenues. Preclinical
studies to demonstrate product safety must be conducted in conformance with
the FDA's Good Laboratory Practice regulations. Clinical testing must meet
requirements for institutional review board oversight and informed consent,
as well as FDA prior review, oversight and Good Clinical Practice
requirements. The Company or the FDA may suspend clinical trials at any time
if it believes that the subjects participating in such trials are being
exposed to unacceptable health risks. Even if FDA and other regulatory
approvals are obtained, the marketing and manufacturing of products are
subject to continuing FDA and other regulatory review, and later discovery of
previously unknown problems with a product, manufacturer or facility may
result in restrictions on the product or manufacturer, including withdrawal
of the product from the market. Additional governmental regulations may be
promulgated that could delay regulatory approval of the Company's or a
corporate partner's potential products. The Company cannot predict the impact
of adverse governmental regulation which might arise from future legislative
or administrative action.
8.
<PAGE>
Accordingly, no assurance can be given that the Company will ever
receive approval from the FDA or foreign regulatory authorities for any of
its products and the failure to receive such approval, or significant delays
in obtaining such approval, could prevent the commercial development of such
products and would have a material adverse effect on the Company.
LACK OF MANUFACTURING EXPERIENCE
The Company's collaborative partners generally have the exclusive right
to manufacture products resulting from the collaborations, and the Company
expects to have similar manufacturing arrangements in its other
collaborations. The Company currently does not have the facilities to
manufacture products for small or large-scale clinical trials or in
commercial quantities, and has no experience in such manufacturing. The
Company is dependent on third parties, including its collaborative partners,
for the manufacturing of its products. There can be no assurance that such
parties will be able to meet the Company's needs either with respect to
timing, quantity or quality. If the Company is unable to obtain or retain
third-party manufacturing on acceptable terms, it may be delayed in its
ability to commercialize products. The Company's dependence upon third
parties, including its collaborative partners, for the manufacturing of
products may adversely affect the Company's profit margins and its ability to
develop, deliver and sell products on a timely and competitive basis. In the
event the Company undertakes to establish its own commercial manufacturing
capabilities, it will require substantial additional funds, manufacturing
facilities, equipment and personnel.
UNCERTAINTY OF MARKET ACCEPTANCE
Even if the requisite regulatory approvals are obtained for the
Company's potential products or for products developed in collaboration with
the Company, uncertainty exists as to whether such products will be accepted
by the market. A number of additional factors also may limit the market
acceptance of products which may be developed by or discovered through
collaboration with the Company, including the rate of adoption by health care
practitioners, the indications for which the product is approved, the rate of
the products' acceptance by the target population, the timing of market entry
relative to competitive products, the availability of alternative therapies,
the price of the Company's product relative to alternative therapies, the
availability of third-party reimbursement and the extent of marketing efforts
by the Company and third-party distributors or agents retained by the
Company. Side effects or unfavorable publicity concerning the Company's
products or any similar product could have an adverse effect on the Company's
ability to obtain physician, patient or third-party payor acceptance and on
efforts to sell the Company's products. There can be no assurance of the
Company's ability, or the length of time required, to achieve
commercialization of the Company's products or that physicians, patients or
third-party payors will accept any of the Company's products as readily as
alternative therapies or at all.
LACK OF MARKETING EXPERIENCE; DEPENDENCE ON THIRD PARTIES
The Company currently has no sales, marketing or distribution
capability. The Company intends to rely on relationships with one or more
pharmaceutical companies with established distribution systems and direct
sales forces to market its products. In the event that the Company is unable
to reach agreement with one or more pharmaceutical companies to market its
products, it may be required to market its products directly and to develop a
marketing and sales force with technical expertise and supporting
distribution capability. There can be no assurance that the Company will be
able to establish in-house sales and distribution capabilities or
relationships with third parties, or that it will be successful in gaining
market acceptance for its products. To the extent that the Company enters
into co-promotion or other licensing arrangements, the Company must develop
its own sales, marketing or distribution capability, and there can be no
assurance that such efforts will be successful.
RISK OF PRODUCT LIABILITY; UNCERTAINTY OF AVAILABILITY OF INSURANCE
The Company's business will expose it to potential product liability
risks that are inherent in the testing, manufacturing and marketing of human
therapeutic products. The Company has obtained clinical trial liability
insurance but there can be no assurance that it will be able to maintain such
insurance for any of its clinical trials. In addition, there can be no
assurance that the Company will be able to obtain or maintain product
liability insurance in the future on acceptable terms or with adequate
coverage against potential liabilities.
9.
<PAGE>
UNCERTAINTY RELATED TO PHARMACEUTICAL PRICING AND REIMBURSEMENT
In both domestic and foreign markets, sales of the Company's proposed
products will depend in part upon the availability of reimbursement from
third-party payors, such as government health administration authorities,
private health insurers and other organizations. In addition, other
third-party payors are increasingly challenging the price and cost
effectiveness of medical products and services. Significant uncertainty
exists as to the reimbursement status of newly approved health care products.
There can be no assurance that the Company's potential products or products
discovered in collaboration with the Company will be considered
cost-effective or that adequate third-party reimbursement will be available
to enable Onyx to maintain price levels sufficient to realize an appropriate
return on its investment in product research, discovery and development.
Legislation and regulations affecting the pricing of pharmaceuticals may
change before the Company's proposed products are approved for marketing.
Adoption of such legislation could further limit reimbursement for medical
products. If adequate coverage and reimbursement levels are not provided by
the government and third-party payors for the Company's products, the market
acceptance of these products would be adversely affected, which would have a
material adverse effect on the Company's business, financial condition and
results of operations.
RISKS ASSOCIATED WITH HAZARDOUS MATERIALS
The Company's research and development involves the controlled use of
hazardous materials, chemicals and various radioactive compounds. Although
the Company believes that its safety procedures for handling and disposing of
such materials comply with the standards prescribed by state and federal
regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident,
the Company could be held liable for any damages that result and any such
liability could exceed the resources of the Company. The Company may incur
substantial costs to comply with environmental regulations if the Company
develops manufacturing capacity.
VOLATILITY OF COMMON STOCK PRICE
The market prices for securities of pharmaceutical and biotechnology
companies, including Onyx, have historically been highly volatile. The market
has from time to time experienced significant price and volume fluctuations
that are unrelated to the operating performance of particular companies. In
addition, factors such as fluctuations in the Company's operating results,
future sales of Common Stock, announcements of technological innovations or
new therapeutic products by the Company or its competitors, announcements of
collaborative partners, clinical trial results, government regulation,
developments in patent or other proprietary rights, public concern as to the
safety of drugs developed by the Company or others, comments made, including
changes in recommendations, by securities analysts, and general market
conditions can have a significant adverse effect on the market price of the
Common Stock. In particular, the realization of any of the risks described in
these "Risk Factors" could have a significant adverse impact on such market
price.
CONTROL BY EXISTING STOCKHOLDERS
Executive officers and directors of the Company and other holders of 5%
or more of the capital stock of the Company, together with entities
affiliated with them, beneficially own approximately 45% of the Common Stock
of the Company. Bayer Corporation has the right to have its nominee elected
to the Company's Board of Directors until the later of (i) the end of the
research term or (ii) if the parties have a Collaboration Compound (as
defined in the collaboration agreements) in clinical development, until such
time as the parties do not have a Collaboration Compound in clinical
development. In addition, International Biotechnology Trust plc has the right
to have its nominee elected to the Company's Board of Directors as long as it
continues to own more than 66 2/3% of the Common Stock purchased by it from
the Company on January 12, 1998. Because of such ownership and voting
arrangements, these officers, directors and stockholders may be able to
effectively control the election of all members of the Board of Directors and
to determine all corporate actions.
10.
<PAGE>
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
The Company's Board of Directors has the authority to issue up to
5,000,000 shares of preferred stock and to determine the price, rights,
preferences and privileges of those shares without any further vote or action
by the Company's stockholders. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by, the rights of the holders of
any preferred stock that may be issued in the future. While the Company has
no present intention to issue shares of preferred stock, such issuance, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of
the Company. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. The application of
Section 203 could have the effect of delaying or preventing a change of
control of the Company. The Company's Certificate of Incorporation provides
for staggered terms for the members of the Board of Directors. The staggered
Board of Directors and certain other provisions of the Company's Certificate
of Incorporation and Bylaws may have the effect of delaying or preventing
changes in control or management of the Company, which could adversely affect
the market price of the Company's common stock.
ADDITIONAL FINANCINGS
Future sales of substantial amounts of Common Stock in the public market
could have an adverse effect on the price of Common Stock. Such sales might
also impair the Company's ability to raise additional funds through equity
financing. In such event, to the extent that funds generated from
operations, together with the Company's existing capital resources, are
insufficient to meet the Company's capital requirements, the Company will be
required to rely on alternative sources of funding, including debt financing,
corporate partnering arrangements and capital lease transactions. No
assurance can be given that additional financing will be available or, if
available, will be available on acceptable terms.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock
by the Selling Shareholders in the offering.
11.
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders,
the number of shares of Common Stock owned beneficially by each of them as of
March 18, 1998 and the number of shares which may be offered pursuant to this
Prospectus. This information is based upon information provided by the
Selling Shareholders. The Selling Shareholders may offer all, some or none of
their Common Stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES BENEFICIALLY NUMBER OF OWNED
OWNED PRIOR TO OFFERING(1) SHARES AFTER OFFERING(1)(2)
NAME NUMBER OF SHARES PERCENT(3) BEING OFFERED NUMBER PERCENT(3)
---- ---------------- ---------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
International Biotechnology
Trust, plc .............................. 1,122,807 9.97% 1,122,807 0 *
Lombard Odier & Cie...................... 561,402 4.98% 561,402 0 *
---------
1,684,209
</TABLE>
- ----------------------
* Less than 1%
(1) Unless otherwise indicated below, the persons named in the table have sole
voting and investment power with respect to all shares beneficially owned
by them, subject to community property laws where applicable.
(2) Assumes the sale of all shares offered hereby.
(3) Applicable percentage of ownership is based on 11,262,569 shares of Common
Stock outstanding on March 18, 1998.
12.
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock offered by the Selling Shareholders may be
sold from time to time to purchasers directly by any of the Selling
Shareholders acting as principal for its own account in one or more
transactions at a fixed price, which may be changed, or at varying prices
determined at the time of sale or at negotiated prices. Alternatively, any
of the Selling Shareholders may from time to time offer the Common Stock
through underwriters, dealers or agents who may receive compensation in the
form of underwriting discounts, commissions or concessions from the Selling
Shareholders and/or the purchasers of shares for whom they may act as agent.
Sales may be made on the Nasdaq National Market or in private transactions.
In addition to sales of Common Stock pursuant to the Registration Statement
of which this Prospectus is a part, the Selling Shareholders may sell such
Common Stock in compliance with Rule 144 promulgated under the Act.
The Selling Shareholders and any agents, broker-dealers or underwriters
that participate in the distribution of the Common Stock offered hereby may
be deemed to be underwriters within the meaning of the Act, and any
discounts, commissions or concessions received by them and any profit on the
resale of the Common Stock purchased by them might be deemed to be
underwriting discounts and commissions under the Act.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states
the Common Stock may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is
available and is complied with.
Pursuant to the Stock Purchase Agreement dated January 12, 1998, and
the Stock Transfer Agreement dated January 12, 1998, the Company has agreed
to register the Selling Shareholders' Common Stock under applicable federal
and state securities laws under certain circumstances and at certain times.
The Company will pay substantially all of the expenses incident to the
offering and sale of the Common Stock to the public, other than commissions,
concessions and discounts of underwriters, dealers or agents. Such expenses
(excluding such commissions and discounts) are estimated to be $45,000. The
above-referenced agreements provide for cross-indemnification of the Selling
Shareholders and the Company to the extent permitted by law, for losses,
claims, damages, liabilities and expenses arising, under certain
circumstances, out of any registration of the Common Stock.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The financial statements of the Company appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein, and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
13.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such other information and representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer or solicitation by anyone in any
state in which such offer or solicitation is not authorized, or in which the
person making such offer or solicitation is not qualified to do so, or to any
person to whom it is unlawful to make such offer or solicitation. The
delivery of this Prospectus at any time does not imply that the information
herein is correct as of any time subsequent to the date hereof.
----------------------------
TABLE OF CONTENTS
<TABLE>
Page
<S> <C>
Available Information...................................... 2
Incorporation of Certain
Documents by Reference.................................. 2
The Company................................................ 3
Risk Factors............................................... 3
Use of Proceeds............................................ 11
Selling Shareholders....................................... 12
Plan of Distribution....................................... 13
Legal Matters.............................................. 13
Experts.................................................... 13
</TABLE>
----------------------------
14.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by ONYX Pharmaceuticals, Inc. (the
"Registrant") in connection with the sale of the Common Stock being
registered. All the amounts shown are estimates except for the registration
fee.
<TABLE>
<S> <C>
Registration fee................................ $ 3,758
Printing and engraving expenses................. 2,000
Legal fees and expenses......................... 10,000
Accounting fees and expenses.................... 3,000
Nasdaq fee...................................... 17,500
Miscellaneous................................... 8,742
---------
Total..................................... $ 45,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under
the Securities Act of 1933. The Registrant's Bylaws also provide that the
Registrant will indemnify its directors and executive officers and may
indemnify its other officers, employees and agents to the fullest extent
permitted by Delaware Law.
The Registrant's Certificate of Incorporation provides for the
elimination of liability for monetary damages for breach of the directors'
fiduciary duty of care to the Registrant and its stockholders. These
provisions do not eliminate the directors' duty of care and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of
non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability 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 any transaction from which the director derived an improper personal
benefit, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision does not
affect a director's responsibilities under any other laws, such as the
federal securities laws or state or federal environmental laws.
II-1
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<S> <C>
4.6+ Stock Purchase Agreement, dated January 12, 1998, among the
Registrant, International Biotechnology Trust plc, and Lombard
Odier & Cie.
4.7 Stock Transfer Agreement dated January 12, 1998, among the
Registrant, Chiron Corporation and Lombard Odier & Cie.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors. Reference
is made to page II-6.
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.
</TABLE>
+Filed as an exhibit to the Registrant's Current Report on Form 8-K
filed on January 26, 1998 and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement 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;
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act 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.
(b) Acceleration of Effectiveness
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 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in 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.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report to security holders that is incorporated
by reference in the Prospectus and furnished pursuant to and meeting the
II-2
<PAGE>
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 or
Regulation S-X are not set forth in the Prospectus, to deliver, or cause to
be delivered to each person to whom the Prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
(c) Registration Statement Permitted by Rule 430A
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant duly 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 Richmond, County of Contra Costa,
State of California, on March 30, 1998.
ONYX PHARMACEUTICALS, INC.
By: /s/ Hollings C. Renton
----------------------------------------
Hollings C. Renton
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Hollings C. Renton and Douglas L.
Blankenship and each or any one of them, as his true and lawful
attorney-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Hollings C. Renton President, Chief Executive March 30, 1998
- -------------------------- Officer and Director (PRINCIPAL
Hollings C. Renton EXECUTIVE OFFICER)
/s/ Douglas L. Blankenship Treasurer (PRINCIPAL FINANCIAL March 30, 1998
- -------------------------- AND ACCOUNTING OFFICER)
Douglas L. Blankenship
/s/ Michael J. Berendt Director March 31, 1998
- -------------------------
Michael J. Berendt
/s/ Samuel D. Colella Director March 30, 1998
- --------------------------
Samuel D. Colella
II-4
<PAGE>
/s/ Paul Goddard Director March 30, 1998
- -------------------------
Paul Goddard
/s/ Kathleen LaPorte Director March 30, 1998
- -------------------------
Kathleen LaPorte
/s/ Edward E. Penhoet Director March 30, 1998
- -------------------------
Edward E. Penhoet
/s/ Ralph H. Thurman Director March 30, 1998
- -------------------------
Ralph H. Thurman
/s/ Nicole Vitullo Director March 30, 1998
- -------------------------
Nicole Vitullo
/s/ Wendell Wierenga Director March 30, 1998
- -------------------------
Wendell Wierenga
</TABLE>
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our Firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of ONYX
Pharmaceuticals, Inc. for the registration of 1,684,209 shares of its common
stock and to the incorporation by reference therein of our report dated
February 20, 1998, with respect to the financial statements of ONYX
Pharmaceuticals, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Palo Alto, California
March 30, 1998
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE NUMBER
- ------ ----------------------- -----------
<S> <C> <C>
4.6+ Stock Purchase Agreement, dated January 12, 1998, among the Registrant,
International Biotechnology Trust plc and Lombard Odier & Cie
4.7 Stock Transfer Agreement, dated January 12, 1998, among the Registrant,
Chiron Corporation and Lombard Odier & Cie
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Ernst & Young LLP, Independent Auditors. Reference
is made to page II-6
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
</TABLE>
+Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on
January 26, 1998 and incorporated by reference herein.
II-7
<PAGE>
STOCK TRANSFER AGREEMENT
THIS STOCK TRANSFER AGREEMENT is entered into as of January 12, 1998, by
and between LOMBARD ODIER & CIE (the "PURCHASER"), CHIRON CORPORATION
("CHIRON") and, in regards to Section 3 only, ONYX PHARMACEUTICALS, INC. (the
"COMPANY").
RECITALS
WHEREAS, the Purchaser is participating in a private placement by the
Company pursuant to the Stock Purchase Agreement dated January 12, 1998 (the
"Purchase Agreement").
WHEREAS, Chiron owns 280,701 shares of the Common Stock (the "Shares")
of the Company and;
WHEREAS, the Purchaser desires to purchase the Shares from Chiron and
Chiron desires to sell the Shares to the Purchaser, on the terms set forth
herein.
AGREEMENT
The Purchaser, the Company (with regard to Section 3 only) and Chiron,
intending to be legally bound, agree as follows:
SECTION 1. SALE AND PURCHASE OF SHARES
1.1 SALE AND PURCHASE OF THE SHARES. At the Closing (as defined
below), Chiron shall sell, assign, transfer and deliver to Purchaser and
Purchaser agrees to purchase from Chiron the Shares at a purchase price of
$7.125 per share, on the terms and subject to the conditions set forth in
this Agreement.
1.2 PURCHASE PRICE. The aggregate purchase price payable by the
Purchaser for the Shares (the "Purchase Price") shall be $1,999,994.63
delivered to Chiron upon the Closing Date by wire transfer of immediately
available funds.
1.3 CLOSING.
(a) The closing of the sale of the Shares to the Purchaser (the
"Closing") shall take place at the offices of Cooley Godward LLP, Five Palo
Alto Square, 3000 El Camino Real, Palo Alto, California 94306 on January 12,
1998 (the "Closing Date").
<PAGE>
(b) At the Closing:
(i) the Purchaser shall pay to Purchase Price as
contemplated by Section 1.2;
(ii) Chiron shall deliver to the Company's transfer agent
prior to Closing the stock certificates representing the Shares and
executed stock powers assigning the Shares to the Purchaser and promptly
following the Closing, but in no event later than three days following
the Closing, Chiron shall deliver to Purchaser stock certificates
representing the Shares registered in the name of Purchaser, or in such
nominee name(s) as designated by such Purchaser.
1.4 ASSIGNMENT OF REGISTRATION RIGHTS. Chiron hereby assigns its
registration rights under Sections 6, 7, 8 and 9 of that certain Amended and
Restated Information and Registration Rights Agreement, as amended (the
"Registration Agreement") to the Purchaser pursuant to Section 19 of the
Registration Agreement, but only with respect to the Shares. Chiron shall
retain all registration rights under the Registration Agreement with respect
to the remaining shares of Common Stock of the Company owned by Chiron.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF CHIRON
Chiron represents and warrants to Purchaser as follows:
2.1 ORGANIZATION. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority and all licenses, permits and
authorizations to conduct its business as it is currently being conducted and
as it is presently proposed to be conducted.
2.2 AUTHORIZATION; DUE EXECUTION; BINDING OBLIGATIONS.
(a) Chiron has full power and authority to execute, deliver and
perform its obligations under this Agreement and all agreements, instruments
and documents contemplated hereby, and all action of Chiron necessary for
such execution, delivery and performance has been duly taken.
(b) Chiron's execution, delivery and performance of this Agreement
have been duly authorized by all requisite corporate and stockholder action
by Chiron and its stockholders, respectively. Upon the execution and
delivery by Chiron, and assuming the valid execution and delivery of this
Agreement by each of the Purchaser and the Company, this Agreement will
constitute a valid and binding obligation of Chiron, enforceable in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law), including specific performance.
2.3 TITLE TO THE SHARES. Chiron is the owner, beneficially and of
record, of the Shares, free and clear of any liens, encumbrances, security
agreements, equities, options, claims,
2
<PAGE>
charges or restrictions, and effective with the Closing, Chiron's entire
right, title and interest in and to the Shares shall have been conveyed to
the Purchaser.
2.4 NO CONSENT REQUIRED. No consent, authorization, approval, order,
license, certificate or permit or act of or from, or declaration or filing
with, any foreign, federal, state, local or other governmental authority or
regulatory body or any court or other tribunal or any party to any contract,
agreement, instrument, lease or license to which Chiron is a party or to
which Chiron is subject that is required to be obtained by Chiron for the
execution, delivery or performance by Chiron of this Agreement or any of the
other agreements, instruments and documents being or to be executed and
delivered hereunder or in connection herewith or for the consummation of the
transactions contemplated hereby, assuming the accuracy of Purchaser's
representations and warranties in Section 4.3.
2.5 NO CONFLICTS. Chiron's execution, delivery and performance of this
Agreement will not violate, conflict with, result in a breach of or
constitute (upon notice or lapse of time or both) a default under, or result
in the creation or imposition of any lien, security interest, mortgage,
pledge, charge or other encumbrance, of any material nature, upon any
properties or assets of Chiron under any (a) law, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of
any government, governmental agency, court or arbitrator to which Chiron is
subject, (b) Chiron's Amended and Restated Certificate of Incorporation or
Bylaws of Chiron or (c) any provision of any material indenture, mortgage,
agreement, contract or other material instrument to which Chiron is a party
or by which Chiron or any of its properties or assets is bound as of the date
hereof.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Subject to and except as set forth on the Schedule of Exceptions which
is arranged in Sections corresponding to the sub-section numbered provisions
contained below in this Section and except as described in the SEC Reports,
the Company hereby represents and warrants to, and covenants with, the
Purchaser as follows:
3.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority and all
licenses, permits and authorizations to conduct its business as it is
currently being conducted and as it is presently proposed to be conducted.
The Company is duly qualified and is authorized to transact business and is
in good standing as a foreign corporation in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business,
assets, liabilities, operations, financial condition or prospects.
3.2 SEC REPORTS.
(a) Since January 1, 1997, the Company has filed with the
Securities and Exchange Commission (the "SEC") all reports ("SEC Reports")
required to be filed by it under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All of the SEC Reports filed by the Company
comply in all material respects with the requirements of the Exchange Act.
None of the SEC Reports contains, as of the respective dates thereof, any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make
3
<PAGE>
the statements therein not misleading in light of the circumstances under
which they were made. All financial statements contained in the SEC Reports
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the period indicated ("GAAP").
Each balance sheet presents fairly in accordance with GAAP the financial
position of the Company as of the date of such balance sheet, and each
statement of operations, of stockholders' equity and of cash flows presents
fairly in accordance with GAAP the results of operations, the stockholders'
equity and the cash flows of the Company for the periods then ended.
(b) The Company has delivered to the Purchaser the following SEC
Reports:
(i) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (without exhibits);
(ii) the Company's Quarterly Reports on Form 10-Q as
filed with the SEC for the quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 (without exhibits);
(iii) the Company's Proxy Statement for the 1997 Annual
Meeting of Stockholders.
(c) No event has occurred since January 1, 1997, requiring the
filing of an SEC Report that has not heretofore been filed and furnished to
the Purchaser (including, without limitation, any amendment to any such SEC
Report).
3.3 NO MATERIAL CHANGE. As of the date hereof, there has been no
material adverse change in the business, assets, liabilities, financial
condition, operations or prospects of the Company since September 30, 1997,
except that the Company continues to incur losses as described in the SEC
Reports.
3.4 CAPITALIZATION. The authorized capital stock of the Company
consists of (i) 25,000,000 shares of Common Stock, $.001 par value, of which
9,854,018 such shares were issued and outstanding as of January 9, 1998 and
(ii) 5,000,000 shares of preferred stock, $.001 par value, of which no shares
are issued and outstanding on the date hereof. As of the date hereof, the
Company has no intention to issue any shares of such Preferred Stock. Except
as contemplated by this Agreement, there are no existing options, warrants,
calls, preemptive (or similar) rights, subscriptions or other rights,
agreements, arrangements or commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred or
sold, any shares of capital stock of the Company or other equity interests in
the Company or any securities convertible into or exchangeable for such
shares of capital stock or other equity interests, and there are no
outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire, or prepare and file with the SEC any registration
statement to register under the Securities Act of 1933, as amended (the
"Securities Act") with respect to, any such shares of capital stock or other
equity interests.
3.5 NASDAQ NATIONAL MARKET. The Company's Common Stock is listed on
the Nasdaq National Market, and there are no proceedings to revoke or suspend
such listing.
4
<PAGE>
3.6 ABSENCE OF LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's best knowledge, that has been
filed, commenced or threatened, by or before any governmental agency, court
or arbitrator against the Company which might result either individually or
in the aggregate, in any material adverse change in the business, assets,
liabilities, financial condition, operations or prospects of the Company
(including, without limitation, any such action, suit, proceeding or
investigation that questions the validity of this Agreement or the issuance
of the Shares thereunder).
3.7 INTANGIBLE RIGHTS. To the Company's best knowledge, the Company
owns or has the right to use pursuant to valid and enforceable licenses,
sublicenses, agreements or permissions, all Intangible Rights (as defined
below) that are necessary or desirable for the conduct of the business of the
Company as it is currently being conducted and as it is presently proposed to
be conducted, and no claims adverse to the interests of the Company are
pending or, to the best knowledge of the Company, have been threatened or
otherwise asserted with respect to the Company's ownership or use of any such
Intangible Rights. To the Company's best knowledge, the Company is not
infringing any Intangible Right owned or used by any third party nor, to the
Company's best knowledge, is any third party infringing any Intangible Right
owned or used by the Company. For purposes of this Agreement, the term
"Intangible Rights" means (i) all inventions (whether patentable or
unpatentable, and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (ii) all trademarks,
service marks, trade dress, logos, trade names and corporate names, together
with all translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (c) all copyrightable
works, all copyrights, all applications, registrations and renewals in
connection therewith, (iii) all trade secrets and confidential business
information (including, without limitation, ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, supplier
lists, and business and marketing plans and proposals), (iv) all computer
software (including, data and related documentation), (v) all other
proprietary rights and (vi) all copies and tangible embodiments of any of the
foregoing (in whatever form or medium).
3.8 LEGAL COMPLIANCE. The Company has not violated any applicable laws
(including, without limitation, all rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings and charges thereunder) of
federal, state, local and foreign governments (and all agencies thereof) in
respect of the conduct of its business or the ownership of its properties
which violation would (either individually or in the aggregate) materially
and adversely affect the business, assets, liabilities, financial condition,
operations or prospects of the Company.
3.9 CERTAIN AGREEMENTS. All of the collaborative agreements, research
and development agreements, licensing agreements and other agreements with
corporate partners and governmental or educational entities that have been
previously disclosed by the Company in the SEC Reports referred to in paragraph
(b) of Section 4.5 hereof are valid and enforceable obligations of the Company
and, to the Company's best knowledge, the other parties thereto. Except for
breaches and defaults that would not, singly or in the aggregate, have a
material adverse effect on the Company or its assets, liabilities, operations,
financial condition, business or prospects, the Company is not in breach or
default under any such contracts or agreements nor
5
<PAGE>
has any event occurred which, with the giving of notice or the passage of
time or both, would constitute a breach or default on the Company's part
thereunder. To the Company's best knowledge, none of the other parties to
such contracts or agreements is in breach or default thereunder nor has any
event occurred which, with the giving of notice or the passage of time or
both, would constitute a breach or default on such other parties' part.
3.10 REGISTRATION. The Company acknowledges and agrees that the
execution and delivery of this Agreement by the Purchaser constitutes the
Purchaser's notice pursuant to its rights under the Registration Agreement to
have the Shares registered under the Registration Statement (as defined in
the Purchase Agreement).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants, to and for the benefit of Chiron,
as follows:
4.1 AUTHORITY, APPROVAL AND ENFORCEABILITY.
(a) Purchaser has full power and authority to execute, deliver and
perform its obligations under this Agreement and all agreements, instruments
and documents contemplated hereby, and all action of Purchaser necessary for
such execution, delivery and performance has been duly taken.
(b) Purchaser's execution, delivery and performance of this
Agreement have been duly authorized by all requisite action by Purchaser,
respectively. Upon the execution and delivery by Purchaser, and assuming the
valid execution and delivery of this Agreement by each of the Purchaser and
the Company, this Agreement will constitute a valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting parties'
rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law), including specific performance.
4.2 NO CONSENT REQUIRED. No consent, authorization, approval, order,
license, certificate or permit or act of or from, or declaration or filing
with, any foreign, federal, state, local or other governmental authority or
regulatory body or any court or other tribunal or any party to any contract,
agreement, instrument, lease or license to which Purchaser is a party or to
which Purchaser is subject that is required for the execution, delivery or
performance by Purchaser of this Agreement or any of the other agreements,
instruments and documents being or to be executed and delivered hereunder or
in connection herewith or for the consummation of the transactions
contemplated hereby.
4.3 INVESTMENT REPRESENTATIONS. Purchaser understands that the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") and shall continue to bear the Securities Act legend.
Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act
based in part upon Purchaser's representations contained in the Agreement.
Purchaser hereby represents and warrants as follows:
6
<PAGE>
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk
of this investment indefinitely unless the Shares are registered pursuant to
the Securities Act, or an exemption from registration is available.
Purchaser understands that the Company has no present intention of
registering the Shares. Purchaser also understands that there is no
assurance that any exemption from registration under the Securities Act will
be available and that, even if available, such exemption may not allow the
Company to transfer all or any portion of the Shares under the circumstances,
in the amounts or at the times Purchaser might propose.
(b) ACCREDITED INVESTOR. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities
Act.
(c) COMPANY INFORMATION. Purchaser is familiar with the Company's
business, management, financial affairs, operations and facilities.
(d) RULE 144. Purchaser acknowledges and agrees that the Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
Purchaser has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to be
sold, the sale being through an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934, as amended) and the number of shares being
sold during any three-month period not exceeding specified limitations.
SECTION 5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company,
Chiron, and Purchaser herein shall survive the execution of this Agreement
and the sale to the Purchaser of the Shares and shall terminate upon the
subsequent transfer of the Shares.
SECTION 6. CONDITIONS TO CHIRON'S OBLIGATIONS AT THE CLOSING.
Chiron's obligation to complete the sale and issuance of the Shares at
Closing shall be subject to the following conditions to the extent not waived
by Chiron:
6.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by Purchaser in Section 4 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
6.2 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by the Purchaser on or prior to the Closing
Date shall have been performed or complied with in all material respects.
7
<PAGE>
6.3 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are binding upon the Purchaser and that
are required in connection with the lawful sale of the Shares at such Closing
pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the date of such Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no
proceedings for such purpose shall be pending or, to the knowledge of Chiron,
threatened by the SEC or any commissioner of corporations or similar officer
of any state having jurisdiction over this transaction. At the time of such
Closing, the sale of the Shares to be purchased and sold at such Closing
shall be legally permitted by all laws and regulations to which the Purchaser
and Chiron are subject.
SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING.
Purchaser's obligation to purchase the Shares at the Closing thereby shall be
subject to the following conditions to the extent not waived by the Purchaser:
7.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof and by Chiron in Section 2
hereof shall be true and correct when made, and shall be true and correct as
of the Closing Date.
7.2 COVENANTS PERFORMED. All covenants, agreements and conditions
contained herein to be performed by the Company and Chiron shall have been
performed or complied with in all material respects.
7.3 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are binding upon Chiron and that are
required in connection with the lawful sale of the Shares at such Closing
pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the Closing Date. No stop order or other order
enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of Chiron, threatened
by the SEC, or any commissioner of corporations or similar officer of any
state having jurisdiction over this transaction. At the time of the Closing,
the sale of the Shares shall be legally permitted by all laws and regulations
to which the Purchaser and Chiron are subject.
7.4 CLOSING OF PRIVATE PLACEMENT. The private placement by the Company
of 1,403,508 shares of its Common Stock pursuant to the Purchase Agreement
shall have closed.
7.5 NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the business, assets, liabilities, operations or financial
condition of the Company since the date of this Agreement.
7.6 NO LITIGATION. Since the date of this Agreement, no proceeding
challenging this Agreement or the transactions contemplated hereby, or
seeking to prohibit, alter, prevent or materially delay the Closing or the
performance by the Company of any of its obligations hereunder, shall have
been instituted before any governmental agency, court or arbitrator and shall
be pending.
8
<PAGE>
SECTION 8. MISCELLANEOUS PROVISIONS
8.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in
California.
8.2 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by
any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
8.3 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. It
is further agreed that any waiver, permit, consent or approval of any kind or
character of any breach, default or noncompliance under this Agreement or any
waiver of any provisions or conditions of the Agreement must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or otherwise afforded to
any party, shall be cumulative and not alternative.
8.4 NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made
and received on the date when delivered by hand delivery with receipt
acknowledged, or upon the next business day following receipt of telex or
telecopy transmission, or upon the third day after deposit in the United
States mail, registered or certified with postage prepaid, return receipt
requested, addressed as set forth on the signature page.
Any party may alter the addresses to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 8.4 for the giving of notice.
8.5 ASSIGNMENT: BINDING UPON SUCCESSORS AND ASSIGNS. None of the
parties hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other party hereto. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.6 AMENDMENT AND WAIVERS. Any term or provision 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 by a writing signed by the party to be bound thereby.
The waiver by a party of any breach hereof or default in the performance
hereof will not be deemed to constitute a waiver of any other default or any
succeeding breach or default.
9
<PAGE>
8.7 EXPENSES. Each party will bear its respective expenses and legal
fees incurred with respect to this Agreement, and the transactions
contemplated hereby including any broker's fees for which they are
responsible.
8.8 ENTIRE AGREEMENT. This Agreement and the exhibits hereto
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior and
contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect hereto,
which shall remain in full force and effect. The express terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
8.9 TITLES AND SUBTITLES. The titles of the sections and subsections
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.10 SEVERABILITY. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the greatest extent
possible, the economic, business and other purposes of the void or
unenforceable provision.
8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
10
<PAGE>
THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AND
DELIVERED AS OF JANUARY 12, 1998.
<TABLE>
<CAPTION>
"CHIRON": CHIRON CORPORATION
<S> <C>
BY: /s/ James Kent
-------------------------------------
TITLE: Vice President and Treasurer
----------------------------------
"PURCHASER": LOMBARD ODIER & CIE
BY: /s/ Daniel Malfani
-------------------------------------
TITLE: Assistant Vice President
----------------------------------
BY: /s/ Rene-Alain Walthert
-------------------------------------
TITLE: Assistant Manager
----------------------------------
"COMPANY" ONYX PHARMACEUTICALS, INC.
BY: /s/ Hollings C. Renton
-------------------------------------
TITLE: President and Chief Executive Officer
----------------------------------
</TABLE>
11
<PAGE>
Exhibit 5.1
[COOLEY GODWARD LLP LETTERHEAD]
April 2, 1998
ONYX Pharmaceuticals, Inc.
3031 Research Drive
Richmond, CA 94806
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by ONYX Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), of a Resale Registration Statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") on
April 2, 1998 covering the offering of up to 1,684,209 shares of the
Company's common stock, par value of $.001 per share (the "Shares"). All of
the Shares are to be sold by certain stockholders as described in the
Registration Statement.
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus included therein, the Company's
Restated Certificate of Incorporation and Bylaws, and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, and the conformity to originals of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares are validly issued, fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in
the Prospectus included in the Registration Statement and to the filing of
this opinion as an exhibit to the Registration Statement.
Sincerely,
Cooley Godward LLP
By: /s/ Deborah A. Marshall
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Deborah A. Marshall
