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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 2000
REGISTRATION NO. 333-37144
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ONYX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 94-3154463
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
</TABLE>
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3031 RESEARCH DRIVE
RICHMOND, CA 94806
(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
(510) 222-9700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
COPIES TO:
ROBERT L. JONES, ESQ.
MICHAEL L. WEINER, ESQ.
COOLEY GODWARD LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94036
(650) 843-5000
--------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
--------------------------
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. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE SECURITIES AND
EXCHANGE COMMISSION DECLARES OUR REGISTRATION STATEMENT EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
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SUBJECT TO COMPLETION, DATED JUNE 23, 2000
PRELIMINARY PROSPECTUS
ONYX PHARMACEUTICALS, INC.
2,000,000 SHARES
COMMON STOCK
The 2,000,000 shares of our common stock offered by this prospectus are
outstanding shares that may be sold from time to time by or on behalf of the
selling stockholders identified in this prospectus. The selling stockholders
purchased these 2,000,000 shares from us in a private placement of our common
stock. We are not selling any shares of our common stock under this prospectus
and will not receive any of the proceeds from the sale of shares by the selling
stockholders.
The selling stockholders may sell the shares of common stock described in this
prospectus in a number of different ways and at varying prices. We provide more
information about how the selling stockholders may sell their shares in the
section titled "Plan of Distribution" on page 18.
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- Trading Symbol: Nasdaq National Market--ONXX
- On June 22, 2000, the last reported sales price for our common stock was
$12.625 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4 TO READ ABOUT RISKS THAT YOU SHOULD CONSIDER BEFORE BUYING
SHARES OF OUR COMMON STOCK.
THE DATE OF THIS PROSPECTUS IS JUNE __, 2000.
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TABLE OF CONTENTS
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PAGE
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Summary..................................................... 3
Risk Factors................................................ 4
Use of Proceeds............................................. 17
Selling Stockholders........................................ 17
Plan of Distribution........................................ 18
Legal Matters............................................... 18
Experts..................................................... 18
Where You Can Find More Information......................... 19
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You should rely only on the information contained in this prospectus and
information incorporated by reference into this prospectus. We have not
authorized anyone to provide you with different information. This prospectus is
not an offer to sell, nor is it seeking an offer to buy, these securities in any
state where the offer or sale is not permitted. The information contained in
this prospectus is complete and accurate only as of the date on the front cover,
but the information may have changed since that date.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in the sections entitled "Summary," "Risk Factors" and
"Use of Proceeds," and elsewhere in this prospectus constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause our or our industry's results, levels of activity,
or achievements to differ significantly and materially from that expressed or
implied by such forward-looking statements. Such factors include, among others,
those listed under "Risk Factors" and elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by terminology such
as "may," "will," "should," "intend," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," or "continue," or the negative of such terms
or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements. We do not intend to
update any of the forward-looking statements after the date of this prospectus
to conform such statements to actual results.
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SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION REGARDING OUR COMPANY AND OUR FINANCIAL STATEMENTS AND NOTES THERETO
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
We are engaged in the discovery and development of novel cancer therapies based
on our proprietary technology platform. We believe that this platform enables us
to develop therapeutics that selectively kill cancer cells in the human body,
leaving healthy, non-cancerous tissues unharmed. Our lead product, CI-1042,
formerly known as ONYX-015, is a human adenovirus that has been genetically
engineered to replicate in and kill cancer cells based on abnormal p53 pathway
function in these cells. Other product candidates from our technology platform
include viruses armed with anticancer genes. We have also developed an
engineered human adenovirus that replicates in and kills cancer cells based on
other abnormal tumor suppressor gene mutations in cancer cells.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. YOU SHOULD ALSO CONSIDER THE OTHER INFORMATION IN THIS
PROSPECTUS. IN ADDITION, THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING US BECAUSE WE ARE ALSO SUBJECT TO ADDITIONAL RISKS AND
UNCERTAINTIES NOT PRESENTLY KNOWN TO US. IF ANY OF THESE RISKS ACTUALLY OCCUR,
OUR BUSINESS, FINANCIAL CONDITION, OPERATING RESULTS OR CASH FLOWS, COULD BE
MATERIALLY ADVERSELY AFFECTED. THIS COULD CAUSE THE TRADING PRICE OF OUR COMMON
STOCK TO DECLINE, AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS
THE RESULTS OF CLINICAL TRIALS OF CI-1042 ARE UNCERTAIN.
We have completed Phase II clinical or human trials designed to obtain safety
and efficacy trend information for CI-1042 for the treatment of head and neck
cancer, both as a single agent and in combination with chemotherapy. Based on
data from these Phase II clinical trials, we have recently initiated a
multi-center clinical trial, or a Phase III clinical trial, designed to obtain
efficacy information for CI-1042 for the treatment of recurrent head and neck
cancer. Historically, many pharmaceutical products have failed in Phase III
clinical trials notwithstanding favorable results in Phase II clinical trials.
The results of the Phase III clinical trial of CI-1042 may fail to demonstrate
desired efficacy levels. In addition, we may observe previously unforseen side
effects. The results may not extend the findings of previous clinical trials,
including tumor response rates, duration of tumor response or safety.
There can be no assurance that the Food and Drug Administration, or FDA, will
accept the results of the Phase III clinical trial, or accept other elements of
the application that we may file for CI-1042, as being sufficient for market
approval. The FDA may require additional clinical trials. Additional clinical
trials may be extensive, expensive and time-consuming. We will not be able to
market CI-1042 unless we receive regulatory approval for the drug. In addition,
in our clinical trials we treat patients who have failed conventional treatments
and who are in advanced stages of cancer. During the course of treatment, these
patients can die or suffer adverse medical effects for reasons that may not be
related to CI-1042. These adverse effects may impact the interpretation of
clinical trial results.
IF WE ARE UNSUCCESSFUL IN DEVELOPING AND COMMERCIALIZING OUR PRODUCTS, OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD BE SERIOUSLY
HARMED.
None of our products has received regulatory approval from the FDA, and only
CI-1042 has entered clinical trials to date. Accordingly, all of our products
will require:
- the commitment of substantial resources;
- extensive research and development;
- preclinical or animal testing;
- clinical trials;
- manufacturing scale-up; and
- regulatory approval prior to commercial sale.
We cannot assure you that commercially viable products will result from our
efforts and those parties collaborating with us. Even if we develop our products
and obtain the requisite regulatory approvals, we may not successfully
commercialize our products.
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WE MAY FAIL TO DEMONSTRATE THAT CI-1042 IS EFFECTIVE FOR THE TREATMENT OF OTHER
TYPES OF CANCER EVEN IF CI-1042 IS PROVEN EFFECTIVE FOR THE TREATMENT OF HEAD
AND NECK CANCER.
We are initially developing CI-1042 for treatment of head and neck cancer, using
direct injection into tumors, or intratumoral injection. Even if we are
successful in developing CI-1042 for this type of cancer, we cannot assure you
that we will be able to demonstrate that CI-1042 is effective in the treatment
of a broader array of cancer types. We have completed a Phase I/II clinical
trial for treatment of liver metastases of colorectal cancer with CI-1042
administered by way of the hepatic artery, or intrahepatic artery infusion. In
addition, we are in the process of completing Phase I/II clinical trials for
CI-1042 for treatment of pancreatic cancer. The Phase I/II clinical trial in
liver metastases of colorectal cancer is based on a small number of patients and
we cannot assure you that the results can be reproduced in future clinical
studies since clinical trial results are inherently uncertain. In addition, we
cannot assure you that we will succeed in our efforts to deliver CI-1042 to
tumors through routes other than intratumoral injection and intrahepatic artery
infusion. If we are not successful in developing additional routes of
administration for CI-1042, or it is otherwise ineffective in the treatment of a
broader array of cancer types, the commercial potential of this product will be
reduced.
THE BIOLOGICAL CHARACTERISTICS OF OUR THERAPEUTIC VIRUSES, AND THEIR
INTERACTIONS WITH OTHER DRUGS AND THE HUMAN IMMUNE AND OTHER DEFENSE SYSTEMS ARE
NOT FULLY UNDERSTOOD.
The use of therapeutic replicating viruses is novel and we are still determining
the biological characteristics of these viruses. For example, in our clinical
trials to date, we have achieved the best results when CI-1042 is used in
combination with standard chemotherapy drugs, but the reasons for and the nature
of the interaction of the virus with these drugs is still uncertain. In
addition, the response of the human immune system to our therapeutic viruses is
still being investigated, and the immune system may play a role in limiting the
tumor-killing effect of our therapeutic viruses. We also do not know the extent
the human body may clear our therapeutic viruses from circulation and limit the
tumor-killing activity of our therapeutic viruses. Further, there is some
scientific uncertainty as to whether the killing activity of CI-1042 is specific
to cells with p53 tumor suppressor gene mutations. Moreover, we do not know all
of the many factors that contribute to the formation of each individual
patient's cancer, since each tumor is unique. These factors include not only the
cancer type, but also the pressures within the tumor, the presence of normal
cells and fibrous tissue within the tumor. These are among the reasons why only
some cancer patients respond to a particular type of cancer therapy while others
do not, even among patients with the same cancer type. The novelty and
scientific uncertainties regarding our therapeutic viruses and the uniqueness of
human cancers from patient-to-patient increases the risk that we will not
successfully develop our product candidates, or that even if we succeed in
developing our product candidates, these product candidates will not have a
therapeutic effect in a broad patient population.
WE ARE DEPENDENT UPON COLLABORATIVE RELATIONSHIPS TO DEVELOP, MANUFACTURE AND
COMMERCIALIZE OUR PRODUCTS AND TO OBTAIN REGULATORY APPROVAL, WHICH COULD DELAY
THE DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS.
Our strategy for developing, manufacturing and commercializing our products and
obtaining regulatory approval depends in large part upon maintaining and
entering into collaboration agreements with pharmaceutical companies or other
collaborative parties. We have entered into a number of collaboration agreements
with different parties, including research, development and marketing agreements
with Warner-Lambert Company and Bayer Corporation. If we fail to maintain these
collaborative relationships or establish new collaborative relationships, we
would need to undertake these activities at our own expense, which would
significantly increase our capital requirements and
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limit the programs we are able to pursue. Further, we would incur significant
delays with the development, manufacture or sale of our products.
We are subject to a number of risks associated with our dependence upon
collaborative relationships, including:
- the amount and timing of expenditure of resources can vary for reasons outside
our control;
- business combinations and changes in a collaborative party's business strategy
may adversely affect the party's willingness or ability to complete its
obligations under the collaboration agreement with us;
- the right of the collaborative party to terminate its collaboration agreement
with us on limited notice and for reasons outside our control;
- loss of significant rights to our collaborative parties if we fail to meet our
obligations under these agreements;
- disagreements as to ownership of clinical trial results or regulatory
approvals, and the refusal of the FDA to recognize us as holding the
regulatory approvals necessary to commercialize our products;
- withdrawal of support by a collaborative party following the development or
acquisition by the collaborative party of competing products; and
- disagreements with a collaborative party regarding the collaboration agreement
or ownership of proprietary rights.
These factors and other possible disagreements with collaborative parties could
lead to delays in the research, development or commercialization of our products
or could require or result in litigation or arbitration, which would be time
consuming and expensive.
CHIRON MAY HAVE PREFERENTIAL RIGHTS TO ESTABLISH COLLABORATIONS WITH US, WHICH
WILL COMPLICATE OUR FUTURE COLLABORATIVE ARRANGEMENTS.
We were established in April 1992 by means of a transfer from Chiron Corporation
to us of the drug discovery program conducted at Chiron by Dr. Frank McCormick,
our scientific founder, and his research team. Under the agreement executed at
that time, we granted Chiron preferential rights to receive product licenses in
the fields of diagnostics and vaccines, and also established a mechanism for our
making proposals to Chiron for future collaborations. Chiron has advised us that
it believes this mechanism requires us to offer gene therapy programs to Chiron
before licensing any of these programs to a third party. We and Chiron have
different interpretations of this agreement as it relates to the scope of
Chiron's rights. Chiron delivered a letter to us under which Chiron waived any
rights it has under the agreement with respect to collaborative arrangements
that we may enter into with others until the end of July 2000, based on our
replicating virus technology. During the period of time covered by this letter,
we executed our agreement with Warner-Lambert for the development of CI-1042 and
two other virus products. If Chiron does not grant us further waivers and
asserts rights under the April 1992 agreement, or if disputes arise, our ability
to enter into future collaborations for other product candidates would be
complicated and might be delayed or interfered with.
WARNER-LAMBERT HAS BEEN ACQUIRED BY PFIZER, INC., WHICH COULD AFFECT OUR
COLLABORATION RELATIONSHIP WITH WARNER-LAMBERT
On June 19, 2000, Pfizer, Inc. acquired Warner-Lambert. We cannot assure you
that Pfizer will be interested in continuing the multiple research and
development and marketing collaboration
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agreements we have with Warner-Lambert, including a collaboration agreement
related to CI-1042, because these collaborations may address smaller markets
than Pfizer generally seeks to address. We also cannot assure you that Pfizer is
interested in the development of a therapeutic virus technology platform or the
products we seek to develop. Pfizer could modify, disrupt or terminate our
collaboration agreements with Warner-Lambert currently in effect, subject to the
terms of these agreements. Pursuant to our agreement with Warner-Lambert
relating to CI-1042, Warner-Lambert has the right to terminate this agreement
for any reason with 90 days notice, in which case they would be required to
return all rights to CI-1042 to us royalty-free. We cannot assure you that
Pfizer will not modify, disrupt or terminate one or more of our collaboration
agreements with Warner-Lambert pursuant to the terms of these agreements.
If Pfizer terminates our agreement relating to CI-1042, a significant portion of
the $40 million Warner-Lambert is obligated to fund for the development of
CI-1042, including the cost of clinical trials, would be lost. In addition,
because we do not have any sales and marketing capability, we are relying on
Warner-Lambert's sales and marketing expertise to commericialize CI-1042.
Further, if Pfizer terminates our agreement relating to CI-1042 and does not
agree to continue to manufacture CI-1042 for commercial use, we would have to
establish an alternate manufacturing source for CI-1042 which would cause a
delay in the commercial sale of CI-1042.
WE DO NOT HAVE CLINICAL OR COMMERCIAL SCALE MANUFACTURING EXPERTISE OR
CAPABILITIES AND ARE DEPENDENT ON THIRD PARTIES TO FULFILL OUR MANUFACTURING
NEEDS.
We lack the resources and capabilities to manufacture our products on our own
for clinical trials or in commercial quantities, and we have no experience in
such manufacturing. We would require substantial funds to establish these
capabilities. Consequently, we are dependent on third parties, including
collaborative parties and contract manufacturers, to manufacture our products
and product candidates. These parties may encounter difficulties in production
scale-up, including problems involving production yields, quality control and
quality assurance and shortage of qualified personnel. These third parties may
not perform as agreed or may not continue to manufacture our products for the
time required by us to successfully market our products. These third parties may
fail to deliver the required quantities of our products or product candidates
for clinical or commercial use on a timely basis and at commercially reasonable
prices.
WE CURRENTLY RELY ON A SOLE SOURCE OR LIMITED NUMBER OF SOURCES FOR THE
MANUFACTURING OF CI-1042 AND MAY NOT BE ABLE TO FIND REPLACEMENT MANUFACTURERS.
We currently rely on a sole source contract manufacturer for the supply of
CI-1042 for Phase III clinical trials. To date, this contract manufacturer has
produced a limited amount of material for our Phase III clinical trials. In
addition, under our agreement with Warner-Lambert, Warner-Lambert is responsible
for manufacturing CI-1042 for commercial use, and following Pfizer's acquisition
of Warner-Lambert, Pfizer assumes the responsibility for manufacturing CI-1042.
There are a limited number of parties who could manufacture CI-1042 for
commercial use. If our contract manufacturer or Pfizer are unable to deliver the
required quantities of CI-1042 or either of them terminate our relationship, we
may not be able to find a replacement manufacturer within a reasonable amount of
time or at commercially reasonable rates.
WE OR PFIZER MAY NOT BE ABLE TO SCALE-UP THE MANUFACTURING PROCESS OF CI-1042
FOR COMMERCIAL USE, WHICH COULD DELAY REGULATORY APPROVAL.
To obtain regulatory approval for CI-1042, Pfizer or our contract manufacturer
will need to produce commercial quantities of CI-1042. To do so, we and Pfizer
will need to modify the manufacturing process to produce large quantities of
CI-1042 and obtain access to a larger manufacturing facility. This could require
a significant amount of time and experimentation to meet our quality standards
for
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CI-1042. This will also require a significant capital investment on our part. In
addition, if we do not treat patients in our Phase III pivotal trial with
product from the new process manufactured at the larger facility, the FDA will
most likely require a bridging study to show that the CI-1042 produced from the
new process at the larger facility is comparable to CI-1042 produced from our
existing manufacturing process at our contract manufacturer's existing facility.
If we encounter difficulties in modifying the manufacturing process in time to
conduct a bridging study prior to FDA review of our Phase III pivotal clinical
trial, commercial sales of CI-1042 could be delayed.
MARKET ACCEPTANCE OF OUR PRODUCTS IS UNCERTAIN.
Even if our product development efforts are successful and even if the requisite
regulatory approvals are obtained, our products may not gain market acceptance
among physicians, patients, healthcare payers and the medical community. A
number of additional factors may limit the market acceptance of products
including the following:
- rate of adoption by healthcare practitioners;
- types of cancer for which the product is approved;
- rate of the products' acceptance by the target population;
- timing of market entry relative to competitive products;
- availability of alternative therapies;
- price of our product relative to alternative therapies;
- availability of third-party reimbursement;
- extent of marketing efforts by us and third-party distributors or agents
retained by us; and
- side effects or unfavorable publicity concerning our products or similar
products.
WE DO NOT HAVE MARKETING OR SALES EXPERIENCE OR CAPABILITIES AND ARE DEPENDENT
ON THE EFFORTS OF OTHERS.
We intend to enter into agreements with third parties to market and sell most of
our products. We may not be able to enter into marketing and sales agreements
with others on acceptable terms, if at all. To the extent that we enter into
marketing and sales agreements with other companies, our revenues, if any, will
depend on the efforts of others. We also have the right under our collaboration
agreements to co-promote our products in conjuction with our collaborative
parties. If we are unable to enter into third-party agreements or if we are
exercising our rights to co-promote a product, then we will be required to
develop marketing and sales capabilities. We may not successfully establish
marketing and sales capabilities or have sufficient resources to do so. If we do
not develop marketing and sales capabilities, we may not be able to meet our
co-promotion obligations under our collaboration agreements, which could result
in our losing these co-promotion rights. If we do develop such capabilities, we
will compete with other companies that have experienced and well-funded
marketing and sales operations.
ADVERSE EVENTS IN THE FIELD OF GENE THERAPY MAY NEGATIVELY AFFECT REGULATORY
APPROVAL OR PUBLIC PERCEPTION OF OUR PRODUCTS.
Our commercial success will depend in part on public acceptance of the use of
gene therapies for the prevention or treatment of human diseases. Public
attitudes may be influenced by claims that gene therapy is unsafe, and gene
therapy may not gain acceptance of the public or the media. Negative public
reaction to gene therapy could result in greater governmental regulation and
stricter clinical trial oversight and commercial product labeling requirements
of gene therapies and could cause a decrease in the demand for products we may
develop.
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The recent death of a patient at the University of Pennsylvania undergoing gene
therapy has been widely publicized. The patient in the University of
Pennsylvania trial was receiving therapy by delivery through the hepatic artery
of the liver. This route is the same as the one we are using in our current
Phase I/II clinical trial of CI-1042 for treatment of liver metastases of
colorectal cancer. This death and any other adverse events in the field of gene
therapy that may occur in the future may result in greater governmental
regulation of our product candidates and potential regulatory delays relating to
the testing or approval of our product candidates. As a result of this death,
the United States Senate has commenced hearings to determine whether additional
legislation is required to protect volunteers and patients who participate in
gene therapy clinical trials. The Recombinant DNA Advisory Committee, which acts
as an advisory body to the National Institutes of Health, has extensively
discussed gene therapy clinical trials. Any increased scrutiny or new government
regulation could delay or increase the costs of our product development efforts
or clinical trials.
WE HAVE A HISTORY OF LOSSES AND OUR FUTURE PROFITABILITY IS UNCERTAIN.
To date, we have engaged primarily in research and development. Our research and
development and general and administrative expenses have resulted in substantial
losses from operations. As of March 31, 2000, we had an accumulated deficit of
approximately $79.8 million. We expect to incur significant and increasing
operating losses over the next several years as our research and development
efforts and preclinical testing and clinical trial activities expand. We expect
that the amount of operating losses will fluctuate significantly from quarter to
quarter as a result of increases or decreases in our research and development
efforts, the establishment or termination of collaborations, the timing and
amount of collaboration payments under the terms of our collaborative
agreements, or the initiation, success or failure of clinical trials.
We do not expect to generate revenues from the sale of products for the
foreseeable future. We expect that substantially all of our revenues for the
foreseeable future will result from payments under our collaborative agreements.
Our ability to achieve profitability depends upon our success in completing
development of our potential products, obtaining required regulatory approvals
and manufacturing and marketing our products.
WE WILL NEED SUBSTANTIAL ADDITIONAL FUNDS.
We will require substantial additional funds to conduct the costly and
time-consuming research, preclinical testing and clinical trials necessary to
develop our technology and proposed products, and to establish or maintain
relationships with collaborative parties to bring our products to market. Our
future capital requirements will depend upon a number of factors, including:
- continued scientific progress in the research and development of our
technology programs;
- the size and complexity of these programs;
- our ability to establish and maintain collaboration agreements;
- 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.
If we are unable to obtain additional funds, we may be forced to delay or
terminate clinical trials, curtail operations or obtain funds through
collaborative and licensing arrangements that may require us to relinquish
commercial rights or potential markets or grant licenses that are unfavorable to
us.
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WE ARE DEPENDENT UPON OUR KEY EMPLOYEES AND CONSULTANTS AND MAY BE UNABLE TO
ATTRACT OR RETAIN QUALIFIED PERSONNEL.
Our success depends on our continued ability to attract, retain and motivate
highly qualified management and scientific personnel. We face competition for
qualified individuals from numerous pharmaceutical and biotechnology companies,
universities, and other research institutions. Because of the scientific nature
of our business, we are highly dependent on principal members of our scientific
and management staff. To pursue our product development plans, we will need 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 require
additional management personnel and the development of additional expertise by
existing management personnel.
WE FACE INTENSE COMPETITION AND RAPID TECHNOLOGICAL CHANGE.
We are engaged in a rapidly changing and highly competitive field. Other
products and therapies that currently exist or are being developed will compete
with the products we are seeking to develop and market. Many other companies are
actively seeking to develop products that have disease targets similar to those
we are pursuing. Some of these competitive products are in clinical trials. In
particular, among other trials, Schering-Plough Corporation is conducting a
Phase II clinical trial of its p53 gene therapy product in liver metastases of
colorectal cancer. Aventis, Inc./Introgen Therapeutics, Inc. have initiated a
Phase III clinical trial in head and neck cancer with their p53 gene therapy
products. If approved, the products of these and other competitors now in
clinical trials will compete directly with CI-1042. Other companies are
developing small molecule drugs that may compete with product candidates
identified in our small molecule drug programs.
Many of our competitors, either alone or together with collaborative parties,
have substantially greater financial resources and larger research and
development staffs than we do. In addition, many of these competitors, either
alone or together with their collaborative parties, have significantly greater
experience than we do in:
- developing products;
- undertaking preclinical testing and human clinical trials;
- obtaining FDA and other regulatory approvals of products; and
- manufacturing and marketing products.
Accordingly, our competitors may succeed in obtaining patent protection,
receiving FDA approval or commercializing products before we do. If we commence
commercial product sales, we will be competing against companies with greater
marketing and manufacturing capabilities, areas in which we have limited or no
experience.
We also face, and will continue to face, competition from academic institutions,
government agencies and research institutions. There are numerous competitors
working on products to treat each of the diseases for which we are seeking to
develop therapeutic products. In addition, any product candidate that we
successfully develop may compete with existing therapies that have long
histories of safe and effective use. Competition may also arise from:
- other drug development technologies and methods of preventing or reducing the
incidence of disease;
- new small molecule drugs; or
- other classes of therapeutic agents.
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Developments by competitors may render our product candidates or technologies
obsolete or noncompetitive. We face and will continue to face intense
competition from other companies for collaborations with pharmaceutical and
biotechnology companies for establishing relationships with academic and
research institutions, and for licenses to proprietary technology. These
competitors, either alone or with collaborative parties, may succeed with
technologies or products that are more effective than ours.
RISKS RELATED TO THE INDUSTRY
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND WE MAY NOT BE ABLE TO
OBTAIN REGULATORY APPROVALS.
Our product candidates under development are subject to extensive and rigorous
domestic regulation. The FDA regulates, among other things, the development,
testing, manufacture, safety, efficacy, recordkeeping, labeling, storage,
approval, advertising, promotion, sale and distribution of biopharmaceutical
products. If we market our products abroad, they also are subject to extensive
regulation by foreign governments. None of our products has been approved for
sale in the United States or any foreign market. Because our products involve
the application of new technologies and will be based on new therapeutic
approaches, various governmental regulatory authorities will need to complete a
substantial review before we may market our products. As a result, we may obtain
regulatory approvals more slowly than do other companies for products using more
conventional technologies.
The regulatory review and approval process takes many years, requires the
expenditure of substantial resources, involves post-marketing surveillance, and
may involve ongoing requirements for post-marketing studies. Additional or more
rigorous governmental regulations may be promulgated that could delay regulatory
approval of our or a collaborative party's product candidates. Delays in
obtaining regulatory approvals may:
- adversely affect the successful commercialization of any products that we or
collaborative parties develop;
- impose costly procedures on us or our collaborative parties;
- diminish any competitive advantages that we or collaborative parties may
attain; and
- adversely affect our receipt of revenues or royalties.
We expect to rely on collaborative parties to file investigational new drug
applications and generally direct the regulatory approval process for many of
our product candidates. These collaborative parties may not be able to conduct
clinical testing or obtain necessary approvals from the FDA or other regulatory
authorities for any product candidates. If we fail to obtain required
governmental approvals, we or our collaborative parties will experience delays
in or be precluded from marketing products developed through our research. In
addition, the commercial use of our products will be limited. If we have
disagreements as to ownership of clinical trial results or regulatory approvals,
and the FDA refuses to recognize us as holding the regulatory approvals
necessary to commercialize our products, we may experience delays in or be
precluded from marketing products developed through our research.
The FDA or other regulatory agencies may withdraw approvals after granting them.
Further, if we fail to comply with applicable FDA and other domestic or foreign
regulatory requirements at any stage during the regulatory process, we, our
contract manufacturers or our collaborative parties may be subject to sanctions,
including:
- delays;
- warning letters;
- fines;
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<PAGE>
- product recalls or seizures;
- injunctions;
- refusal of the FDA or its foreign counterparts to review pending market
approval applications or supplements to approval applications;
- total or partial suspension of production;
- civil penalties;
- withdrawals of previously approved marketing applications, and
- criminal prosecutions.
We and our contract manufacturers also are required to comply with the
applicable FDA current good manufacturing practice regulations, which include
requirements relating to quality control and quality assurance as well as the
corresponding maintenance of records and documentation. Further, manufacturing
facilities must be approved by the FDA before they can be used to manufacture
our products, and are subject to additional FDA inspection. We or our contract
manufacturers may not be able to comply with the applicable good manufacturing
practice requirements and other FDA regulatory requirements.
After a product has received approval from the FDA, we cannot guarantee that the
FDA will:
- permit us to market the product for applications beyond those for which
approval was granted;
- approve of separate product applications which represent extensions of our
basic technology; or
- not withdraw or modify in a significant manner existing approvals.
Further, it is possible that the FDA will promulgate additional regulations
restricting the sale of our products.
The FDA, state regulatory agencies and, in some circumstances, the Federal Trade
Commission, scrutinize labeling and promotional activities. FDA enforcement
policy prohibits the marketing of approved products for unapproved, or
off-label, uses. These regulations, and the FDA's interpretation of them, may
impair our ability to effectively market products for which we gain approval.
The FDA may take regulatory enforcement action if we fail to comply with these
requirements.
In addition, problems or failures with the products of others, including our
competitors, could have an adverse effect on our ability to obtain or maintain
regulatory approval for any of our product candidates or products.
CLINICAL TRIALS ARE EXPENSIVE AND THEIR OUTCOMES ARE UNCERTAIN.
Conducting clinical trials is a lengthy, time-consuming and expensive process.
Before obtaining regulatory approvals for the commercial sale of any of our
product candidates, we or collaborative parties must demonstrate through
preclinical testing and clinical trials that the product is safe and effective
for use in humans. We will incur substantial expense for, and devote a
significant amount of time to, preclinical and clinical testing and clinical
trials. Historically, the results from preclinical testing and early clinical
trials have not been predictive of results obtained in later clinical trials
involving large-scale testing of patients in comparison to control groups.
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.
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<PAGE>
The length of time of a clinical trial generally varies substantially according
to the type, complexity, novelty and intended use of the product candidate. Our
commencement and rate of completion of clinical trials may be delayed by many
factors, including:
- inability to acquire sufficient quantities of materials for use in clinical
trials;
- competition for and inability to enroll a sufficient number of suitable
patients for testing and inability to adequately follow patients after
treatment;
- variations in interpretation of data obtained from trials;
- failure to meet or comply with efficacy, safety or quality applicable
standards; or
- government or regulatory delays.
Our product candidates may fail to demonstrate safety and efficacy in clinical
trials. This failure may delay development of our other product candidates, and
hinder our ability to conduct related preclinical testing and clinical trials.
Failure to obtain regulatory approval for our product candidates may also create
difficulties in obtaining additional financing.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY OR OPERATE OUR BUSINESS
WITHOUT INFRINGING UPON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Our technology will be protected from unauthorized use by others only to the
extent that it is covered by valid and enforceable patents or effectively
maintained as trade secrets. As a result, our success depends in part on our
ability to:
- obtain patents;
- license technology rights from others;
- protect trade secrets;
- operate without infringing upon the proprietary rights of others; and
- prevent others from infringing on our proprietary rights.
We cannot be certain that our patents or patents that we license from others
will be enforceable and afford protection against competitors. The patent
positions of biotechnology and pharmaceutical companies are highly uncertain and
involve complex legal and factual questions. Therefore, we cannot predict the
breadth of claims that will be allowed under our patent applications or their
enforceability. Our patents or patent applications, issued or pending,
respectively, may be challenged, invalidated or circumvented. Our patent rights
may not provide us with proprietary protection or competitive advantages against
competitors with similar technologies. Others may independently develop
technologies similar to ours or independently duplicate our technologies. Due to
the extensive time required for development, testing and regulatory review of
our potential products, our patents may expire or remain in existence for only a
short period following commercialization. This would reduce or eliminate any
advantage the patents may give us.
We cannot be certain that we were the first to make the inventions covered by
each of our issued or pending patent applications or that we were the first to
file patent applications for such inventions. We may need to license the right
to use third-party patents and intellectual property to continue development and
marketing of our products. We may not be able to acquire such required licenses
on acceptable terms, if at all. If we do not obtain such licenses, we may need
to design around other
13
<PAGE>
parties' patents, or we may not be able to proceed with the development,
manufacture or sale of our products. We may need to:
- face litigation to defend against claims of infringement;
- assert claims of infringement;
- enforce our patents;
- protect our trade secrets or know-how; or
- determine the scope and validity of others' proprietary rights.
In addition, we may require interference proceedings declared by the United
States Patent and Trademark Office to determine the priority of inventions
relating to our patent applications. These activities, and especially patent
litigation, are costly.
Specifically, we are aware of patent applications filed in the United States and
abroad that, if they were to issue, would cover CI-1042 and other
selectively-replicating viruses. We are also aware of patent applications that
claim enzymes for converting prodrugs to their active forms for treating
disease, including cancers, and methods of delivering the enzymes using a virus.
We may be unable to sell our products affected by these patents, if any of these
patents are issued and we are unable to:
- successfully challenge any claims asserting that our product candidates or
products infringe the patent;
- design around the patent; or
- negotiate a reasonable license under the patent.
WE FACE PRODUCT LIABILITY RISKS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
INSURANCE.
The use of any of our product candidates in clinical trials, and the sale of any
approved products, may expose us to liability claims resulting from such use or
sale of our products. These claims might be made directly by consumers,
healthcare providers or by pharmaceutical companies or others selling such
products. We may experience financial losses in the future due to product
liability claims. We have obtained limited product liability insurance coverage
for our clinical trials. We intend to expand our insurance coverage to include
the sale of commercial products if marketing approval is obtained for product
candidates in development. However, insurance coverage is becoming increasingly
expensive. We may not be able to maintain insurance coverage at a reasonable
cost or in sufficient amounts to protect us against losses.
OUR OPERATIONS INVOLVE HAZARDOUS MATERIALS.
Our research and process development activities involve the controlled use of
hazardous materials. We cannot eliminate the risk of accidental contamination or
injury from these materials. In the event of an accident or environmental
discharge, we may be held liable for any resulting damages, which may exceed our
financial resources and may seriously harm our business. In addition, if we
develop a manufacturing capacity, we may incur substantial costs to comply with
environmental regulations and would be subject to the risk of accidental
contamination or injury from the use of hazardous materials in our manufacturing
process.
14
<PAGE>
RISKS RELATED TO THIS OFFERING
OUR STOCK PRICE IS HIGHLY VOLATILE.
The market price of our common stock has been highly volatile and is likely to
continue to be volatile. Factors affecting our stock price include:
- results of clinical trials;
- ability to accrue patients;
- ability to manufacture sufficient supply of CI-1042;
- success or failure in obtaining regulatory approval by us or our competitors;
- public concern as to the safety and efficacy of our products;
- developments concerning the business of collaborative parties or their
transactions with third parties;
- developments in our relationship with collaborative parties;
- developments in patent or other proprietary rights;
- additions or departures of key personnel;
- announcements by us or our competitors of technological innovations or new
commercial therapeutic products;
- published reports by securities analysts;
- fluctuations in stock market price and volume, which are particularly common
among securities of biotechnology companies;
- fluctuations in our operating results;
- statements of governmental officials; and
- changes in healthcare reimbursement policies.
PROVISIONS IN DELAWARE LAW AND OUR CHARTER MAY PREVENT OR DELAY A CHANGE OF
CONTROL.
We are subject to the Delaware anti-takeover laws regulating corporate
takeovers. These anti-takeover laws prevent Delaware corporations from engaging
in a merger or sale of more than 10% of its assets with any stockholder,
including all affiliates and associates of the stockholder, who owns 15% or more
of the corporation's outstanding voting stock, for three years following the
date that the stockholder acquired 15% or more of the corporation's stock
unless:
- the board of directors approved the transaction where the stockholder acquired
15% or more of the corporation's stock;
- after the transaction where the stockholder acquired 15% or more of the
corporation's stock, the stockholder owned at least 85% of the corporation's
outstanding voting stock, excluding shares owned by directors, officers and
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held under the plan will be tendered
in a tender or exchange offer;
- on or after this date, the merger or sale is approved by the board of
directors and the holders of at least two-thirds of the outstanding voting
stock that is not owned by the stockholder.
15
<PAGE>
As such, these laws could prohibit or delay mergers or a change of control of us
and may discourage attempts by other companies to acquire us.
Our certificate of incorporation and bylaws include a number of provisions that
may deter or impede hostile takeovers or changes of control or management. These
provisions include:
- classification of our board into three classes of directors as nearly equal in
size as possible with staggered three year-terms;
- authorization of our board to issue up to 5,000,000 shares of preferred stock
and to determine the price, rights, preferences and privileges of these
shares, without stockholder approval;
- the requirement that all stockholder actions must be effected at a duly called
meeting of stockholders and not by written consent;
- authorization of only the chairman of the board, the chief executive officer
or the board to call special meetings of stockholders; and
- the exclusion of cumulative voting.
These provisions may have the effect of delaying or preventing a change of
control, even at stock prices higher than the then current stock price.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the selling
stockholders in this offering.
SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders, the number
of shares of common stock owned beneficially by each of them as of March 31,
2000 and the number of shares which may be offered pursuant to this Prospectus.
This information is based upon information provided by the selling stockholders.
The selling stockholders may offer all, some or none of their common stock.
We determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission.
Except as indicated in the footnotes to this table and pursuant to applicable
community property laws, each stockholder named in the table has sole voting and
investment power with respect to the shares shown as beneficially owned by it.
Percentage of ownership is based on 14,187,244 shares of common stock
outstanding on March 31, 2000.
<TABLE>
<CAPTION>
PERCENT OF
PERCENT OF OUTSTANDING
BENEFICIAL OUTSTANDING BENEFICIAL SHARES
OWNERSHIP PRIOR SHARES BEFORE SHARES OWNERSHIP AFTER AFTER
NAME OF BENEFICIAL OWNER TO OFFERING THE OFFERING BEING OFFERED THIS OFFERING THE OFFERING
----------------------------------- --------------- ------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
International Biotechnology Trust
plc(1) .......................... 1,345,029 9.5% 222,222 1,122,807 7.9%
Five Arrows House
St. Swithins Lane
London EC4N 8NR
United Kingdom
Alta BioPharma Partners, L.P ...... 690,651 4.9 690,651 0 *
One Embarcadero Center, Suite
4050
San Francisco, CA 94111
Domain Partners IV, L.P.(2) ....... 651,065 4.6 651,065 0 *
One Palmer Square
Princeton, N.J. 08542
Onyx Chase Partners
(Alta Bio), LLC ................. 394,428 2.8 394,428 0 *
One Embarcadero Center,
Suite 4050
San Francisco, CA 94111
Alta Embarcadero BioPharma
Partners, LLC ................... 26,032 * 26,032 0 *
One Embarcadero Center,
Suite 4050
San Francisco, CA 94111
DP IV Associates, L.P.(2) ......... 15,602 * 15,602 0 *
One Palmer Square ---------
Princeton, NJ 08542
Total Shares Being Offered 2,000,000
</TABLE>
------------------
*Less than 1%
(1) From 1992 to April 1999, Ms. Nicole Vitullo, one of our directors, was a
Senior Vice President of Rothchild Asset Management which advises and
manages International Biotechnology Trust plc. Ms. Vitullo currently serves
as International
17
<PAGE>
Biotechnology Trust's nominee on our Board of Directors. Ms. Vitullo
disclaims beneficial ownership of the shares held by International
Biotechnology Trust plc except to the extent of her pecuniary interest
therein.
(2) Ms. Nicole Vitullo, one of our directors, is Managing Director of Domain
Associates, L.L.C., which is the manager of Domain Partners IV, L.P. and DP
IV Associates, L.P. Ms. Vitullo disclaims beneficial ownership of shares
held by Domain Partners IV, L.P. and DP IV Associates, L.P. except to the
extent of her pecuniary interest therein.
PLAN OF DISTRIBUTION
The shares of common stock offered by the selling stockholders, or by their
pledgees, transferees or other successors in interest, may be sold from time to
time to purchasers directly by any of the selling stockholders 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 stockholders 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 stockholders 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
stockholders may sell such common stock in compliance with Rule 144 promulgated
under the Securities Act of 1933, as amended.
The selling stockholders 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 Securities 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 Securities Act.
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.
In connection with our private placement, we have agreed to register the selling
stockholders' common stock under applicable federal and state securities laws.
We 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. These expenses (excluding such
commissions and discounts) are estimated to be $70,000. The agreement related to
the private placement provides for cross-indemnification of the selling
stockholders 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 us by Cooley Godward LLP, Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial statements
at December 31, 1998 and 1999, and for each of the three years in the period
ended December 31, 1999, as set forth in their report. We have incorporated our
financial statements by reference in the prospectus and elsewhere in
18
<PAGE>
the registration statement in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms in Washington, D.C., New York, NY and Chicago, IL. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference rooms. Our SEC filings are also available at the SEC's
Web site at "http://www.sec.gov". In addition, you can read and copy our SEC
filings at the office of the National Association of Securities Dealers, Inc. at
1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. Further, all
filings we make under the Securities Exchange Act after the date of the initial
registration statement and prior to effectiveness of the registration statement
shall be deemed to be incorporated by reference into this prospectus. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 1999 filed on
March 27, 2000;
2. Our Current Report on Form 8-K filed on March 1, 2000;
3. Our proxy for our stockholders meeting on June 8, 2000 filed on April 28,
2000; and
4. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 filed
on May 15, 2000.
We will provide to you at no cost a copy of any and all of the information
incorporated by reference into the registration statement of which this
prospectus is a part. You may make a request for copies of this information in
writing or by telephone. You should direct your requests to:
Onyx Pharmaceuticals, Inc.
Attention: Secretary
3031 Research Drive
Richmond, CA 94806
(510) 222-9700
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by us in connection with the
sale of the common stock being registered. All the amounts shown are estimates,
except for the SEC registration fee and Nasdaq additional listing fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee........................................ $ 6,600
Nasdaq additional listing fee............................... 17,500
Printing and engraving expenses............................. 2,500
Legal fees and expenses..................................... 25,000
Accounting fees and expenses................................ 10,000
Transfer Agent and Registrar fees and expenses.............. 2,500
Miscellaneous............................................... 5,900
-------
Total................................................... $70,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, we have broad powers
to indemnify our directors and officers against liabilities they may incur in
such capacities, including liabilities under the Securities Act of 1933.
Our certificate of incorporation and by-laws include provisions to
(1) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by
Section 102(b)(7) of the General Corporation Law of Delaware and (2) require us
to indemnify our directors and officers to the fullest extent permitted by
Section 145 of the Delaware Law, including circumstances in which
indemnification is otherwise discretionary. Pursuant to Section 145 of the
Delaware Law, a corporation generally has the power to indemnify its present and
former directors, officers, employees and agents against expenses incurred by
them in connection with any suit to which they are, or are threatened to be
made, a party by reason of their serving in such positions so long as they acted
in good faith and in a manner they reasonably believed to be in, or not opposed
to, the best interest of the corporation, and with respect to any criminal
action, they had no reasonable cause to believe their conduct was unlawful. We
believe that these provisions are necessary to attract and retain qualified
persons as directors and officers. 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 directors' duty of loyalty to us, for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for acts or omissions that the director believes to be
contrary to the best interests of us or our stockholders, for any transaction
from which the director derived an improper personal benefit, for acts or
omissions involving a reckless disregard for the directors' duty to us or our
stockholders when the director was aware or should have been aware of a risk of
serious injury to us or our stockholders, for acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of the
director's duty to us or our stockholders, for improper transactions between the
director and us and for improper distributions to stockholders and loans to
directors and officers. The provision also does not affect a director's
II-1
<PAGE>
responsibilities under any other law, such as the federal securities law or
state or federal environmental laws.
We have entered into indemnity agreements with each of our directors and
executive officers that require us to indemnify such persons against expenses,
judgments, fines, settlements and other amounts incurred, including expenses of
a derivative action, in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was a director or an executive officer of Onyx or any of
its affiliated enterprises, provided such person acted in good faith and in a
manner such persons reasonably believed to be in, or not opposed to, the best
interests of us and, with respect to any criminal proceeding, has no reasonable
cause to believe his conduct was unlawful. The indemnification agreements also
set forth procedures that will apply in the event of a claim for indemnification
thereunder.
At present, there is no pending litigation or proceeding involving any of our
directors or officers as to which indemnification is being sought, nor are we
aware of any threatened litigation that may result in claims for indemnification
by any officer or director.
We maintain an insurance policy covering our officers and directors with respect
to certain liabilities, including liabilities arising under the Securities Act
or otherwise.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
-------------- ------------------------------------------------------------
<C> <S>
5.1+ Legal Opinion of Cooley Godward LLP.
10.28* Stock Purchase Agreement between the Registrant
and the Investors dated January 18, 2000.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
23.2+ Consent of Cooley Godward LLP (see Exhibit 5.1).
24.1+ Power of Attorney. See page II-4.
</TABLE>
------------------------
* Incorporated by reference to our Current Report on Form 8-K filed on March
1, 2000.
+ Previously filed.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 offerings.
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
II-2
<PAGE>
(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.
(b) Filings incorporating subsequent Exchange Act documents by reference.
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.
(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.
(e) Incorporated annual and quarterly reports.
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 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.
(h) Request for acceleration of effective date.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 15, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of ONYX's annual report
pursuant to Section 13(a) or Section 15(d) of the
II-3
<PAGE>
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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 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 June 23, 2000.
ONYX PHARMACEUTICALS, INC.
<TABLE>
<S> <C> <C>
By: /s/ HOLLINGS C. RENTON
----------------------------
Hollings C. Renton
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
In accordance with the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Chief Executive
/s/ HOLLINGS C. RENTON Officer and Director June 23, 2000
--------------------------------- (PRINCIPAL EXECUTIVE
Hollings C. Renton OFFICER AND FINANCIAL OFFICER)
Controller
/s/ MARILYN E. WORTZMAN (PRINCIPAL ACCOUNTING June 23, 2000
--------------------------------- OFFICER)
Marilyn E. Wortzman
* Director June 23, 2000
---------------------------------
Michael J. Berendt
* Director June 23, 2000
---------------------------------
Paul Goddard
Director
---------------------------------
Magnus Lundberg
Director
---------------------------------
George Scangos
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director June 23, 2000
---------------------------------
Nicole Vitullo
* Director June 23, 2000
---------------------------------
Wendell Wierenga
</TABLE>
<TABLE>
<S> <C>
*By: /s/ HOLLINGS C. RENTON
---------------------------
Hollings C. Renton
(ATTORNEY-IN-FACT)
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
-------------- ------------------------------------------------------------
<C> <S>
5.1+ Legal Opinion of Cooley Godward LLP.
10.28* Stock Purchase Agreement between the Registrant
and the Investors dated January 18, 2000.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2+ Consent of Cooley Godward LLP (see Exhibit 5.1).
24.1+ Power of Attorney. See page II-4.
</TABLE>
--------------
* Incorporated by reference to our Current Report on Form 8-K filed on March
1, 2000.
+ Previously filed.
