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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 2000
REGISTRATION NO. 333-37144
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
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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SUBJECT TO COMPLETION, DATED JULY 14, 2000
ONYX PHARMACEUTICALS, INC.
2,000,000 SHARES
COMMON STOCK
The selling stockholders named on page 17 of this prospectus are offering
2,000,000 shares of our common stock.
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- Trading Symbol: Nasdaq National Market--ONXX
- On July 13, 2000, the last reported sales price for our common stock was
$12.00 per share.
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Neither the Securities and Exchange Commission, nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offence.
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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 JULY __, 2000.
<PAGE>
TABLE OF CONTENTS
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PAGE
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Onyx Pharmaceuticals, Inc................................... 3
Risk Factors................................................ 4
Forward-Looking Statements.................................. 16
Use of Proceeds............................................. 17
Selling Stockholders........................................ 17
Plan of Distribution........................................ 18
Legal Matters............................................... 18
Experts..................................................... 18
Where You Can Find More Information......................... 19
</TABLE>
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ONYX PHARMACEUTICALS, INC.
We are engaged in the discovery and development of novel cancer therapies based
on our proprietary virus technology. We believe that this technology enables us
to develop therapeutic viruses 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 virus that has been genetically
engineered to replicate in and kill cancer cells based on a particular abnormal
function in the cells. Specifically, the abnormality involves the p53 gene,
which is the most common abnormality in human cancer. We have also developed an
engineered human virus that replicates in and kills cancer cells based on other
abnormal functions. In addition, we are developing viruses armed with anticancer
genes.
Our principal executive offices are located at 3031 Research Drive, Richmond,
California 94806, and our telephone number is (510) 222-9700.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. IF ANY OF THESE RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION, OPERATING RESULTS OR CASH FLOWS, COULD BE SERIOUSLY HARMED.
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
IF WE ARE NOT ABLE TO DEMONSTRATE THE EFFICACY OF CI-1042 IN OUR CLINICAL TRIALS
OR IF OUR CLINICAL TRIALS ARE DELAYED, WE MAY BE UNABLE TO COMMERCIALIZE ANY
PRODUCTS BASED ON CI-1042.
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 companies have failed to demonstrate the efficacy of
pharmaceutical products in Phase III clinical trials notwithstanding favorable
results in Phase II clinical trials. We may fail to demonstrate desired efficacy
levels in our Phase III clinical trial of CI-1042. In addition, we may observe
previously unforseen side effects. We may fail to extend the findings of
previous clinical trials in our Phase III clinical trial of CI-1042, including
similar tumor response rates, duration of tumor response or safety.
The process of obtaining Food and Drug Administration, or FDA, and other
required regulatory approvals, including foreign approvals, often takes many
years and can vary substantially based upon the type, complexity and novelty of
the products involved. We have had only limited experience in filing and
pursuing applications necessary to gain regulatory approvals. The FDA may not
accept the results of our Phase III clinical trial, or accept as sufficient for
market approval other elements of the application that we may file for CI-1042.
The FDA may require additional clinical trials, which may be extensive,
expensive and time-consuming. We cannot market CI-1042 unless we receive
regulatory approval.
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 may die or suffer adverse medical effects
for reasons that may be unrelated to CI-1042. These adverse effects may impact
the interpretation of clinical trial results.
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 may not 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 colon cancer
which has spread to the liver, or liver metatases of colorectal cancer, with
CI-1042 administered through an artery in the liver, 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 may not reproduce these results in future clinical trials with
additional patients. In addition, we may not succeed in our efforts to deliver
CI-1042 to tumors through routes other than intratumoral injection and
intrahepatic artery infusion. If
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we are not successful in developing additional routes of administration for
CI-1042, or establishing its effectiveness in a broad range of cancer types,
CI-1042 may not have a broad commercial use.
WE DO NOT FULLY UNDERSTAND THE BIOLOGICAL CHARACTERISTICS OF OUR THERAPEUTIC
VIRUSES, AND THEIR INTERACTIONS WITH OTHER DRUGS AND THE HUMAN IMMUNE AND OTHER
DEFENSE SYSTEMS, WHICH MAY CAUSE US TO FAIL TO DEMONSTRATE THE SAFETY AND
EFFICACY OF OUR PRODUCTS IN CLINICAL TRIALS.
Therapeutic viruses are 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 we are uncertain as to the reasons for and the
nature of the interaction of the virus with these drugs. In addition, we are
still investigating the response of the human immune system to our therapeutic
viruses, 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 in the bloodstream and limit
the tumor-killing activity of our therapeutic viruses. Further, we are uncertain
as to whether the killing activity of CI-1042 is specific to cells having the
abnormal function involving the p53 gene. Moreover, we do not understand 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. Because of the variety of factors, 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 increase the risk that we will not successfully
develop our product candidates or prove their safety and efficacy in clinical
trials. Even if we succeed in developing our product candidates, our product
candidates may 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
collaborators. 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 to establish new collaborative relationships, we
would need to undertake these research, development and marketing activities at
our own expense, which would significantly increase our capital requirements and
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 collaborator'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 collaborator 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;
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- 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 collaborator following the development or
acquisition by the collaborator of competing products; and
- disagreements with a collaborator regarding the collaboration agreement or
ownership of proprietary rights.
Due to these factors and other possible disagreements with collaborators, we
could suffer delays in the research, development or commercialization of our
products or we may become involved 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, we may
encounter difficulties or delays in entering into future collaborations for
other product candidates.
PFIZER, INC. HAS ACQUIRED WARNER-LAMBERT, WHICH COULD RESULT IN THE
MODIFICATION, DISRUPTION OR TERMINATION OF OUR COLLABORATIVE RELATIONSHIP WITH
WARNER-LAMBERT.
On June 19, 2000, Pfizer, Inc. acquired Warner-Lambert. Pfizer may not be
interested in continuing the multiple research and development and marketing
collaboration agreements we have with Warner-Lambert, including a collaboration
agreement related to CI-1042, in part because these collaborations may address
smaller markets than Pfizer generally seeks to address. Pfizer may also not be
interested in the development of a therapeutic virus technology program or the
products we seek to develop. Pfizer could modify, disrupt or terminate the
collaboration agreements we originally entered into with Warner-Lambert, subject
to the terms of these agreements. Under the agreement relating to CI-1042,
Pfizer has the right to terminate the agreement for any reason with 90 days
notice, in which case Pfizer is required to return all rights to CI-1042 to us
royalty-free.
If Pfizer terminates our agreement relating to CI-1042, we would lose a
significant portion of the $40 million of funding for the development of
CI-1042, including the cost of clinical trials, which Warner-Lambert had agreed
to provide under the agreement. In addition, we would not have access to the
sales and marketing capabilities and expertise to commericialize CI-1042 as
provided in the agreement. We do not have our own sales and marketing
capability, and we currently intend to rely on the sales and marketing services
provided to us under the agreement. Further, if Pfizer terminates our agreement
relating to CI-1042 and does not agree to manufacture CI-1042 for commercial
use, we would have to establish an alternative manufacturing source for CI-1042.
If we need to establish an alternative manufacturing source for CI-1042, the FDA
may delay regulatory approval of CI-1042.
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WE DO NOT HAVE MANUFACTURING EXPERTISE OR CAPABILITIES AND ARE DEPENDENT ON
THIRD PARTIES TO FULFILL OUR MANUFACTURING NEEDS, WHICH COULD RESULT IN THE
DELAY OF CLINICAL TRIALS OR REGULATORY APPROVAL.
We lack the resources, experience and capabilities to manufacture our products
on our own. 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 on a timely basis and
at commercially reasonable prices. Failure by these third parties could delay
our clinical trials or regulatory approval. If these third parties do not
adequately perform, we may be forced to incur additional expenses to pay for the
manufacture of our products or to develop our own manufacturing capabilities.
WE CURRENTLY RELY ON A SOLE SOURCE OR LIMITED NUMBER OF SOURCES FOR THE
MANUFACTURING OF CI-1042, AND IF THESE SOURCES ARE UNABLE OR UNWILLING TO
DELIVER THE REQUIRED QUANTITIES, WE MAY NOT BE ABLE TO FIND REPLACEMENT
MANUFACTURERS, WHICH COULD RESULT IN A DELAY IN CLINICAL TRIALS OR IN REGULATORY
APPROVAL.
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. If our
contract manufacturer is unable or unwilling to deliver the required quantities
of CI-1042 or terminates our relationship, we may not find a replacement
manufacturer within a reasonable amount of time or at commercially reasonable
rates. This could delay our clinical trials or regulatory approval. If this
third party fails to supply us with sufficient materials, we may be forced to
incur additional expenses to pay for the manufacture of materials, if we can
find a replacement manufacturer, or to develop our own manufacturing
capabilities.
WE OR PFIZER MAY NOT BE ABLE TO PRODUCE COMMERCIAL QUANTITIES OF CI-1042, WHICH
COULD DELAY REGULATORY APPROVAL.
Following Pfizer's acquisition of Warner-Lambert, Pfizer became responsible for
manufacturing CI-1042 for commercial use under our original agreement with
Warner-Lambert. To obtain regulatory approval for CI-1042, we will need to treat
patients in our Phase III clinical trial using CI-1042 produced from the same
manufacturing process and in the same manufacturing facility that we intend to
use following FDA approval. We and Pfizer will need to modify the manufacturing
process to produce large quantities of CI-1042. We and Pfizer may need to spend
a significant amount of time and capital and to complete a substantial amount of
experimentation to modify the manufacturing process and to meet our quality
standards for CI-1042. We and Pfizer may need to obtain a new manufacturing
facility to produce commercial quantities of CI-1042. If we do not treat
patients in our Phase III clinical trial with product from the new process
manufactured at the new facility, the FDA will most likely require a bridging
study to show that the CI-1042 produced from the new process is comparable to
CI-1042 produced from our existing manufacturing process at our contract
manufacturer's existing facility. The FDA may delay regulatory approval, if we:
- encounter difficulties in modifying the manufacturing process;
- fail to treat patients in our Phase III clinical trial with product from
the new manufacturing process; or
- fail to conduct a bridging study prior to FDA review of our Phase III
clinical trial.
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EVEN IF OUR PRODUCTS ARE APPROVED THE MARKET MAY NOT ACCEPT OUR PRODUCTS.
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.
If any of our products do not achieve market acceptance, we may lose our
investment in that product which may cause our stock price to decline.
WE DO NOT HAVE MARKETING OR SALES EXPERIENCE OR CAPABILITIES AND ARE DEPENDENT
ON THE EFFORTS OF OTHERS, WHICH COULD LIMIT OUR ABILITY TO COMMERCIALIZE OUR
PRODUCTS.
We intend to enter into agreements with third parties to market and sell most of
our products if we receive regulatory approval for a product. 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 collaborators. 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 and we will
incur additional expenses.
ADVERSE EVENTS IN THE FIELD OF GENE THERAPY MAY NEGATIVELY AFFECT REGULATORY
APPROVAL OR PUBLIC PERCEPTION OF OUR PRODUCTS, WHICH COULD DELAY OUR CLINICAL
TRIALS.
We 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. As a result of negative public reaction to gene
therapy, the FDA may impose greater regulation of gene therapy, stricter
clinical trial oversight and stricter commercial product labeling requirements
of gene therapies.
The media has widely publicized the recent death of a patient at the University
of Pennsylvania undergoing gene therapy. The patient in the University of
Pennsylvania trial was receiving therapy by delivery through the hepatic artery
of the liver. We are using the same route in our current Phase I/II clinical
trial of CI-1042 for treatment of liver metastases of colorectal cancer. As a
result of this death, the United States Senate has commenced hearings to
determine whether additional legislation is
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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. 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.
WE HAVE A HISTORY OF LOSSES AND WE EXPECT TO CONTINUE TO INCUR LOSSES.
As of March 31, 2000, we had an accumulated deficit of approximately $79.8
million. We have incurred these losses principally from costs incurred in our
research and development programs and from our general and administrative costs.
We have derived no significant revenues from product sales or royalties. We
expect to incur significant and increasing operating losses over the next
several years as we expand our research and development efforts and preclinical
testing and clinical trial activities. 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, AND OUR FUTURE ACCESS TO CAPITAL IS
UNCERTAIN.
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. 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.
We may not be able to raise additional financing on favorable terms, or at all.
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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IF WE LOSE OUR KEY EMPLOYEES AND CONSULTANTS OR ARE UNABLE TO ATTRACT OR RETAIN
QUALIFIED PERSONNEL, OUR BUSINESS COULD SUFFER.
The loss of the services of one or more of our key employees could have an
adverse impact on our business. We do not maintain key person life insurance on
any of our officers, employees or consultants, other than for our chief
executive officer. We depend 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 management personnel,
additional qualified scientific personnel to perform research and development,
as well as personnel with expertise in clinical testing, government regulation
and manufacturing. We may not be successful in hiring or retaining qualified
personnel.
WE FACE INTENSE COMPETITION AND RAPID TECHNOLOGICAL CHANGE, AND MANY OF OUR
COMPETITORS HAVE SUBSTANTIALLY GREATER MANAGERIAL RESOURCES THAN WE HAVE.
We are engaged in a rapidly changing and highly competitive field. We are
seeking to develop and market products that will compete with other products and
therapies that currently exist or are being developed. 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 in liver metastases of colorectal cancer for a product
which targets the abnormality in cells involving the p53 gene.
Aventis, Inc./Introgen Therapeutics, Inc. have initiated a Phase III clinical
trial in head and neck cancer with their product which targets the abnormality
in cells involving the p53 gene. If approved, the products of these and other
competitors now in clinical trials will compete directly with CI-1042. Other
companies are developing drugs targeting other abnormal functions in cancer
cells that may compete with our other product candidate.
Many of our competitors, either alone or together with collaborators, 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 collaborators, 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. Further, we face numerous
competitors working on products to treat each of the diseases for which we are
seeking to develop therapeutic products. In addition, our product candidates
compete with existing therapies that have long histories of safe and effective
use. We may also face competition from other drug development technologies and
methods of preventing or reducing the incidence of disease and 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.
We anticipate that we will face increased competition in the future as new
companies enter our markets and as scientific developments surrounding other
cancer therapies continue to accelerate. If our products receive regulatory
approval but cannot compete effectively in the marketplace, our business would
suffer.
RISKS RELATED TO THE INDUSTRY
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION, WHICH CAN BE COSTLY, TIME
CONSUMING AND SUBJECT US TO UNANTICIPATED DELAYS; EVEN IF WE OBTAIN REGULATORY
APPROVAL FOR SOME OF OUR PRODUCTS, THOSE PRODUCTS MAY STILL FACE REGULATORY
DIFFICULTIES.
All of our potential products are subject to comprehensive regulation by the FDA
in the United States and by comparable authorities in other countries. If we
violate regulatory requirements at any stage, whether before or after marketing
approval is obtained, the FDA or other regulatory authority may fine us, force
the removal of a product from the market or take other measures which could have
other adverse consequences to us. Additionally, we may not obtain the labeling
claims neccessary or desirable for the promotion of our products. The FDA may
also require us to undertake post-marketing trials. In addition, identification
of side effects after any of our products are on the market, or the occurence of
manufacturing problems, could cause subsequent withdrawal of approval,
reformulation of our products, additional clinical trials, changes in labeling
of our products and additional marketing applications.
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.
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.
OUR CLINICAL TRIALS COULD TAKE LONGER TO COMPLETE THAN WE PROJECT OR MAY NOT BE
COMPLETED AT ALL.
Although for planning purposes we project the commencement, continuation and
completion of clinical trials, the actual timing of these events may be subject
to significant delays relating to various causes, including scheduling conflicts
with participating clinicians and clinical institutions, and difficulties in
identifying and enrolling patients who meet trial eligibility criteria. We may
not commence clinical trials involving any of our products or complete them as
projected.
11
<PAGE>
We have limited experience in conducting clinical trials. We rely on academic
institutions or clinical research organizations to conduct, supervise or monitor
some or all aspects of clinical trials involving our products. We will have less
control over the timing and other aspects of these clinical trials than if we
conducted them entirely on our own. Failure to commence or complete, or delays
in, any of our planned clinical trials would adversely affect our stock price
and prevent us from commercializing our products.
IF TESTING OF A PARTICULAR PRODUCT DOES NOT YIELD SUCCESSFUL RESULTS, THEN WE
WILL BE UNABLE TO COMMERCIALIZE THAT PRODUCT.
If preclinical or clinical testing of one or more of our products does not yield
successful results, the product will fail. To achieve the results we need, we
must demonstrate our products' safety and efficacy in humans through extensive
preclinical and clinical testing. Numerous unforeseen events may arise during,
or as a result of, the testing process, including the following:
- safety and efficacy results attained in early human clinical trials may not be
indicative of results that are obtained in later clinical trials;
- the results of preclinical studies may be inconclusive, or they may not be
indicative of results that will be obtained in human clinical trials;
- after reviewing test results, we or our collaborators may abandon projects
that we previously believed to be promising;
- we, our collaborators or regulators, may suspend or terminate clinical trials
if the participating subjects or patients are being exposed to unacceptable
health risks; and
- potential products may not have the desired effect or may have undesirable
side effects or other characteristics that preclude regulatory approval or
limit their commercial use if approved.
Clinical testing is very expensive and can take many years. The failure to
adequately demonstrate the safety and efficacy of a product would delay or
prevent regulatory approval of the product.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY OR OPERATE OUR BUSINESS
WITHOUT INFRINGING UPON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
We can protect our technology from unauthorized use by others only to the extent
that our technology is covered by valid and enforceable patents or effectively
maintained as trade secrets. As a result, we depend 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.
The patent positions of biotechnology and pharmaceutical companies are highly
uncertain and involve complex legal and factual questions. We may not be able to
enforce our patents or patents that we license from others to provide us with
proprietary protection or competitive advantages against competitors with
similar technologies. Competitors may challenge or circumvent our patents or
patent applications. Courts may find our patents invalid. Due to the extensive
time required for development, testing and regulatory review of our potential
products, our patents may expire or remain in existence
12
<PAGE>
for only a short period following commercialization, which would reduce or
eliminate any advantage the patents may give us.
We may not have been the first to make the inventions covered by each of our
issued or pending patent applications or we may not have been the first to file
patent applications for such inventions. Competitors may have independently
developed technologies similar to ours. We may need to license the right to use
third-party patents and intellectual property to develop and market 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 parties' patents;
- 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 viruses that
selectively replicate. We are also aware of patent applications that claim
enzymes for converting drugs to their active forms for treating disease,
including cancers, and claim methods of delivering the enzymes using a virus. We
may be unable to commercialize 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.
13
<PAGE>
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, exposes us to liability claims resulting from the use or sale
of our products. 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. We may not be able
to obtain insurance coverage that will be adequate to satisfy any liability that
may arise. Regardless of merit or eventual outcome, product liability claims may
result in:
- decreased demand for a product;
- injury to our reputation;
- withdrawal of clinical trial volunteers; and
- loss of revenues.
Thus, whether or not we are insured, a product liability claim or product recall
may result in losses that could be material.
WE DEAL WITH HAZARDOUS MATERIALS AND MUST COMPLY WITH ENVIRONMENTAL LAWS AND
REGULATIONS, WHICH CAN BE EXPENSIVE AND RESTRICT HOW WE DO BUSINESS.
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.
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;
14
<PAGE>
- 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.
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.
15
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements largely on our current expectations and projections
about future events and financial trends affecting the financial condition of
our business. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions about ONYX, including those listed under "Risk
Factors."
In addition, in this prospectus, the words "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "plan," "potential" or "continue"
and similar expressions, as they relate to ONYX, our business or our management,
are intended to identify forward-looking statements.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks and uncertainties, the forward-looking events and
circumstances discussed in this prospectus may not occur and actual results
could differ materially from those anticipated or implied in the forward-looking
statements.
While the provisions of Section 27A of the Securities Act, including the
protections provided by Section 27A to persons making forward-looking
statements, may not apply to forward-looking statements in this document, this
caution nevertheless is intended to highlight the risks, uncertainties and
assumptions inherent in discussing future events and trends so that potential
investors are put on advance notice of them.
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with different information. We are not
making an offer of these securities in any jurisdiction where the offer or sale
is not permitted. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the front cover of
this prospectus.
16
<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 $90,000. 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 Securities and Exchange Commission, or
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
19
<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............................. 7,500
Legal fees and expenses..................................... 30,000
Accounting fees and expenses................................ 20,000
Transfer Agent and Registrar fees and expenses.............. 2,500
Miscellaneous............................................... 5,900
-------
Total................................................... $90,000
=======
</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 July 13, 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 July 13, 2000
--------------------------------- (PRINCIPAL EXECUTIVE
Hollings C. Renton OFFICER AND FINANCIAL OFFICER)
Controller
/s/ MARILYN E. WORTZMAN (PRINCIPAL ACCOUNTING July 13, 2000
--------------------------------- OFFICER)
Marilyn E. Wortzman
* Director July 13, 2000
---------------------------------
Michael J. Berendt
* Director July 13, 2000
---------------------------------
Paul Goddard
Director
---------------------------------
Magnus Lundberg
Director
---------------------------------
George Scangos
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director July 13, 2000
---------------------------------
Nicole Vitullo
* Director July 13, 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.
