As filed with the Securities and Exchange Commission on May 23, 2000
REGISTRATION NUMBER 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KOS PHARMACEUTICALS, INC.
-------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 65-0670898
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(State of Incorporation) (I.R.S. Employer Identification No.)
DANIEL M. BELL
1001 BRICKELL BAY DRIVE, 25TH FLOOR 1001 BRICKELL BAY DRIVE, 25TH FLOOR
MIAMI, FLORIDA 33131 MIAMI, FLORIDA 33131
(305) 577-3464 (305) 577-3464
-------------- --------------
(Address, including zip code, and (Name, address, including zip code, and
telephone number, including telephone number, including
area code, of registrant's principal area code, of agent for service)
executive offices)
COPY TO:
STEVEN SONBERG, ESQ.
HOLLAND & KNIGHT LLP
701 BRICKELL AVENUE, SUITE 3000
MIAMI, FLORIDA 33131
(305) 374-8500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of the Registration
Statement and from time to time thereafter.
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 as 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 the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------- --------------------- -------------------- --------------------- ------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE REGISTRATION FEE
- ----------------------------------------------- --------------------- -------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value................ 75,000 $15.125 $1,134,375 $300
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(1) Estimated solely for the purpose of calculating the registration fee
based upon the average of the high and low prices reported on the
Nasdaq National Market on May 22, 2000.
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, AS AMENDED, 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.
<PAGE>
- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED MAY 23, 2000
PROSPECTUS
75,000 SHARES
KOS PHARMACEUTICALS, INC.
COMMON STOCK
This Prospectus relates to the proposed sale from time to time of up to
an aggregate of 75,000 shares of common stock of Kos Pharmaceuticals, Inc., a
Florida corporation, by the selling shareholders.
The selling shareholders may sell all or any portion of their shares of
common stock in one or more transactions on the Nasdaq National Market or in
private, negotiated transactions. The selling shareholders will determine the
prices at which they sell their shares. We will not receive any of the proceeds
from the sale of the shares by the selling shareholders, but we will pay all
registration expenses. The selling shareholders will pay all selling expenses,
including all underwriting discounts and selling commissions.
On April 28, 2000, Kos Pharmaceuticals, Inc. had 18,401,814 shares of
its common stock outstanding. The common stock is listed on the Nasdaq National
Market under the symbol KOSP. On May 22, 2000, the last reported sale price of
the common stock on the Nasdaq National Market was $15.0625 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
We may amend or supplement this Prospectus from time to time by filing
amendments or supplements as required. You should read this entire Prospectus
and any amendments or supplements carefully before you make your investment
decision.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS MAY __, 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION.........................................3
THE COMPANY.................................................................4
RISK FACTORS................................................................7
USE OF PROCEEDS............................................................18
SELLING SHAREHOLDERS.......................................................19
PLAN OF DISTRIBUTION.......................................................19
LEGAL MATTERS..............................................................20
EXPERTS....................................................................20
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any document we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information 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
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
(1) Annual Report on Form 10-K for the year ended December 31,
1999.
(2) Quarterly Report on Form 10-Q for the quarter ended March 31,
2000.
(3) The description of our common stock included under the heading
"Description of Securities" in the Kos Registration Statement
on Form S-1 filed with the Securities and Exchange Commission
on December 17, 1996 (File No. 333-17991), as amended.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Kos Pharmaceuticals, Inc.
1001 Brickell Bay Drive, 25th Floor
Miami, Florida 33131
(305) 577-3464
Attention: Secretary
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You should rely only on information incorporated by reference or
provided in this Prospectus and any prospectus supplement. We have not
authorized anyone else to provide you with different information.
As used in this Prospectus, unless the context requires otherwise, "we"
or "Kos" or the "Company" means Kos Pharmaceuticals, Inc. and its consolidated
subsidiaries. Italicized terms in this Prospectus indicate trademarks or other
protected intellectual property which we own or license.
THE COMPANY
Kos Pharmaceuticals, Inc. is a fully-integrated specialty
pharmaceutical company engaged in the development of proprietary prescription
products for the treatment of chronic cardiovascular and respiratory diseases.
We manufacture our lead product, NIASPAN(R), and market such product directly
through our own specialty sales force. Additionally, we market two complementary
anti-hypertensive products, MAVIK(R) and TARKA(R), through a co-promotion
alliance with Knoll Pharmaceutical Company. Our cardiovascular products under
development consist of controlled-release, once-a-day, oral dosage formulations.
Our respiratory products under development consist of aerosolized inhalation
formulations to be used primarily with our proprietary inhalation devices.
We believe that substantial market opportunities exist for developing
drugs that are reformulations of existing approved prescription pharmaceutical
products, but which offer certain safety advantages (such as reduced harmful
side effects) or patient compliance advantages (such as once-a-day rather than
multiple daily dosing regimens) over such currently existing products. We
believe that developing proprietary products based on currently approved drugs,
rather than new chemical entities, may reduce regulatory and development risks
and, in addition, may facilitate the marketing of such products because
physicians are generally familiar with the safety and efficacy of such products.
All of our products currently under development require new drug application
("NDA") filings with the U.S. Food and Drug Administration ("FDA"). Although
such NDA filings are more expensive and time consuming, developing products that
require NDA approval offers several advantages compared with generic products,
including the potential for higher gross margins, limited competition resulting
from significant clinical and formulation development challenges, and a
three-year statutory barrier to generic competition.
The principal elements of our business strategy are as follows: (i)
select products with unrealized commercial potential where safety or patient
compliance may be improved; (ii) focus on the large, rapidly growing
cardiovascular and respiratory markets, which include many chronic diseases
requiring long-term therapy; (iii) develop proprietary formulations of currently
approved pharmaceutical compounds; (iv) manage internally the clinical
development of our products; (v) manufacture our products internally; (vi)
market our products directly through our specialty sales force; and (vii)
leverage our core competencies through corporate and academic alliances.
On July 28, 1997, we received clearance from the FDA to market NIASPAN
for the treatment of mixed lipid disorders. NIASPAN is the only once-a-day and
the first extended-release formulation of any type of niacin product ever
approved by the FDA for the treatment of mixed lipid disorders. NIASPAN is
indicated for the following: (i) reduce elevated total cholesterol, low-density
lipoprotein ("LDL") cholesterol, and apolipoprotein B, and increase low high
density lipoprotein ("HDL") cholesterol; (ii) reduce very high serum
triglycerides; (iii) reduce elevated total and
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LDL cholesterol when used in combination with a bile-acid binding resin; (iv)
reduce recurrent nonfatal myocardial infarction; and (v) promote the regression
or slow the progression of atherosclerosis when combined with bile-binding
resins. In addition, NIASPAN'S prescribing information references NIASPAN'S
ability to significantly reduce lipoprotein (a), known as "Lp(a)", which is an
independent risk factor for coronary heart disease.
In addition to NIASPAN, we currently market two anti-hypertensive
drugs, Mavik and Tarka, through a co-promotion arrangement with Knoll
Pharmaceutical Company, the U.S. pharmaceutical unit of BASF Corporation. The
product complements NIASPAN because of the high degree of physician overlap that
exists for prescribers of cholesterol and anti-hypertensive medications. In this
manner, we are able to leverage our sales force to generate incremental revenue
from two additional products without compromising the growth of NIASPAN.
We are also currently developing several other products in the solid
dose and aerosolized inhalation areas. Our next product NICOSTATIN, a product
that consists of a combination of NIASPAN and a currently marketed statin will
be used to treat mixed lipid disorders. The NICOSTATIN product will require an
NDA. We believe that a once-a-night tablet with the combined complementary
properties of its NIASPAN product and a statin represents an effective modality
for treating patients with mixed lipid disorders. We intend to file the NDA for
NICOSTATIN during the second half of 2000.
Leveraging our unique expertise in the area of pressurized metered-dose
inhalation ("MDI") devices, we completed formulation development of two inhaled
steroids to be used with our proprietary inhalation devices for the treatment
of asthma. We intend to complete the development of both products, which require
an NDA through strategic alliances with development partners. We also began a
protein/peptide formulation development program during 1999. The program
consists of formulating several unnamed proteins and delivering such compounds
within our proprietary, innovative MDI's. We expect to generate IN VITRO and IN
VIVO pre-clinical data demonstrating the performance and efficacy of delivering
such proteins via the lung through our MDI's. Another of our proprietary MDI
devices, a breath actuated inhaler, operates automatically and is being
developed principally to address the difficulties often faced by children and
the elderly in taking inhaled medication. We are also developing a proprietary
inhalation dose counter designed to indicate when sufficient doses no longer
remain in the aerosol canister, thereby alerting the patient to obtain a refill
prescription. At present, we intend to use the inhalation dose counter on all of
our proprietary inhalation devices.
As of February 11, 2000, we had 425 full-time employees. Our
predecessor, Kos Holdings, Inc. ("Holdings"), which was previously named Kos
Pharmaceuticals, Inc., was incorporated in Florida on July 1, 1988. Our wholly
owned subsidiaries include, Aeropharm Technology, Inc., IEP Pharmaceutical
Devices, Inc., and the business and operations of Holdings until June 30, 1996.
Our principal executive
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offices are located at 1001 Brickell Bay Drive, 25th Floor, Miami, Florida
33131, and our telephone number is (305) 577-3464.
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RISK FACTORS
In addition to the other information in this Prospectus or incorporated
herein by reference, the following risk factors should be considered carefully
in evaluating Kos and its business before purchasing the shares offered in this
Prospectus.
OUR NEAR-TERM SUCCESS DEPENDS ON OUR ABILITY TO INCREASE SALES OF OUR NIASPAN
PRODUCT.
Our success currently depends primarily upon our ability to
successfully market and sell increasing quantities of the NIASPAN product. Our
ability to successfully sell increasing quantities of the NIASPAN product will
depend significantly on the increasing acceptance of the NIASPAN product by
physicians and their patients. We believe that intolerable flushing and
potential liver toxicity associated with currently available formulations of
niacin are the principal reasons why physicians generally have been reluctant to
prescribe or recommend such currently available formulations. Flushing episodes
are often characterized by facial redness, tingling or rash. Although most
patients taking the NIASPAN product will sometimes flush, the formulation and
dosing regimen for NIASPAN have been designed to maximize patient acceptance and
minimize the occurrence of flushing. There can be no assurance, however, that
patients using the NIASPAN product will not suffer episodes of flushing that
they consider intolerable. The failure of physicians to prescribe the NIASPAN
product or the failure of patients to continue taking NIASPAN due to intolerable
flushing or to other side effects would have a material adverse effect on us.
Unanticipated side effects or unfavorable publicity concerning the
NIASPAN product or any other product incorporating technology similar to that
used in the NIASPAN product also could have an adverse effect on our ability to
obtain regulatory approvals, to achieve acceptance by prescribing physicians,
managed care providers, or patients; any of which would have a material adverse
effect on us.
WE HAVE A HISTORY OF OPERATING LOSSES AND AN UNCERTAINTY AS TO FUTURE
PROFITABILITY.
To date, we have dedicated most of our financial resources to the
development and commercialization of the NIASPAN product, the development of
other products, and general and administrative expenses. We expect to incur
significant operating losses for at least the next twelve months, due primarily
to continued manufacturing and marketing, sales and administrative expenses
associated with the commercial launch of the NIASPAN product and for investments
in our research and development programs. No assurance can be given that
additional significant losses will not continue thereafter. Our ability to
achieve and maintain profitability will depend, among other things, on the
commercial success of the NIASPAN product; our ability to successfully exploit
our manufacturing and sales and marketing capabilities; to complete the
development of, and obtain
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regulatory approvals for, and achieve market acceptance for our products under
development; and on our ability to maintain sufficient funds to finance our
activities. As of March 31, 2000, our accumulated deficit was $250.9 million. In
connection with the transfer of operations from Holdings to us on June 30, 1996,
net operating loss carryforwards amounting to approximately $51.0 million and
related tax benefits remained with Holdings and were not transferred to us.
Consequently, we may utilize net operating loss carryforwards sustained
subsequent to June 30, 1996, amounting to approximately $200 million as of March
31, 2000, to offset future taxable net income, if any. There can be no
assurance, however, that we will be able to achieve profitability to utilize
such carryforwards or that profitability, if any, can be sustained.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL.
We have experienced negative cash flows from operations since our
inception. We have spent and will continue to be required to spend substantial
funds to continue research and development, including clinical trials of our
products under development, and to commercialize the NIASPAN product and our
products under development if regulatory approvals are obtained for such
products under development. We believe that we have sufficient resources,
including funds available to us under certain funding arrangements, to fund our
operations until we achieve positive cash flows. We, however, may need or elect
to raise additional capital prior to such date. Our capital requirements will
depend on many factors, primarily relating to the near-term commercial success
of NIASPAN; our ability to meet the conditions necessary to obtain funding under
our lines of credit; the problems, delays, expenses and complications frequently
encountered by companies at this stage of development; the progress of our
research, development, and clinical trial programs; the costs and timing of
seeking regulatory approvals of our products under development; our ability to
obtain such regulatory approvals; costs in filing, prosecuting, defending, and
enforcing patent claims and other intellectual property rights; the extent and
terms of any collaborative research, manufacturing, marketing, or other
arrangements; and changes in economic, regulatory, or competitive conditions or
our planned business. Estimates about the adequacy of funding for our activities
are based on certain assumptions, including assumptions regarding the marketing
and sales success of the NIASPAN product, and that testing and regulatory
procedures relating to the our products under development can be conducted at
projected costs and within projected time frames. There can be no assurances
that any of these assumptions will prove to be accurate.
To satisfy our capital requirements, we may seek to raise funds in the
public or private capital markets. Our ability to raise additional funds in the
public markets may be adversely affected if our sales of the NIASPAN product do
not increase rapidly, if the results of our clinical trials for our products
under development are not favorable, or if regulatory approval for any of our
products under development is not obtained. We may seek additional funding
through
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corporate collaborations and other financing vehicles. There can be no assurance
that any such funding will be available to us, or if available, that it will be
available on acceptable terms. If adequate funds are not available, we may be
required to curtail significantly one or more of our research or development
programs or we may be required to obtain funds through arrangements with future
collaborative partners or others that may require us to relinquish rights to the
NIASPAN product or to some or all of our technologies or products under
development or take significant cost-reducing actions or both. If we are
successful in obtaining additional financing, the terms of the financing may
have the effect of diluting or adversely affecting the holdings or the rights of
the holders of Common Stock.
OUR CURRENT MARKETING RESOURCES ARE LIMITED.
Although we market the NIASPAN product and the MAVIK and TARKA products
and we intend to market other products under development through our own
specialty sales force, our current marketing resources are limited. Substantial
resources will continue to be required for us to promote the sale of the
NIASPAN, MAVIK and TARKA products and our products under development. There can
be no assurance that we will be able to devote resources to the NIASPAN, MAVIK
and TARKA products or to our other products under development sufficient to
achieve increasing market acceptance. Our failure to expend the resources to
adequately promote the NIASPAN, MAVIK and TARKA products or our products under
development would have a material adverse effect on us.
Moreover, we have fewer sales persons than many of our competitors and
there can be no assurance that our sales force will be able to detail
successfully physicians who prescribe lipid-altering medications. There can be
no assurance that we will be able to retain our current sales representatives,
that any additional representatives hired by us will be immediately effective in
promoting the sale of the NIASPAN, MAVIK and TARKA products, or that our sales
representatives will be able to generate significantly increased sales of the
Niaspan, MAVIK and TARKA products. The failure of our sales representatives to
generate increased sales of the NIASPAN product would have a material adverse
effect on our operating results.
WE ARE CONTROLLED BY AN EXISTING SHAREHOLDER.
Michael Jaharis, the Chairman of our Board of Directors and one of Kos'
founders, owns, directly or indirectly, approximately 51.5% of the Common Stock
outstanding as of December 31, 1999. Accordingly, this shareholder can control
the outcome of certain shareholder votes, including votes concerning the
election of directors, the adoption or amendment of provisions in our Articles
of Incorporation, and the approval of mergers and other significant corporate
transactions. This level of concentrated ownership by one person may have the
effect of delaying or preventing a change in the management or voting control of
Kos. In addition, a line of credit totaling $50,000,000 between Kos and Mr.
Jaharis gives Mr. Jaharis the right to convert (at $4.91 per share) amounts owed
to Mr. Jaharis by Kos under such line of credit into shares of our Common Stock
and another line of credit gives Mr. Jaharis the
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right to exercise warrants to purchase 6 million shares of our Common Stock at
$5.00 per share. If this conversion option or warrant exercise were to occur,
Mr. Jaharis would own a significantly greater percentage of our outstanding
Common Stock thus resulting in substantial dilution to existing shareholders.
WE FACE COMPETITION FROM OTHER MANUFACTURERS THAT DIRECTLY COMPETE WITH OUR
PRODUCTS.
Many products are commercially available for the treatment of elevated
LDL cholesterol, and the manufacturers of such products, individually and
collectively, have significantly greater financial resources and sales and
manufacturing capabilities than us, including a combined field sales force
exceeding 12,000 representatives compared with our approximately 200-person
field sales force. We estimate that our existing NIASPAN prescriptions account
for less than 1.5% of the total prescriptions currently being written in the
United States for cholesterol-lowering pharmaceutical compounds. There can be no
assurance that NIASPAN or any other product developed by us will be able to
compete successfully with any of those products or that we will be able to
overcome such competition and achieve increasing sales of the NIASPAN product.
Moreover, the active ingredient in NIASPAN, niacin, is available in several
other formulations, most of which do not require a prescription. Although we
believe that there are no other currently available niacin formulations that
have been approved by the FDA specifically for once-a-day dosing, there can be
no assurance that physicians will not prescribe or recommend some of these
unapproved niacin formulations, using the NIASPAN product's dosing regimen, to
try to achieve the same results as NIASPAN. Substitution of other niacin
formulations for the NIASPAN product could have a material adverse effect on us.
Moreover, manufacturers of other niacin formulations could promote their
products using the NIASPAN product's dosing regimen and could promote the sale
of their products to treat the indications for which we have received clearance
to market NIASPAN. Although such promotion would be a violation of FDA
regulations, the occurrence of such practices would have a material adverse
effect on us. Moreover, many established pharmaceutical and biotechnology
companies, universities, and other research institutions with resources
significantly greater than ours may develop products that directly compete with
our products. Even if our products under development prove to be more effective
than those developed by other entities, such other entities may be more
successful in marketing their products than us because of greater financial
resources, stronger sales and marketing efforts, and other factors. These
entities may succeed in developing products that are safer, more effective or
less costly than the products developed by us. There can be no assurance that
any products developed by us will be able to compete successfully with any of
those products.
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WE CAN NOT GUARANTEE THAT THE COST OF OUR PRODUCTS WILL BE REIMBURSED BY
THIRD-PARTY PAYORS.
Our ability to commercialize successfully our products under
development is dependent in part on the extent to which appropriate levels of
reimbursement for the NIASPAN product or for the other products we sell are
obtained from government authorities, private health insurers, and managed care
organizations such as health maintenance organizations ("HMOs"). Managed care
organizations and other third-party payors are increasingly challenging the
pricing of pharmaceutical products. The trend toward managed healthcare in the
United States, the growth of organizations such as HMOs, and legislative
proposals to reform healthcare and government insurance programs could
significantly influence the purchase of pharmaceutical products, resulting in
lower prices and reduced demand for NIASPAN or our products under development.
Such cost containment measures and potential legislative reform could affect our
ability to sell NIASPAN or our products under development and may have a
material adverse effect on us. Significant uncertainty exists about the
reimbursement status of newly approved pharmaceutical products. Although we have
obtained approvals for reimbursement for the cost of NIASPAN from many
third-party payers, there can be no assurance that we will be able to maintain
such approvals. There can be no assurance that reimbursement in the United
States or foreign countries will be available for NIASPAN or any of our products
under development, that any reimbursement granted will be maintained, or that
limits on reimbursement available from third-party payors will not reduce the
demand for, or negatively affect the price of, NIASPAN or our products under
development. The unavailability or inadequacy of third-party reimbursement for
NIASPAN or our products under development would have a material adverse effect
on us.
THE DEPARTURE OF KEY PERSONNEL COULD HAVE A DETRIMENTAL EFFECT ON US.
Our success is dependent on our ability to attract and retain highly
qualified scientific, management and sales personnel. We face intense
competition for personnel from other companies, academic institutions,
government entities, and other organizations. There can be no assurance that we
will be successful in attracting and retaining key personnel. The loss of key
personnel, or the inability to attract and retain the additional, highly-skilled
employees required for the expansion of our activities, could adversely affect
our operating results.
MOST OF OUR PRODUCTS ARE STILL UNDER DEVELOPMENT.
Although we have obtained clearance from the FDA to market the NIASPAN
product, there can be no assurance that we will be able to successfully
formulate any of our other products as planned, or that we will be successful in
demonstrating the safety and efficacy of such products in human clinical trials.
These trials may be costly and time-consuming. The administration of any product
we develop may
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produce undesirable side effects that could result in the interruption, delay or
suspension of clinical trials, or the failure to obtain FDA or other regulatory
approval for any or all targeted indications. Even if regulatory approval is
secured, our products under development may later produce adverse effects that
limit or prevent their widespread use or that necessitate their withdrawal from
the market. We may discontinue the development of any of our products under
development at any time.
WE CAN NOT ENSURE THE VALIDITY OR PROTECTION OF OUR INTELLECTUAL PROPERTY RIGHTS
OR PATENT RIGHTS.
Our ability to commercialize any of our products under development will
depend, in part, on our or our licensors' ability to obtain patents, enforce
those patents, preserve trade secrets, and operate without infringing on the
proprietary rights of third parties. In addition, the patents for which we have
applied relating to NIASPAN and certain other of our products under development
are based on, among other things, the timed administration of NIASPAN. If the
indications treated by NIASPAN and such other products under development could
be treated using drugs without such timed administration, our patents, if
issued, would not prevent the use of such drugs for the treatment of such
indications, which would have a material adverse effect on us. There can be no
assurance that the patent applications licensed to or owned by us will result in
issued patents, that patent protection will be secured for any particular
technology, that any patents that have been or may be issued to us or our
licensors will be valid or enforceable or that any patents will provide
meaningful protection to us.
In general, the U.S. patents and patent applications owned by or
licensed to us are method-of-use patents that cover the timed use of certain
compounds to treat specified conditions. Composition-of-matter protection is not
available for the active ingredient in NIASPAN. The active ingredient in
NIASPAN, niacin, is currently sold in the United States and other markets for
lipid altering and for other uses. Even in jurisdictions where the use of the
active ingredient in NIASPAN for lipid altering and other indications may be
covered by the claims of a use patent licensed to us, off-label sales might
occur, especially if another company markets the active ingredient at a price
that is less than the price of NIASPAN, thereby potentially reducing the sales
of NIASPAN.
We have patent applications pending in the U.S. Patent and Trademark
Office ("PTO") with claims covering NIASPAN's method-of-use consistent with its
recommended once-a-day dosing regimen. We have been notified by the PTO that
certain of these claims have been allowed, but none of the claims have yet been
issued as a patent. We have paid the issue fees for those claims that have been
allowed and now are waiting to receive from the PTO the assigned patent numbers
and dates on which the patents for those allowed claims will issue. The patent
examiner has also indicated that it may submit certain claims to the PTO's Board
of
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Interference to determine whether it should declare an interference between such
Kos application and a method-of-use patent issued to a privately owned generic
manufacturer allegedly claiming the same dosing regimen invention. On February
7, 1997, we entered into a cross-licensing agreement (the "License Agreement")
with such generic manufacturer pursuant to which we have agreed to resolve, as
between ourselves, the effects of such potential interference by granting
licenses under our respective patent application and patent.
We are aware that certain European and U.S. patents have been issued
with claims covering products that contain certain non-CFC propellant-driven
aerosol formulations. The European patents are currently subject to an
opposition proceeding in Europe, and certain claims in such patents have been
held invalid in the United Kingdom. Certain or all of our aerosol products under
development may use a formulation covered by such European or U.S. patents. In
such event, we would be prevented from making, using or selling such products
unless we obtain a license under such patents, which license may not be
available on commercially reasonable terms, or at all, or unless such patents
are determined to be invalid or unenforceable in Europe or the United States,
respectively. Our development of products that are covered by such patents and
our failure to obtain licenses under such patents in the event such patents are
determined to be valid and enforceable could have an adverse effect on our
business.
The patent positions of pharmaceutical and biotechnology companies are
highly uncertain and involve complex legal and factual questions. There can be
no assurance that the patents owned and licensed by us, or any future patents,
will prevent other companies from developing similar or therapeutically
equivalent products or that others will not be issued patents that may prevent
the sale of our products or require licensing and the payment of significant
fees or royalties by us. Furthermore, there can be no assurance that any of our
future products or methods will be patentable, that such products or methods
will not infringe upon the patents of third parties, or that our patents or
future patents will give us an exclusive position in the subject matter claimed
by those patents. We may be unable to avoid infringement of third party patents
and may have to obtain a license, defend an infringement action, or challenge
the validity of the patents in court. There can be no assurance that a license
will be available to us, if at all, on terms and conditions acceptable to us, or
that we will prevail in any patent litigation. Patent litigation is costly and
time consuming, and there can be no assurance that we will have or will devote
sufficient resources to pursue such litigation. If we do not obtain a license
under such patents, if we are found liable for infringement or if we are not
able to have such patents declared invalid, we may be liable for significant
money damages, may encounter significant delays in bringing products to market,
or may be precluded from participating in the manufacture, use, or sale of
products or methods of treatment requiring such licenses.
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<PAGE>
We also rely on trade secrets and other unpatented proprietary
information in our product development activities. To the extent that we rely on
trade secrets and unpatented know-how to maintain our competitive technological
position, there can be no assurance that others may not independently develop
the same or similar technologies. We seek to protect trade secrets and
proprietary knowledge in part through confidentiality agreements with our
employees, consultants, advisors and collaborators. Nevertheless, these
agreements may not effectively prevent disclosure of our confidential
information and may not provide us with an adequate remedy in the event of
unauthorized disclosure of such information. If our employees, scientific
consultants or collaborators develop inventions or processes independently that
may be applicable to our products under development, disputes may arise about
ownership of proprietary rights to those inventions and processes. Such
inventions and processes will not necessarily become our property, but may
remain the property of those persons or their employers. Protracted and costly
litigation could be necessary to enforce and determine the scope of our
proprietary rights. Failure to obtain or maintain patent and trade secret
protection, for any reason, would have a material adverse effect on us.
We engage in collaborations, sponsored research agreements, and other
arrangements with academic researchers and institutions that have received and
may receive funding from U.S. government agencies. As a result of these
arrangements, the U.S. government or certain third parties may have rights in
certain inventions developed during the course of the performance of such
collaborations and agreements as required by law or such agreements. Several
legislative bills affecting patent rights have been introduced in the United
States Congress. These bills address various aspects of patent law, including
publication, patent term, re-examination subject matter and enforceability. It
is not certain whether any of these bills will be enacted into law or what form
such new laws may take. Accordingly, the effect of such potential legislative
changes on our intellectual property estate is uncertain.
OUR BUSINESS IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION.
Our research and development activities, preclinical studies, clinical
trials, and the manufacturing and marketing of our products are currently
subject to extensive regulation by the FDA and may in the future be subject to
foreign regulations. The drug approval process takes many years and requires the
expenditure of substantial resources. Data obtained from preclinical and
clinical activities are susceptible to varying interpretations that could delay,
limit, or prevent regulatory approval. Although we may consult the FDA for
guidance in developing protocols for clinical trials, that consultation provides
no assurance that the FDA will accept the clinical trials as adequate or
well-controlled or accept the results of those trials. In addition, delays or
rejections of applications for regulatory approval may result from changes in or
additions to FDA regulations concerning the drug approval process. Similar
delays may also be encountered in foreign countries.
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<PAGE>
There can be no assurance that any regulatory review will be conducted in a
timely manner or that regulatory approvals will be obtained for any products
developed by us. Even if regulatory approval of a product is obtained, the
approval may be limited as to the indicated uses for which it may be promoted or
marketed. In addition, a marketed drug, its bulk chemical supplier, its
manufacturer and its manufacturing facilities are subject to continual
regulatory review and periodic inspections, and later discovery of previously
unknown problems with a product, supplier, manufacturer or facility may result
in restrictions on such products or manufacturers, which may require a
withdrawal of the product from the market. Failure to comply with the applicable
regulatory requirements can, among other things, result in fines, suspensions of
regulatory approvals, product recalls, operating restrictions and criminal
prosecution, any of which could have a material adverse effect on us.
Our business is also subject to regulation under state, federal and
local laws, rules, regulations and policies relating to the protection of the
environment and health and safety, including those governing the use,
generation, manufacture, storage, air emission, effluent discharge, handling and
disposal of certain materials. We believe that we are in compliance in all
material respects with all such laws, rules, regulations and policies applicable
to us. There can be no assurance that we will not be required to incur
significant costs to comply with such environmental and health and safety laws
and regulations in the future. Our research and development involves the
controlled use of hazardous materials. Although we believe that our safety
procedures for handling and disposing of such materials comply with the
standards prescribed by applicable state, federal and local regulations, the
risk of contamination or injury from these materials cannot be completely
eliminated. In the event of such contamination or injury, we could be held
liable for any damages that result and any such liability could exceed our
resources and materially adversely affect our business, financial condition and
results of operations.
WE DEPEND ON THE COLLABORATION WITH OTHERS IN THE DEVELOPMENT OF OUR PRODUCTS.
We rely on various third parties for certain aspects of the development
of our presently planned or future products. There can be no assurance that we
will be able to enter into future collaborative arrangements on favorable terms,
or at all. Even if we are successful in entering into such collaborative
agreements, there can be no assurance that any such arrangement will be
successful. The success of any such arrangement is dependent on, among other
things, the skills, experience and efforts of the third party's employees
responsible for the project, the third party's commitment to the arrangement,
and the financial condition of the third party, all of which are beyond our
control.
15
<PAGE>
WE HAVE LIMITED MANUFACTURING EXPERIENCE.
We currently manufacture the NIASPAN product in one manufacturing plant
that has been inspected and approved by the FDA, and we manufacture clinical
materials for our products under development in another manufacturing plant. We
believe both plants operate in substantial compliance with current Good
Manufacturing Practices ("cGMP") regulations for the manufacture of
pharmaceutical products. We may need to further scale-up certain of our current
manufacturing processes to achieve production levels consistent with the
commercial sale of our products. Further, modifications to the facilities,
systems and procedures may be necessary to maintain capacity at a level
sufficient to meet market demand or to maintain compliance with cGMP regulations
and other regulations prescribed by various regulatory agencies including the
Occupational Safety and Health Administration and the Environmental Protection
Agency. Our failure to successfully further scale-up, expand in connection with
manufacture for commercial sale, or modify our manufacturing process or to
comply with cGMP regulations and other regulations could delay the approval of
our products under development or limit our ability to meet the demand for our
products, either of which would have a material adverse effect on us. Such
occurrences may require use to acquire alternative means of manufacturing our
products, which may not be available to us on a timely basis, on commercially
practicable terms, or at all.
WE DEPEND ON MATERIALS FOR OUR PRODUCTS THAT ARE SUPPLIED BY A SINGLE SOURCE.
Some materials used in our products, including niacin, the active
ingredient in NIASPAN, are currently sourced from a single qualified supplier.
We do not have a contractual arrangement with our sole supplier of niacin.
Although we have not experienced difficulty to date in acquiring niacin, or
other materials for product development, no assurance can be given that supply
interruptions will not occur in the future or that we will not have to obtain
substitute materials, which would require additional product validations and
regulatory submissions. Any such interruption of supply could have a material
adverse effect on our ability to manufacture our products or to obtain or
maintain regulatory approval of such products.
WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS FROM THE USE OF OUR PRODUCTS.
Manufacturing, marketing, selling, and testing NIASPAN and our products
under development entails a risk of product liability. We could be subject to
product liability claims in the event our products or products under development
fail to perform as intended. Even unsuccessful claims could result in the
expenditure of funds in litigation and the diversion of management time and
resources and could damage our reputation and impair the marketability of our
products. While we maintain liability insurance, there can be no assurance that
a successful claim could not be made against us, that the amount of
indemnification payments or
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<PAGE>
insurance would be adequate to cover the costs of defending against or paying
such a claim, or that damages payable by us would not have a material adverse
effect on our business, financial condition, and results of operations and on
the price of the our Common Stock.
THE REGISTRATION RIGHTS HELD BY CERTAIN SHAREHOLDERS MAY HAVE AN ADVERSE EFFECT
ON OUR COMMON STOCK.
We have granted certain registration rights to our controlling
shareholder and to Kos Investments, Inc. and Holdings, which entitle such
entities to cause us to effect an unlimited number of registrations under the
Securities Act of sales of shares of our Common Stock owned by such entities.
These registration rights generally would also permit the holders of such rights
to include shares in any registration statement otherwise filed by us. By
exercising these registration rights, these entities could cause a large number
of shares to be registered and become freely tradeable without restrictions
under the Securities Act (except for those purchased in the offering by our
affiliates) immediately upon the effectiveness of such registration. Such sales
may have an adverse effect on the market price of the Common Stock and could
impair our ability to raise additional capital.
THE PRICE OF OUR COMMON STOCK MAY BE SUBJECT TO VOLATILE CHANGES.
The stock market, including the Nasdaq National Market, on which our
shares are listed, has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of our Common Stock, like
the stock prices of many publicly traded pharmaceutical and biotechnology
companies, has been and may continue to be highly volatile. The sale by our
controlling shareholder or members of our management of shares of Common Stock,
announcements of technological innovations or new commercial products by us or
our competitors, developments or disputes concerning patent or proprietary
rights, publicity regarding actual or potential medical results relating to the
NIASPAN product or to products under development by us or our competitors,
regulatory developments in either the United States or foreign countries, public
concern as to the safety of pharmaceutical and biotechnology products and
economic and other external factors, as well as the trend of prescriptions for
the NIASPAN product and the period-to-period fluctuations in sales or other
financial results, among other factors, may have a significant impact on the
market price of the Common Stock.
FLORIDA LAW AND OUR ARTICLES OF INCORPORATION AND BYLAWS MAY MAKE A TAKEOVER OF
OUR COMPANY MORE DIFFICULT.
Certain provisions of the our Articles of Incorporation and Bylaws, as
well as the Florida Business Corporation Act, could discourage a third party
from attempting to acquire, or make it more difficult for a third party to
acquire, control
17
<PAGE>
of us without approval of our Board of Directors. Such provisions could also
limit the price that certain investors might be willing to pay in the future for
shares of the Common Stock. Certain of such provisions allow the Board of
Directors to authorize the issuance of preferred stock with rights superior to
those of the Common Stock. Moreover, certain provisions of the our Articles of
Incorporation or Bylaws generally permit removal of directors only for cause by
a 60% vote of the shareholders, require a 60% vote of the shareholders to amend
our Articles of Incorporation or Bylaws, require a demand of at least 50% of our
shareholders to call a special meeting of shareholders, and prohibit shareholder
actions by written consent.
PENDING OR THREATENED LITIGATION MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS.
On August 5, 1998, a purported class action lawsuit was filed in the
United States District Court for the Northern District of Illinois, Eastern
Division, against us, the members of our Board of Directors, certain officers of
Kos, and the underwriters of our October 1997 offering of shares of Common
Stock. In its complaint, the plaintiff asserts, on behalf of itself and a
putative class of purchasers of our Common Stock during the period from July 29,
1997, through November 13, 1997, claims under: (i) sections 11, 12(a)(2) and 15
of the Securities Act of 1933; (ii) sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and (iii) for
common law fraud, negligent misrepresentation and breach of fiduciary duty. The
claims in the lawsuit relate principally to certain statements made by us, or
certain of our representatives, concerning the efficacy, safety, sales volume
and commercial viability of our NIASPAN product. The complaint sought
unspecified damages and costs, including attorneys' fees and costs and expenses.
Upon our motion, the case was transferred to the United States District Court
for the Southern District of Florida. We filed a motion to dismiss the complaint
along with the individual Kos defendants on January 7, 1999. On May 24, 1999,
the United States District Court for the Southern District of Florida dismissed
the lawsuit with prejudice. The plaintiffs filed an appeal on June 7, 1999, with
the United States Circuit Court of Appeals for the 11th Circuit. The outcome of
the litigation cannot yet be determined. Accordingly, no provision for any
liability that may result from these matters has been recognized in our
financial statements. There can be no assurance, however, that the outcome of
this litigation will not have a material adverse effect on our business, results
of operations, and financial condition.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by
the selling shareholders.
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<PAGE>
SELLING SHAREHOLDERS
The following table sets forth the number of shares of common stock
owned by each of the selling shareholders.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES SHARES OF COMMON
HELD NUMBER OF COMMON STOCK OWNED
PRIOR TO THE SHARES STOCK AFTER THE
NAME AND POSITION OFFERING OFFERED RETAINED OFFERING
- ----------------- -------- ------- -------- --------
<S> <C> <C> <C> <C>
Richard Bird Restated Revocable 31,579 31,579 0 0%
Trust dated 10/2/96
J. Randolph Coupland IV 1,930 1,930 0 0%
Perry A. Genova 1,930 1,930 0 0%
Warren R. Jewett Restated Revocable 38,596 38,596 0 0%
Trust dated 9/27/94
Charles E. Yeganian 965 965 0 0%
</TABLE>
This Registration Statement will also cover any additional shares of
common stock which become issuable in connection with the shares registered for
sale hereby by reason of any stock dividend, stock split, merger, consolidation,
recapitalization or other similar transaction effected without the receipt of
consideration that results in an increase in the number of outstanding shares of
common stock.
PLAN OF DISTRIBUTION
We are registering this offering of shares on behalf of the selling
shareholders, and we will pay all costs, expenses and fees related to such
registration, including all registration and filing fees, printing expenses,
fees and disbursements of our counsel, blue sky fees and expenses and the
expenses of any special audits or "cold comfort" letters. The selling
shareholders will pay all selling expenses, including all underwriting discounts
and selling commissions, if any, all fees and disbursements of their counsel and
all "road show" and other marketing expenses.
The selling shareholders may sell their shares from time to time in one
or more transactions on the Nasdaq National Market or in private, negotiated
transactions. The selling shareholders will determine the prices at which they
sell their shares. Such transactions may or may not involve brokers or dealers.
If the selling shareholders use a broker-dealer to complete their sale
of the shares, such broker-dealer may receive compensation in the form of
discounts,
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<PAGE>
concessions or commissions from such selling shareholder or from you, as
purchaser (which compensation might exceed customary commission).
The selling shareholders may indemnify any agent, dealer or
broker-dealer that participates in sales of the shares against similar
liabilities.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed on for
us by Holland & Knight LLP, 701 Brickell Avenue, Suite 3000, Miami, Florida
33131.
EXPERTS
The consolidated financial statements and the related financial
statement schedule of Kos Pharmaceuticals, Inc. and Subsidiaries incorporated in
this prospectus by reference from our Annual Report on Form 10-K for the year
ended December 31, 1999 have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their report with respect thereto,
which is incorporated herein by reference and have been so incorporated by
reference in reliance upon the authority of such firm as experts in accounting
and auditing in giving said report.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses to be paid by the Company in connection with the issuance of
the securities being registered hereby are estimated as follows:
SEC registration fee................................ $ 300.00
Accounting fees and expenses ....................... $ 5,000.00
Legal fees and expenses ............................ $ 10,000.00
Miscellaneous....................................... $ 700.00
Total...................................... $ 16,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority to indemnify its directors and officers to
the extent provided in the Florida Business Corporation Act (the "FBCA").
Section 607.0850 of the FBCA permits a Florida corporation to indemnify a
present or former director or officer of the corporation (and certain other
persons serving at the request of the corporation in related capacities) for
liabilities, including legal expenses, arising by reason of service in such
capacity if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and in any criminal proceeding if such person had no reasonable
cause to believe his conduct was unlawful. However, in the case of actions
brought by or in the right of the corporation, no indemnification may be made
with respect to any matter as to which such director or officer shall have been
adjudged liable, except in certain limited circumstances.
The Bylaws provide that the Company shall indemnify its officers and
directors to the fullest extent provided by law.
ITEM 16. EXHIBITS
The following exhibits are filed herewith:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
3.1(1) Amended and Restated Articles of Incorporation of the Company
3.2(1) Amended and Restated Bylaws of the Company
4 See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Articles of Incorporation and Amended
21
<PAGE>
and Restated Bylaws of the Company defining the rights of
holders of Common Stock of the Company
5 Form of Opinion of Holland & Knight LLP
23.1 Consent of Holland & Knight LLP (included in opinion filed as
Exhibit 5)
23.2 Consent of Arthur Andersen LLP.
24 Powers of Attorney (included on signature page hereto).
- -------------------
(1) Filed with the Company's Registration Statement on Form S-1 (File No.
333-17991), as amended, filed with the Securities and Exchange
Commission on December 17, 1996, and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
(a) 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:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial BONA FIDE offering thereof.
(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.
22
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, 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 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 Act and will
be governed by the final adjudication of such issue.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
behalf of the undersigned, thereunto duly authorized on the 22 day of May, 2000.
KOS PHARMACEUTICALS, INC.
By: /s/ Daniel M. Bell
-------------------------------------
Daniel M. Bell
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Daniel M. Bell and Juan F. Rodriguez and each of
them, his true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this Report on Form 10-K,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each of said attorneys-in-fact
or his substitute or substitutes, any lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Michael Jaharis Chairman of the Board May 22, 2000
- ------------------------------------ of Directors
Michael Jaharis
/s/ Daniel M. Bell President, Chief Executive May 22, 2000
- ------------------------------------ Officer, and Director
Daniel M. Bell (Principal Executive Officer)
/s/ Robert E. Baldini Vice Chairman of the Board and May 22, 2000
- ------------------------------------ Chief Sales and Marketing Officer
Robert E. Baldini
/s/ Juan F. Rodriguez Vice President, Controller May 22, 2000
- ------------------------------------ (Principal Financial Officer and
Juan F. Rodriguez Accounting Officer)
/s/ John Brademas Director May 22, 2000
- ------------------------------------
John Brademas
/s/ Steven Jaharis Director May 22, 2000
- ------------------------------------
Steven Jaharis
/s/ Louis c. Lasagna Director May 22, 2000
- ------------------------------------
Louis C. Lasagna
/s/ Mark Novitch Director May 22, 2000
- ------------------------------------
Mark Novitch
/s/ Frederick B. Whittemore Director May 22, 2000
- ------------------------------------
Frederick B. Whittemore
</TABLE>
24
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
5 Form of Opinion of Holland & Knight LLP
23.1 Consent of Holland & Knight LLP (included in opinion
filed as Exhibit 5)
23.2 Consent of Arthur Andersen LLP.
EXHIBIT 5
Holland & Knight LLP
701 Brickell Avenue, Suite 3000
Miami, Florida 33131
____________, 2000
Kos Pharmaceuticals, Inc.
1001 Brickell Bay Drive, 25th Floor
Miami, Florida 33131
Re: Kos Pharmaceuticals, Inc.--Registration Statement on Form S-3
(File No. 333-______)
Gentlemen:
We refer to the Registration Statement (the "Registration Statement")
on Form S-3 (File No. 333-______), filed by Kos Pharmaceuticals, Inc. (the
"Company"), with the Securities and Exchange Commission, for the purpose of
registering under the Securities Act of 1933 an aggregate of 75,000 shares (the
"Shares") of the authorized common stock, par value $.01 per share (the "Common
Stock"), of the Company being offered to the public.
In connection with the foregoing registration, we have acted as counsel
for the Company, and have examined originals, or copies certified to our
satisfaction of all such corporate records of the Company, certificates of
public officials and representatives of the Company, and other documents as we
deemed it necessary to require as a basis for the opinion hereafter expressed.
Based on the foregoing, and having regard for legal considerations that
we deem relevant, it is our opinion that the Shares are duly authorized, legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement, and to the reference to this firm under the caption
"Legal Matters" in the Registration Statement. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
Holland & Knight LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 4, 2000 included in Kos Pharmaceuticals, Inc.'s Form 10-K for the year
ended December 31, 1999 and to all references to our firm included in this
registration statement.
ARTHUR ANDERSON LLP
Miami, Florida,
May 22, 2000
