As Filed With The Securities And Exchange Commission On October 20, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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TRIANGLE PHARMACEUTICALS, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware 56-1930728
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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4 University Place
4611 University Drive
Durham, North Carolina, 27707
(919) 493-5980
(Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Registrant's Principal Executive Offices)
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David W. Barry, M.D.
Chairman And Chief Executive Officer
TRIANGLE PHARMACEUTICALS, INC.
4 University Place
4611 University Drive
Durham, North Carolina 27707
(919) 493-5980
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
-----------------------------------
Copies to:
Luci Staller Altman, Esq.
Ellen Corenswet, Esq.
BROBECK, PHLEGER & HARRISON LLP
1633 Broadway, 47th Floor
New York, NY 10019
(212) 581-1600
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If only the 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, 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: |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed maximum aggregate
Title of shares to be registered offering price(1) Amount of registration fee
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<S> <C> <C>
Common Stock, $.001 par value..... $100,000,000 $26,400
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</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(o) under the Securities Act
of 1933.
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 SEC, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
Subject to completion, dated October 20, 2000.
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 in any state where the offer or sale is not permitted.
Prospectus
TRIANGLE PHARMACEUTICALS, INC.
$100,000,000 aggregate amount of common stock
This prospectus will allow us to issue securities over time. This means:
o we will provide a prospectus supplement each time we issue
securities;
o the prospectus supplement will inform you about the specific terms
of that offering and also may add, update or change information
contained in this document; and
o you should read this document and any prospectus supplement
carefully before you invest.
Our common stock is traded on the Nasdaq National Market under the symbol
"VIRS." On October 18, 2000, the last reported sale price for our common stock
was $9.00 per share.
-----------------------------------
The common stock offered involves a high degree of risk. See "Risk
Factors" commencing on page 2 for a discussion of some important risks you
should consider before buying any shares of common stock.
-----------------------------------
Neither the Securities and Exchange Commission, SEC, nor any state
securities commission has approved or disapproved these securities, or passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense
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The date of this prospectus is ________ , 2000
<PAGE>
TABLE OF CONTENTS
Page
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WHERE YOU CAN FIND MORE INFORMATION...........................................1
INFORMATION INCORPORATED BY REFERENCE.........................................1
OUR BUSINESS..................................................................2
RISK FACTORS..................................................................2
FORWARD-LOOKING STATEMENTS...................................................13
USE OF PROCEEDS..............................................................13
PLAN OF DISTRIBUTION.........................................................14
LEGAL MATTERS................................................................15
EXPERTS......................................................................15
You should rely only on the information contained in this document or to which
we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information contained in this document may only be
accurate on the date of this document. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, in any state where the
offer or sale is prohibited. Neither the delivery of this prospectus, nor any
sale made under this prospectus shall, under any circumstances, imply that the
information in this prospectus is correct as of any date after the date of this
prospectus.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public on the SEC's website at
http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
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 we make with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
1. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999 (file no. 000-21589), including certain information in our
Definitive Proxy Statement in connection with our 2000 Annual
Meeting of Stockholders;
2. Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2000 (file no. 000-21589);
3. Our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2000 (file no. 000-21589);and
4. The description of our common stock contained in our Registration
Statements on Form 8-A filed October 18, 1996, February 10, 1999,
and June 18, 1999 (file no. 000-21589).
The reports and other documents that we file after the date of this
prospectus will update and supersede the information in this prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at:
Triangle Pharmaceuticals, Inc.,
4 University Place
4611 University Drive
Durham, North Carolina, 27707
(919) 493-5980
Attn: General Counsel.
We have received U.S. trademark registrations for our corporate name and
logo, Coactinon(R) and Coviracil(R). This prospectus also includes names and
trademarks of other companies.
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OUR BUSINESS
We develop new drug candidates primarily in the antiviral area, with a
particular focus on therapies for HIV, including AIDS, and the hepatitis B
virus. We have an existing portfolio of five licensed drug candidates and
several drug candidates for which we have an option to acquire a license.
Members of our senior management, prior to joining Triangle, played instrumental
roles in developing and commercializing several leading antiviral therapies. Our
goal is to capitalize on our management team's expertise, as well as on advances
in virology and immunology, to identify, develop and commercialize new drug
candidates that can be used alone or in combination to coactively treat serious
diseases.
Triangle was incorporated in Delaware in July 1995. Our principal
executive offices are located at 4 University Place, 4611 University Drive,
Durham, North Carolina 27707, and our telephone number is (919) 493-5980.
RISK FACTORS
In addition to the other information in this prospectus, you should carefully
consider the following risks and uncertainties before deciding to purchase
shares of our common stock. An investment in our common stock involves a high
degree of risk
All of our product candidates are in development and may never be successfully
commercialized which would have an adverse impact on your investment and our
business.
Some of our drug candidates are at an early stage of development and all
of our drug candidates will require expensive and lengthy testing and regulatory
clearances. None of our drug candidates has been approved by regulatory
authorities. We do not expect any of our drug candidates to be commercially
available until at least the year 2002. There are many reasons that we may fail
in our efforts to develop our drug candidates, including that:
o our drug candidates will be ineffective, toxic or will not receive
regulatory clearances,
o our drug candidates will be too expensive to manufacture or market
or will not achieve broad market acceptance,
o third parties will hold proprietary rights that may preclude us from
developing or marketing our drug candidates, or
o third parties will market equivalent or superior products.
The success of our business depends upon our ability to successfully
develop and market our drug candidates.
We have incurred losses since inception and may never achieve profitability.
We formed Triangle in July 1995 and we have only a limited operating
history for you to review in evaluating our business. We have incurred losses
since our inception. At June 30, 2000, our accumulated deficit was $279.6
million. Our historical costs relate primarily to the acquisition and
development of our drug candidates and selling, general and administrative
costs. We have not generated any revenue from the sale of our drug candidates to
date, and do not expect to do so until at least the year 2002. In addition, we
expect annual losses to increase over the next several years as we expand our
drug development and commercialization efforts. To become profitable, we must
successfully develop and obtain regulatory approval for our drug candidates and
effectively manufacture, market and sell any products we develop. We may never
generate significant revenue or achieve profitable operations.
If we need additional funds and are unable to raise them, we would have to
curtail or cease operations.
Our drug development programs and potential commercialization of our drug
candidates require substantial capital expenditures, including expenses for
preclinical testing, chemical synthetic scale-up, manufacture of drug
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substance for clinical trials, toxicology studies, clinical trials of drug
candidates, sales and marketing expenses, payments to our licensors and
potential commercial launch of our drug candidates. We expect our capital
requirements to continue to increase. Our future capital needs will depend on
many factors, including:
o the progress and magnitude of our drug development programs,
o the scope and results of preclinical testing and clinical trials,
o the cost, timing and outcome of regulatory reviews,
o the costs under current and future license and option agreements for
our drug candidates, including the costs of obtaining patent
protection for our drug candidates,
o the costs of acquiring any additional drug candidates,
o the rate of technological advances,
o the commercial potential of our drug candidates,
o the magnitude of our administrative and legal expenses,
o the costs of establishing sales and marketing functions, and
o the costs of establishing third party arrangements for
manufacturing.
We have incurred negative cash flow from operations since we incorporated
Triangle and do not expect to generate positive cash flow from our operations
for at least the next several years. Although the strategic alliance with Abbott
Laboratories, the Abbott Alliance, provided us with significant additional
funding, we cannot assure you that such funding, combined with other available
sources of funds, will be sufficient to meet our future needs. In addition, we
cannot assure you that we will receive the contingent future research funding
payments under the Abbott Alliance. Therefore, we may need additional future
financings to fund our operations. We may not be able to obtain adequate
financing to fund our operations, and any additional financing we obtain may be
on terms that are not favorable to us. In addition, any future financings could
substantially dilute our stockholders. If adequate funds are not available, we
will be required to delay, reduce or eliminate one or more of our drug
development programs, to enter into new collaborative arrangements or to modify
the Abbott Alliance on terms that are not favorable to us. These collaborative
arrangements or modifications could result in the transfer to third parties of
rights that we consider valuable. In addition, we often consider the acquisition
of technologies and drug candidates that would increase our capital
requirements.
Because our product candidates may not successfully complete clinical trials
required for commercialization, our business may never achieve profitability.
To obtain regulatory approvals needed for the sale of our drug candidates,
we must demonstrate through preclinical testing and clinical trials that each
drug candidate is safe and effective. The clinical trial process is complex and
uncertain and the regulatory environment varies widely from country to country.
Positive results from preclinical testing and early clinical trials do not
ensure positive results in pivotal clinical trials. Many companies in our
industry have suffered significant setbacks in pivotal clinical trials, even
after promising results in earlier trials. Any of our drug candidates may
produce undesirable side effects in humans. These side effects could cause us or
regulatory authorities to interrupt, delay or halt clinical trials of a drug
candidate, as occurred with mozenavir dimesylate, or could result in regulatory
authorities refusing to approve the drug candidate for any and all targeted
indications. In April 2000, the Food and Drug Administration, the FDA, issued a
clinical hold on, and the South African Medicines Control Council, the MCC,
terminated, clinical study FTC-302 for our drug candidate Coviracil, formerly
known as FTC. Study FTC-302 was being conducted under a U.S. Investigational New
Drug Application, IND, at sites in South Africa. The FDA indicated that study
FTC-302 may not be adequate to provide pivotal data in support of a New Drug
Application, NDA. Discussions with the FDA and MCC on this issue are continuing.
Due to these circumstances, the planned submission of a U.S. NDA for Coviracil
may be significantly delayed. We, the FDA, or foreign regulatory authorities may
suspend or terminate clinical trials at any time if we or they believe the trial
participants face unacceptable health risks. Clinical trials may not demonstrate
that our drug candidates are safe or effective.
Clinical trials are lengthy and expensive. They require adequate supplies
of drug substance and sufficient patient enrollment. Patient enrollment is a
function of many factors, including:
o the size of the patient population,
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o the nature of the protocol,
o the proximity of patients to clinical sites, and
o the eligibility criteria for the clinical trial.
Delays in patient enrollment can result in increased costs and longer
development times. Even if we successfully complete clinical trials, we may not
be able to file any required regulatory submissions in a timely manner and we
may not receive regulatory approval for the drug candidate.
In addition, if the FDA or foreign regulatory authorities require
additional clinical trials, we could face increased costs and significant
development delays, as occurred with Coactinon(R) and which may occur with
Coviracil. Changes in regulatory policy or additional regulations adopted during
product development and regulatory review of information we submit could also
result in delays or rejections. The FDA has notified us that two of our drug
candidates, Coviracil and DAPD for the treatment of HIV, qualify for designation
as "fast track" products under provisions of the Food and Drug Administration
Modernization Act of 1997. The fast track provisions are designed to expedite
the review of new drugs intended to treat serious or life-threatening conditions
and essentially codified the criteria previously established by the FDA for
accelerated approval. These drug candidates may not, however, continue to
qualify for expedited review and our other drug candidates may fail to qualify
for fast track development or expedited review. Even though some of our drug
candidates have qualified for expedited review, the FDA may not approve them at
all or any sooner than other drug candidates that do not qualify for expedited
review.
If we or our licensors are not able to obtain and maintain adequate patent
protection for our product candidates, we may be unable to commercialize our
product candidates or to prevent other companies from using our technology in
competitive products.
Our success will depend on our ability and the ability of our licensors to
obtain and maintain patents and proprietary rights for our drug candidates and
to avoid infringing the proprietary rights of others, both in the United States
and in foreign countries. We have no patents in our own name and we have a small
number of patent applications of our own pending. One of our patent applications
is a joint application with co-inventors from another institution. We have,
however, licensed or we have an option to license patents, patent applications
and other proprietary rights from third parties for each of our drug candidates.
If we breach our licenses, we may lose rights to important technology and drug
candidates.
Our patent position, like that of many pharmaceutical companies, is
uncertain and involves complex legal and factual questions for which important
legal principles are unresolved. We may not develop or obtain rights to products
or processes that are patentable. Even if we do obtain patents, they may not
adequately protect the technology we own or have in-licensed. In addition,
others may challenge, seek to invalidate, infringe or circumvent any patents we
own or in-license, and rights we receive under those patents may not provide
competitive advantages to us. Further, the manufacture, use or sale of our
products or processes may infringe the patent rights of others.
Several pharmaceutical and biotechnology companies, universities and
research institutions have filed patent applications or received patents that
cover our technologies or technologies similar to ours. Others have filed patent
applications and received patents that conflict with patents or patent
applications we own or have in-licensed, either by claiming the same methods or
compounds or by claiming methods or compounds that could dominate those owned by
or licensed to us. In addition, we may not be aware of all patents or patent
applications that may impact our ability to make, use or sell any of our drug
candidates. For example, United States patent applications are confidential
while pending in the Patent and Trademark Office, PTO, and patent applications
filed in foreign countries are often first published six months or more after
filing. Any conflicts resulting from third party patent applications and patents
could significantly reduce the coverage of our patents and limit our ability to
obtain meaningful patent protection. If other companies obtain patents with
conflicting claims, we may be required to obtain licenses to these patents or to
develop or obtain alternative technology. We may not be able to obtain any such
license on acceptable terms or at all. Any failure to obtain such licenses could
delay or prevent us from pursuing the development or commercialization of our
drug candidates, which would adversely affect our business.
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There are significant risks regarding the patent rights of two of our
in-licensed drug candidates. We may not be able to commercialize Coviracil or
DAPD due to patent rights held by third parties other than our licensors. Third
parties have filed numerous patent applications and have received numerous
issued patents in the United States and many foreign countries that relate to
these drug candidates and their use alone or coactively to treat HIV and
hepatitis B. As a result, our patent position regarding the use of Coviracil and
DAPD to treat HIV and/or hepatitis B is highly uncertain and involves numerous
complex legal and factual questions that are unknown or unresolved. If any of
these questions is resolved in a manner that is not favorable to us, we would
not have the right to commercialize Coviracil and/or DAPD in the absence of a
license from one or more third parties, which may not be available on acceptable
terms or at all. In addition, even if any of these questions is favorably
resolved, we may still attempt to obtain licenses from one or more third parties
to reduce or eliminate the risks relating to some or all of these matters. Such
licenses may not be available on acceptable terms or at all. Our inability to
commercialize either of these drug candidates could adversely affect our
business.
Coviracil (emtricitabine)
Coviracil, a purified form of FTC, belongs to the same general class of
nucleosides as lamivudine, also known as 3TC. In the United States, the FDA has
approved 3TC for the treatment of hepatitis B and for use in combination with
zidovudine, also known as AZT, for the treatment of HIV. Regulatory authorities
have approved 3TC for the treatment of hepatitis B and for use in combination
with other nucleoside analogues for the treatment of HIV in a number of other
countries. Glaxo Wellcome plc, Glaxo, currently sells 3TC for the treatment of
HIV and hepatitis B under a license agreement with BioChem Pharma Inc., BioChem
Pharma. We obtained rights to Coviracil under a license from Emory University,
Emory. In 1990 and 1991, Emory filed in the United States and thereafter in
numerous foreign countries patent applications with claims to compositions of
matter and methods to treat HIV and hepatitis B with Coviracil. In 1991, Yale
University, Yale, filed in the United States patent applications on FTC,
including Coviracil and its use to treat hepatitis B, and subsequently licensed
its rights under those patent applications to Emory. Our license arrangement
with Emory includes all rights to Coviracil and its uses claimed in the Yale
patent applications.
HIV. Emory received a United States patent in 1993 covering a method to
treat HIV with Coviracil. Emory has also received United States and European
patents containing composition of matter claims that cover Coviracil. BioChem
Pharma filed a patent application in the United States in 1989 and received a
patent in 1991 covering a group of nucleosides in the same general class as
Coviracil, but which did not include Coviracil. BioChem Pharma filed foreign
patent applications in 1990, which expanded upon its 1989 United States patent
application to include FTC among a large class of nucleosides. The foreign
patent applications are pending in many countries and have issued in a number of
countries with claims directed to FTC that may cover Coviracil and its use to
treat HIV. In addition, BioChem Pharma filed a United States patent application
in 1991 specifically directed to Coviracil. BioChem Pharma has received two
patents in the United States based on this patent application, one directed to
Coviracil and the other directed to a method for treating viral diseases with
Coviracil. The PTO has determined that there are conflicts between both BioChem
Pharma patents and patent applications filed by Emory because they have
overlapping claims to the same technology. The PTO is conducting two adversarial
proceedings, interferences, to determine whether BioChem Pharma or Emory is
entitled to the patent claims in dispute regarding BioChem Pharma's two issued
patents. Emory may not prevail in the adversarial proceedings, and the
proceedings may also delay the decision of the PTO regarding Emory's patent
application. BioChem Pharma also filed patent applications in many foreign
countries based upon its 1991 United States patent application and has received
patents in certain countries. BioChem Pharma may have additional patent
applications pending in the United States.
In the United States, the first to invent a technology is entitled to
patent protection on that technology. For patent applications filed prior to
January 1, 1996, United States patent law provides that a party who invented a
technology outside the United States is deemed to have invented the technology
on the earlier of the date it introduced the invention in the United States or
the date it filed its patent application. In a filing with the Securities and
Exchange Commission, SEC, BioChem Pharma stated that prior to January 1, 1996,
it conducted substantially all of its research activities outside the United
States. BioChem Pharma also stated that it considered this to be a disadvantage
in obtaining United States patents based on patent applications filed before
January 1, 1996 as compared to companies that mainly conducted research in the
United States. We do not know whether Emory or BioChem Pharma was the first to
invent the technology claimed in their respective United States patent
applications or patents. We also do not know whether BioChem Pharma invented the
technology disclosed in its patent
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applications in the United States or introduced that technology in the United
States before the date of its patent applications.
In foreign countries, the first party to file a patent application on a
technology, not the first to invent the technology, is entitled to patent
protection on that technology. We believe that Emory filed patent applications
disclosing Coviracil as a useful anti-HIV agent in many foreign countries before
BioChem Pharma filed its foreign patent applications on that technology.
However, BioChem Pharma has received patents in several foreign countries. In
addition, BioChem Pharma has filed patent applications on Coviracil and its uses
in certain countries in which Emory did not file patent applications. Emory has
opposed or otherwise challenged patent claims on Coviracil granted to BioChem
Pharma in Australia and Europe. Emory may not initiate patent opposition
proceedings in any other countries or be successful in any foreign proceeding
attempting to prevent the issuance of, revoke or limit the scope of patents
issued to BioChem Pharma. BioChem Pharma has opposed patent claims on Coviracil
granted to Emory in Europe, Japan, Australia and South Korea. BioChem Pharma may
make additional challenges to Emory patents or patent applications, which Emory
may not succeed in defending. Our sales, if any, of Coviracil for the treatment
of HIV may be held to infringe United States and foreign patent rights of
BioChem Pharma. Under the patent laws of most countries, a product can be found
to infringe a third party patent either if the third party patent expressly
covers the product or method of treatment using the product, or if the third
party patent covers subject matter that is substantially equivalent in nature to
the product or method, even if the patent does not expressly cover the product
or method. If it is determined that the sale of Coviracil for the treatment of
HIV infringes a BioChem Pharma patent, we would not have the right to make, use
or sell Coviracil for the treatment of HIV in one or more countries in the
absence of a license from BioChem Pharma. We may be unable to obtain such a
license from BioChem Pharma on acceptable terms or at all.
Hepatitis B. Burroughs Wellcome Co, Burroughs Wellcome, filed patent
applications in March 1991 and May 1991 in Great Britain on a method to treat
hepatitis B with FTC and purified forms of FTC, that include Coviracil.
Burroughs Wellcome filed similar patent applications in other countries,
including the United States. Glaxo subsequently acquired Burroughs Wellcome's
rights under those patent applications. Those patent applications were filed in
foreign countries prior to the date Emory filed its patent application on the
use of Coviracil to treat hepatitis B. Burroughs Wellcome's foreign patent
applications, therefore, have priority over those filed by Emory. In July 1996,
Emory instituted litigation against Glaxo in the United States District Court to
obtain ownership of the patent applications filed by Burroughs Wellcome,
alleging that Burroughs Wellcome converted and misappropriated Emory's invention
and property and that an Emory employee is the inventor or a co-inventor of the
subject matter covered by the Burroughs Wellcome patent applications. In May
1999, Emory and Glaxo settled the litigation, and we became the exclusive
licensee of the United States and all foreign patent applications and patents
filed by Burroughs Wellcome on the use of Coviracil to treat hepatitis B. Under
the license and settlement agreements, Emory and we were also given access to
development and clinical data and drug substance held by Glaxo relating to
Coviracil.
BioChem Pharma filed a patent application in May 1991 in Great Britain
also directed to a method to treat hepatitis B with FTC. BioChem Pharma filed
similar patent applications in other countries. In January 1996, BioChem Pharma
received a patent in the United States, which included a claim to treat
hepatitis B with Coviracil. The PTO has determined that there is a conflict
between the BioChem Pharma patent and patent applications filed by Yale and
Emory. The PTO is conducting an adversarial proceeding, an interference, to
determine which party is entitled to the patent claims in dispute. Yale licensed
all of its rights relating to FTC, including Coviracil, and its uses claimed in
this patent application to Emory, which subsequently licensed these rights to
us. Neither Emory nor Yale may prevail in the adversarial proceeding, and the
proceeding may delay the decision of the PTO regarding Yale's and Emory's patent
applications. In addition, the PTO has recently added the U.S. patent
application filed by Burroughs Wellcome to this interference. Emory may not
pursue or succeed in any such proceedings. We will not be able to sell Coviracil
for the treatment of hepatitis B in the United States unless a United States
court or administrative body determines that the BioChem Pharma patent is
invalid or unless we obtain a license from BioChem Pharma. We may be unable to
obtain such a license on acceptable terms or at all. In July 1991, BioChem
Pharma received a United States patent on the use of 3TC to treat hepatitis B
and has corresponding patent applications pending or issued in foreign
countries. If it is determined that the use of Coviracil to treat hepatitis B is
not substantially different from the use of 3TC to treat hepatitis B, a court
could hold that the use of Coviracil to treat hepatitis B infringes these
BioChem Pharma 3TC patents.
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In addition, BioChem Pharma has filed in the United States and foreign
countries several patent applications on manufacturing methods relating to a
class of nucleosides that includes Coviracil, from which BioChem Pharma has
received several patents in the United States and many foreign countries. If we
use a manufacturing method that is covered by patents issued on any of these
applications, we will not be able to manufacture Coviracil without a license
from BioChem Pharma. We may not be able to obtain such a license on acceptable
terms or at all.
DAPD
We obtained our rights to DAPD under a license from Emory and the
University of Georgia Research Foundation, Inc., University of Georgia. Our
rights to DAPD include a number of issued United States patents that cover
composition of matter, a method for the synthesis of DAPD, methods for the use
of DAPD alone or in combination with certain other agents for the treatment of
hepatitis B, and a method to treat HIV with DAPD. We also have rights to several
foreign patents and patent applications that cover methods for the use of DAPD
alone or in combination with certain other anti-hepatitis B agents for the
treatment of hepatitis B. Additional foreign patent applications are pending
which contain claims for the use of DAPD to treat HIV. Emory and the University
of Georgia filed patent applications claiming these inventions in the United
States in 1990 and 1992. BioChem Pharma filed a patent application in the United
States in 1988 on a group of nucleosides in the same general class as DAPD and
their use to treat HIV, and has filed corresponding patent applications in
foreign countries. The PTO issued a patent to BioChem Pharma in 1993 covering a
class of nucleosides that includes DAPD and its use to treat HIV. Corresponding
patents have been issued to BioChem Pharma in many foreign countries. Emory has
filed an opposition to patent claims granted to BioChem Pharma by the European
Patent Office based, in part, upon Emory's assertion that BioChem Pharma's
patent does not disclose how to make DAPD. In a patent opposition hearing held
at the European Patent Office on March 4, 1999, the Opposition Division ruled
that the BioChem Pharma European patent covering DAPD is valid. Emory has
appealed this decision to the European Patent Office Technical Board of Appeal.
If the Technical Board of Appeal affirms the decision of the Opposition
Division, or if Emory or Triangle do not pursue the appeal, we would not be able
to sell DAPD in Europe without a license from BioChem Pharma, which may not be
available on acceptable terms or at all. Patent claims granted to Emory on a
portion of the DAPD technology by the Australian Patent Office have also been
opposed by BioChem Pharma. We cannot assure you that a court or administrative
body would invalidate BioChem Pharma's patent claims. Further, a sale of DAPD by
us may infringe BioChem Pharma's patents. If Emory, the University of Georgia
and we do not challenge, or are not successful in any challenge to, BioChem
Pharma's issued patents, pending patent applications, or patents that may issue
from such applications, we will not be able to manufacture, use or sell DAPD in
the United States and any foreign countries in which BioChem Pharma receives a
patent without a license from BioChem Pharma. We may not be able to obtain such
a license from BioChem Pharma on acceptable terms or at all.
Immunostimulatory Sequence Product Candidates
In March 2000, we entered into a licensing and collaborative agreement
with Dynavax Technologies Corporation, Dynavax, to develop immunostimulatory
polynucleotide sequence product candidates for the prevention and/or treatment
of serious viral diseases, which became effective in April 2000.
Immunostimulatory sequences are polynucleotides which stimulate the immune
system, and could potentially be used in combination with our small molecule
product candidates to increase the body's ability to defend against viral
infection. Immunostimulatory sequences can be stabilized for use through
internal linkages that do not occur in nature, including phosphorothioate
linkages.
There are a number of companies which have patent applications and issued
patents, both in the United States and in other countries, that cover
immunostimulatory sequences and their uses. Coley Pharmaceuticals, Inc. has
filed several patent applications in this area and has in addition exclusively
licensed a number of patent applications on this subject from the University of
Iowa and Isis Pharmaceuticals, Inc. A number of these patent applications have
been issued. A number of companies have also filed patent applications and have
or are expected to receive patents on certain polynucleotides and methods for
their use and manufacture. We could be prevented from making, using or selling
any immunostimulatory sequence that is covered by a patent issued to a third
party company, unless we obtain a license from that company, which may not be
available on reasonable terms or at all.
With respect to any of our drug candidates, litigation, patent opposition
and adversarial proceedings, including the currently pending proceedings, could
result in substantial costs to us. We expect the costs of the
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currently pending proceedings to increase significantly during the next several
years. We anticipate that additional litigation and/or proceedings will be
necessary or may be initiated to enforce any patents we own or in-license, or to
determine the scope, validity and enforceability of other parties' proprietary
rights and the priority of an invention. Any of these activities could result in
substantial costs and/or delays to us. The outcome of any of these proceedings
may significantly affect our drug candidates and technology. United States
patents carry a presumption of validity and generally can be invalidated only
through clear and convincing evidence. As indicated above, the PTO is conducting
three adversarial proceedings in connection with the emtricitabine technology.
We cannot assure you that a court or administrative body would hold our
in-licensed patents valid or would find an alleged infringer to be infringing.
Further, the license and option agreements with Emory, the University of
Georgia, The Regents of the University of California, The DuPont Pharmaceuticals
Company, Mitsubishi Chemical Corporation, and Dynavax provide that each of these
licensors is primarily responsible for any patent prosecution activities, such
as litigation, patent conflict proceeding, patent opposition or other actions,
for the technology licensed to us. These agreements also provide that in general
we are required to reimburse these licensors for the costs they incur in
performing these activities. Similarly, Yale and the University of Georgia, the
licensors of clevudine to Bukwang Pharm. Ind. Co., Ltd., are primarily
responsible for patent prosecution activities with respect to clevudine at our
expense. As a result, we generally do not have the ability to institute or
determine the conduct of any such patent proceedings unless our licensors elect
not to institute or to abandon such proceedings. If our licensors elect to
institute and prosecute patent proceedings, our rights will depend in part upon
the manner in which these licensors conduct the proceedings. In any proceedings
they elect to initiate and maintain, these licensors may not vigorously pursue
or defend or may decide to settle such proceedings on terms that are unfavorable
to us. An adverse outcome of these proceedings could subject us to significant
liabilities to third parties, require disputed rights to be licensed from third
parties or require us to cease using such technology, any of which could
adversely affect our business. Moreover, the mere uncertainty resulting from the
initiation and continuation of any technology related litigation or adversarial
proceeding could adversely affect our business pending resolution of the
disputed matters.
We also rely on unpatented trade secrets and know-how to maintain our
competitive position, which we seek to protect, in part, by confidentiality
agreements with employees, consultants and others. These parties may breach or
terminate these agreements, and we may not have adequate remedies for any
breach. Our trade secrets may also be independently discovered by competitors.
We rely on certain technologies to which we do not have exclusive rights or
which may not be patentable or proprietary and thus may be available to
competitors. We have filed applications for, but have not obtained, trademark
registrations for various marks in the United States and other jurisdictions. We
have received U.S. trademark registrations for our corporate name and logo,
Coactinon(R) and Coviracil(R). We have also received registrations in the
European Union for the mark Coactinon(R) and our corporate logo. Our pending
application in the European Union for the mark Coviracil(TM) has been opposed by
Orsem, based upon registrations for the mark Coversyl in various countries, and
Les Laboratories Serveir, based on a French registration for the mark Coversyl.
We do not believe that the marks Coviracil and Coversyl are confusingly similar,
but, in the event they are found to be confusingly similar, we may need to adopt
a different product name for emtricitabine in the applicable jurisdictions.
Several other companies use trade names that are similar to our name for their
businesses. If we are unable to obtain any licenses that may be necessary for
the use of our corporate name, we may be required to change our name. Our
management personnel were previously employed by other pharmaceutical companies.
The prior employers of these individuals may allege violations of trade secrets
and other similar claims relating to their drug development activities for us.
We are subject to extensive government regulation and may fail to receive
regulatory approval which could prevent or delay the commercialization of our
products.
In addition to preclinical testing, clinical trials and other approval
procedures for human pharmaceutical products, we are subject to numerous other
regulations covering the development of pharmaceutical products. These
regulations include, for example, domestic and international regulations
relating to the manufacturing, safety, labeling, storage, record keeping,
reporting, marketing and promotion of pharmaceutical products. We are also
regulated with respect to non-clinical and clinical laboratory practices, safe
working conditions, and the use and disposal of hazardous substances, including
radioactive compounds and infectious disease agents used in connection with our
development work. The requirements vary widely from country to country and some
requirements may vary from state to state in the United States. We expect the
process of obtaining these approvals and complying with appropriate government
regulations to be time consuming and expensive. Even if our drug candidates
receive regulatory approval, we may still face difficulties in marketing and
manufacturing those drug candidates. Further,
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any approval may require postmarketing studies or other conditions. The approval
of any of our drug candidates may limit the indicated uses of the drug
candidate. A marketed product, its manufacturer and the manufacturer's
facilities are subject to continual review and periodic inspections. The
discovery of previously unknown problems with a product, manufacturer or
facility may result in restrictions on the product or manufacturer, including
withdrawal of the product from the market. The failure to comply with applicable
regulatory requirements can, among other things, result in:
o fines,
o suspended regulatory approvals,
o refusal to approve pending applications,
o refusal to permit exports from the United States,
o product recalls,
o seizure of products,
o injunctions,
o operating restrictions, and
o criminal prosecutions.
In addition, adverse clinical results by others could negatively impact
the development and approval of our drug candidates. Some of our drug candidates
are intended for use as coactive therapy with one or more other drugs, and
adverse safety, effectiveness or regulatory developments in connection with such
other drugs will also have an adverse effect on our business.
Intense competition may render our drug candidates noncompetitive or obsolete.
We are engaged in segments of the drug industry that are highly
competitive and rapidly changing. Any of our current drug candidates that we
successfully develop will compete with numerous existing therapies. In addition,
many companies are pursuing novel drugs that target the same diseases we are
targeting. We believe that a significant number of drugs are currently under
development and will become available in the future for the treatment of HIV and
hepatitis B. We anticipate that we will face intense and increasing competition
as new products enter the market and advanced technologies become available. Our
competitors' products may be more effective, or more effectively marketed and
sold, than any of our products. Competitive products may render our products
obsolete or noncompetitive before we can recover the expenses of developing and
commercializing our drug candidates. Furthermore, the development of a cure or
new treatment methods for the diseases we are targeting could render our drug
candidates noncompetitive, obsolete or uneconomical. Many of our competitors:
o have significantly greater financial, technical and human resources
than we have and may be better equipped to develop, manufacture and
market products,
o have extensive experience in preclinical testing and clinical
trials, obtaining regulatory approvals and manufacturing and
marketing pharmaceutical products, and
o have products that have been approved or are in late stage
development and operate large, well-funded research and development
programs.
Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and
biotechnology companies. Academic institutions, governmental agencies and other
public and private research organizations are also becoming increasingly aware
of the commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.
If we successfully develop and obtain approval for our drug candidates, we
will face competition based on the safety and effectiveness of our products, the
timing and scope of regulatory approvals, the availability of supply, marketing
and sales capability, reimbursement coverage, price, patent position and other
factors. Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position.
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Because we face risks related to our license and option agreements, we could
lose our rights to our drug candidates.
We have in-licensed or obtained an option to in-license our drug
candidates under agreements with our licensors. These agreements permit our
licensors to terminate the agreements under certain circumstances, such as our
failure to achieve certain development milestones or the occurrence of an
uncured material breach by us. The termination of any of these agreements could
result in the loss of our rights to a drug candidate. Upon termination of most
of our license agreements, we are required to return the licensed technology to
our licensors. In addition, most of these agreements provide that our licensors
are primarily responsible for any patent prosecution activities, such as
litigation, patent conflict, patent opposition or other actions, for the
technology licensed to us. These agreements also provide that in general we are
required to reimburse our licensors for the costs they incur in performing these
activities. We believe that these costs as well as other costs under our license
and option agreements will be substantial and may increase significantly during
the next several years. Our inability or failure to pay any of these costs with
respect to any drug candidate could result in the termination of the license or
option agreement for the drug candidate.
Because we may be unable to successfully manufacture our drug candidates, our
business may never achieve profitability.
We do not have any internal manufacturing capacity and we rely on third
party manufacturers for the manufacture of all of our clinical trial material.
We plan to expand our existing relationships or to establish relationships with
additional third party manufacturers for products that we successfully develop.
The terms of the Abbott Alliance provide that Abbott Laboratories, Abbott, will
manufacture all or a portion of our product requirements for those products that
are or become covered by the Abbott Alliance. We may be unable to maintain our
relationship with Abbott or to establish or maintain relationships with other
third party manufacturers on acceptable terms, and third party manufacturers may
be unable to manufacture products in commercial quantities on a cost effective
basis. Our dependence upon third parties for the manufacture of our products may
adversely affect our profit margins and our ability to develop and commercialize
products on a timely and competitive basis. Further, third party manufacturers
may encounter manufacturing or quality control problems in connection with the
manufacture of our products and may be unable to maintain the necessary
governmental licenses and approvals to continue manufacturing our products.
We may be unable to successfully market, sell or distribute our drug candidates.
In the United States, we currently intend to market the drug candidates
covered by the Abbott Alliance in collaboration with Abbott and to market other
drug candidates that we successfully develop, that do not become part of the
Abbott Alliance, through a direct sales force. Outside of the United States, we
expect Abbott to market drug candidates covered by the Abbott Alliance and, for
any other drug candidates that we successfully develop that do not become part
of the Abbott Alliance, we intend to market and sell through arrangements or
collaborations with third parties. In addition, we expect Abbott to handle the
distribution and sale of drug candidates covered by the Abbott Alliance both
inside and outside the United States. With respect to the United States, our
ability to market the drug candidates that we successfully develop will be
contingent upon recruitment, training and deployment of a sales and marketing
force as well as the performance of Abbott under the Abbott Alliance. We may be
unable to establish marketing or sales capabilities or to maintain arrangements
or enter into new arrangements with third parties to perform those activities on
favorable terms. In addition, any such third parties may have significant
control or influence over important aspects of the commercialization of our drug
candidates, including market identification, marketing methods, pricing,
composition of sales force and promotional activities. We also may have limited
control over the amount and timing of resources that a third party may devote to
our drug candidates. Our business may never achieve profitability if we fail to
establish or maintain a sales force and marketing, sales and distribution
capabilities.
Because we depend on third parties for the development and acquisition of drug
candidates, we may not be able to successfully acquire additional drug
candidates or commercialize or develop our current drug candidates.
We have engaged and intend to continue to engage third party contract
research organizations and other third parties to help us develop our drug
candidates. Although we have designed the clinical trials for our drug
candidates, the contract research organizations have conducted many of the
clinical trials. As a result, many
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important aspects of our drug development programs have been and will continue
to be outside of our direct control. In addition, the contract research
organizations may not perform all of their obligations under arrangements with
us. If the contract research organizations do not perform clinical trials in a
satisfactory manner or breach their obligations to us, the development and
commercialization of any drug candidate may be delayed or precluded. We do not
currently intend to engage in drug discovery. Our strategy for obtaining
additional drug candidates is to utilize the relationships of our management
team and scientific consultants to identify drug candidates for in-licensing
from companies, universities, research institutions and other organizations. We
may not succeed in acquiring additional drug candidates on acceptable terms or
at all.
Because we may not be able to attract and retain key personnel and advisors, we
may not successfully develop our products or achieve our other business
objectives.
We are highly dependent on our senior management and scientific staff,
including Dr. David Barry, our Chairman and Chief Executive Officer. We have
entered into employment agreements with each officer of Triangle. Dr. Barry's
employment agreement contains certain non-competition provisions. In addition,
the employment agreements for each officer provide for certain severance
payments which are contingent upon each officer's refraining from competition
with Triangle. The loss of the services of any member of our senior management
or scientific staff may significantly delay or prevent the achievement of
product development and other business objectives. Our ability to attract and
retain qualified personnel, consultants and advisors is critical to our success.
In order to pursue our drug development programs and marketing plans, we will
need to hire additional qualified scientific and management personnel.
Competition for qualified individuals is intense and we face competition from
numerous pharmaceutical and biotechnology companies, universities and other
research institutions. We may be unable to attract and retain these individuals,
and our failure to do so would have an adverse effect on our business.
Health care reform measures and third party reimbursement practices are
uncertain and may adversely impact the commercialization of our products.
The efforts of governments and third party payors to contain or reduce the
cost of health care will continue to affect the business and financial condition
of drug companies. A number of legislative and regulatory proposals to change
the health care system have been proposed in recent years. In addition, an
increasing emphasis on managed care in the United States has and will continue
to increase pressure on drug pricing. While we cannot predict whether
legislative or regulatory proposals will be adopted or what effect those
proposals or managed care efforts may have on our business, the announcement
and/or adoption of such proposals or efforts could have an adverse effect on our
profit margins and financial condition. Sales of prescription drugs depend
significantly on the availability of reimbursement to the consumer from third
party payors, such as government and private insurance plans. These third party
payors frequently require that drug companies give them predetermined discounts
from list prices, and they are increasingly challenging the prices charged for
medical products and services. Present coactive treatment regimens for the
treatment of HIV are expensive; published reports indicate the cost per patient
per year can exceed $13,000, and may increase as new combinations are developed.
These costs have resulted in limitations in the reimbursement available from
third party payors for the treatment of HIV infection, and we expect that
reimbursement pressures will continue in the future. If we succeed in bringing
one or more products to the market, these products may not be considered cost
effective and reimbursement to the consumer may not be available or sufficient
to allow us to sell our products on a competitive basis.
If our drug candidates do not achieve market acceptance, our business may never
achieve profitability.
Our success will depend on the market acceptance of any products we
develop. The degree of market acceptance will depend upon a number of factors,
including the receipt and scope of regulatory approvals, the establishment and
demonstration in the medical community of the safety and effectiveness of our
products and their potential advantages over existing treatment methods, and
reimbursement policies of government and third party payors. Physicians,
patients, payors or the medical community in general may not accept or utilize
any product that we may develop.
We may not have adequate insurance protection against product liability.
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Our business exposes us to potential product liability risks that are
inherent in the testing of drug candidates and the manufacturing and marketing
of drug products and we may face product liability claims in the future. We
currently have only limited product liability insurance. We may be unable to
maintain our existing insurance and/or obtain additional insurance in the future
at a reasonable cost or in sufficient amounts to protect against potential
losses. A successful product liability claim or series of claims brought against
us could require us to pay substantial amounts that would decrease our
profitability, if any.
We may incur substantial costs related to our use of hazardous materials.
We use hazardous materials, chemicals, viruses and various radioactive
compounds in our drug development programs. Although we believe that our
handling and disposing of these materials comply with state and federal
regulations, the risk of accidental contamination or injury still exists. In the
event of such an accident, we could be held liable for any damages or fines that
result and any such liability could exceed our resources.
Our controlling stockholders may make decisions which you do not consider to be
in your best interest.
As of June 30, 2000, our directors, executive officers and their
affiliates, excluding Abbott, owned approximately 12.5% of our outstanding
common stock and Abbott owned approximately 17.3% of our outstanding common
stock. Pursuant to the terms of the Abbott Alliance, Abbott has the right to
purchase additional amounts of our common stock up to a maximum aggregate
percentage of 21% of our outstanding common stock and has certain rights to
purchase shares directly from us in order to maintain its existing level of
ownership, also known as antidilution protection. One Abbott designee serves as
a member of our Board of Directors. As a result, our controlling stockholders
are able to significantly influence all matters requiring stockholder approval,
including the election of directors and the approval of significant corporate
transactions. This concentration of ownership could also delay or prevent a
change in control of Triangle that may be favored by other stockholders.
The market price of our stock may be adversely affected by market volatility.
The market price of our common stock is likely to be volatile and could
fluctuate widely in response to many factors, including:
o announcements of the results of clinical trials by us or our
competitors,
o developments with respect to patents or proprietary rights,
o announcements of technological innovations by us or our competitors,
o announcements of new products or new contracts by us or our
competitors,
o actual or anticipated variations in our operating results due to the
level of development expenses and other factors,
o changes in financial estimates by securities analysts and whether
our earnings meet or exceed such estimates,
o conditions and trends in the pharmaceutical and other industries,
o new accounting standards,
o general economic, political and market conditions and other factors,
and
o the occurrence of any of the risks described in these "Risk
Factors."
In the past, following periods of volatility in the market price of the
securities of companies in our industry, securities class action litigation has
often been instituted against those companies. If we face such litigation in the
future, it would result in substantial costs and a diversion of management
attention and resources, which would negatively impact our business.
In addition, if our stockholders sell a substantial number of shares of
our common stock in the public market, the market price of our common stock
could be reduced. As of June 30, 2000, there were 38,293,849 shares of common
stock outstanding, of which approximately 24,500,000 were immediately eligible
for resale in the public market without restriction. Holders of approximately
6,850,000 shares have rights to cause us to register them for sale to the
public. We have filed registration statements to register the sale of
approximately 3,900,000 of these shares. In addition, Abbott will have the right
on or after June 30, 2002 to cause us to register for resale in the
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public market the 6,571,428 shares of common stock purchased at the closing of
the Abbott Alliance. Any such sales may make it more difficult for us to raise
needed capital through an offering of our equity or convertible debt securities
and may reduce the market price of our common stock.
Antitakeover provisions in our charter documents and Delaware law could delay,
defer or prevent a tender offer or takeover attempt that you consider to be in
your best interest.
We have adopted a number of provisions that could have antitakeover
effects. On January 29, 1999, our Board of Directors, the Board, adopted a
preferred stock purchase rights plan, commonly referred to as a "poison pill."
The rights plan is intended to deter an attempt to acquire Triangle in a manner
or on terms not approved by the Board. Thus, the rights plan will not prevent an
acquisition of Triangle which is approved by the Board. Our charter authorizes
the Board to issue shares of undesignated preferred stock without stockholder
approval on terms as the Board may determine. Moreover, the issuance of
preferred stock may make it more difficult for a third party to acquire, or may
discourage a third party from acquiring, voting control of Triangle. Our bylaws
divide the Board into three classes of directors with each class serving a three
year term. These and other provisions of our charter and our bylaws, as well as
certain provisions of Delaware law, could delay or impede the removal of
incumbent directors and could make more difficult a merger, tender offer or
proxy contest involving Triangle, even if the events could be beneficial to our
stockholders. These provisions could also limit the price that investors might
be willing to pay for our common stock.
We have not declared or paid any dividends on our common stock.
We have never declared or paid any cash dividends on our common stock, and
we currently do not intend to pay any cash dividends on our common stock in the
foreseeable future. We intend to retain our earnings, if any, for the operation
of our business.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended. All statements, other
than statements of historical facts, included in, or incorporated by reference
into this prospectus, are forward-looking statements. In addition, when used in
this document, the words "anticipate", "estimate", "project", and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are subject to various risks or uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected. Although we believe
that the expectations reflected in these forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have
been correct. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks outlined
under "Risk Factors," that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus or to conform these statements to actual results unless
required by law.
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with
this offering because we may choose not to issue any shares of common stock.
Unless otherwise provided in a supplement to this prospectus, we intend to
use any net proceeds from this offering, together with other available funds,
for operating costs, capital expenditures and working capital needs,
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which may include costs of further preclinical development and clinical testing
of drug candidates in our pipeline, development of the infrastructure necessary
to support those activities, payment of license fees and other amounts to
licensors and other general corporate purposes.
We have not specifically identified the precise amounts we will spend on
each of these areas or the timing of these expenditures. The proceeds of this
offering may also be used to acquire companies or intellectual property that
complement our business, although we cannot at this time predict whether any of
these types of acquisitions will occur in the near future. The amounts actually
expended for each purpose may vary significantly depending upon numerous
factors, including the amount and timing of the proceeds from this offering,
progress with clinical drug development and other drug development programs. In
addition, expenditures may also depend on the establishment of new collaborative
arrangements with other companies, the availability of other financing, and
other factors.
We anticipate that we will be required to raise substantial additional
capital to continue to fund the clinical development of our other drug product
candidates. Additional capital may be raised through additional public or
private financing, as well as collaborative relationships, incurring debt and
other available sources.
PLAN OF DISTRIBUTION
We may offer our common stock:
o directly to purchasers;
o to or through underwriters;
o through dealers, agents or institutional investors; or
o through a combination of such methods.
Regardless of the method used to sell the securities, we will provide a
prospectus supplement or amendment that will disclose:
o the identity of any underwriters, dealers, agents or investors who
purchase the securities;
o the material terms of the distribution, including the amount sold
and the consideration paid;
o the amount of any compensation, discounts or commissions to be
received by the underwriters, dealers or agents;
o the terms of any indemnification provisions, including
indemnification from liabilities under the federal securities laws;
and
o the nature of any transaction by an underwriter, dealer or agent
during the offering that is intended to stabilize or maintain the
market price of the securities.
We may sell our common stock at fixed prices, which may change, at market
prices prevailing at the time of sale, at prices related to prevailing market
prices or at negotiated prices.
In connection with the sale of our common stock, underwriters may receive
compensation from us or from purchasers of our common stock in the form of
discounts, concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of our common stock may be deemed to be
underwriters. Discounts or commissions they receive and any profit on their
resale of our common stock may be considered underwriting discounts and
commissions under the Securities Act of 1933.
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We may agree to indemnify underwriters, dealers and agents who participate
in the distribution of our common stock against various liabilities, including
liabilities under the Securities Act of 1933. We may also agree to contribute to
payments which the underwriters, dealers or agents may be required to make in
respect of these liabilities. We may authorize dealers or other persons who act
as our agents to solicit offers by various institutions to purchase our common
stock from us under contracts which provide for payment and delivery on a future
date. We may enter into these contracts with commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others. If we enter into these agreements concerning
any series of our common stock, we will indicate that in the prospectus
supplement.
In connection with an offering of our common stock, underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
our common stock. Specifically, underwriters may over-allot in connection with
the offering, creating a syndicate short position in our common stock for their
own account. In addition, underwriters may bid for, and purchase, our common
stock in the open market to cover short positions or to stabilize the price of
our common stock. Finally, underwriters may reclaim selling concessions allowed
for distributing our common stock in the offering if the underwriters repurchase
previously distributed common stock in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of our common stock above independent market
levels. Underwriters are not required to engage in any of these activities and
may end any of these activities at any time. Agents and underwriters may engage
in transactions with, or perform services for, us and our affiliates in the
ordinary course of business.
LEGAL MATTERS
For purposes of this offering, Brobeck, Phleger & Harrison LLP, New York,
New York, is giving its opinion as to the validity of the shares.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Triangle for the year ended December 31, 1999,
have been incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All the amounts
shown are estimates, except for the registration fee.
Registration Fee......................................... $ 26,400
Legal fees and expenses*................................. 50,000
Accounting fees and expenses*............................ 8,000
Printing*............................................... 4,000
Transfer Agent and Registrar Fees*....................... 1,500
Nasdaq Filing Fees*...................................... 35,000
Miscellaneous Expenses*.................................. 1,100
TOTAL............................................... $126,000
========
*Estimated.
Item 15. Indemnification of Officers and Directors.
Section 145 of the Delaware General Corporation Law permits
indemnification of officers and directors of Triangle under certain conditions
and subject to certain limitations. Section 145 of the Delaware General
Corporation Law also provides that a corporation has the power to purchase and
maintain insurance on behalf of its officers and directors against any liability
asserted against such person and incurred by him or her in such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability under the
provisions of Section 145 of the Delaware General Corporation Law.
Article VII, Section (i) of the Restated Bylaws of Triangle provides that
Triangle shall indemnify its directors and executive officers to the fullest
extent not prohibited by the Delaware General Corporation Law. The rights to
indemnity thereunder continue as to a person who has ceased to be a director,
officer, employee or agent and inure to the benefit of the heirs, executors and
administrators of the person. In addition, expenses incurred by a director or
officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding by reason of the fact that he or she is or was a
director or officer of Triangle (or was serving at Triangle's request as a
director or officer of another corporation) shall be paid by Triangle in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by Triangle as authorized by the relevant Section of the Delaware
General Corporation Law.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
Article 5, Section (a) of Triangle's Second Restated Certificate of
Incorporation provides that a director of Triangle shall not be personally
liable for monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to Triangle
or its stockholders, (ii) for acts or omissions not in good faith or acts or
omissions that involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived any improper personal benefit.
Triangle has entered into indemnification agreements with its directors
and executive officers. Generally, the indemnification agreements attempt to
provide the maximum protection permitted by Delaware law as it may be amended
from time to time. Under such additional indemnification provisions, however, an
individual will not receive indemnification for judgments, settlements or
expenses if he or she is found liable to Triangle (except to the extent the
court determines he or she is fairly and reasonably entitled to indemnity for
expenses), for settlements not approved by Triangle or for settlements and
expenses if the settlement is not approved by the court. The indemnification
agreements provide for Triangle to advance to the individual any and all
reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding. In
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<PAGE>
order to receive an advance of expenses, the individual must submit to Triangle
copies of invoices presented to him or her for such expenses. Also, the
individual must repay such advances upon a final judicial decision that he or
she is not entitled to indemnification.
The Registrant has an insurance policy covering the directors and officers
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Exhibit No. Description
----------- -----------
4.1* Instruments defining the rights of stockholders. Reference
is made to the Registration Statement on Form 8-A, filed
October 18, 1996 (file no. 000-21589), and the
Registration Statement on Form 8-A, filed February 10,
1999 (file no. 000-21589), as amended on June 18, 1999
(file no. 000-21589).
5.1 Opinion of Brobeck, Phleger & Harrison LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference is
made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
*Previously filed.
Item 17. Undertakings.
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 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; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 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.
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 Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to
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<PAGE>
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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Triangle
pursuant to the foregoing provisions, Delaware Corporation law, the Underwriting
Agreement 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, therefor, 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 hereunder,
the Registrant will, unless in the opinion of its counsel the question has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of 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:
(1) For determining any liability under the Securities Act, treat 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 us under the Rule 424(b)(1), or (4)
or 497(h) under the Securities Act as part of this registration
statement as of the time the Securities and Exchange Commission
declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the
registration statement, and that offering of the securities at that
time as the bona fide offering of those securities.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on the 19th day of
October, 2000.
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ DAVID W. BARRY
------------------
David W. Barry
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature below
constitutes and appoints Chris A. Rallis his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this registration statement
on Form S-3, and to file the same, with all exhibits thereto, and all documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in 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 said
attorneys-in-fact and agents, and acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in this capacities and on the
dates indicated:
Signature Title
--------- -----
/s/ DAVID W. BARRY Chairman of the Board and Chief October 19, 2000
-------------------------- Executive Officer (Principal
David W. Barry Executive Officer)
/s/ CHRIS A. RALLIS Director, President and Chief October 19, 2000
-------------------------- Operating Officer
Chris A. Rallis
/s/ ROBERT F. AMUNDSEN JR. Executive Vice President and October 19, 2000
-------------------------- Chief Financial Officer (Principal
Robert F. Amundsen, Jr. Financial and Accounting Officer)
/s/ ANTHONY B. EVNIN Director October 19, 2000
--------------------------
Anthony B. Evnin
/s/ STANDISH M. FLEMING Director October 19, 2000
--------------------------
Standish M. Fleming
/s/ DENNIS B. GILLINGS Director October 19, 2000
--------------------------
Dennis B. Gillings
/s/ ARTHUR J. HIGGINS Director October 19, 2000
--------------------------
Arthur J. Higgins
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<PAGE>
/s/ HENRY G. GRABOWSKI Director October 19, 2000
--------------------------
Henry G. Grabowski
/s/ GEORGE MCFADDEN Director October 19, 2000
--------------------------
George McFadden
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<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1* Instruments defining the rights of stockholders. Reference is
made to the Registration Statement on Form 8-A, filed October
18, 1996 (file no. 000-21589), and the Registration Statement
on Form 8-A, filed February 10, 1999 (file no. 000-21589), as
amended on June 18, 1999 (file no. 000-21589).
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference is made
to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
*Previously filed.
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