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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 21, 2000
REGISTRATION STATEMENT 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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PENWEST PHARMACEUTICALS CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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WASHINGTON 91-1513032
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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2981 ROUTE 22
PATTERSON, NY 12563-9970
(914) 878-3414
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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TOD R. HAMACHEK
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
PENWEST PHARMACEUTICALS CO.
2981 ROUTE 22
PATTERSON, NY 12563-9970
(914) 878-3414
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
STUART M. FALBER, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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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. [ ]
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If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $0.001 par value per share.... 1,399,232 shares $14.8125 $20,726,124 $5,471.70
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices of our Common Stock on the Nasdaq National Market on
March 20, 2000.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES OR ACCEPT AN OFFER TO BUY 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 WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED MARCH , 2000
1,399,232 SHARES
PENWEST PHARMACEUTICALS CO.
COMMON STOCK
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This prospectus relates to resales of common stock we issued and sold to
the selling stockholders listed on page 14. We will not receive any of the
proceeds from the sale of the shares by the selling stockholders. All of the
shares were acquired by the selling stockholders from us in a private placement
we conducted on March 6, 2000. We have agreed to pay certain expenses in
connection with the registration of the shares and to indemnify the selling
stockholders against certain liabilities. The selling stockholders will pay all
underwriting discounts and selling commissions, if any, in connection with the
sale of the shares.
Our common stock is traded on the Nasdaq National Market under the symbol
"PPCO." On March 20, 2000, the last reported sale price of our common stock on
the Nasdaq National Market was $14.125 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
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The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
Our principal executive offices are located at 2981 Route 22, Patterson, NY
12563-9970 and our telephone number is (914) 878-3414.
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THE DATE OF THIS PROSPECTUS IS MARCH , 2000.
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TABLE OF CONTENTS
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Who We Are.................................................. 3
Risk Factors................................................ 4
Special Note Regarding Forward-Looking Statements........... 11
Use of Proceeds............................................. 12
Selling Stockholders........................................ 13
Plan of Distribution........................................ 13
Legal Matters............................................... 15
Experts..................................................... 15
Where You Can Find More Information......................... 15
Incorporation of Certain Documents by Reference............. 16
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We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of the shares.
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WHO WE ARE
We are engaged in the research, development and commercialization of novel
drug delivery technologies and have extensive expertise in developing and
manufacturing excipient ingredients for the pharmaceutical industry. Based on
this fundamental expertise in tabletting ingredients, we have developed our
proprietary TIMERx(R) controlled release drug delivery technology, which is
applicable to a broad range of orally administered drugs, and ProSolv(TM) a
co-processing drug delivery technology platform.
We were incorporated under the name Edward Mendell Co., Inc. in the State
of Washington in February 1991 as a wholly-owned subsidiary of Penford (formerly
known as Penwest, Ltd.) and changed our name to Penwest Pharmaceuticals Co. Our
executive offices are located at 2981 Route 22, Patterson, NY 12563-9970. Our
telephone number is (914) 878-3414.
TIMERx(R), EMCOCEL(R), EXPLOTAB(R), EMDEX(R), EMCOMPRESS(R), CANDEX(R), and
PROSOLV SMCC(R) are our registered trademarks. PROSOLV HD(TM) is also our
trademark. Other tradenames and trademarks appearing in this Prospectus are the
property of their respective owners.
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RISK FACTORS
You should consider carefully the following risks, along with the other
information contained or incorporated by reference in this prospectus, before
you decide to buy any common stock. The risks and uncertainties described below
are not the only ones affecting us. Additional risks and uncertainties may also
adversely affect our business and operations. If any of the following events
actually occur, our business, financial condition, or results of operations
would likely suffer, possibly materially.
OUR CONTROLLED RELEASE PRODUCTS THAT ARE GENERIC VERSIONS OF BRANDED CONTROLLED
RELEASE PRODUCTS THAT ARE COVERED BY ONE OR MORE PATENTS MAY BE SUBJECT TO
LITIGATION
We expect that our collaborators will file Abbreviated New Drug
Applications, or ANDAs, for our controlled release products that are generic
versions of branded controlled release products that are covered by one or more
patents. It is likely that the owners of the patents covering the brand name
product or the sponsors of the New Drug Applications, or NDA, with respect to
the branded product will sue or undertake regulatory initiatives to preserve
marketing exclusivity, as Pfizer, Inc. did with respect to Nifedipine XL a
generic version of Pfizer's Procardia XL. Any significant delay in obtaining
Food and Drug Administration, or FDA, approval to market our product candidates
as a result of litigation, as well as the expense of such litigation, whether or
not we or our collaborators are successful, could have a material adverse effect
on our business, financial condition and results of operations.
WE ARE DEPENDENT ON MYLAN PHARMACEUTICALS, INC. AND OTHER CORPORATE
COLLABORATORS TO CONDUCT FULL-SCALE BIOEQUIVALENCE STUDIES AND CLINICAL TRIALS,
OBTAIN REGULATORY APPROVALS FOR, AND MANUFACTURE, MARKET, AND SELL OUR TIMERX(R)
CONTROLLED RELEASE PRODUCTS
We develop and commercialize our TIMERx(R) controlled release products in
collaboration with pharmaceutical companies. We are parties to collaborative
agreements with third parties relating to certain of our principal products. We
are relying on Mylan to conduct full-scale bioequivalence studies and clinical
trials, obtain regulatory approvals for, and manufacture, market and sell one of
our TIMERx(R) controlled release products, and Endo Pharmaceuticals, Inc. to
develop and commercialize a controlled release version of Numorphan. We are also
dependent on Mylan with respect to the marketing and sale of the 30 mg strength
of Pfizer's generic version of Procardia XL. Our collaborators may not devote
the resources necessary or may otherwise be unable to complete development and
commercialization of these potential products. Our existing collaborations are
subject to termination without cause on short notice under certain
circumstances.
If we cannot maintain our existing collaborations or establish new
collaborations, we would be required to terminate the development and
commercialization of our potential products or undertake product development and
commercialization activities at our own expense. Moreover, we have limited or no
experience in conducting full-scale bioequivalence studies and clinical trials,
preparing and submitting regulatory applications and manufacturing, marketing
and selling our TIMERx(R) controlled release products. We may not be successful
in performing these activities.
Our existing collaborations and any future collaborations with third
parties may not be scientifically or commercially successful. Factors that may
affect the success of our collaborations include the following:
- our collaborators may be pursuing alternative technologies or developing
alternative products, either on their own or in collaboration with
others, that may be competitive with the product as to which they are
collaborating with us, which could affect our collaborator's commitment
to the collaboration with us;
- reductions in marketing or sales efforts or a discontinuation of
marketing or sales of our products by our collaborators would reduce our
revenues, which will be based on a percentage of net sales by the
collaborator;
- our collaborators may terminate their collaborations with us, which could
make it difficult for us to attract new collaborators or adversely affect
our perception in the business and financial communities; and
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- our collaborators may pursue higher priority programs or change the focus
of their development programs, which could affect the collaborator's
commitment to us.
WE HAVE NOT BEEN PROFITABLE
We have incurred net losses since our inception, including net losses of
approximately $7.3 million, $8.8 million and $7.7 million during 1997, 1998 and
1999, respectively. As of December 31, 1999, our accumulated deficit was
approximately $36.2 million. A substantial portion of our revenues have been
generated from the sales of our pharmaceutical excipients. Our future
profitability will depend on several factors, including:
- the timing of the commercial launch by Mylan of Pfizer's generic version
of the 30 mg strength of Procardia XL in the United States;
- the successful commercialization of our controlled release products for
which regulatory approval currently is pending;
- the completion of the development of other pharmaceuticals using our
TIMERx(R) controlled release technology;
- an increase in sales of our pharmaceutical excipient products; and
- our funding obligations under certain of our collaborations.
WE FACE SIGNIFICANT COMPETITION, WHICH MAY RESULT IN OTHERS DISCOVERING,
DEVELOPING OR COMMERCIALIZING PRODUCTS BEFORE OR MORE SUCCESSFULLY THAN WE DO
The pharmaceutical industry is highly competitive and is affected by new
technologies, governmental regulations, health care legislation, availability of
financing, litigation and other factors. Many of our competitors have longer
operating histories and greater financial, marketing, legal and other resources
than we do and than certain of our collaborators do.
Our TIMERx(R) business faces competition from numerous public and private
companies and their controlled release technologies, including ALZA
Corporation's oral osmotic pump (OROS(R)) technology, multiparticulate systems
marketed by Elan Corporation PLC and Biovail Corporation International,
traditional matrix systems marketed by SkyePharma, plc and other controlled
release technologies marketed or under development by Andrx Corporation, among
others.
In addition to developing controlled release versions of immediate release
products, we have concentrated a significant portion of our initial development
efforts on generic versions of branded controlled release products. The success
of generic versions of branded controlled release products based on our
TIMERx(R) technology will depend, in large part, on the intensity of competition
from the branded controlled release product, other generic versions of the
branded controlled release product and other drugs and technologies that compete
with the branded controlled release product, as well as the timing of product
approval. Competition from other generic versions of branded controlled release
products will also reduce the royalty rate to be paid to us under several of our
collaborations.
The generic drug industry is characterized by frequent litigation between
generic drug companies and branded drug companies. Those companies with
significant financial resources will be better able to bring and defend any such
litigation.
In our excipients business, we compete with a number of large manufacturers
and other distributors of excipient products, many of which have substantially
greater financial, marketing and other resources than the Company. Our principal
competitor in this market is FMC Corporation, which markets its own line of MCC
excipient products.
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WE MAY REQUIRE ADDITIONAL FUNDING
Our requirements for additional capital could be substantial and will
depend on many factors, including:
- the timing and amount of payments received under existing and possible
future collaborative agreements;
- the structure of any future collaborative or development agreements;
- the progress of our collaborative and independent development projects;
- revenues from our excipients business;
- the costs to us of clinical studies for our products;
- the prosecution, defense and enforcement of patent claims and other
intellectual property rights; and
- the development of manufacturing, marketing and sales capabilities.
We have no committed sources of capital. We may seek additional funds
through collaborative arrangements and public or private financing. Additional
financing may not be available to us on acceptable terms, if at all. If we raise
additional funds by issuing equity securities, further dilution to our then
existing stockholders will result. In addition, the terms of the financing may
adversely affect the holdings or the rights of such stockholders. If we are
unable to obtain funding on a timely basis, we may be required to significantly
curtail one or more of our research or development programs. We also could be
required to seek funds through arrangements with collaborators or others that
may require us to relinquish rights to certain of our technologies, product
candidates or products which we otherwise pursue on our own.
OUR SUCCESS DEPENDS ON OUR PROTECTING OUR PATENTS AND PATENTED RIGHTS
Our success depends in significant part on our ability to develop
patentable products, to obtain patent protection for our products, both in the
United States and in other countries, and to enforce these patents. The patent
positions of pharmaceutical firms, including us, are generally uncertain and
involve complex legal and factual questions. As a result, patents may not issue
from any patent applications that we own or license. If patents do issue, the
claims allowed may not be sufficiently broad to protect our technology. In
addition, issued patents that we own or license may be challenged, invalidated
or circumvented. Our patents also may not afford us protection against
competitors with similar technology.
Our success also depends on our not infringing patents issued to
competitors or others. We are aware of patents and patent applications belonging
to competitors and others that may require us to alter our products or
processes, pay licensing fees or cease certain activities.
We may not be able to obtain a license to any technology owned by a third
party that we require to manufacture or market one or more products. Even if we
can obtain a license, the financial and other terms may be disadvantageous.
Our success also depends on our maintaining the confidentiality of our
trade secrets and patented know-how. We seek to protect such information by
entering into confidentiality agreements with employees, consultants, licensees
and pharmaceutical companies. These agreements may be breached by such parties.
We may not be able to obtain an adequate, or perhaps, any remedy to such a
breach. In addition, our trade secrets may otherwise become known or be
independently developed by our competitors.
WE ARE INVOLVED IN AND MAY BECOME INVOLVED IN ADDITIONAL PATENT LITIGATION OR
OTHER INTELLECTUAL PROPERTY PROCEEDINGS RELATING TO OUR PRODUCTS OR PROCESSES
WHICH COULD RESULT IN LIABILITY FOR DAMAGES OR STOP OUR DEVELOPMENT AND
COMMERCIALIZATION EFFORTS
The pharmaceutical industry has been characterized by significant
litigation and interference and other proceedings regarding patents, patent
applications and other intellectual property rights. In addition to the recently
dismissed litigation involving Mylan, Pfizer and the still pending litigation
involving Mylan and Bayer, we may become parties to, or our products (or
products based on our TIMERx(R) controlled release
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technology) may become the subject of, additional patent litigation and other
proceedings in the future. The types of situations in which we may become
parties to such litigation or proceedings include:
- We or our collaborators may initiate litigation or other proceedings
against third parties to enforce our patent rights.
- We or our collaborators may initiate litigation or other proceedings
against third parties to seek to invalidate the patents held by such
third parties or to obtain a judgment that our products or processes do
not infringe such third parties' patents.
- If our competitors file patent applications that claim technology also
claimed by us, we or our collaborators may participate in interference or
opposition proceedings to determine the priority of invention.
- If third parties initiate litigation claiming that our processes or
products infringe their patent or other intellectual property rights, we
and our collaborators will need to defend against such proceedings.
An adverse outcome in any litigation or other proceeding could subject us
to significant liabilities to third parties and require us to cease using the
technology that is at issue or to license the technology from third parties. We
may not be able to obtain any required licenses on commercially acceptable terms
or at all.
The cost of any patent litigation or other proceeding, even if resolved in
our favor, could be substantial. Although the legal costs of defending
litigation relating to a patent infringement claim (unless such claim relates to
TIMERx(R) in which case such costs are our responsibility) are generally the
contractual responsibility of our collaborators, we could nonetheless incur
significant unreimbursed costs in participating and assisting in the litigation.
Some of our competitors may be able to sustain the cost of such litigation and
proceedings more effectively than we can because of their substantially greater
resources. Uncertainties resulting from the initiation and continuation of
patent litigation or other proceedings could have a material adverse effect on
our ability to complete in the marketplace. Patent litigation and other
proceedings may also absorb significant management time.
In 1994, the Boots Company PLC filed in the European Patent Office, or the
EPO, an opposition to a patent granted by the EPO to us relating to our
TIMERx(R) technology. In June 1996, the EPO dismissed Boots' opposition, leaving
intact all claims included in the patent. Boots has appealed this decision to
the EPO Board of Appeals, but no judgment has been rendered. We can provide no
assurance that we will prevail in this matter.
IF OUR CLINICAL TRAILS ARE NOT SUCCESSFUL OR TAKE LONGER TO COMPLETE THAN WE
EXPECT, WE MAY NOT BE ABLE TO DEVELOP AND COMMERCIALIZE CERTAIN OF OUR PRODUCTS
In order to obtain regulatory approvals for the commercial sale of certain
of our potential products, including controlled release versions of immediate
release drugs and new chemical entities, our collaborators will be required to
complete clinical trials in humans to demonstrate the safety and efficacy of the
products. Our collaborators may not be able to obtain authority from the FDA or
other regulatory agencies to commence or complete these clinical trails.
The results from preclinical testing of a product that is under development
may not be predictive of results that will be obtained in human clinical trials.
In addition, the results of early human clinical trials may not be predictive of
results that will be obtained in larger scale advanced stage clinical trials.
Furthermore, we, one of our collaborators, or the FDA may suspend clinical
trails at any time if the subjects or patients participating in such trails are
being exposed to unacceptable health risks, or for other reasons.
The rate of completion of clinical trials is dependent in part upon the
rate of enrollment of patients. Patient accrual is a function of many factors
including the size of the patient population, the proximity of patients to
clinical sites, the eligibility criteria for the study and the existence of
competitive clinical trials. Delays in planned patient enrollment may result in
increased costs and program delays.
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We and our collaborators may not be able to successfully complete any
clinical trial of a potential product within any specified time period. In some
cases, we may not be able to complete the trial at all. Moreover, clinical
trials may not show any potential product to be safe or efficacious. Thus, the
FDA and other regulatory authorities may not approve any of our potential
products for any indication.
Our business, financial condition, or results of operations could be
materially adversely affected if:
- we or our collaborators are unable to complete a clinical trial of one of
our potential products;
- the results of any clinical trial are unfavorable; or
- the time or cost of completing the trial exceeds our expectations.
WE MAY NOT OBTAIN REGULATORY APPROVAL; THE APPROVAL PROCESS CAN BE
TIME-CONSUMING AND EXPENSIVE
The development, clinical testing, manufacture, marketing and sale of
pharmaceutical products are subject to extensive federal, state and local
regulation in the United States and other countries. This regulatory approval
process can be time-consuming and expensive.
We may encounter delays or rejections during any stage of the regulatory
approval process based upon the failure of clinical data to demonstrate
compliance with, or upon the failure of the product to meet, the FDA's
requirements for safety, efficacy and quality; and those requirements may become
more stringent due to changes in regulatory agency policy or the adoption of new
regulations. After submission of a marketing application, in the form of an NDA
or an ANDA, the FDA may deny the application, may require additional testing or
data and/or may require postmarketing testing and surveillance to monitor the
safety or efficacy of a product. While the U.S. Food, Drug and Cosmetic Act, or
FDCA, provides for a 180-day review period, the FDA commonly takes one to two
years to grant final approval to a marketing application (NDA or ANDA). Further,
the terms of approval of any marketing application, including the labeling
content, may be more restrictive than we desire and could affect the
marketability of products incorporating our controlled release technology.
Many of the controlled release products that we are developing with our
collaborators are generic versions of branded controlled release products, which
require the filing of ANDAs. Certain ANDA procedures for generic versions of
controlled release products are the subject of petitions filed by brand name
drug manufacturers, which seek changes from the FDA in the approval process for
generic drugs. These requested changes include, among other things, tighter
standards for certain bioequivalence studies and disallowance of the use by a
generic drug manufacturer in its ANDA of proprietary data submitted by the
original manufacturer as part of an original new drug application. Any changes
in FDA regulations that make ANDA approvals more difficult may have a material
adverse effect on our business, financial condition and results of operations.
Other products containing our TIMERx(R) controlled release technology
require the filing of an NDA. A full NDA must include complete reports of
preclinical, clinical and other studies to prove adequately that the product is
safe and effective, which involves, among other things, full clinical testing,
and as a result requires the expenditure of substantial resources. In certain
cases involving controlled release versions of FDA-approved immediate release
drugs, we may be able to rely on existing publicly available safety and efficacy
data to support an NDA for controlled release products under Section 505(b)(2)
of the FDCA when such data exists for an approved immediate release version of
the same chemical entity. However, we can provide no assurance that the FDA will
accept such section 505(b)(2) NDA, or that we will be able to obtain publicly
available data that is useful. The section 505(b)(2) NDA process is a highly
uncertain avenue to approval because the FDA's policies on section 505(b)(2)
NDAs have not yet been fully developed. There can be no assurance that the FDA
will approve an application submitted under section 505(b)(2) in a timely manner
or at all.
The FDA also has the authority to revoke or suspend approvals of previously
approved products for cause, to debar companies and individuals from
participating in the drug-approval process, to request recalls of allegedly
violative products, to seize allegedly violative products, to obtain injunctions
to close manufacturing
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plants allegedly not operating in conformity with current Good Manufacturing
Practices (GMP) and to stop shipments of allegedly violative products. The FDA
may seek to impose pre-clearance requirements on products currently being
marketed without FDA approval, and there can be no assurance that the Company or
its third-party manufacturers or collaborators will be able to obtain approval
for such products within the time period specified by the FDA.
EVEN IF WE OBTAIN MARKETING APPROVAL, OUR PRODUCTS WILL BE SUBJECT TO ONGOING
REGULATORY REVIEW
If regulatory approval of a product is granted, such approval may be
subject to limitations on the indicated uses for which the product may be
marketed or contain requirements for costly post-marketing follow-up studies. As
to products for which marketing approval is obtained, the manufacturer of the
product and the manufacturing facilities will be subject to continual review and
periodic inspections by the FDA and other regulatory authorities. The subsequent
discovery of previously unknown problems with the product, manufacturer or
facility may result in restrictions on the product or manufacturer, including
withdrawal of the product from the market.
If we fail to comply with applicable regulatory requirements, we may be
subject to fines, suspension or withdrawal of regulatory approvals, product
recalls, seizure of products, operating restrictions and criminal prosecution.
THE MARKET MAY NOT BE RECEPTIVE TO PRODUCTS INCORPORATING OUR TIMERX(R)
CONTROLLED RELEASE TECHNOLOGY
The commercial success of products incorporating our controlled release
technology that are approved for marketing by the FDA and other regulatory
authorities will depend upon their acceptance by the medical community and third
party payors as clinically useful, cost-effective and safe.
Other factors that we believe could materially affect market acceptance of
these products include:
- the timing of the receipt of marketing approvals and the countries in
which such approvals are obtained;
- the safety and efficacy of the product as compared to competitive
products; and
- the cost-effectiveness of the product and the ability to receive third
party reimbursement.
WE HAVE ONLY LIMITED MANUFACTURING CAPABILITIES AND WILL BE DEPENDENT ON THIRD
PARTY MANUFACTURERS
We lack commercial scale facilities to manufacture our TIMERx(R) material
in accordance with current GMP requirements prescribed by the FDA. We currently
rely on a third party pharmaceutical company for the bulk manufacture of our
TIMERx(R) material for delivery to our collaborators.
There are a limited number of manufacturers that operate under GMP
regulations capable of manufacturing our TIMERx(R) material. We have not yet
qualified a second source of supply. In the event that our current manufacturer
is unable to manufacture the TIMERx(R) material in the required quantities or at
all, we may be unable to obtain alternative contract manufacturing, or obtain
such manufacturing on commercially reasonable terms.
If our third party manufacturer fails to perform its obligations, we may be
adversely affected in a number of ways, including:
- our collaborators may not be able to meet commercial demands for our
products on a timely basis;
- our collaborators may not be able to initiate or continue clinical trials
of products that are under development; and
- our collaborators may be delayed in submitting applications for
regulatory approvals of our products.
We have limited experience in manufacturing TIMERx(R) material on a
commercial scale and no facilities or equipment to do so. If we determine to
develop our own manufacturing capabilities, we will need to recruit qualified
personnel and build or lease the requisite facilities and equipment. We may not
be able to
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successfully develop our own manufacturing capabilities. Moreover, it may be
very costly and time consuming for us to develop such capabilities.
The manufacture of any of our products (both TIMERx(R) material and
excipients) is subject to regulation by the FDA and comparable agencies in
foreign countries. Any delay in complying or failure to comply with such
manufacturing requirements could materially adversely affect the marketing of
our products and our business, financial condition and results of operations.
WE ARE DEPENDENT UPON A SOLE SOURCE SUPPLIER FOR THE GUMS USED IN OUT TIMERX(R)
MATERIAL AND UPON A LIMITED NUMBER OF SUPPLIERS FOR THE WOOD PULP USED IN THE
MANUFACTURE OF OUR EXCIPIENTS
Our TIMERx(R) drug delivery system is a hydrophilic matrix combining
primarily two polysaccharides, xanthan and locust bean gums, in the presence of
dextrose. We purchase these gums from a sole source supplier. Emcocel and
Prosolv, our two largest selling excipients, are manufactured from a specialty
grade of wood pulp. We have qualified alternate suppliers with respect to these
materials, but we can provide no assurance that interruptions in supplies will
not occur in the future or that we will not have to obtain substitute suppliers.
Any interruption in these supplies could have a material adverse effect on our
ability to manufacture bulk TIMERx(R) for delivery to our collaborators or to
manufacture these excipients.
IF OUR COLLABORATORS FAIL TO OBTAIN AN ADEQUATE LEVEL OF REIMBURSEMENT BY THIRD
PARTY PAYORS FOR OUR CONTROLLED RELEASE PRODUCTS THEY MAY NOT BE ABLE TO
SUCCESSFULLY COMMERCIALIZE CONTROLLED RELEASE PRODUCTS IN CERTAIN MARKETS
The availability of reimbursement by governmental and other third party
payors affects the market for any pharmaceutical product. These third party
payors continually attempt to contain or reduce the costs of health care by
challenging the prices charged for medical products and services. In certain
foreign countries, particularly the countries of the European Union, the pricing
of prescription pharmaceuticals is subject to governmental control.
The generic versions of controlled release products being developed by us
and our collaborators may be assigned an AB rating if the FDA considers the
product to be therapeutically equivalent to the branded controlled release drug.
Failure to obtain an AB rating from the FDA would indicate that for certain
purposes the drug would not be deemed to be therapeutically equivalent, would
not be fully substitutable for the branded controlled release drug and would not
be relied upon by Medicaid and Medicare formularies for reimbursement.
In both the U.S. and certain foreign jurisdictions, there have been a
number of legislative and regulatory proposals to change the health care system.
Further proposals are likely. The potential for adoption of these proposals may
affect our ability to raise capital, obtain additional collaborative partners
and market our products.
If we or our collaborators obtain marketing approvals for our products, we
expect to experience pricing pressure due to the trend toward managed health
care, the increasing influence of health maintenance organizations and
additional legislative proposals. We may not be able to sell our products
profitably if reimbursement is unavailable or limited in scope or amount.
WE WILL BE EXPOSED TO PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
ADEQUATE PRODUCT LIABILITY INSURANCE
Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of pharmaceutical
products. Product liability claims might be made by consumers, health care
providers or pharmaceutical companies or others that sell our products. These
claims may be made even with respect to those products that are manufactured in
licensed and regulated facilities or that otherwise possess regulatory approval
for commercial sale.
We are currently covered by primary product liability insurance in the
amount of $1.0 million per occurrence and $2.0 million annually in the aggregate
on a claims-made basis and by umbrella liability
10
<PAGE> 12
insurance in excess of $25.0 million which can also be used for product
liability insurance. This coverage may not be adequate to cover any product
liability claims. Product liability coverage is expensive. In the future, we may
not be able to maintain or obtain such product liability insurance at a
reasonable cost or in sufficient amounts to protect us against losses due to
liability claims. Any claims that are not covered by product liability insurance
could have a material adverse effect on our business, financial condition and
results of operations.
THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE
The market price of our common stock, like the market prices for securities
of pharmaceutical, biopharmaceutical and biotechnology companies, have
historically been highly volatile. The market from time to time experiences
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. Factors such as fluctuations in our
operating results, future sales of our common stock, announcements of
technological innovations or new therapeutic products by us or our competitors,
announcements regarding collaborative agreements, clinical trial results,
government regulation, developments in patent or other proprietary rights,
public concern as to the safety of drugs developed by us or others, changes in
reimbursement policies, comments made by securities analysts and general market
conditions may have a significant effect on the market price of the common
stock.
CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND OF
WASHINGTON LAW, AS WELL AS THE RIGHTS AGREEMENT TO WHICH WE ARE A PARTY, MAKE A
TAKEOVER OF PENWEST MORE DIFFICULT
Provisions of our Certificate of Incorporation, our Bylaws and Washington
law, as well as the Rights Agreement to which we are a party, may have the
effect of deterring hostile takeovers or delaying or preventing changes in
control or management of our company, including transactions in which our
stockholders might otherwise receive a premium for their shares over then
current market prices. In addition, these provisions may limit the ability of
stockholders to approve transactions that they may deem to be in their best
interest.
RESIDUAL YEAR 2000 ISSUES MAY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL POSITION,
RESULT OF OPERATIONS AND RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS
Prior to January 1, 2000, there was a great deal of concern regarding the
ability of computer programs and hardware and other equipment to adequately
recognize 21st century dates from 20th century dates due to the two-digit date
fields used by many systems. For example, computer programs that have
time-sensitive components may recognize a date represented as "00" as the year
1900 rather than the year 2000. In addition, programs may have failed to
recognize February 29, 2000 as a leap year date as a result of an exception to
the calculation of leap years that did occur in the year 2000 and otherwise
occurs only once every 400 years. As of March 7, 2000, our computer programs and
hardware and other equipment are functioning normally and the compliance and
remediation work performed by us appears to be effective to prevent any
problems. However, computer experts have warned that there may still be residual
consequences of the change in centuries. If residual Year 2000 issues cause the
failure of any of the computer programs and hardware and other equipment
necessary to operate our business, our business, financial position and results
of operations, as well as our relationships with customers and suppliers, may be
adversely affected. Furthermore, if third parties of business importance to us
do not successfully and timely anticipate and address their own residual Year
2000 issues, any residual Year 2000 issues that arise could have a material
adverse effect on our business, financial position and results of operations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. You can identify
these forward-looking statements by our use of the words "believes,"
"anticipates," "plans," "expects," "intends," and similar expressions, whether
in the negative or affirmative. We cannot guarantee that we actually will
achieve the plans, intentions or expectations discussed in these forward-
11
<PAGE> 13
looking statements. Our actual results could differ materially. We have included
important factors in the cautionary statements contained or incorporated in this
prospectus, particularly under the heading "Risk Factors," that we believe could
cause or actual results to differ materially from the forward-looking statements
that we make. We do not intend to update information contained in any
forward-looking statement we make.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by them for brokerage, accounting, tax, legal
services or other expenses incurred by the selling stockholders in disposing of
their shares. We will bear all other costs, fees and expenses incurred in
effecting the registration of the shares covered by this prospectus, including,
without limitation, all registration and filing fees, Nasdaq listing fees, fees
and expenses of our counsel, fees of our accountants, and blue sky fees and
expenses.
12
<PAGE> 14
SELLING STOCKHOLDERS
We issued the shares of common stock covered by this prospectus in a
private placement. None of the selling stockholders has held a position or
office with, or has otherwise had a material relationship with us or any of our
subsidiaries within the past three years. The following table sets forth, to our
knowledge, certain information about the selling stockholders as of March 6,
2000.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES OF SHARES OF NUMBER OF SHARES PERCENTAGE OF
COMMON STOCK COMMON STOCK NUMBER OF OF COMMON STOCK SHARES OF COMMON
BENEFICIALLY BENEFICIALLY SHARES OF BENEFICIALLY STOCK BENEFICIALLY
OWNED PRIOR OWNED PRIOR COMMON STOCK OWNED AFTER OWNED AFTER
NAME OF SELLING STOCKHOLDERS TO OFFERING(1) TO OFFERING(1) OFFERED HEREBY OFFERING(1)(2) OFFERING(1)(2)
- ---------------------------- -------------- -------------- -------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
BayStar Capital, LP................ 300,000 2.4% 300,000 0 *
BayStar International, LTD......... 100,000 * 100,000 0 *
Caxton International Limited....... 216,619 1.7% 61,539 155,080 1.2%
Caxton Equity Growth, LLC.......... 27,602 * 7,692 19,910 *
Caxton Equity Growth, (BVI)
LTD. ............................ 16,402 * 7,692 8,710 *
The John Galt Fund, LP............. 103,000 * 103,000 0 *
The John Galt Offshore Fund........ 5,650 * 5,650 0 *
Zurich HFR Master Hedge Fund Index
Ltd. ............................ 9,850 * 9,850 0 *
Asset Management Holding Co. ...... 31,500 * 31,500 0 *
Balboa Fund L.P. .................. 80,000 * 80,000 0 *
Kahn Capital Partners, L.P. ....... 250,000 2.0% 250,000 0 *
Pequot Scout Fund, L.P. ........... 230,770 1.8% 230,770 0 *
Performance Capital, LP............ 319,523 2.5% 76,923 242,600 1.9%
Performance Capital, II, LP........ 43,462 * 38,462 5,000 *
UMB Bank, N.A., Custodian For
Geoffrey O. Hartzler and Dorothy
E. Hartzler, JTWROS.............. 76,918 * 76,918 0 *
UMB Bank, N.A., Custodian For Ward
Financial Corporation............ 12,318 * 12,318 0 *
UMB Bank, N.A., Custodian For The
Tucker Childrens Trust........... 6,918 * 6,918 0 *
</TABLE>
- ---------------
* Indicates less than 1%
(1) Except as otherwise indicated, the number of shares beneficially owned is
determined under rules promulgated by the SEC, and the information is not
necessarily indicative of beneficial ownership for any other purpose. The
selling stockholder has sole voting power and investment power with respect
to all shares listed as owned by the selling stockholder.
(2) We do not know when or in what amounts the selling stockholder may offer
shares for sale. The selling stockholder may not sell any or all of the
shares offered by this prospectus. Because the selling stockholder may offer
all or some of the shares pursuant to this offering, and because there are
currently no agreements, arrangements or understandings with respect to the
sale of any of the shares that will be held by the selling stockholder after
completion of the offering, we cannot estimate the number of the shares that
will be held by the selling stockholder after completion of the offering.
However, for purposes of this table, we have assumed that, after completion
of the offering, none of the shares covered by this prospectus will be held
by the selling stockholder.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholders. The term "selling stockholders" includes
pledgees, donees, transferees or other successors in interest selling shares
received after the date of this prospectus from the selling stockholders as a
pledge, gift or
13
<PAGE> 15
other non-sale related transfer. To the extent required, we may amend and
supplement this prospectus from time to time to describe a specific plan of
distribution.
The selling stockholders will act independently of Penwest in making
decisions with respect to the timing, manner and size of each sale. The selling
stockholders may make these sales at prices and under terms then prevailing or
at prices related to the then current market price. The selling stockholders may
also make sales in negotiated transactions, including pursuant to one or more of
the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market; and
- in privately negotiated transactions.
In connection with distributions of the shares or otherwise, the selling
stockholders may:
- enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares in
the course of hedging the positions they assume;
- sell the shares short and redeliver the shares to close out such short
positions;
- enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to them of shares
offered by this prospectus, which they may in turn resell; and
- pledge shares to a broker-dealer or other financial institution, which,
upon a default, they may in turn resell.
In addition, the selling stockholders may sell any shares that qualify for
sale pursuant to Rule 144 under Rule 144 rather than pursuant to this
prospectus.
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders, in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling
stockholders, and any broker-dealers and any other participating broker-dealers
who execute sales for the selling stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales. Any profits realized by the selling stockholders and the compensation of
such broker-dealer may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, the shares
must be sold in those states only through registered or licensed brokers or
dealers. In addition, in certain states the shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
14
<PAGE> 16
At the time a particular offer of shares is made, if required, we will
distribute a prospectus supplement that will set forth:
- the number of shares being offered;
- the terms of the offering, including the name of any underwriter, dealer
or agent;
- the purchase price paid by any underwriter;
- any discount, commission and other underwriter compensation;
- any discount, commission or concession allowed or reallowed or paid to
any dealer; and
- the proposed selling price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the Registration
Statement of which this prospectus constitutes a part effective until the
earlier of (i) such time as all of the shares covered by this prospectus have
been disposed of pursuant to the Registration Statement, (ii) March 6, 2002 or
(iii) such time as all of the shares covered by this prospectus can be sold
within any given three-month period without regard to the trading volume of our
common stock pursuant to Rule 144 promulgated under the Securities Act.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed upon
by Perkins Coie LLP.
EXPERTS
The consolidated financial statements (including schedule) of Penwest
Pharmaceuticals Co. appearing in Penwest Pharmaceuticals Co.'s Annual Report
(Form 10-K) for the year ended December 31, 1999, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements and schedule are incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the SEC for the
stock we are offering by this prospectus. This prospectus does not include all
of the information contained in the registration statement. You should refer to
the registration statement and its exhibits for additional information. Whenever
we make reference in this prospectus to any of our contracts, agreements or
other documents, the references are not necessarily complete and you should
refer to the exhibits attached to the registration statement for copies of the
actual contract, agreement or other document.
We file annual, quarterly, and special reports, proxy statements, and other
information with the SEC. You can read our SEC filings, including the
registration statement, over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the SEC
at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549. You may also obtain copies of the documents at prescribed rates by
writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities.
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell shares of common stock and
seeking offers to buy shares of common stock only in jurisdictions where offers
and sales
15
<PAGE> 17
are permitted. The information contained in this prospectus is accurate only as
of the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of the common stock.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information that we file with the SEC in the future and
incorporate by reference will automatically update and may supersede the
information contained in this prospectus. We incorporate by reference the
documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the sale of all
the shares covered by this prospectus.
The following documents that we have filed with the SEC are incorporated
herein by reference:
- our Annual Report on Form 10-K for the year ended December 31, 1999;
- our Current Report on Form 8-K filed on March 10, 2000;
- all of our filings pursuant to the Exchange Act after the date of filing
the initial registration statement and prior to effectiveness of the
registration statement; and
- the description of our common stock contained in our Registration
Statement on Form 10, including any amendments or reports filed for the
purpose of updating that description.
You may request a copy of these documents, at no cost, by writing to:
Penwest Pharmaceuticals Co.
2981 Route 22
Patterson, NY 12563-9970
(914) 878-3414
16
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred by us in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by us. All amounts shown are estimates except
the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 5,471.70
Legal fees and expenses..................................... 5,000.00
Blue Sky expenses and counsel fees.......................... 3,500.00
Printing and engraving expenses............................. 5,000.00
NASDAQ listing fee.......................................... 14,000.00
Miscellaneous expenses...................................... 7,028.30
----------
Total expenses.................................... $40,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Washington Business Corporation Act and our Amended and Restated Bylaws
provide for indemnification of our directors and officers for liabilities and
expenses that they may incur in such capacities. In general, under our Amended
and Restated Bylaws, directors and officers are indemnified with respect to
actions taken in good faith in a manner reasonably believed to be in, or not
opposed to, our best interests, and with respect to any criminal action or
proceeding, actions that the indemnitee had no reasonable cause to believe were
unlawful. Our officers and directors are currently covered under director and
officer liability insurance maintained by us.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
4.1(1) Amended and Restated Articles of Incorporation.
4.2(2) Articles of Amendment to the Amended and Restated Articles
of Incorporation filed on June 19, 1998.
4.3(1) Amended and Restated By-Laws.
4.4(1) Specimen stock certificate for shares of common stock of our
company.
5 Opinion of Perkins Coie LLP.
23.1 Consent of Perkins Coie LLP, included in Exhibit 5 filed
herewith.
23.2 Consent of Ernst & Young LLP.
24 Power of Attorney (See page II-3 of this Registration
Statement).
</TABLE>
- ---------------
(1) Incorporated by reference to Exhibits to our Registration Statement on Form
S-1 (File No. 333-38389).
(2) Incorporated by reference to our to Exhibits to our Registration Statement
on Form 10 filed with the SEC on June 22, 1998 and July 31, 1998.
ITEM 17. UNDERTAKINGS.
Our company, 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, as amended (the "Securities Act");
II-1
<PAGE> 19
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any derivation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each 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 the 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.
We hereby undertake that, for purposes of determining any liability under
the Securities Act, each filing of our annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of our company
pursuant to the indemnification provisions described herein, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer, or controlling person of our company 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, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Penwest
Pharmaceuticals Co. 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 Town of Patterson, State of New York, on this 21st day
of March, 2000.
PENWEST PHARMACEUTICALS CO.
By: /s/ JENNIFER L. GOOD
------------------------------------
Jennifer L. Good
Vice President, Finance and Chief
Financial
Officer and Secretary
POWER OF ATTORNEY
We, the undersigned officers and directors of Penwest Pharmaceuticals Co.,
hereby severally constitute Tod R. Hamachek and Jennifer L. Good, and each of
them singly, our true and lawful attorneys with full power to any of them, and
to each of them singly, to sign for us and in our names in the capacities
indicated below the Registration Statement on Form S-3 filed herewith and any
and all pre-effective and post-effective amendments to said Registration
Statement and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable Penwest Pharmaceuticals Co., to
comply with the provisions of the Securities Act and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
II-3
<PAGE> 21
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ TOD R. HAMACHEK Chairman of the Board and Chief
- --------------------------------------------------- Executive Officer (Principal
Tod R. Hamachek Executive Officer) March 17, 2000
/s/ JENNIFER L. GOOD Vice President, Finance and
- --------------------------------------------------- Chief Financial Officer and
Jennifer L. Good Secretary (Principal
Financial and Accounting
Officer) March 17, 2000
/s/ PAUL E. FREIMAN Director March 17, 2000
- ---------------------------------------------------
Paul E. Freiman
/s/ JERE E. GOYAN, PH.D. Director March 17, 2000
- ---------------------------------------------------
Jere E. Goyan, Ph.D.
/s/ ROLF H. HENEL Director March 17, 2000
- ---------------------------------------------------
Rolf H. Henel
/s/ ROBERT J. HENNESSEY Director March 17, 2000
- ---------------------------------------------------
Robert J. Hennessey
/s/ N. STEWART ROGERS Director March 17, 2000
- ---------------------------------------------------
N. Stewart Rogers
/s/ JOHN N. STANIFORTH, PH.D. Director March 17, 2000
- ---------------------------------------------------
John N. Staniforth, Ph.D.
/s/ ANNE M. VANLENT Director March 17, 2000
- ---------------------------------------------------
Anne M. VanLent
</TABLE>
II-4
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<C> <S>
5 Opinion of Perkins Coie LLP.
23.1 Consent of Perkins Coie LLP, included in Exhibit 5 filed
herewith.
23.2 Consent of Ernst & Young LLP.
24 Power of Attorney (See page II-3 of this Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 5
PERKINS COIE LLP
1201 THIRD AVENUE, SUITE 4800 - SEATTLE, WASHINGTON 98101-3099
TELEPHONE: 206 583-8888 - FACSIMILE 206 583-8500
March 21, 2000
Penwest Pharmaceuticals Co.
2981 Route 22
Patterson, NY 12563-9970
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen and Ladies:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Act"), which you are filing with the
Securities and Exchange Commission for the resale of up to 1,399,232 shares of
Common Stock, $0.001 par value (the "Shares"). We have examined the
Registration Statement and such documents and records of the Company and other
documents as we have deemed necessary for the purpose of this opinion.
Based on the subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
Perkins Coie LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Penwest
Pharmaceuticals Co. for the registration of 1,399,232 shares of its common stock
and to the incorporation by reference therein of our report dated March 15,
2000, with respect to the consolidated financial statements and schedule of
Penwest Pharmaceuticals Co. included in its Annual Report (Form 10-K) for the
year ended December 31, 1999, filed with the Securities and Exchange Commission.
Stamford, Connecticut
March 15, 2000
