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Registration Statement No.
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933
AXONYX INC.
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 86-0883978
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
825 THIRD AVENUE, 40TH FLOOR
NEW YORK, NEW YORK 10022
(212) 688-4770
(Address, including zip code, and telephone number, of Registrant's
principal executive offices)
Marvin S. Hausman, M.D., President & Chief Executive Officer
825 Third Avenue, 40th Floor
New York, New York 10022
(212) 688-4770
(Name, address, including zip code, and telephone number of agent for service)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this Registration Statement.
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, as amended, 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 number of the earlier 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: [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of Securities Aggregate Amount of
To be Registered Offering Price (1) Registration Fee
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Securities $25,000,000 $6,600.00
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(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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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Subject to completion, dated September 21, 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
AXONYX INC.
$25,000,000 aggregate amount of common stock
This prospectus will allow us to issue securities over time. This means:
- we will provide a prospectus supplement each time we issue securities;
- 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
- you should read this document and any prospectus supplement carefully
before you invest.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"AXYX." On September 18, 2000, the closing bid price for our common stock was
$11.375 per share.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES
ONLY IF YOU CAN AFFORD A LOSS OF YOUR ENTIRE INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 2000.
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TABLE OF CONTENTS
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PAGE
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Where you can find more information.......................................... 1
The Company.................................................................. 2
The Offering................................................................. 3
Risk Factors................................................................. 4
Forward-Looking Statements................................................... 11
Use of Proceeds.............................................................. 12
Plan of Distribution......................................................... 12
Legal Matters................................................................ 14
Experts...................................................................... 14
</TABLE>
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 make 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.
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1
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and special reports,
proxy statements and other information with the United States Securities and
Exchange Commission. You may read and copy any documents 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 publicly available through the
SEC's web site on the Internet at http://www.sec.gov. In addition, you can read
and copy our SEC filings at the office of the National Association of Securities
Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supercede this information. Further, all
filings we make under the Securities Exchange Act after the date of the initial
registration statement and prior to effectiveness of the registration statement
shall be deemed to be incorporated by reference into this prospectus. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
1. Our Annual Report on Form 10-KSB for the year ended December 31, 1999;
2. Our Proxy Statement dated May 10, 2000;
3. Our Quarterly Reports on Form 10-QSB for the quarters ended March 31,
2000 and June 30, 2000; and
4. The description of our common stock set forth in our Amendment No. 1,
Registration Statement on Form 10-SB, filed with the SEC on August 10,
1999.
This prospectus does not contain all of the information set forth in the
registration statement and the exhibits thereto. Descriptions of any contract or
other document referred to in this prospectus are not necessarily complete, and
in each instance reference is made to the copy of the contract or other document
filed as an exhibit to the registration statement for a more complete
description of the matter involved, each statement being qualified in its
entirety by such reference. At your written or telephonic request, we will
provide you, without charge, a copy of any of the information that is
incorporated by reference herein (excluding exhibits to the information that is
incorporated by reference unless the exhibits are themselves specifically
incorporated by reference). Direct your request to us at Axonyx Inc., 825 Third
Ave., 40th Floor, New
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2
York, New York 10022, Attention: Michael Strage, Vice President & Treasurer,
telephone (212) 688-4770.
THE COMPANY
We are engaged in the business of identifying and acquiring novel central
nervous system drug candidates. We acquire patent rights to central nervous
system pharmaceutical compounds with significant potential market impact and
advance the compounds through clinical development towards regulatory approval.
We have acquired worldwide exclusive patent rights to three main classes of
therapeutic compounds designed for the treatment of Alzheimer's Disease, Mild
Cognitive Impairment, and related diseases. We licensed these patent rights from
New York University and, via a sublicense, from the National Institute on Aging.
We have an ongoing research and development relationship with both of these
licensors. In addition, we are sponsoring the development of a diagnostic test
for Alzheimer's Disease at the University of Melbourne (Australia).
We are developing compounds under contract in laboratories at the New York
University School of Medicine and, through a research and development
collaboration, with the National Institute on Aging's laboratories and
elsewhere. We entered into a Development Agreement and Right to License with a
subsidiary of Ares Serono, S.A., a Swiss pharmaceutical company, for a one year
term ending May 17, 2000, renewable for a second year, with a right to
sublicense our patent rights to certain of our compounds. Under this license
Ares Serono is undertaking research on the covered compounds. On May 2, 2000
Ares Serono informed us that Ares Serono is exercising its right to license and
the two companies are currently negotiating the final terms of a licensing
agreement. We intend to develop other corporate partnerships with established
and well capitalized pharmaceutical companies for the clinical development of
some of our other compounds and for their production, commercialization and
marketing. We do not currently maintain any proprietary laboratory or research
premises.
We have licensed a portfolio of drugs that covers three distinct
therapeutic approaches. These drugs have demonstrated activity in treating the
causes of Alzheimer's Disease in preclinical development. Each class of drug
compounds has a different target and represents a unique, innovative platform
for the development of pharmaceutical products for the diagnosis and treatment
of Alzheimer's Disease.
The treatment of people with Alzheimer's Disease is a multi billion-dollar
industry in the United States alone and constitutes an extremely large potential
market with an unmet therapeutic need. Currently there are only three approved
drugs that provide at best marginal symptomatic relief for one aspect of
Alzheimer's Disease. One of our compounds, Phenserine, an acetylcholinesterase
inhibitor, has shown in preclinical studies a potential therapeutic and safety
profile superior to the leading product currently on the market. Our two other
lead product candidates, phenethylcymserine, a butyrylcholinesterase inhibitor,
and the Amyloid Inhibitory Peptides, attack the disease in other inventive and
effective ways, representing potentially new platform technologies for the
treatment of Alzheimer's Disease. The Development Agreement and Right to
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3
License with Ares Serono includes the Amyloid Inhibitory Peptides. We expect to
derive our revenues from patent sub-licensing fees, royalties from
pharmaceutical sales, appropriate milestone payments, and research and
development contracts.
THE OFFERING
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Securities offered in this prospectus $25,000,000 aggregate amount of common stock shares
Common stock outstanding:
Prior to the offering 15,282,371 shares
After the offering shares (1)
------------------
Use of proceeds For operating costs, capital expenditures and
working capital needs, including costs associated
with clinical testing and manufacturing of Phenserine,
research and development of phenethylcymserine and
for our other pipeline drug product candidates; for
the development of administrative and other support
services necessary to support these activities; and other
general corporate purposes. See "Use of Proceeds."
Nasdaq trading symbol for common stock AXYX
Risk factors This offering involves a high degree of
risk. See "Risk Factors".
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(1) The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of September 18, 2000, and
excludes:
- 763,000 shares issuable upon the exercise of common stock purchase
warrants outstanding as of September 18, 2000;
- 1,485,700 shares subject to outstanding options as of September 18,
2000; and
- 1,788,300 shares issuable upon exercise of future options available
for grant under our stock option plans.
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4
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE INVESTING IN
OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS
COULD BE HARMED. THIS COULD CAUSE THE PRICE OF OUR STOCK TO DECLINE, AND YOU MAY
LOSE PART OR ALL OF YOUR INVESTMENT. THIS PROSPECTUS CONTAINS, IN ADDITION TO
HISTORICAL INFORMATION, FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS ABOUT
FUTURE PLANS, OBJECTIVES, AND INTENTIONS, THAT INVOLVE RISKS AND UNCERTAINTIES.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE OR CONTRIBUTE TO THESE
DIFFERENCES INCLUDE THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS PROSPECTUS.
RISKS RELATED TO OUR BUSINESS
WE ARE AT AN EARLY STAGE OF DEVELOPMENT AND WE HAVE A LIMITED OPERATING HISTORY.
WE HAVE A LARGE ACCUMULATED DEFICIT AND MAY NEVER BECOME PROFITABLE.
We have a very limited operating history upon which investors may base an
evaluation of our likely future performance. Since we began operations in 1997
we have been engaged in organizational and start-up activities, including
developing our research programs, recruiting outside directors, employees and
key consultants, and consummating patent licensing agreements. To date, we have
not had any laboratory facilities in which to conduct any research and will not
have any operational laboratories of our own in the near future. We have had
only limited revenue from license fees to date, other than interest income. As
of June 30, 2000, we had an accumulated deficit of $9,262,000, and our operating
losses are continuing.
WE HAVE NO PRODUCTS AVAILABLE FOR SALE AND THERE CAN BE NO ASSURANCE THAT WE
WILL BE SUCCESSFUL IN DEVELOPING PRODUCTS SUITABLE FOR COMMERCIALIZATION.
- We have no products available for sale and we do not expect to have any
products commercially available for several years, if at all.
- Our research and development programs are at an early stage.
- We cannot assure you that our research will lead to the discovery of any
therapeutic agents.
- If any potential products are identified, they will require significant
additional research, development, preclinical and clinical testing,
regulatory approval and substantial additional investment prior to
commercialization.
- Any potential products we identify may not be successfully developed, prove
to be safe and efficacious in clinical trials, meet applicable regulatory
standards, or be capable of being produced in commercial quantities at
acceptable costs or be successfully marketed.
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5
WE CANNOT ASSURE YOU THAT WE WILL HAVE FUTURE REVENUE OR OPERATING PROFITS AND
YOU COULD LOSE YOUR ENTIRE INVESTMENT.
We expect to incur substantial operating losses for at least the next
several years. We currently have limited sources of revenue other than interest
income, and we cannot assure you that we will be able to develop other revenue
sources or that our operations will become profitable, even if we are able to
enter into joint venture arrangements to commercialize any products. Other than
interest income, the only revenue that we have realized to date has been a
modest fee paid by Ares Serono, S.A. under the terms of the Development
Agreement and Right to License. If we do not generate significant increases in
revenue, at some point in the future we may not be in a position to continue
operations and investors could lose their entire investment.
IF WE FAIL TO COMPLY WITH THE TERMS OF OUR LICENSING AGREEMENTS OUR LICENSORS
MAY TERMINATE CERTAIN LICENSES TO PATENT RIGHTS, CAUSING US TO LOSE VALUABLE
INTELLECTUAL PROPERTY ASSETS.
Under the terms of its licensing agreements with each of our patent
licensors, New York University and, via a sublicense, the United States Public
Health Service (on behalf of the National Institute of Aging), our exclusive
license to our patent rights may be terminated if we fail to meet our
obligations to the licensors. We have not, as of the date of this prospectus,
received notice of default of any of our obligations. If we receive written
notice of our default or material breach of any of our obligations under the
licensing agreements, we must cure the default within thirty or sixty days or
the relevant licensor may terminate the license. After such termination, we
would not be entitled to make any further use whatsoever of the licensed patent
rights or any technology we have derived from them. Such termination could also
cause us to lose some or all of our revenues under sublicensing agreements, if
any.
The performance of our obligations to the licensors will require increasing
expenditures as the development of the licensed drug compounds proceed. We
cannot guarantee that we will be capable of raising the funds necessary to meet
our license obligations, sublicense part or all of our licensed drug compounds
to a third party capable of undertaking the obligations, or fulfill additional
licensing obligations.
WE DO NOT CURRENTLY HAVE THE CAPABILITY TO UNDERTAKE MANUFACTURING, MARKETING,
OR SALES OF ANY POTENTIAL PRODUCTS AND WE HAVE LIMITED PERSONNEL TO OVERSEE
CLINICAL TESTING AND THE REGULATORY APPROVAL PROCESS.
We have not invested in manufacturing, marketing or product sales
resources. There can be no assurance that we will be able to acquire such
resources. We will also need to hire additional personnel skilled in the
clinical testing and regulatory compliance process if we develop additional
products with commercial potential. We have no history of manufacturing or
marketing. There can be no assurance that we will successfully manufacture or
market any product we may develop, either independently or under
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6
manufacturing or marketing arrangements, if any, with other companies. There can
be no assurance any arrangements with other companies can be successfully
negotiated or that such arrangements will be on commercially reasonable terms.
To the extent that we arrange with other companies to manufacture or market our
products, if any, the success of such products may depend on the efforts of
those other companies.
WE WILL NEED SUBSTANTIAL ADDITIONAL FUNDS IN THE FUTURE TO MEET OUR FIXED
FINANCIAL COMMITMENTS.
The amounts and timing of our expenditures will depend on the progress of
our research and development and the cost and timing of regulatory approvals.
Based on our current research and product development programs, we anticipate
that the maximum net proceeds of this offering and interest income earned
thereon should be adequate to satisfy our capital and operational requirements
for at least two years from the date of this document. Our cash requirements may
vary materially from those now planned because of results of research and
development, results of clinical testing, relationships with possible strategic
partners, changes in the focus and direction of our research and development
programs, competitive and technological advances, the FDA regulatory process and
other factors. The proceeds of this offering will not be sufficient to fund our
operations up to the commercialization of our first product.
We have substantial fixed commitments under certain research and licensing
agreements and office leases. Our fixed commitments are currently in excess of
$529,000 per year and are likely to increase.
- We will require substantial additional funding for our research and product
development programs, for operating expenses, and in pursuit of regulatory
clearances.
- Additional funds for these purposes may not be available when needed or on
terms acceptable to us.
- We may spend the proceeds of this offering without developing any
commercially viable product.
- Insufficient funds may require us to delay, scale back or eliminate certain
of our research and development programs or to license third parties to
commercialize products or technologies that we would otherwise seek to
develop ourselves.
- To the extent we raise additional capital by issuing securities, further
dilution to the investors in this offering may result.
- We have no established banking arrangements for borrowing funds.
WE ARE DEPENDENT ON NON-EMPLOYEE SCIENTIFIC PERSONNEL AND EXECUTIVE OFFICERS WHO
DO NOT HAVE EMPLOYMENT CONTRACTS.
Because of the specialized scientific nature of our business, we are highly
dependent upon our ability to attract and retain qualified scientific and
management personnel. The loss of our President and Chief Executive Officer, Dr.
Marvin Hausman, and/or other executive officers would be detrimental to us. We
do not currently have any
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written employment agreements with our executive officers. We do not have
employment agreements with key scientific personnel who are doing research at
New York University and the National Institute of Aging under research and
licensing agreements with those institutions, and can have no assurance that
such personnel will continue to be employed in such research.
There is intense competition for qualified personnel in the areas of our
activities, and there can be no assurance that we will be able to continue to
attract and retain qualified personnel necessary for the development of our
business. Loss of the services of or failure to recruit additional key
scientific and technical personnel would be detrimental to our research and
development programs and business.
Most members of our Scientific Advisory Board and our other scientific
consultants are employed by academic and research institutions, or are
self-employed. For this reason, our advisors and consultants will be able to
devote only a portion of their time to us. In addition, it is possible, in
certain circumstances, that inventions or processes discovered by them will not
become the property of our company but will be the property of their full-time
employers.
WE ARE CURRENTLY DEPENDENT FOR OUR REVENUES UPON THE SUCCESSFUL NEGOTIATION OF A
LICENSING AGREEMENT WITH ARES SERONO.
The only revenue we have generated to date arose from our Development and
Right to License Agreement with a wholly owned subsidiary of Ares Serono, a
Swiss pharmaceutical company. While Ares Serono has exercised its rights to
license certain of our patent rights and will pay an additional fee to us if we
finalize a licensing agreement with them, we cannot be certain that such
negotiation will prove successful. If we fail to sign a licensing agreement with
Ares Serono our business prospects will be adversely affected and there can be
no assurance that, in such an event, we will be able to enter into other revenue
producing licensing agreements covering the same or other patent rights owned by
us.
OUR BUSINESS COULD BE HARMED IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY.
We have licensed rights to certain patented and patent pending proprietary
technology from research institutions to which we are obligated to pay royalties
if we or our sublicensees develop products based upon the licensed technology.
Because of the substantial length of time and expense associated with bringing
new products through development and regulatory approval to the marketplace, the
pharmaceutical industry places considerable importance on patent and trade
secret protection for new technologies, products and processes. In addition to
the five issued patents, we and our licensors have filed three patent
applications in the United States. We plan to file patent applications in other
countries, and we may seek additional patents in the future. We cannot assure
you as to the breadth or the degree of protection that any such patents, if
issued, will afford us or that any patents based on the patent applications will
be issued at all. In addition, there can be no assurance that others will not
independently develop
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8
substantially equivalent proprietary information or otherwise obtain access to
our know-how or that others may not be issued patents that may require licensing
and the payment of significant fees or royalties by us for the pursuit of our
business.
WE MIGHT FACE INTELLECTUAL PROPERTY CLAIMS THAT MAY BE COSTLY TO RESOLVE AND
COULD DIVERT MANAGEMENT ATTENTION.
We may from time to time be subject to claims of infringement of other
parties' proprietary rights. We could incur substantial costs in defending
ourselves in any suits brought against us claiming infringement of the patent
rights of others or in asserting our patent rights in a suit against another
company. Adverse determinations in any litigation could subject us to
significant liabilities to third parties, require us to seek costly licenses
from third parties and prevent us or our sublicencees from manufacturing and
selling our potential products. Despite the use of confidentiality agreements
and noncompete agreements, which themselves may be of limited effectiveness, it
will be difficult for us to protect our trade secrets.
WE ARE SIGNIFICANTLY CONTROLLED BY OUR MANAGEMENT.
Our executive officers comprise three of the six members of the Board of
Directors. As a result, our management has the ability to exercise influence
over our significant matters. This high level of influence may have a
significant effect in delaying, deferring or preventing a change of control of
our company.
RISKS RELATED TO OUR INDUSTRY
POTENTIAL TECHNOLOGICAL CHANGES IN OUR FIELD OF BUSINESS CREATE CONSIDERABLE
UNCERTAINTY.
We are engaged in the biopharmaceutical field, which is characterized by
extensive research efforts and rapid technological progress. New developments in
Alzheimer's Disease research are expected to continue at a rapid pace in both
industry and academia. There can be no assurance that research and discoveries
by others will not render some or all of our programs or products noncompetitive
or obsolete.
Our business strategy is based in large part upon inhibition of amyloid
conformational change and amyloid precursor protein processing and the
application of these new and unproven technologies to the development of
biopharmaceutical products for the treatment of Alzheimer's Disease and other
human diseases. No assurance can be given that unforeseen problems will not
develop with these technologies or applications or that commercially feasible
products will ultimately be developed by us.
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9
THE MARKETS IN WHICH WE SEEK TO PARTICIPATE ARE INTENSELY COMPETITIVE AND WE ARE
A SMALL FACTOR.
There are many companies, both public and private, including well-known
pharmaceutical companies, engaged in developing synthetic pharmaceutical and
biotechnological products for human therapeutic applications in the Alzheimer's
Disease area. Many of these companies have substantially greater capital,
research and development and human resources and experience than us and
represent significant long-term competition for us. In addition, many of these
competitors have significantly greater experience than us in undertaking
preclinical testing and clinical trials of new pharmaceutical products and
obtaining FDA and other regulatory approvals. Furthermore, if we or a future
licensee is permitted to commence commercial sales of any product, we or our
licensee will also be competing with companies that have greater resources and
experience in manufacturing, marketing and sales. We have no experience in these
areas. These other companies may succeed in developing products that are more
effective or less costly than any that may be developed by our future licensee
and may also prove to be more successful than our future licensee in production
and marketing. Competition may increase further as a result of the potential
advances in the commercial applicability of peptide chemistry and greater
availability of capital for investment in these fields. Other companies are
engaged in research and product development based on amyloidogenesis and
acetylcholinesterase inhibition.
THERE CAN BE NO ASSURANCE OF FDA APPROVAL FOR OUR POTENTIAL PRODUCTS AND
GOVERNMENT REGULATION MAY IMPACT OUR DEVELOPMENT PLANS.
The FDA and comparable agencies in foreign countries impose substantial
requirements on the introduction of therapeutic pharmaceutical products through
lengthy and detailed laboratory and clinical testing procedures and other costly
and time-consuming procedures. Satisfaction of these requirements typically
takes a number of years and varies substantially based upon the type, complexity
and novelty of the pharmaceutical compounds. All of our drug product candidates
are currently in various stages of pre-clinical development and consequently
significant regulatory hurdles remain before any application for regulatory
approval can be submitted. None of our drug product candidates have been tested
in human clinical trials and there can be no assurance that the drug candidates
will elicit similar results in human testing to the results in animal testing.
We cannot predict with any certainty when we may submit products, if any, for
FDA or other regulatory approval. Government regulation also affects the
manufacture and marketing of pharmaceutical products.
The effect of government regulation may be to delay marketing of our new
products for a considerable period of time, to impose costly procedures upon our
activities and to furnish a competitive advantage to larger companies that
compete with us. There can be no assurance that FDA or other regulatory approval
for any products developed by us will be granted on a timely basis, if at all.
Any such delay in obtaining, or failure to obtain, such approvals would
adversely affect the marketing of our products
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10
and the ability to generate product revenue. Government regulation may increase
at any time creating additional hurdles for us. The extent of potentially
adverse government regulation which might arise from future legislation or
administrative action cannot be predicted.
RISKS RELATED TO THIS OFFERING
WE DO NOT PAY CASH DIVIDENDS.
We have never paid dividends and do not presently intend to pay any
dividends in the foreseeable future.
FUTURE SALES OF OUR COMMON STOCK MAY CAUSE OUR STOCK PRICE TO DECLINE.
There are currently 12,632,869 shares of our common stock outstanding which
are "restricted securities" as that term is defined by Rule 144 under the
Securities Act of 1933. Such shares will be eligible for public sale only if
registered under the Securities Act or if sold in accordance with Rule 144.
Under Rule 144, a person who has held restricted securities for a period of one
year may sell a limited number of shares to the public in ordinary brokerage
transactions. The timing and amount of sales of common stock that are currently
restricted securities could have a depressive effect on the future market price
of our common stock.
THERE IS ONLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK AND IT IS POSSIBLE
THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES EASILY.
There is currently only a limited trading market for our common stock. Our
common stock trades on the Nasdaq SmallCap Market under the symbol "AXYX" with
very limited trading volume. There can be no assurance that a substantial
trading market will ever develop (or be sustained, if developed) for our common
stock upon completion of this offering, or that purchasers will be able to
resell their securities or otherwise liquidate their investment without delay.
Recent history relating to the market prices of newly public companies indicates
that, from time to time, there may be significant volatility in the market price
of our securities because of factors unrelated, as well as related, to our
operating performance. Factors such as announcements of technological
innovations or new products by us or our competitors, government regulatory
action, patent or proprietary rights developments and market conditions for
biotechnology stocks in general could have a significant impact on the future
market price of our common stock. In the period from September 1, 1999 to
September 1, 2000, the price of our common stock has ranged from $7.75 to
$21.00.
THE FUTURE ISSUANCE OF COMMON STOCK UPON EXERCISE OF WARRANTS AND STOCK OPTIONS
MAY DEPRESS THE PRICE OF OUR COMMON STOCK.
To date, we have granted options to purchase an aggregate of 1,373,700
shares of our common stock to our employees, officers, directors, and
consultants under our 2000,
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11
1998 and 1997 Stock Option Plans. We may issue options to purchase an additional
1,788,300 shares of our common stock under the 2000 and 1998 Stock Option Plans.
In addition, we have granted options to purchase an aggregate of 112,000
shares of common stock outside of our Stock Option Plans to consultants and
others.
There are currently outstanding warrants to purchase an aggregate of
763,000 shares of common stock.
During the respective terms of the warrants and options granted or to be
granted under our stock option plans or outside the plans, the holders thereof
are given an opportunity to benefit from a rise in the market price of the
common stock, with a resultant dilution of the interests of existing
stockholders. The existence of these warrants and options could make it more
difficult for us to obtain additional financing while such securities are
outstanding. The holders may be expected to exercise their rights to acquire
common stock and sell at a time when we would, in all likelihood, be able to
obtain needed capital through a new offering of securities on terms more
favorable than those provided by these warrants and options.
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 to conform these statements to actual results unless required
by law.
<PAGE>
12
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with
this offering.
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, which may
include costs of further clinical testing of Phenserine, further preclinical
development of Phenethylcymserine, research and development of other acetyl- and
butyrylcholinesterase inhibitory compounds in our drug pipeline, development of
the infrastructure necessary to support those activities 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 of Phenserine, and progress with our
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 Phenserine and
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:
- directly to purchasers;
- to or through underwriters;
- through dealers, agents or institutional investors; or
- through a combination of such methods.
Regardless of the method used to sell the securities, we will provide a
prospectus supplement that will disclose:
<PAGE>
13
- the identity of any underwriters, dealers, agents or investors who purchase
the securities;
- the material terms of the distribution, including the amount sold and the
consideration paid;
- the amount of any compensation, discounts or commissions to be received by
the underwriters, dealers or agents;
- the terms of any indemnification provisions, including indemnification from
liabilities under the federal securities laws; and
- 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.
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
<PAGE>
14
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
We are represented by Brobeck, Phleger & Harrison LLP of New York, New
York with respect to legal matters related to this offering. The validity of
the issuance of the securities offered hereby, under Nevada law, will be
passed upon for us by Gordon & Silver, Ltd. of Las Vegas, Nevada.
EXPERTS
Richard A. Eisner & Company, LLP, independent auditors, have audited our
financial statements included in our Annual Report on Form 10-KSB for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Richard A.
Eisner & Company, LLP's report, given on their authority as experts in
accounting and auditing.
<PAGE>
15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate that we will need to pay the following expenses in connection
with the distribution of the securities being registered:
<TABLE>
<S> <C>
SEC Registration and Filing Fee ........................ $ 6,600
Legal Fees and Expenses* ............................... $50,000
Accounting Fees and Expenses*........................... $ 8,000
Printing* .............................................. $ 2,000
Transfer Agent Fees*.................................... $ 1,500
Nasdaq Filing Fees* .................................... $21,000
Miscellaneous* ......................................... $ 900
TOTAL ......................................... $90,000
</TABLE>
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada General Corporation Law allows us to indemnify our officers and
directors from liability incurred by reason of the fact that he or she is or was
an officer or director of the corporation. We may authorize such indemnification
if we determine that it is proper under the circumstances. This determination
can be authorized based on a vote of our stockholders, by a majority vote of a
quorum of directors who were not parties to the relevant legal action, or under
certain circumstances, by independent legal counsel in a written opinion. The
indemnification can include, but is not limited to, reimbursement of all fees,
including amounts paid in settlement and attorney's fees actually and reasonably
incurred, in connection with the defense or settlement of any action or suit by
the officer or director.
We have purchased and maintained insurance covering our officers and
directors for the purpose of covering indemnification expenses.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of our company as to which indemnification
is being sought.
<PAGE>
16
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<S> <C>
3.1* Restated Articles of Incorporation dated June 23, 2000
3.2** By-Laws
5.1 Opinion of Gordon & Silver, Ltd.
23.1 Consent of Richard A. Eisner & Company LLP
23.2 Consent of Gordon & Silver Ltd. (Reference is made to
Exhibit 5.1.)
24.1 Power of Attorney. (See signature page.)
</TABLE>
----------
* Incorporated by reference to the corresponding exhibit in the Form 10-QSB
previously filed by the Company on August 14, 2000.
** Incorporated by reference to the corresponding exhibit in the Registration
Statement on Form 10-SB previously filed by the Company on March 17, 1999
(File no. 000-25571).
ITEM 17. UNDERTAKINGS
(1) We hereby undertake:
(a) 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;
(ii) To reflect in the prospectus any facts or events after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any additional or changed 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.
<PAGE>
17
(b) That, for the purpose 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, and the
offering of securities at that time shall be deemed to be the initial
bona fide offering.
(c) To remove from registration by means of a post-effective amendment any
of the securities that remain unsold at the termination of the
offering.
(2) We hereby undertake that, for the purposes of determining any liability
under the Securities Act, each filing of our annual report pursuant to Section
13(a) or 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.
(3) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, 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 our payment of expenses incurred or paid by a director,
officer or controlling person in the successful defense of any action, suit or
proceeding) is asserted by our directors, officers or controlling persons 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 of whether indemnification is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) We also undertake that we will:
(a) 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.
(b) 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.
<PAGE>
18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, we
certify that we have reasonable grounds to believe that our company meets all of
the requirements for filing on Form S-3 and we have authorized this registration
statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in New York, New York, on September 18, 2000.
AXONYX INC.
By: /s/ Marvin S. Hausman, M.D.
--------------------------------------
Marvin S. Hausman, M.D.
President & Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature below
constitutes and appoints Albert D. Angel and Marvin S. Hausman, M.D. 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 of 1933, this
registration statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Albert D. Angel
----------------------------- Chairman of the Board 9/20/00
Albert D. Angel
/s/ Marvin S. Hausman, M.D.
----------------------------- President & Chief Executive Officer 9/20/00
Marvin S. Hausman, M.D. and Director (Principal Executive Officer)
<PAGE>
19
/s/ Abraham E. Cohen
----------------------------- Director 9/20/00
Abraham E. Cohen
/s/ Michael M. Strage
----------------------------- Vice President, Treasurer and Director 9/20/00
Michael M. Strage (Principal Financial & Accounting Officer)
/s/ Michael R. Espey
----------------------------- Vice President, Secretary, 9/20/00
Michael R. Espey General Counsel and Director
/s/ Christopher Wetherhill
----------------------------- Director 9/20/00
Christopher Wetherhill
</TABLE>
<PAGE>
20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
3.1* Restated Articles of Incorporation dated June 23, 2000
3.2** By-Laws
5.1 Opinion of Gordon & Silver, Ltd.
23.1 Consent of Richard A. Eisner & Company LLP
23.2 Consent of Gordon & Silver Ltd. (Reference is made
to Exhibit 5.1.)
24.1 Power of Attorney. (See signature page.)
</TABLE>
----------
* Incorporated by reference to the corresponding exhibit in the Form 10-QSB
previously filed by the Company on August 14, 2000.
** Incorporated by reference to the corresponding exhibit in the Registration
Statement on Form 10-SB previously filed by the Company on March 17, 1999
(File no. 000-25571).
