As Filed with the Securities and Exchange Commission on May ____, 2000
Registration No.____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ACCESS PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 3841
- ------------------------------ ---------------------------
(State or Other Jurisdiction (Primary Standard Industrial
of Incorporation or Organization) Classification Code Number)
83-0221517
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(I.R.S. Employer
Identification No.)
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207 (214) 905-5100
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Kerry P. Gray
President and Chief Executive Officer
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
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(Name, address, including zip code, and
telephone number, including area code, of agent for service)
with copies to:
John J. Concannon III
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
(617) 951-8000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement is declared 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. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Title of Securities Propsed Maximum
to be Registered Amount to be Registered Offering Price Per Share(1)
- ------------------- ------------------------- ----------------------------
Common Stock $.01 6,541,418 share (2) $3.65
par value per share
Proposed Maximum Aggregate
Offering Price (1) Amount of Registration Fee
- -------------------------- ----------------------------
$23,876,176 $6,303.31
(1) Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) under the Securities Act of 1933
based on the average of the high and low prices as reported by the
American Stock Exchange on May 23, 2000.
(2) Includes 409,963 shares issuable to certain selling stockholders upon
exercise of warrants for the purchase of shares of the Registrant's Common
Stock (see "Selling Stockholders").
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
Section 8(a), may determine.
<PAGE>
PROSPECTUS
Access Pharmaceuticals, Inc.
Information contained in this prospectus is subject to completion or
amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may
not be sold until the registration statement becomes effective. This
prospectus is not an offer to sell and is not a solicitation of an offer to buy
these securities in any state in which an offer, solicitation or sale is not
permitted.
Subject to completion, May 25, 2000.
6,541,418 Shares of
Common Stock, $.01 par value
This prospectus relates to the sale of up to 6,541,418 shares of our common
stock, or the Shares, $.01 par value per share, by certain stockholders of
ours, the Selling Stockholders, for their respective accounts.
We will not receive any proceeds from the sale of the Shares by the Selling
Stockholders. None of the Shares have been registered prior to the filing of
the Registration Statement of which this Prospectus is a part.
On May 23, 2000, the last sales price of our Common Stock was, as
reported by the American Stock Exchange, or AMEX, under the symbol
AKC, $3.75 per share.
The Selling Stockholders may sell the Shares in public or private
transactions, in or off the AMEX market, at prevailing market prices, or
at privately negotiated prices. The Selling Stockholders may sell shares
directly to purchasers or through brokers or dealers. Brokers or dealers may
receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders. For more information, see "Plan of
Distribution."
Investing in the common stock involves risks. For a discussion of certain
factors you should consider, see "Risk Factors" beginning on Page 4.
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
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
Where You Can Get More Information 2
Certain Information We Are Incorporating By Reference 3
Forward Looking Statements 3
Risk Factors 4
Access Pharmaceuticals, Inc. 10
Recent Developments 10
Use of Proceeds 11
Selling Stockholders 11
Plan of Distribution 15
Legal Matters 16
Experts 16
</TABLE>
1
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WHERE YOU CAN GET MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
filed by us with the Securities and Exchange Commission, or SEC, under
the Securities Act of 1933. This prospectus does not contain all of the
information set forth in the Registration Statement, since we have omitted
some parts in accordance with the SEC's rules and regulations. The SEC
permits us to "incorporate by reference" the information we file with it,
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 with the SEC
will automatically update and supersede this information. Access has filed
a Registration Statement on Form S-3 under the Securities Act of 1933 with
the SEC with respect to common stock being offered pursuant to this
prospectus. This prospectus omits certain information contained in the
Registration Statement on Form S-3, as permitted by the SEC. Refer to the
Registration Statement on Form S-3, including the exhibits, for further
information about Access and the common stock being offered pursuant to
this prospectus. Statements in this prospectus regarding provisions of certain
documents filed with, or incorporated by reference in, the Registration
Statement are not necessarily complete and each statement is qualified in all
respects by that reference. Copies of all or any part of the Registration
Statement, including the documents incorporated by reference or the
exhibits, may be obtained without charge at the offices of the SEC listed
below.
We are subject to the reporting requirements of the Securities Exchange Act
of 1934 and we therefore file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy
any document we file at the public reference facilities of the SEC located
at 450 Fifth Street N.W., Washington D.C. 20549. You may obtain
information on the operation of the SEC's public reference facilities by
calling the SEC at 1-800-SEC-0330. You can also access copies of such
material electronically on the SEC's home page on the World Wide Web
at http://www.sec.gov.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents. We will also
provide to each person to whom a copy of this prospectus has been
delivered, upon specific request and without charge, a copy of all
documents filed from time to time by us with the SEC pursuant to the
Securities Exchange Act of 1934. You should direct a request for such
copies to Access Pharmaceuticals, Inc., 2600 Stemmons Frwy, Suite 176,
Dallas, Texas 75207, attention Chief Financial Officer. You may direct
telephone requests to the Chief Financial Officer at (214) 905-5100.
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CERTAIN INFORMATION WE ARE INCORPORATING BY REFERENCE
We incorporate by reference the documents listed below and any future
filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934:
* Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
* Registration Statement on Form 8-A filed on March 29, 2000;
* Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
* The description of the common stock contained in Access' Registration
Statement (No. 333-95413) filed with the SEC under Section 12(d) of the
Securities Exchange Act including any amendment or report filed for the
purpose of updating such description.
You may request a copy of these filings at no cost, by writing, telephoning
or e-mailing us at the following address:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
Attention: Chief Financial Officer
(214) 905-5100
email: [email protected]
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or
provided in this prospectus. No one else is authorized to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of this document.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms or other comparable terminology.
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 any
future results, levels or activity, performance or achievements expressed or
implied by such 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. We are under no duty to update any
of the forward-looking statements after the date of this prospectus to
conform such statements to actual results.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks described below and the other information in this prospectus
before purchasing our common stock.
We have experienced a history of losses and we expect to incur future
losses.
We have recorded minimal revenue to date and we have incurred a
cumulative operating loss of approximately $27.5 million through March
31, 1999. Our losses have resulted principally from costs incurred in
research and development activities related to our efforts to develop target
candidates and from the associated administrative costs. We expect to incur
significant additional operating losses over the next several years. We also
expect cumulative losses to increase substantially due to expanded research
and development efforts and preclinical and clinical trials.
We do not have significant operating revenue and we may never attain
profitability.
Our ability to achieve significant revenue or profitability depends upon our
ability to successfully complete the development of drug candidates, to
develop and obtain patent protection and regulatory approvals for our drug
candidates and to manufacture and commercialize the resulting drugs. We
have not received significant royalties for sales of our amlexanox products
to date and we may not receive significant revenues or profits from the sale
of these products in the future. Furthermore, we may not be able to ever
successfully identify, develop, commercialize, patent, manufacture, market
and obtain required regulatory approvals for any additional products.
Moreover, even if we do identify, develop, commercialize, patent,
manufacture, market and obtain required regulatory approvals for additional
products, we may not receive revenues or royalties from commercial sales
of these products for a significant number of years, if at all. Therefore, our
proposed operations are subject to all the risks inherent in the establishment
of a new business enterprise. In the next few years, our revenues may be
limited to any amounts that we receive under strategic partnerships and
research or drug development collaborations that we may establish and we
cannot assure you that we will be able to establish any such relationships
on terms acceptable to us. We cannot assure you that we will achieve or
maintain profitability in the future and our failure to receive significant
revenues or to achieve profitable operations would impair our ability to
sustain operations.
We may not successfully commercialize our drug candidates.
Our drug candidates are subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies. These
risks include the possibilities that some or all of our drug candidates will
be found to be unsafe or ineffective or otherwise fail to meet applicable
regulatory standards or receive necessary regulatory clearances; that these
drug candidates, if safe and effective will be difficult to develop into
commercially viable drugs or to manufacture on a large scale or will be
uneconomical to market; that proprietary rights of third parties will
preclude us from marketing such drugs; or that third parties will market
superior or equivalent drugs. Our failure to develop safe, commercially
viable drugs would have a material adverse effect on our business,
operating results and financial condition.
The success of our research and development activities, upon which we
primarily focus, is uncertain.
Our primary focus is on our research and development activities and the
commercialization of compounds covered by proprietary biopharmaceutical
patents. Research and development activities, by their nature, preclude
definitive statements as to the time required and costs involved in reaching
certain objectives. Actual research and development costs, therefore, could
exceed budgeted amounts and estimated time frames may require extension.
Cost overruns, unanticipated regulatory delays or demands, unexpected
adverse side effects or insufficient therapeutic efficacy will prevent or
substantially slow the research and development effort and our business
could ultimately suffer. We anticipate that we will remain principally
engaged in research and development activities for an indeterminate, but
substantial, period of time.
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We may be unable to obtain necessary additional capital to fund operations
in the future.
We require substantial capital for our development programs and operating
expenses, to pursue regulatory clearances and to prosecute and defend our
intellectual property rights. Although we believe that our existing capital
resources, interest income and revenue from possible licensing agreements
and collaborative agreements will be sufficient to fund our currently
expected operating expenses and capital requirements for up to three years,
we may need to raise substantial additional capital during that period
because our actual cash requirements may vary materially from those now
planned and will depend upon numerous factors, including the results of our
research and development and collaboration programs, the timing and
results of preclinical trials, our ability to maintain existing and establish
new collaborative agreements with other companies to provide funding to
us, the technological advances and activities of competitors and other
factors. We intend to seek additional funding through additional equity
offerings or collaborative or other arrangements with corporate partners.
We cannot assure you, however, that any such equity offerings will occur,
or that additional financing will be available from any of these sources or,
if available, will be available on acceptable or affordable terms. If we do
raise additional funds by issuing equity securities, further dilution to
existing stockholders may result and future investors may be granted rights
superior to those of existing stockholders. Alternatively, we may seek to
raise additional funds through borrowing. As a non-revenue producing
company, however, we are unable to obtain standard credit arrangements,
and it is therefore likely that if we were to raise additional funds through
borrowing, we would be forced to accept unfavorable terms. Furthermore,
there can be no assurance that any credit arrangement would be available
at all. If adequate funds are not available to us through additional equity
offerings or borrowing, we may be required to delay, reduce the scope of
or eliminate one or more of our research and development programs or to
obtain funds by entering into arrangements with collaborative partners or
others that require us to issue additional equity securities or to relinquish
rights to certain technologies or drug candidates that we would not
otherwise issue or relinquish in order to continue independent operations.
The success of our business may depend, in part, upon relationships with
other companies.
Our strategy for the research, development and commercialization of our
potential pharmaceutical products may require us to enter into various
arrangements with corporate and academic collaborators, licensors,
licensees and others, in addition to our existing relationships with other
parties. Specifically, if we successfully develop any commercially
marketable pharmaceutical products, we may seek to enter joint venture,
sublicense or other marketing arrangements with parties that have an
established marketing capability or we may choose to pursue the
commercialization of such products on our own. We may, however, be
unable to establish additional collaborative arrangements or license
agreements as we may deem necessary to develop and commercialize our
potential pharmaceutical products on acceptable terms, and our collaborative
arrangements or license agreements may be unsuccessful. Furthermore, if
we maintain and establish arrangements or relationships with third parties,
our business may depend upon the successful performance by these third
parties of their responsibilities under those arrangements and relationships.
We may depend upon contract manufacturers to assist us with the
commercialization of any new products that we may develop.
We have no experience in the manufacture of pharmaceutical products in
clinical quantities or for commercial purposes and we may not be able to
manufacture any new pharmaceutical products that we may develop, so we
intend to establish arrangements with contract manufacturers to supply
sufficient quantities of products to conduct clinical trials and for the
manufacture, packaging, labeling and distribution of finished pharmaceutical
products if any of our potential products are approved for
commercialization. If we are unable to contract for a sufficient supply of
our potential pharmaceutical products on acceptable terms, our preclinical
and human clinical testing schedule may be delayed, resulting in the delay
of our submission of products for regulatory approval and initiation of new
development programs, which could cause our business to suffer. Delays
or difficulties in establishing relationships with manufacturers to produce,
package, label and distribute our finished pharmaceutical or other medical
products, if any, market introduction and subsequent sales of such products
could cause our business to
5
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suffer. Moreover, contract manufacturers that
we may use must adhere to current Good Manufacturing Practices, as
required by the U.S. Food and Drug Administration, or FDA. In this
regard, the FDA will not issue a pre-market approval or product and
establishment licenses, where applicable, to a manufacturing facility for the
products until after the manufacturing facility passes a pre-approval plant
inspection. If we are unable to obtain or retain third party manufacturing
on commercially acceptable terms, we may not be able to commercialize
our products as planned. Our potential dependence upon third parties for
the manufacture of our products may adversely affect our profit margins
and our ability to develop and deliver such products on a timely and
competitive basis.
We are subject to extensive governmental regulation which increases our
cost of doing business and may affect our ability to commercialize any new
products that we may develop.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of pharmaceutical products through
lengthy and detailed laboratory, preclinical and clinical testing procedures
and other costly and time-consuming procedures to establish their safety and
efficacy. All of our drug candidates will require governmental approvals for
commercialization, none of which have been obtained. Preclinical and
clinical trials and manufacturing of our drug candidates will be subject to
the rigorous testing and approval processes of the FDA and corresponding
foreign regulatory authorities. Satisfaction of these requirements typically
takes a significant number of years and can vary substantially based upon
the type, complexity and novelty of the product. We cannot assure when
we, independently or with our collaborative partners, might submit a New
Drug Application, or NDA, for FDA or other regulatory review.
Government regulation also affects the manufacturing and marketing of
pharmaceutical products.
Government regulations may delay marketing of our potential drugs for a
considerable or indefinite period of time, impose costly procedural
requirements upon our activities and furnish a competitive advantage to
larger companies or companies more experienced in regulatory affairs.
Delays in obtaining governmental regulatory approval could adversely affect
our marketing as well as our ability to generate significant revenues from
commercial sales. We cannot assure you that the FDA or other regulatory
approvals for any drug candidates will be granted on a timely basis or at
all. Moreover, if regulatory approval of a drug candidate is granted, such
approval may impose limitations on the indicated use for which such drug
may be marketed. Even if initial regulatory approvals for our drug
candidates are obtained, we, or our drugs and our manufacturing facilities
would be subject to continual review and periodic inspection, and later
discovery of previously unknown problems with a drug, manufacturer or
facility may result in restrictions on the marketing or manufacture of such
drug, including withdrawal of the drug from the market. The regulatory
standards are applied stringently by the FDA and other regulatory
authorities and failure to comply can, among other things, result in fines,
denial or withdrawal of regulatory approvals, product recalls or seizures,
operating restrictions and criminal prosecution.
Our ability to successfully commercialize new products will be subject to
the uncertainty associated with preclinical and clinical testing.
Before obtaining regulatory approvals for the commercial sale of any of our
potential drugs, the drug candidates will be subject to extensive preclinical
and clinical trials to demonstrate their safety and efficacy in humans. We
cannot assure you that preclinical or clinical trials of any future drug
candidates will demonstrate the safety and efficacy of such drug candidates
at all or to the extent necessary to obtain regulatory approvals. In this
regard, for example, adverse side effects can occur during the clinical
testing of a new drug on humans or animals which may delay ultimate FDA
approval or even lead us to terminate our efforts to develop the drug for
commercial use. Companies in the biotechnology industry have suffered
significant setbacks in advanced clinical trials, even after demonstrating
promising results in earlier trials. The failure to adequately demonstrate
the safety and efficacy of a drug candidate under development could delay or
prevent regulatory approval of the drug candidate and could cause our
business, operating results and financial condition to suffer.
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We may incur substantial product liability expenses due to the use or misuse
of our products for which we may be unable to obtain complete insurance
coverage.
Our business exposes us to potential liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. These
risks will expand with respect to our drug candidates, if any, that receive
regulatory approval for commercial sale and we may face substantial
liability for damages in the event of adverse side effects or product defects
identified with any of our products that are used in clinical tests or
marketed to the public. We have product liability insurance for drug
candidates that are undergoing human clinical trials. Product liability
insurance for the biotechnology industry is generally expensive, however,
if available at all, and we cannot assure you that in the future we will be
able to obtain insurance coverage at acceptable costs or in a sufficient
amount, if at all. We may be unable to satisfy any claims for which we may
be held liable as a result of the use or misuse of products which we have
developed, manufactured or sold and any such product liability claim could
adversely affect our business, operating results or financial condition.
We may incur significant liabilities if we fail to comply with stringent
environmental regulations or if we did not comply with these regulations in
the past.
Our research and development processes involve the controlled use of
hazardous materials. We are subject to a variety of federal, state and local
governmental laws and regulations related to the use, manufacture, storage,
handling and disposal of such material and certain waste products. Although
we believe that our activities and our safety procedures for storing, using,
handling and disposing of such materials comply with the standards
prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely
eliminated. In the event of such accident, we could be held liable for any
damages that result and any such liability could exceed our resources. In
addition, although we believe that we are in compliance in all material
respects with applicable environmental laws and regulations and currently
do not expect to make material capital expenditures for environmental
control facilities in the near-term, we cannot assure you that we will not be
required to incur significant costs to comply with environmental laws and
regulations in the future, or that our operations, business or assets will not
be materially adversely affected by current or future environmental laws or
regulations.
Intense competition may limit our ability to successfully develop and market
commercial products.
The biotechnology and pharmaceutical industries are intensely competitive
and subject to rapid and significant technological change. Our competitors
in the United States and elsewhere are numerous and include, among
others, major multinational pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions. Many of these competitors have and employ greater financial
and other resources, including larger research and development staffs and
more effective marketing and manufacturing organizations, than us or our
collaborative partners. We cannot assure you that our competitors will not
succeed in developing technologies and drugs that are more effective or less
costly than any which are being developed by us or which would render our
technology and future products obsolete and noncompetitive.
In addition, some of our competitors have greater experience than us in
conducting preclinical and clinical trials and obtaining FDA and other
regulatory approvals. Accordingly, our competitors may succeed in
obtaining FDA or other regulatory approvals for drug candidates more
rapidly than us. Companies that complete clinical trials, obtain required
regulatory agency approvals and commence commercial sale of their drugs
before their competitors may achieve a significant competitive advantage.
We cannot assure you that drugs resulting from our research and
development efforts or from our joint efforts with collaborative partners
will be able to compete successfully with our competitors' existing products
or products under development.
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Our ability to successfully develop and commercialize our drug candidates
will substantially depend upon the availability of reimbursement funds for
the costs of the resulting drugs and related treatments.
The successful commercialization of, and the interest of potential
collaborative partners to invest in, the development of our drug candidates
will depend substantially on reimbursement of the costs of the resulting
drugs and related treatments at acceptable levels from government
authorities, private health insurers and other organizations, including health
maintenance organizations, or HMOs. We cannot assure you that
reimbursement in the United States or elsewhere will be available for any
drugs that we may develop or, if available, will not be decreased in the
future, or that reimbursement amounts will not reduce the demand for, or
the price of, our drugs, thereby adversely affecting our business. If
reimbursement is not available or is available only to limited levels, we
cannot assure you that we will be able to obtain collaborative partners to
commercialize our drugs, or be able to obtain a sufficient financial return
on our own manufacture and commercialization of any future drugs.
Any pharmaceutical products that we successfully develop may not be
accepted by the market.
The drugs that we are attempting to develop will compete with a number
of well-established drugs manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any drugs
developed by us will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of our
drug candidates, the potential advantage of our drug candidates over
existing therapies and the reimbursement policies of government and third-
party payers. Physicians, patients or the medical community in general
may not accept or use any drugs that we may develop independently or with
our collaborative partners and if they do not, our business could suffer.
Trends toward managed health care and downward price pressures on
medical products and services may limit our ability to profitably sell any
drugs that we may develop.
Lower prices for pharmaceutical products may result from:
* third-party payers' increasing challenges to the prices charged for
medical products and services;
* the trend toward managed health care in the United States and the
concurrent growth of HMOs and similar organizations that can control or
significantly influence the purchase of healthcare services and products; and
* legislative proposals to reform healthcare or reduce government
insurance programs.
The cost containment measures that healthcare providers are instituting,
including practice protocols and guidelines and clinical pathways, and the
effect of any health care reform, could limit our ability to profitably sell
any drugs that we may successfully develop. Moreover, any future
legislation or regulation, if any, relating to the healthcare industry or third-
party coverage and reimbursement, may cause our business to suffer.
We may not be successful in protecting our intellectual property and
proprietary rights.
Our success depends, in part, on our ability to obtain U.S. and foreign
patent protection for our drug candidates and processes, preserve our trade
secrets and operate our business without infringing the proprietary rights of
third parties. Although Access is either the owner or licensee of technology
to 13 U.S. patents and to 7 U.S. patent applications now pending, we
cannot assure you that any additional patents will issue from any of the
patent applications owned by, or licensed to, us. Furthermore, we cannot
assure you that any rights we may have under issued patents will provide
us with significant protection against competitive products or otherwise be
commercially viable. Legal standards relating to the validity of patents
covering pharmaceutical and biotechnological inventions and the scope of
claims made under such patents are still developing and there is no
consistent policy regarding the breadth of claims allowed in biotechnology
patents. The patent position of a biotechnology firm is highly uncertain and
involves
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complex legal and factual questions. We cannot assure you that
any existing or future patents issued to, or licensed by, us will not
subsequently be challenged, infringed upon, invalidated or circumvented by
others. In addition, patents may have been granted to third parties or may
be granted covering products or processes that are necessary or useful to the
development of our drug candidates. If our drug candidates or processes
are found to infringe upon the patents or otherwise impermissibly utilize the
intellectual property of others, our development, manufacture and sale of
such drug candidates could be severely restricted or prohibited. In such
event, we may be required to obtain licenses from third parties to utilize the
patents or proprietary rights of others. We cannot assure you that we will
be able to obtain such licenses on acceptable terms, if at all. If we become
involved in litigation regarding our intellectual property rights or the
intellectual property rights of others, the potential cost of such litigation,
regardless of the strength of our legal position, and the potential damages
that we could be required to pay could be substantial.
Our business could suffer if we lose the services of, or fail to attract, key
personnel.
We are highly dependent upon the efforts of our senior management and
scientific team, including our President and Chief Executive Officer. The
loss of the services of one or more of these individuals could seriously
impede our success. We do not maintain any "key-man" insurance policies
on any of our key employees and we do not intend to obtain such insurance.
In addition, due to the specialized scientific nature of our business, we are
highly dependent upon our ability to attract and retain qualified scientific
and technical personnel. In view of the stage of our development and our
research and development programs, we have restricted our hiring to
research scientists and a small administrative staff and we have made no
investment in manufacturing, production, marketing, product sales or
regulatory compliance resources. If we develop pharmaceutical products
that we commercialize ourselves, however, we will need to hire additional
personnel skilled in the clinical testing and regulatory compliance process
and in marketing and product sales. There is intense competition among
major pharmaceutical and chemical companies, specialized biotechnology
firms and universities and other research institutions for qualified personnel
in the areas of our activities, however, and we may be unsuccessful in
attracting and retaining these personnel.
Ownership of our shares is concentrated, to some extent, in the hands of a
few individual investors.
Larry N. Feinberg (Oracle Partners LP, Oracle Institutional Partners LP
and Oracle Investment Management Inc.), Richard Stone and Howard P.
Milstein currently beneficially own approximately 8.2%, 6.5% and 6.1%
respectively, of our issued and outstanding common stock. Mr. Stone and
Mr. Milstein have signed lock-up agreements for 81,877 and 71,922 shares,
respectively, and have agreed not to sell any of these shares of our common
stock until July 20, 2000. The remainder of their shares are subject to Rule
144.
Provisions of our charter documents could discourage an acquisition of our
company that would benefit our stockholders.
Provisions of our Certificate of Incorporation and By-laws may make it
more difficult for a third party to acquire control of our company, even if
a change of in control would benefit our stockholders. In particular, shares
of our preferred stock may be issued in the future without further
stockholder approval and upon such terms and conditions, and having such
rights, privileges and preferences, as our Board of Directors may
determine, including, for example, rights to convert into our common
stock. The rights of the holders of our common stock will be subject to,
and may be adversely affected by, the rights of the holders of any of our
preferred stock that may be issued in the future. The issuance of our
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire control of us. This
could limit the price that certain investors might be willing to pay in the
future for shares of our common stock and discourage these investors from
acquiring a majority of our common stock.
9
<PAGE>
Substantial sales of our common stock could lower our stock price.
The market price for our common stock could drop as a result of sales of
a large number of our presently outstanding shares. Currently, a significant
percentage of the outstanding shares of our common stock are unrestricted
and freely tradable or tradable under Rule 144. Shareholders holding
approximately 533,000 shares of our common stock will become eligible
to sell such shares on July 20, 2000 and additional shareholders holding
approximately 650,000 shares of our common stock will become eligible to
sell such shares on January 11, 2001. Upon the effectiveness of this
registration statement an additional 6,541,418 shares of our common stock
will be eligible to be sold.
ACCESS PHARMACEUTICALS, INC.
Access Pharmaceuticals is a Delaware corporation in the development stage.
We are an emerging pharmaceutical company focused on developing both
novel low development risk product candidates and technologies with
longer-term major product opportunities. We have proprietary patents or
rights to five technology platforms: synthetic polymers, bioerodible
hydrogels, Residerm TM, carbohydrate targeting technology, and agents for
the prevention and treatment of viral disease, including HIV. In addition,
our partner Block Drug Company, or Block, is marketing in the United
States Aphthasol RTM, the first FDA-approved product for the treatment
of canker sores. We are developing new formulations and delivery forms
to evaluate this product in additional clinical indications. We have licensed
the rights to amlexanox for the treatment of canker sores from Block for
certain countries excluding the U.S. and the worldwide rights for certain
additional indications including mucositis and oral diseases.
Access was founded in 1974 as Chemex Corporation, a Wyoming
corporation, and in 1983 changed its name to Chemex Pharmaceuticals, Inc.
Chemex changed its state of incorporation from Wyoming to Delaware on
June 30, 1989. In connection with the merger of Access Pharmaceuticals,
Inc., a Texas corporation, with and into Chemex on January 25, 1996, we
changed our name to Access Pharmaceuticals, Inc. Our principal executive
office is at 2600 Stemmons Freeway, Suite 176, Dallas, Texas 75207; our
telephone number is (214) 905-5100.
RECENT DEVELOPMENTS
On May 24, 2000 we completed a self directed private placement, closing
two private offerings, from which we received gross proceeds of $3.3
million, from the private placement of 250,000 and 507,750 shares of
common stock, at a per share price of $3.00 and $5.00, respectively.
On March 28, 2000, our application for listing on the American Stock
Exchange, or AMEX was approved and we began trading on AMEX on
March 30, 2000 under the symbol AKC.
On March 1, 2000, with the assistance of an investment bank, we
completed the closing of a private offering, receiving gross proceeds of
$12.0 million, at a per share price of $2.50, from the private placement of
4,800,000 shares of common stock. The placement agent for the offering
received warrants to purchase 409,963 shares of common stock at $2.50 per
share, in accordance with the offering terms and elected to receive 553,705
shares of common stock in lieu of certain sales commissions and expenses.
On February 25, 2000, we signed licensing agreements granting Mipharm
S.p.A. marketing and manufacturing rights for amlexanox for numerous
indications including the prevention and treatment of canker sores and
mucositis, oral lichen planus and atopic dermatitis. These agreements cover
Italy, Switzerland, Turkey and Lebanon. Under the terms of these
agreements, Mipharm will make an equity investment in us, pay upfront
licensing fees, make milestone payments and we will receive a percentage
of the product sales made in the territory. Mipharm will have the option to
license other product developments in the fields of dermatology and
gynecology in the territory.
10
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the Selling
Shareholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of May 24, 2000 and as adjusted to
reflect the sale of our common stock offered hereby, by each of the Selling
Stockholders.
Except as indicated below, none of the Selling Stockholders has had any
position, office or other material relationship within the past three years
with us or our affiliates. In addition, except as provided herein, we
believe, based on information provided to us by the Selling Shareholders,
that each Selling Stockholder has sole voting and investment power with
respect to the shares beneficially owned. For more information regarding
the shares offered, see "Plan of Distribution" below.
<TABLE>
<CAPTION>
Shares Shares to be
Beneficially Beneficially
Owned Prior Shares Owned After
Name of Selling Stockholder to Offering Offered Offering
- --------------------------------- ------------ -------- ---------------
<S> <C> <C> <C>
Alexander Hasenfeld, Inc. Profit
Sharing Retirement Plan 147,067 20,000 57,067
Dean Anderson 50,000 50,000 -
Anfel Trading Limited 45,000 45,000 -
David L. Avidon 9,300 9,300 -
Balmore S.A. 200,000 200,000 -
Louis F. & Virginia C. Bantle 80,000 80,000 -
Bruce N. & Jacqueline A. Barron 28,000 28,000 -
David Bartash 30,566 (1) 8,900 21,666 (1)
BC Capital, LLC 7,500 7,500 -
Bradford S. Beidner 9,300 9,300 -
Jane Bernbach 10,000 10,000 -
Glenn Beyer 9,300 9,300 -
Biotechnology Value Fund LP 200,000 66,667 -
Biotechnology Value Fund II LP 200,000 133,333 -
Benjamin Blech 55,500 30,000 25,500
Martin Blech 4,800 4,800 -
BNB Associates Investments, LP 40,000 40,000 -
Michael Bollag 40,000 40,000 -
Clark Bowers 6,667 6,667 -
Bridgewater Partners LP 30,000 30,000 -
Axel Caudron 37,200 37,200 -
Peter Casolino 491 (1) 491 (1) -
Central Yeshiva Beth Joseph 282,395 (1) 74,633 207,762 (1)
Gabriel M. Cerrone 36,000 36,000 -
11
<PAGE>
Steven Chananya 9,300 9,300 -
John J. Concannon, III (4) 6,467 (1) 4,800 1,667
C.S.L. Associates, LP 30,000 30,000 -
DHF International Inc. 8,000 8,000 -
Dalton Kent 40,745 (2) 36,745 (2) 4,000 (2)
Deanna deCavaigrac 9,300 9,300 -
Guaranty & Trust Co. FBO
Nicholas DiFalco 27,237 (1) 27,237 (1) -
Joseph E. Edelman 80,000 80,000 -
Alan & Linda Elkes 10,333 10,333 -
Richard Warren Eller 10,000 10,000 -
Stoney D. Elmore 20,000 20,000 -
Bear Stearns Securities Corp Custodian
J. Steven Emerson Roth IRA 200,000 40,000 -
Bear Stearns Securities Corp Custodian
J. Steven Emerson IRA II 200,000 160,000 -
Richard A. Englander 20,000 20,000 -
David L. Engel (4) 73,333 56,667 16,666
The Ezra Charitable Trust 7,000 7,000 -
F&N Associates 147,067 10,000 57,067
Zvi Farber 20,333 12,000 8,333
Justyn Feldman 18,600 18,600 -
Beverly Flaks 114,940 100,000 -
David A. Flaks 114,940 (1) 14,940 (2) -
UAM Profit Sharing & 401k FBO of
J Michael Flinn Retirement Plan (3) 74,975 60,000 14,975
Joseph H. Flom 40,000 40,000 -
Rachel & Haim Fried 9,000 9,000 -
Dennis M. Galgano 10,000 10,000 -
The Galceran Family Trust 10,000 10,000 -
James J. Gallagher 10,000 10,000 -
John Gallagher 64,508 (1) 54,087 (1) 10,421 (1)
Joseph Gelbstein 15,000 15,000 -
Carl Goldfischer 8,000 8,000 -
Donald Gross 7,500 7,500 -
M Feldman 9,300 9,300 -
Guaranty & Trust Co.
Marcia R. Carson GTC IRA 10,000 10,000 -
James Haber 20,000 20,000 -
Jason Halpern 27,900 27,900 -
Tehillah B. Harris 4,800 4,800 -
Hasenfeld Stein Inc. Pension Trust 147,067 20,000 57,067
William Heinzerling 25,000 25,000 -
Richard H. Hochman 30,000 30,000 -
Malcolm Hoenlein 10,000 10,000 -
Stephen B. Howell &
Julianne R. Howell (3) 82,000 (1) 10,000 72,000 (1)
Internet Technologies Inc. 40,000 40,000 -
Eli Jacobson 62,545 20,000 42,545
Jag Dorot, LLC 18,000 18,000 -
12
<PAGE>
William Jeffrey III 40,000 40,000 -
Benjamin J. Jesselson 8/21/74 Trust 300,000 75,000 150,000
Michael G. Jesselson 300,000 75,000 150,000
Bear Stearns Securities Corp FBO
Jonathan Brooks IRA 40,000 40,000 -
Lawrence Kaplan 16,000 16,000 -
Guaranty & Trust Co. FBO
Lewis A. Kaplan GTC IRA Rollover 10,000 10,000 -
Stanley A. Kaplan 8,000 8,000 -
Kentucky National Insurance Co 147,067 15,000 57,067
David Kleinkaufman 7,200 7,200 -
Mervyns Klein 100,000 100,000 -
William E. Konrad Trust 30,000 30,000 -
Neal Kozodoy 15,000 12,000 3,000
A. Kucher 1,000 (2) 1,000 (2) -
J. Thomas Lewis 30,000 30,000 -
Lightning Ltd. 30,000 30,000 -
Richard Lipsey 10,000 10,000 -
J. Jay Lobell 30,000 30,000 -
Benjamin D. Lorello 400,000 400,000 -
Nathan Low Roth IRA 469,077 (1) 99,691 (1) 267,886 (1)
Nathan Low 469,077 (1) 101,500 (1) 267,886 (1)
Arthur Luxenbach 16,740 16,740 -
Frank Marino 3,333 3,333 -
Kenneth F. McCain &
Molleen B. McCain 40,000 40,000 -
Herbert H. McDade, Jr. (3) 37,116 10,000 27,116
Meteoric, L.P. 14,000 14,000 -
Justin Morreale (4) 93,333 56,667 36,666
Dwight Miller 12,000 (2) 7,000 (2) 5,000 (2)
David Mugrabi 18,600 18,600 -
Kieran & Beth Nicholson 10,000 10,000 -
Steven Oliviera 154,918 (1) 63,944 (1) 90,974 (1)
Oracle Institutional Partners L.P. 1,000,000 174,000 -
Oracle Offshore Ltd. 1,000,000 32,000 -
Oracle Partners Inc. 1,000,000 629,000 -
Penn Footware Co. 80,000 80,000 -
Pequot Scout Fund L.P. 320,000 320,000 -
J. Daniel Ramsey III 14,940 (2) 14,940 (2) -
Randco, Inc. 10,000 10,000 -
David Reimer 18,600 18,600 -
Rosebury, L.P. 14,000 14,000 -
Peter T. Roselle 18,600 18,600 -
Eva Rosen 74,400 18,600 -
Eva Rosen Trust for Carrie Rosen 74,400 18,600 -
Eva Rosen Trust for Neil Rosen 74,400 18,600 -
Scott Rosen & Elliot Horawitz
Co-Ttees of the Eva Rosen Trust
FBO Scott Rosen 74,400 18,600 -
13
<PAGE>
Abraham Rosenberg 15,000 15,000 -
David Rosenberg 93,600 93,600 -
Abraham J. Roth 2,000 2,000 -
Wayne Rothbaum 80,000 80,000 -
David Rozen 70,817 40,000 30,817
Rutgers Casulaty Insurance Co 147,067 15,000 57,067
David Saferstein 9,300 9,300 -
Irvin Saltzman 10,000 10,000 -
Sam Oracle Fund Inc. 1,000,000 165,000 -
Kristen Scappaticci 491 (2) 491 (2) -
Austost Anstalt Schoen 160,000 160,000 -
Joan Schapiro 10,000 10,000 -
Paul A Scharfer 33,000 (1) 33,000 (1) -
Chaim H. & Ellen Schnur 8,000 8,000 -
Scout Capital Partners, L.P. 10,000 10,000 -
Marc Seelenfreund 49,178 (2) 17,612 (2) 6,250 (2)
Stefan Shoup 10,000 10,000 -
Barry and Judy Silverman Tenants
by the Entirety 30,000 30,000 -
Guarantee & Trust Co FBO Mark Sklar 11,000 (1) 11,000 (1) -
Guarantee & Trust Co FBO Mitchell Sklar 11,000 (1) 11,000 (1) -
Smith Family Trust 17,280 10,000 7,280
State Capital Partners 80,000 80,000 -
Nachum Stein 147,067 10,000 57,067
Jeffrey Steingarten 16,000 16,000 -
Zoltan Stern 40,000 40,000 -
David Stone 126,666 60,000 66,666
Richard B Stone (3) 815,307 (1) 185,429 (1) 629,878 (1)
James Stramondo 18,000 18,000 -
Alan Swerdloff 6,111 (1) 6,111 (1) -
Tallac Corporation 100,000 100,000 -
Joseph Telushkin 14,000 14,000 -
Judy Tenebaum 6,400 6,400 -
Jeffrey Thorp IRA
Bear Stearns Securities Corp. 40,000 40,000 -
Matthew A. Toole 2,200 (1) 2,200 (1) -
Frank Tramantano IRA 10,000 10,000 -
Paul Tramantano 72,833 72,833 -
Douglas D Tsao 13,200 (1) 13,200 (1) -
Preston Tsao (3) 63,872 (1) 37,547 (1) 26,325 (2)
Triple Equity Investments Ltd. 48,000 48,000 -
Zvi Weinreb 55,000 55,000 -
Perry Weitz 33,480 33,480 -
Douglas J. Wicks 18,600 18,600 -
Joseph Wiesner 7,500 7,500 -
Worlwide Ltd. 12,000 12,000 -
Louis Zauderer 18,000 18,000 -
Larry Zelin 9,300 9,300 -
</TABLE>
14
<PAGE>
(1) These share amounts include shares issuable upon exercise of warrants.
(2) These share amounts represent shares issuable upon exercise of
warrants.
(3) Each of Messrs. Flinn, Howell, McDade, Stone and Tsao are our
Directors. Messrs. Stone and Tsao are also directors of Sunrise Securities
Corporation which acted as placement agent or our private placement sales
of our common stock in 2000, 1999, 1998.
(4) Each of Messrs. Concannon, Engel and Morreale are partners of
Bingham Dana LLP. The validity of our common stock to be sold in this
offering is being passed upon for us by Bingham Dana LLP.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell or distribute the Shares directly to
purchasers as principles or through one or more underwriters, brokers,
dealers or agents as follows:
* from time to time in one or more transactions, which may involve block
transactions;
* on any exchange or in the over-the-counter market;
* in transactions otherwise than in the over-the-counter market; or
* through the writing of options, whether such options are listed on an
options exchange otherwise, on or settlement of short sales of, the Shares.
Any of these transactions may be effected at market prices at the time of
sale, at prices related to such prevailing market prices, at varying prices
determined at the time of sale or at negotiated or fixed price in each case
as determined by the Selling Stockholder or by agreement between the
Selling Stockholder and underwriters, brokers, dealers or agents, or
purchasers. If the Selling Stockholder effect such transactions by selling
Shares to or through underwriters, brokers, dealers or agents, the Selling
Stockholders may compensate these underwriters, brokers, dealers or agents
in the form of discounts, concessions or commissions from the Selling
Stockholders or commissions from purchasers of securities for whom they
may act as agent. These compensatory discounts, concessions or
commissions may be in excess of those customary in the types of
transactions involved as to particular underwriters, brokers, dealers or
agents. The Selling Stockholders and any brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any of these
underwriters, brokers, dealers or agents may constitute underwriting
discounts and commissions under the Securities Act of 1933.
Under the securities laws of certain states, the Shares may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
We will pay all of the expenses incident to the registration, offering and
sale of the Shares to the public hereunder, estimated at $33,000, other than
commissions, fees and discounts of underwriters, brokers, dealers and
agents. Those commissions, fees and discounts, if any, will be borne by the
Selling Stockholder. We have agreed to indemnify the Selling Stockholders
and any underwriters against certain liabilities under the Securities Act. We
will not receive any of the proceeds from the sale of any of the Shares by
the Selling Stockholders.
Certain of the underwriters, dealers, brokers or agents may have other
business relationships with us and our affiliates in the ordinary course.
15
<PAGE>
LEGAL MATTERS
The validity of our common stock to be sold in this offering is being passed
upon for us by Bingham Dana LLP 150 Federal Street, Boston,
Massachusetts 02110. Justin P. Morreale, David L. Engel and John J.
Concannon III, partners of Bingham Dana LLP, beneficially own an
aggregate of 172,299 shares of our common stock and warrants to purchase
834 shares of our common stock. Mr. Concannon is the corporate
Secretary.
EXPERTS
Our consolidated financial statements incorporated in this Prospectus by
reference to our Annual Report on Form 10-K for the two year period
ended December 31, 1999 have been so incorporated in reliance on the
report of Grant Thornton LLP, independent certified public accountants,
given on the authority of said firm as experts in accounting and auditing.
The consolidated statements of operations, stockholders' equity (deficit) and
cash flows of Access Pharmaceuticals, Inc. and subsidiary for the year
ended December 31, 1997, have been incorporated by reference herein and
in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
KPMG LLP's independent auditors' report on the consolidated statements
of operations, stockholders' equity (deficit) and cash flows of Access
Pharmaceuticals, Inc. and subsidiary for the year ended December 31,
1997, contained a separate paragraph stating that "the Company has
suffered recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in the
notes to the 1997 consolidated financial statements. The consolidated
financial statements do not include any adjustments that might result from
the outcome of this uncertainty."
The cumulative statements of operations, stockholders' equity (deficit) and
cash flows for the period February 24, 1988 (inception) to December 31,
1994 incorporated in this prospectus by reference to our Annual Report on
Form 10-K have been so incorporated in reliance on the report of Smith,
Anglin & Co., independent certified public accountants, given on the
authority of said firm as experts in accounting and auditing.
16
<PAGE>
- ----------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to give any
information or to make any representations not contained in this Prospectus
or any Prospectus Supplement. You must not rely on any unauthorized
information. Neither this Prospectus nor any Prospectus Supplement is an
offer to sell or a solicitation of an offer to buy any of these securities in
any jurisdiction where an offer or solicitation is not permitted. No sale made
pursuant to this Prospectus shall, under any circumstances, create any
implication that there has not been any change in the affairs of Access since
the date of this Prospectus.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
------
<S> <C>
Where You Can Get More Information 2
Certain Information We Are Incorporating
By Reference 3
Forward Looking Statements 3
Risk Factors 4
Access Pharmaceuticals, Inc. 10
Recent Developments 10
Use of Proceeds 11
Selling Stockholders 11
Plan of Distribution 15
Legal Matters 16
Experts 16
</TABLE>
6,541,418 SHARES
[ LOGO ]
Access Pharmaceuticals, Inc.
COMMON STOCK
PROSPECTUS
May ___, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of our common stock offer hereby are
as follows:
<TABLE>
<S> <C>
SEC registration fee $ 6,303
Printing and engraving expenses 500
Legal fees and expenses 10,000
Accounting fees and expenses 5,000
Blue Sky fees and expenses (including legal fees) 1,000
Transfer agent and registrar fees and expenses 0
Miscellaneous 10,197
---------
Total $ 33,000
=========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is,
or is threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such corporation)
by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, provided
that such person acted in good faith and in a manner that such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, such
person had no reasonable cause to believe his conduct was unlawful. The
indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding. A
Delaware corporation may also indemnify such persons against expenses
(including attorneys' fees) in actions brought by or in the right of the
corporation to procure a judgment in its favor, subject to the same
conditions set forth in the immediately preceding sentences, except that no
indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and to the extent the Court of Chancery of the State of Delaware or
the court in which such action or suit was brought shall determine upon
application that, in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as the Court
of Chancery or other such court shall deem proper. To the extent such
person has been successful on the merits or otherwise in defense of any
action to above, or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in
connection therewith. The indemnification and advancement of expenses
provided for in, or granted pursuant to, Section 145 is not exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 145 of the DGCL also provides that a corporation may maintain
insurance against liabilities for which indemnification is not expressly
provided by the statute. The Registrant is insured against liabilities which
it may incur by reason of its indemnification obligations under its
Certificate of Incorporation, Bylaws and indemnification agreements.
Article X of the Registrant's Certificate of Incorporation provides that the
Registrant will indemnify, defend and hold harmless directors, officers,
employees and agents or the Registrant to the fullest extent currently
permitted under the DGCL.
II-1
<PAGE>
In addition, Article X of the Registrant's Certificate of Incorporation,
provides that neither the Registrant nor its stockholders may recover
monetary damages from the Registrant's directors for a breach of their
fiduciary duty in the performance of their duties as directors of the
Registrant, unless such breach relates to (i) the director's duty of loyalty,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in
Section 174 of the DGCL or (iv) any transactions for which the director
derived an improper personal benefit. The By-Laws of the Registrant
provide for indemnification of the Registrant's directors, officers,
employees and agents on the terms permitted under Section 145 of the
DGCL described above.
The Registrant has entered into indemnification agreements with certain of
its directors and executive officers. These agreements provide rights of
indemnification to the full extent allowed and provided for by Section 145
of the DGCL and the Certificate of Incorporation and Bylaws of Access.
Item 16. Exhibits
Exhibit Number
2.1 Amended and Restated Agreement of Merger and Plan of
Reorganization between Access Pharmaceuticals, Inc. and Chemex
Pharmaceuticals, Inc., dated as of October 31, 1995 (Incorporated by
reference to Exhibit A of the our Registration Statement on Form S-4 dated
December 21, 1995, Commission File No. 33-64031)
2.2 Agreement of Merger and Plan of Reorganization, dated May 23, 1997
among us, Access Holdings, Inc and Tacora Corporation (Incorporated by
reference to Exhibit 10.11 of the Company's Form 10-K for the year ended
December 31, 1997)
2.3 Agreement of Merger and Plan of Reorganization, dated as of
February 23, 1999 among us, Access Holdings, Inc. and Virologix
Corporation (Incorporated by reference to Exhibit 2.2 of the Company's
Form 8-K filed on August 3, 1999)
3.0 Articles of incorporation and bylaws:
3.1 Certificate of Incorporation (Incorporated by Reference to Exhibit 3(a)
of our Form 8-B dated July 12, 1989, Commission File Number 9-9134)
3.2 Certificate of Amendment of Certificate of Incorporation filed August
21, 1992
3.3 Certificate of Merger filed January 25, 1996. (Incorporated by
reference to Exhibit E of our Registration Statement on Form S-4 dated
December 21, 1995, Commission File No. 33-64031)
3.4 Certificate of Amendment of Certificate of Incorporation filed January
25, 1996. (Incorporated by reference to Exhibit E of our Registration
Statement on Form S-4 dated December 21, 1995, Commission File No.
33-64031)
3.5 Amended and Restated Bylaws (Incorporated by reference to Exhibit
3.1 of our Form 10-Q for the quarter ended June 30, 1996)
3.6 Certificate of Amendment of Certificate of Incorporation filed July 18,
1996. (Incorporated by reference to Exhibit 3.8 of our Form 10-K for the
year ended December 31, 1996)
3.7 Certificate of Amendment of Certificate of Incorporation filed June 18,
1998. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the
quarter ended June 30, 1998)
5.1 Opinion of Bingham Dana, LLP,
23.0 Consent of Experts and Counsel
23(a) Consent of Bingham Dana LLP (included in Exhibit 5.1)
23(b) Consent of Grant Thornton LLP
23(c) Consent of KPMG LLP
23(d) Consent of Smith, Anglin & Co.
26 Power of Attorney (For information, see II-4)
II-2
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement 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;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions described in Item 15 above,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, Texas, on
this 24th day of May, 2000.
ACCESS PHARMACEUTICALS, INC.
By /s/ Kerry P. Gray
----------------------
Kerry P. Gray
President and Chief Executive Officer, Director
POWER OF ATTORNEY AND SIGNATURES
Each person whose signature appears below hereby constitutes and appoints
Kerry P. Gray, as his 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, (i) to sign any and all amendments (including post-
effective amendments) to this Registration Statement, (ii) to sign any
registration statement to be filed pursuant to Rule 462(b) under the
Securities Act of 1933 for the purpose of registering additional shares of
Common Stock for the same offering covered by this Registration
Statement, and (iii) to file any of the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, 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 or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following person in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------- ----------------------------- --------------
<S> <C> <C>
/s/ Kerry P. Gray
- -----------------------
Kerry P. Gray President and Chief Executive May 24, 2000
Officer, Director
/s/ Herbert H. McDade, Jr.
- --------------------------
Herbert H. McDade, Jr. Director May 24, 2000
/s/ J. Michael Flinn
- -----------------------
J. Michael Flinn Director May 24, 2000
/s/ Stephen B. Howell
- -----------------------
Stephen B. Howell Director May 24, 2000
/s/ Max Link
- ----------------------
Max Link Director May 24, 2000
/s/ Howard P. Milstein
- ----------------------
Howard P. Milstein Director May 24, 2000
/s/ Richard Stone
- ------------------
Richard Stone Director May 24, 2000
/s/ Preston Tsao
- ------------------
Preston Tsao Director May 24, 2000
/s/ Stephen B. Thompson
- ------------------------
Stephen B. Thompson Vice President, May 24, 2000
Chief Financial Officer,
Treasurer
</TABLE>
II-4
EXHIBIT 5.1
Opinion of Bingham Dana LLP
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
May 24, 2000
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant to a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Act"), initially filed with the Securities and Exchange
Commission on May 24, 2000 (the "Registration Statement"), of up to
6,131,455 shares (the "Shares") of common stock, par value $0.01 per
share (the "Common Stock"), of Access Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and 409,963 shares of Common Stock
issuable upon exercise of currently outstanding warrants to purchase
Common Stock (the "Warrant Shares"), to be sold by certain selling
stockholders of the Company.
We have acted as counsel to the Company in connection with the foregoing
registration of the Shares. We have examined and relied upon originals or
copies of such records, instruments, agreements or other documents of the
Company, and certificates of officers of the Company as to certain factual
matters and have made such investigation of law and have discussed with
officers and representatives of the Company such questions of fact, as we
have deemed necessary or advisable for purposes of this opinion. In our
examinations, we have assumed the genuineness of all signatures, the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing
any document.
We have further assumed that the registration requirements of the Act and
all applicable requirements of state laws regulating the sale of securities will
have been duly satisfied.
This opinion is limited solely to the Delaware General Corporation Law,
as applied by courts located in Delaware, the applicable provisions of the
Delaware Constitution and the reported judicial decisions interpreting those
laws.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are legally issued, fully paid and non-assessable and that the Warrant
Shares, when issued upon the due exercise of and in accordance with the
terms of the warrants under which such Warrant Shares are issuable, will
be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Bingham Dana LLP
------------------
BINGHAM DANA LLP
EXHIBIT 23(b)
Consent Of Independent Certified Public Accountants
The Board of Directors of
Access Pharmaceuticals, Inc.
We have issued our report dated March 3, 2000 accompanying the
consolidated financial statements of Access Pharmaceuticals, Inc. and
subsidiaries appearing in the 1999 Annual Report of the Company on Form
10-K for the year ended December 31, 1999, which is incorporated by
reference in this Registration Statement. We consent to the incorporation
by reference in the Registration Statement of the aforementioned report and
to the use of our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
----------------------
GRANT THORNTON LLP
Dallas, Texas
May 24, 2000
EXHIBIT 23(c)
Independent Auditors' Consent
The Board of Directors of
Access Pharmaceuticals, Inc.
We consent to the use of our report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the prospectus.
Our report dated March 24, 1998 contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations and
has a net capital deficiency, which raise substantial doubt about its ability
to continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of that
uncertainty.
/s/ KPMG LLP
-------------
KPMG LLP
Dallas, Texas
May 24, 2000
EXHIBIT 23(d)
Consent of Independent Auditors
The Board of Directors
Access Pharmaceuticals, Inc.
We consent to the use of our report, dated September 21, 1995,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ Smith Anglin & Co.
----------------------
Smith Anglin & Co.
Dallas, Texas
May 24, 2000
