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As filed with the Securities and Exchange Commission on February 12, 1996
REGISTRATION NO. 333-00125
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GENOME THERAPEUTICS CORP.
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 04-2297484
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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100 BEAVER STREET, WALTHAM, MASSACHUSETTS 02154
(617) 893-5007
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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FENEL M. ELOI
Vice President, Treasurer, and Chief Financial Officer
Genome Therapeutics Corp.
100 Beaver Street
Waltham, Massachusetts 02154
(617) 893-5007
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
DAVID C. CHAPIN, ESQ.
Ropes & Gray
One International Place
Boston, Massachusetts 02110
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
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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, as amended (the "Securities Act"), 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, 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. / /
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 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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INFORMATION CONTAINED HEREIN 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 NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 12, 1996
PROSPECTUS
- ---------- 1,483,098 Shares
GENOME THERAPEUTICS CORP.
Common Stock
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This Prospectus relates to 1,483,098 shares (the "Shares") of Common
Stock, par value $.10 per share (the "Common Stock") of Genome Therapeutics
Corp.(the "Company" or "GTC") being offered by certain existing shareholders of
the Company (the "Selling Stockholders"). See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of Shares of Common
Stock by any of the Selling Stockholders. The Shares offered by the Selling
Stockholders may be sold from time to time by the Selling Stockholders, or by
pledgees, donees, transferees or other successors in interest of the Selling
Stockholders. Such sales may be made in one or more transactions on the Nasdaq
National Market or otherwise, at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
The shares may be sold by one or more of the following (a) a "block" trade in
which the broker or dealer so engaged will attempt to sell the Shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; and (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers
or dealers will receive commissions or discounts from Selling Stockholders
(and, if they act as agent for the purchaser, from such purchaser), which
commissions may, in certain situations, be negotiated and in excess of
customary compensation in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers, and any other participating brokers or dealers,
and certain of the Selling Stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales. In
addition, any Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act of 1933, as amended (the "Securities Act")
may be sold under Rule 144 rather than pursuant to this Prospectus. See "Plan
of Distribution".
The Company's Common Stock is traded over-the-counter on the NASDAQ
National Market under the symbol "GENE". On February 8, 1996 the last reported
sale price of the Common Stock was $13.00 per share.
The Company has agreed to pay the cost of the registration of the
Shares and the preparation of this Prospectus and the Registration Statement
under which it is filed. The expenses so payable by the Company are estimated
to be approximately $30,000.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities, including liabilities arising under the
Securities Act.
The Common Stock offered hereby involves a high degree of risk. See
"Risk Factors" beginning on Page 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is ________ __, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Commissions's Regional offices at 7 World
Trade Center, 13th Floor, New York, NY 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may be obtained at prescribed rates upon request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20449.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement (which
term shall include all amendments, exhibits and schedules thereto) on Form S-3
under the Securities Act, with respect to the Shares of Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, and to which reference is hereby
made. Statements made in this Prospectus as to the contents of any document
referred to are not necessarily complete. With respect to each such document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference. The
Registration Statement may be inspected and copied at the public reference
facilities maintained by the Commission referred to in "Available Information."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended August
31, 1995, the Company's amended Annual Report on Form 10-K/A-3 for the fiscal
year ended August 31, 1995, the Company's Quarterly Report on Form 10-Q for the
quarter ended November 25, 1995, and the description of the Company's Common
Stock contained in its Form 10/A, File No. 0-10824 are incorporated by reference
and made a part of this Prospectus as of the date hereof. All reports and other
documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the termination of this offering shall be
incorporated by reference into this Prospectus and shall be deemed to be part of
this Prospectus from the date of filing of such reports and documents. Any
statement contained herein or in a document incorporated by reference shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, upon request, without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, a copy of any or all of the documents which have been or may be
incorporated in this Prospectus by reference, other than certain exhibits to
such documents. Requests for such copies should be directed to: Genome
Therapeutics Corp., 100 Beaver Street, Waltham, Massachusetts 02154 (telephone:
(617) 893-5007).
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THE COMPANY
Genome Therapeutics Corp. ("GTC" or the "Company") is a leader in the field
of genomics -- the identification and characterizations of genes. The Company
has over ten years of experience in positional cloning, having served as one of
the primary researchers under genome programs sponsored by the United States
government and has developed numerous techniques and tools that are widely used
in this field. GTC's commercial gene discovery strategy capitalizes on its
pioneering work in genomics by applying its proprietary high-throughput
multiplex DNA sequencing technology and positional cloning and bioinformatics
capabilities in two principal areas, the discovery and characterization (i.e.,
determination of functionality) of (i) genes of infectious organisms
("pathogens") that are responsible for many serious diseases and (ii) human
disease genes. The Company believes that its genomic discoveries may lead to
novel therapeutics, vaccines and diagnositc products by it and its strategic
partners. In 1995, the Company entered into two corporate collaborations in
connection with its pathogen gene discovery programs, an agreement with Astra
Hassle AB ("Astra") and an agreement with Schering Corporation and
Schering-Plough Ltd. (collectively, "Schering-Plough").
The Company's principal executive offices are located at 100 Beaver
Street, Waltham, Massachusetts 02154, and its telephone number is (617)
893-5007.
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RISK FACTORS
An investment in the Shares of Common Stock offered hereby involves a high
degree of risk. The following factors, in addition to the other information
contained elsewhere in this Prospectus, should be carefully considered in
evaluating the Company and its business before purchasing shares of Common Stock
offered hereby.
Unproven Technology and Business Strategy. The Company's strategy of
sequencing the genomes of select pathogens and identifying and characterizing
genes responsible for human diseases in order to develop therapeutic, diagnostic
and vaccine products is unproven. To date, only a few products based on genomic
information have been successfully developed. Although technologies similar to
those utilized by the Company have been utilized by others to identify and
characterize genes associated with certain human diseases, the Company has not
yet identified and characterized any such genes under its research programs.
There can be no assurance that the Company's approach to human gene discovery
will enable it to successfully identify and characterize the specific genes that
cause or predispose individuals to the diseases that are the targets of its gene
discovery programs.
Even if the Company is successful in identifying specific human disease
genes or sequencing the genomes of pathogens, there can be no assurance that its
gene discoveries will lead to the development of commercial products. Once the
Company identifies specific genes, it plans to license its discoveries to others
to complete product development and to commercialize products based upon such
discoveries. The Company's success will depend, in part, upon its ability to
focus its research efforts on diseases and pathogens that are suitable
candidates for gene-based therapeutic, diagnostic and vaccine products. The
human diseases targeted by the Company generally are believed to be caused by a
number of genetic as well as environmental factors, and there can be no
assurance that such diseases can be successfully addressed through gene-based
therapeutic, diagnostic or vaccine products.
In addition, the development of products based on the Company's gene
discoveries will be subject to the risks of failure inherent in the development
of products based on new technologies. These risks include the possibilities
that: these technologies or any or all of the products based on these
technologies will be found to be ineffective or toxic, or otherwise fail to
receive necessary regulatory approvals; the products, if safe and effective,
will be difficult to manufacture on a large scale or uneconomical to market;
proprietary rights of third parties will preclude the Company or its
collaborators from marketing products, or third parties will market superior or
equivalent products. As a result, there can be no assurance that the Company's
research and development activities will result in any commercially viable
products.
Availability of, and Competition for, Family Resources. The Company's
human gene discovery programs are based upon statistical analyses of disease
inheritance patterns and require the collection of large numbers of DNA samples
from affected individuals, their families and other suitable populations. The
Company is dependent upon others for the identification of donor populations and
the collection and supply of the DNA samples used in its human disease gene
research programs. The availability of DNA samples from large, family based or
other suitable populations is therefore critical to the Company's ability to
discover the genes responsible for human diseases. The Company currently has
rights to few such samples and does not have exclusive rights to any such
samples. The competition for these resources is intense and certain of the
Company's competitors have obtained rights to significantly more family
resources than the Company. There can be no assurance that the Company will be
able to obtain access to DNA samples necessary to support its human gene
discovery programs and any material lack of availability of such DNA samples
would have an adverse effect on the Company's business.
Reliance Upon Collaborative Partners. The Company's strategy for
development and commercialization of therapeutic, vaccine and diagnostic
products based upon both its human and pathogen gene discovery programs depends
on the formation of various strategic collaborations and licensing arrangements
with pharmaceutical and biotechnology development partners. To date, the
Company has entered into only two such arrangements with respect to the
Company's genetic databases for two pathogens. One such arrangement can be
terminated by the Company's collaborator as early as February 1998.
Commencement of the research collaboration is contingent upon the achievement
by the Company of certain development milestones, and even if those milestones
are met, the arrangement can be terminated by the Company's collaborator as
early as two and one-half years after the start of the research collaboration.
There can be no assurance that the Company will be able to establish
additional strategic collaborations or licensing arrangements that
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the Company deems necessary to develop and commercialize products based upon
its gene discovery programs, that any such arrangements or licenses will be on
terms favorable to the Company, or that the current or future strategic
collaborations or licensing arrangements will ultimately be successful. In
addition, the Company's strategy involves pursuing multiple, concurrent gene
discovery programs in different disease areas. There can be no assurance that
the Company will be able to manage simultaneous programs successfully.
With respect to current and potential future strategic collaborations and
licensing arrangements, the Company will be dependent upon the expertise and
dedication of sufficient resources by these outside parties to develop and
commercialize products based on the Company's gene discoveries. Under the
Company's current strategy, the Company does not expect to develop, manufacture
or market products in the near term. Should a collaborator fail to develop or
commercialize a product to which the Company has rights, the Company's business
may be adversely affected. There can be no assurance that current or future
collaborators will not pursue alternative technologies, or develop alternative
products either on their own or in collaboration with others, including the
Company's competitors, as a means for developing therapeutic, diagnostic or
vaccine products for the diseases targeted by the Company. If the Company
chooses in the future to directly engage in the development, manufacturing and
marketing of certain products, it will require substantial additional funds,
personnel and production facilities.
Reliance on United States Government Funding. Since 1992, the Company's
primary source of revenues has been payments under United States government
grants and research contracts. For fiscal 1993, 1994 and 1995, revenue
recognized pursuant to United States government grants and research contracts
accounted for approximately 78%, 92% and 63%, respectively, of the Company's
total revenues. The government's obligation to make payments under these grants
and contracts is subject to the appropriation by the United States Congress of
funding in each year. Moreover, it is possible that Congress or the government
agencies that administer the federal government's genomics programs will
determine to scale back these programs or terminate them or that the government
will award future grants and contracts to competitors of the Company instead of
the Company. The failure of the Congress to fund the Company's grants and
federal government contracts or any of the other events described in this
paragraph could adversely affect the Company's business and results of
operations, possibly materially.
History of Operating Losses; Anticipation of Future Losses. All of the
Company's research and development programs involve complex research and are at
an early stage of development. It will be a number of years, if ever, before
the Company generates significant revenues or profits from product sales or
royalties. In recent years, substantially all of the Company's revenues have
resulted from payments received under United States government grants and
research contracts, and, to a lesser extent, agreements with collaborators. The
Company expects that substantially all of its revenues for the foreseeable
future will result from payments under government grants and contracts and
existing strategic collaborations, license fees, proceeds from the sale of
rights, payments from future strategic collaborations and licensing
arrangements, if any, and interest income. Certain payments under the Company's
agreements with its collaborators are and will be contingent upon the Company
meeting certain milestones, and funding under the Company's government grants
and research contracts is subject to appropriation each year by the United
States Congress. There can be no assurance that the Company will receive
additional revenues under existing strategic collaborations or government
grants and contracts or that the Company will be successful in entering into
other strategic collaborations or receive additional grants or contracts.
Although the Company had net income of approximately $585,000 for the fiscal
year ended August 31, 1995, the Company had a net loss of approximately
$662,000 for the thirteen week period ended November 25, 1995, and, as of
November 25, 1995, the Company had an accumulated deficit of approximately $36
million. At August 31, 1995, the Company had net operating loss and tax credit
carryforwards of approximately $35,007,000 and $1,120,000, respectively. These
losses and tax credits are available to reduce federal taxable income and
federal income taxes, respectively, in future years if any. These losses and
tax credits are subject to review and possible adjustment by the Internal
Revenue Service and may be limited in the event of certain cumulative changes
in ownership interests of significant shareholders over a three-year period in
excess of 50%. The Company does not believe that it has experienced cumulative
ownership changes in excess of 50% or that the consummation of this offering
will result in a cumulative ownership change in excess of 50%. However, there
can be no assurance that ownership changes will not occur in future periods
which will limit the Company's ability to utilize the losses and tax credits.
The Company anticipates incurring additional losses or generating only modest
net income over at least the next several years. Any such losses may increase
as the Company expands its research and development activities. To achieve
sustained profitability, the Company, alone or with others, must successfully
sequence the genomes of pathogens and identify biologically relevant pathogen
genes and successfully discover and characterize human genes associated with
particular diseases and thereafter utilize such discoveries, either alone or
with others, to develop products, conduct clinical trials, obtain required
regulatory approvals and successfully manufacture, introduce and market such
products. The time required to reach profitability is highly uncertain and
there can be no assurance that the Company will be able to achieve
profitability on a sustained basis, if at all.
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Need for Future Capital; Uncertainty of Additional Funding. Depending upon
the Company's success in entering into additional strategic collaborations and
the progress of the Company's and its collaborators' development programs, the
Company may require substantial additional funds before the Company achieves
profitability on a sustained basis, if at all. The Company expects capital and
operating expenditures to increase over the next several years as it increases
its research and development activities.
The Company's future capital requirements and the adequacy of its available
funds will depend on many factors, including the Company's ability to obtain
additional government grant and research contracts, the progress of its research
programs, the number and breadth of these programs, achievement of milestones
under the Company's strategic collaboration agreements, the ability of the
Company to establish and maintain additional strategic alliance and licensing
agreements, the progress of the development and commercialization efforts of the
Company's collaborators, competing technological and market developments, the
costs associated with collection of patient information and DNA samples, the
costs involved in preparing, filing, prosecuting, maintaining and enforcing
patent claims and other intellectual property rights, the regulatory process and
other factors. The Company may seek such additional funds through public or
private equity or debt offerings or additional strategic collaborations and
licensing arrangements. No assurance can be given that additional funds will be
available when needed, or that, if available, such funds will be obtained on
terms favorable to the Company or its shareholders. To the extent the Company
raises additional capital by issuing equity securities, ownership dilution to
shareholders will result. If adequate funds are not available, the Company may
be required to delay, scale back or eliminate one or more of its research and
development programs or obtain funds through arrangements with collaborators or
others that may require the Company to relinquish rights to technologies,
product candidates, or products that the Company would not otherwise relinquish.
Competition. The Company faces intense competition with respect to its
human gene discovery and pathogen gene discovery programs. Competitors of the
Company include pharmaceutical and biotechnology companies both in the United
States and abroad. In addition, significant research to identify and
characterize genes is being conducted by universities, other non-profit research
institutions and United States and foreign government-sponsored entities. A
number of commercial, scientific and government entities are attempting to
sequence human genes and the genomes of other organisms. Other entities are
utilizing positional cloning to identify and characterize human disease genes.
Certain of the Company's competitors' human gene discovery programs are more
advanced than the Company's and any one of these companies or other entities may
discover and establish a competitive advantage in one or more pathogen gene
discovery programs which the Company has commenced.
The Company believes that its ability to compete is dependent, in part,
upon its ability to create and maintain advanced technology, the speed with
which it can identify and characterize the genes involved in human diseases, the
Company's ability to rapidly sequence the genomes of selected pathogens, its
collaborators' ability to develop and commercialize therapeutic, vaccine and
diagnostic products based upon the Company's gene discoveries, as well as the
Company's ability to attract and retain qualified personnel, obtain patent
protection or otherwise develop proprietary technology or processes and secure
sufficient capital resources for the expected substantial time period between
technological conception and commercial sales of products based upon the
Company's gene discovery programs.
Many of the Company's competitors have substantially greater research and
product development capabilities and financial, scientific, marketing and human
resources than the Company. These competitors may succeed in identifying or
characterizing genes or developing products earlier than the Company or its
collaborators, obtaining authorization from the United States Food and Drug
Administration (the "FDA") for such products more rapidly than the Company or
its collaborators or developing products that are more effective than those
proposed to be developed by the Company or its collaborators. Any potential
products based on genes identified by the Company will face competition both
from companies developing gene-based products and from companies developing
other diagnostics or therapeutics for the particular diseases targeted by the
Company. There can be no assurance that products developed by others will not
render the products, which the Company or its collaborators may seek to develop,
obsolete or uneconomical or result in diagnoses, treatments or cures superior to
any other developed by the Company or its collaborators, or that any product
developed by the Company or its collaborators will be preferred to any existing
or newly developed technologies.
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Uncertainty with respect to Patents and Proprietary Rights; Risk of Third
Party Claims of Infringement. The Company's commercial success will be
dependent in part on its ability to obtain patent protection on genes, or
products based on genes, discovered by it. The current criteria for obtaining
patent protection for partially sequenced genes and for genes whose biological
functions have not been characterized are unclear. The Company's current
strategy is to apply for patent protection upon the identification of a novel
gene or novel gene fragment and pursue claims to these gene sequences as well as
equivalent sequences, such as substantially homologous sequences. Where the
biological function of a gene or gene fragment has not been characterized at the
time of filing a patent application, the Company intends to supplement such
patent filing as soon as additional information with respect to the biological
function of such gene or gene fragment is available. However, there can be no
assurance that the Company will be able to obtain patent protection on such
genes or gene fragments, and even if such patents are issued, the scope of the
coverage or protection provided by any such patents is uncertain. In addition,
there can be no assurance that any patents, if issued, will provide protection
against any competitors, will provide the Company with competitive advantages,
will provide protection for any therapeutic, vaccine or diagnostic product based
on the Company's gene discoveries, or will not be successfully challenged by
others. Furthermore, others have filed and are likely to file in the future
patent applications which have not yet been published covering genes or protein
sequences similar or identical to the Company's. No assurance can be given that
any such patent application will not have priority over patent applications
filed by the Company or that any patent applications filed by the Company will
result in issued patents.
There have been, and continue to be, intensive discussions on the scope of
patent protection for both gene fragments and full-length genes. There can be no
assurance that these discussions will not result in changes in, or
interpretations of, the patent laws which will adversely affect the Company's
patent position. In addition, the United States Patent and Trademark Office (the
"PTO") issued new Utility Guidelines in July 1995 that address the requirements
for demonstrating utility, particularly in inventions relating to human
therapeutics. While the guidelines do not require clinical efficacy data for
issuance of patents for human therapeutics, the guidelines have been issued only
recently and there can be no assurance that the PTO's interpretations of such
guidelines, and any changes to such interpretations, will not delay or adversely
affect the Company's or its collaborators' ability to obtain patent protection.
The biotechnology patent situation outside the United States is even more
uncertain and is currently undergoing review and revision in many countries.
The Company has filed patent applications with respect to a number of full
length genes and corresponding proteins and partial genes of Helicobacter pylori
("H. pylori") and of Mycobaterium leprae ("M. leprae"). The Company plans to
file foreign counterparts of these United States applications within the
appropriate time frames. These applications seek to protect these full length
and partial gene sequences and corresponding proteins, as well as equivalent
sequences, such as substantially homologous sequences, and products derived
therefrom and uses therefor. These applications also identify possible
biological functions for the genes and gene fragments based in part on a
comparison to genes or gene fragments included in public databases, but do not
contain any laboratory or clinical data with respect to such biological
functions. There are certain court decisions indicating that disclosure of a
partial sequence may not be sufficient to support the patentability of a
full-length sequence. In addition, the Company is aware of published patent
applications owned by third parties relating to nucleic acids encoding several
H. pylori proteins. Patents may issue thereon that have priority over the patent
applications filed by the Company, which may limit the scope of coverage or
protection afforded by any patent, if any, that may issue to the Company with
respect to the genes of H. pylori, or may preclude the issuance of any such
patents.
A number of groups are attempting to rapidly identify and patent gene
fragments and full length genes whose functions have not been characterized, as
well as fully characterized genes. To the extent any patents issue on such
partial or full length genes, the risk increases that the potential products of
the Company or its strategic partners may give rise to claims that such products
infringe the patents of others. Such groups could bring legal actions against
the Company or its collaborators claiming damages and seeking to enjoin drug
development efforts or the manufacturing or marketing of the affected products.
If any such actions are successful, in addition to any potential liability for
damages, the Company or its collaborators could be required to obtain a license
in order to continue to manufacture or market the affected products. There can
be no assurance that the Company or its collaborators would prevail in any such
action or that any license required under any such patent would be made
available upon commercially acceptable terms, if at all. The Company believes
that there may be significant litigation in the industry regarding patent and
other intellectual property rights. If the Company becomes involved in such
litigation, it could consume a substantial portion of the Company's management
and financial resources.
In addition, publication of information concerning genes or genetic
sequences prior to the time the Company applies for patent protection based on
the full-length gene could adversely affect the Company's ability to obtain
patent protection with respect to genes identified by it. Washington University
is currently identifying genes through partial sequencing pursuant to funding
provided by Merck & Co., Inc. and depositing the partial-sequences identified in
a public database. In addition, Human Genome Sciences, Inc. recently provided
non-commercial research organizations access to human genetic sequence data
relating to between 30,000 and 50,000 genes from The Institute for Genomic
Research's Human cDNA Database.
Under the Company's government grants and contracts, the government has a
statutory right to practice or have practiced and, under certain circumstances
(including inaction on the part of the Company or its licensees to achieve
practical application of the invention or a need to alleviate public health or
safety concerns not reasonably satisfied by the Company or its licensees), to
grant to other parties licenses under any inventions first reduced to practice
under the government grants and contracts. In addition, under the Company's
government research contracts, the government has ownership rights in the data,
clones, genes and other material derived from the material furnished to the
Company by the government, and the Company has ownership rights in other
technology developed solely by the Company under the contracts. The Company is
also strongly encouraged under certain government grants to make data and
materials resulting from the research public within 180 days from the date such
data and materials are developed. If this requirement results in premature
publication of the Company's discoveries and inventions, the Company's ability
to obtain patent protection of such discoveries and inventions may be adversely
affected. The Company is also a party to a Collaborative Research and
Development Agreement ("CRADA") with the National Institutes of Health (the
"NIH") in connection with the Company's prostate cancer gene discovery program.
Pursuant to this CRADA any inventions or discoveries developed in whole or in
part by NIH researchers are the property, either solely or jointly with the
Company, of the NIH; and the Company has the right to negotiate with the NIH to
obtain an exclusive license to such inventions and discoveries. The terms of any
such license may include field of use restrictions and a royalty obligation on
the part of the Company. The NIH retains a nonexclusive, nontransferable license
to practice any such invention or discovery by or on behalf of the United States
government. The NIH is also entitled to a license, including the right to grant
sublicenses, to use for research purposes any inventions or discoveries
developed solely by the Company in the course of the research plan under the
CRADA.
Amendments to Title 35 of the U.S. Code pursuant to the General Agreement
on Tariffs and Trade, implementing the Uruguay Round Agreement Act of 1994 have
affected the period of enforceability of United States patents. United States
patents that issue from applications filed before June 8, 1995 will be
enforceable for the longer of 17 years from the date of issue or 20 years from
the earliest claimed priority date. United States patents that issue from
applications filed on or after June 8, 1995 will be enforceable for 20 years
from the earliest filing date or the earliest claimed priority date. While the
Company cannot predict the effect that such laws will have on its business, the
adoption of such laws could effectively reduce the term during which a marketed
product is protected by patents.
In addition, the Company is party to various license agreements which give
it rights to use certain technology in its research and development programs
including a license from Harvard College to use the multiplex sequencing
technology. The technology licensed to the Company by Harvard College is covered
by two issued United States patents and foreign counterpart patent applications
in certain countries, but this technology is not covered by patent or patent
applications in all countries of the world. Under its license to the multiplex
sequence technology, the Company is obligated to use reasonable efforts to
sublicense the technology to third parties if the Company's unable to provide
multiplex sequencing services to such third parties and if sublicenses such
technology would not place the company at a materially competitive disadvantage.
This provision may require the Company to make the multiplex sequencing
technology licensed by it from Harvard College available to third parties. The
Company continues to make improvements to the multiplex sequencing technology
with its own funds and funding provided under the Company's $10.4 million Genome
Sequencing Center grant from the NIH. Subject to the rights of the government
described above in inventions developed by the Company under government grants
and the rights of Harvard College described below, the Company owns any such
improvements. The Company has granted Harvard College a license to use the
improvements the Company makes to the software component of the multiplex
sequencing technology for Harvard College's internal academic purposes. In the
event Harvard College desires to grant a sublicense to any such improvements,
the Company has agreed to negotiate with Harvard College concerning the terms of
any such sublicense. There can be no assurance that the Company will be able to
continue to license technology from third parties on commercially reasonable
terms, if at all. Failure by the Company to maintain rights to such technology
could have a material adverse effect on the Company.
The Company relies on trade secrets and proprietary know-how which it seeks
to protect, in part, by confidentiality agreements with its collaborators,
employees and consultants. There can be no assurance that these agreements will
not be breached, that the Company would have adequate remedies for any breach or
that the Company's trade secrets will not otherwise become known or be
independently developed by competitors.
Dependence on Key Personnel. The Company is highly dependent on the
principal members of its senior management and key scientific and technical
personnel, none of whom is bound by a long term employment agreement or the
subject of key man life insurance. The Company's success is also dependent upon
its ability to attract and retain additional qualified scientific, technical
and managerial personnel. Significant competition exists among pharmaceutical
and biotechnology companies for such personnel, and there can be no assurance
7
<PAGE> 9
that the Company will retain its key scientific, technical and managerial
employees or that it will be able to attract, assimilate and retain such other
highly qualified scientific, technical and managerial personnel as may be
required in the future. The Company's anticipated expansion of its gene
discovery programs will require the Company to hire and train a substantial
number of additional personnel with expertise in the Company's areas of
research. The inability of the Company to successfully hire, train and retain
such personnel could have an adverse effect on the Company.
Uncertainty of Regulatory Approval. The FDA and comparable agencies in
foreign countries impose substantial requirements upon the manufacturing and
marketing of human therapeutic, diagnostic and vaccine products such as those
proposed to be developed by the Company or its collaborators. The process of
obtaining FDA and other required regulatory approvals is lengthy and expensive.
The time required for FDA and other approvals is uncertain and typically takes a
number of years, depending on the type, complexity and novelty of the product.
The Company or its collaborators may encounter significant delays or excessive
costs in their efforts to secure necessary approvals or licenses. Because
certain of the products likely to result from the Company's research and
development programs involve the application of new technologies and may be
based on a new therapeutic approach, such products may be subject to substantial
additional review by various governmental regulatory authorities and, as a
result, regulatory approvals may be obtained more slowly than for products using
more conventional technologies. There can be no assurance that FDA or other
approvals will be obtained in a timely manner, if at all. Any delay in
obtaining, or the failure to obtain, such approvals could materially adversely
affect the Company's ability to generate product or royalty revenues. Even if
FDA or other approvals are obtained, the marketing and manufacturing of
diagnostic and therapeutic products are subject to continuing FDA and other
regulatory review, and later discovery of previously unknown problems with a
product, manufacturer or facility may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market. Additional
governmental regulations may be promulgated which could delay regulatory
approval of the Company's or a collaborator's potential products. The Company
cannot predict the impact of adverse governmental regulations which might arise
from future legislative or administrative action.
Uncertainty of Pharmaceutical Pricing; Health Care Reform and Related
Matters. The levels of revenues and profitability of pharmaceutical and
biotechnology companies may be affected by the continuing efforts of
governmental and third party payors to contain or reduce the costs of health
care through various means. For example, in certain foreign markets pricing or
profitability of prescription pharmaceuticals is subject to government control.
In the United States, there have been, and the Company expects that there will
continue to be, a number of federal and state proposals to implement similar
government control. In addition, in both the United States and elsewhere, sales
of prescription pharmaceuticals are dependent in part on the availability of
reimbursement to the consumer from third party payors, such as government and
private insurance plans. Third party payors are increasingly challenging the
prices charged for medical products and services. If the Company or one of its
collaborators succeed in bringing one or more products based upon the Company's
technology to the market, there can be no assurance that these products will be
considered cost effective and that reimbursement to the consumer will be
available or will be sufficient to allow the Company or its collaborators to
sell such products on a profitable basis. Any inability of the Company or its
collaborators to sell products developed using the Company's technology on a
profitable basis would have a material adverse effect on the Company's business.
Uncertainty of Health Care Reform Measures. Federal, state and local
officials and legislators (and certain foreign governmental officials and
legislators) have proposed or are reportedly considering proposing a variety of
reforms to the health care systems in the United States and abroad. The Company
cannot predict what health care reform legislation, if any, will be enacted in
the United States or elsewhere. Significant changes in the health care system
in the United States or elsewhere are likely to have a substantial impact over
time on the manner in which the Company conducts its business. Such changes
could have a material adverse effect on the Company. The existence of pending
health care reform proposals could have a material adverse effect on the
Company's ability to raise capital. Furthermore, the Company's ability to
commercialize its potential products may be adversely affected to the extent
that such proposals have a material adverse effect on the business, financial
condition and profitability of other companies that are prospective corporate
partners with respect to the Company's proposed products.
Lack of Manufacturing, Marketing and Sales Capabilities. The Company plans
to rely significantly on collaborators for the manufacturing, marketing and
distribution of products based on the Company's gene discoveries. As a result,
the Company has made no investment in, and has no, manufacturing, marketing or
product sales capabilities or resources. To the extent the Company enters into
manufacturing, marketing or distribution arrangements with collaborative
partners, any revenues the Company receives will depend upon the efforts of
third parties. There can be no assurance that any third party will market the
products based on the Company's gene discoveries successfully or that any
third-party collaboration will be on terms favorable to the Company. If a
collaborator does not manufacture or market a product successfully, the
Company's business would be materially adversely affected. In order for the
Company to manufacture and sell its own products the Company would be required
to recruit and train qualified personnel, build or lease appropriate facilities
and obtain the necessary regulatory approvals for such facilities, all of which
would entail significant additional costs. There can be no assurance that the
Company would be able to successfully develop its own manufacturing capability
or attract and build a sufficient marketing and sales force, or that the Company
could do so in a manner and at a cost that would enable the Company to compete
successfully against other companies.
Product Liability Exposure. Clinical trials, manufacturing, marketing and
sale of any of the Company's or its collaborators' potential products may expose
the Company to liability claims from the use of such products. The Company
currently does not carry product liability insurance for any product which may
be developed under the Company's gene discovery programs. There can be no
assurance that the Company or its collaborators will be able to obtain such
insurance or, if obtained, that sufficient coverage can be acquired at a
reasonable cost. An inability to obtain sufficient insurance coverage at an
acceptable cost or otherwise protect against potential product liability claims
could prevent or inhibit the commercialization of pharmaceutical products
developed by the Company or its collaborators. A product liability claim or
recall would have a material adverse effect on the business or financial
condition of the Company.
Volatility of Stock Price. The market prices for securities of
biotechnology companies have historically been highly volatile, including the
market price of shares of the Company's Common Stock. Future announcements by
the Company or its competitors, including announcements concerning gene
discoveries, strategic collaborations, results of clinical testing,
technological innovations or new commercial products, changes in government
regulations, regulatory actions, health care reform, proprietary rights,
litigation and public concerns as to safety of the Company's or its
collaborators' products, as well as period-to-period variances in financial
results could cause the market price of the Common Stock to fluctuate
substantially. In addition, the stock market has experienced extreme price and
volume fluctuations that have particularly affected the market price for many
biotechnology companies that have often been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of the Common Stock.
Concentration of Ownership by Directors and Executive Officers. Upon
completion of the offering, the Company's directors and executive officers and
their affiliates will beneficially own approximately 28% of the Company's
outstanding Common Stock (including 2,182,700 shares issuable upon the exercise
of outstanding options held by the Company's directors and executive officers
and their affiliates which are exercisable within the 60-day period following
January 4, 1996). As a result, these shareholders, if acting together, will have
the ability to influence significantly the outcome of corporate actions
requiring stockholder approval. This concentration of ownership may have the
effect of delaying or preventing a change in control of the Company.
Impact of Shares Eligible for Future Sale and Registration Rights; Future
Dilution. All but approximately 4,400,000 shares of the Company's Common Stock
(including shares issuable upon the exercise of certain options held by certain
of the Company's directors and executive officers) will be eligible for
immediate resale as a result of having been registered for resale under the
Securities Act or otherwise. The shares not eligible for immediate resale will
remain eligible for sale pursuant to Rule 144, subject only to the volume
limitation and manner of sale restrictions of Rule 144. In addition, the shares
of Common Stock issuable upon the exercise of outstanding options have been
registered under the Securities Act, and upon exercise, will be eligible for
immediate resale. The sale of shares of the Company's Common Stock could
adversely effect the prevailing market price. To the extent the Company issues
additional equity securities in order to raise capital or pursuant to stock
options, the Company's shareholders will experience dilution of their ownership
percentage and voting power of the Company's Common Stock.
Pursuant to an agreement among the Company and certain of the Selling
Stockholders (the "Rightsholders") that currently hold an aggregate of 1,453,023
shares of Common Stock, the Company is obligated upon the request of holders of
30% of the shares of Common Stock held by the Rightsholders and subject to
certain limitations, to use its best efforts to register for public sale all
shares of Common Stock owned by the Rightsholders which the Rightsholders
request to be registered. The Company is obligated to honor such a request on
two occasions. A certain holder of a warrant (the "Warrantholder") to purchase
up to 162,500 shares of Common Stock also has the right to require the Company,
on one occasion and subject to certain limitations, to use its best efforts to
register such shares for public sale. In addition, in the event the Company
elects to register any of its equity securities under the Securities Act for its
own account or otherwise, subject to certain exceptions and limitations, the
Rightsholders, the Warrantholder and three other holders of an aggregate of
30,075 shares of Common Stock, are entitled to include certain shares in such
registration. The Company is required to bear all registration expenses incurred
in connection with the registration of shares of Common Stock held by the
Rightsholders, the Warrantholders and such other Selling Stockholders. All
selling expenses are to be borne by the holders of shares being registered.
Subject to certain limitations, the registration rights described above are
transferable.
Proposed Public Offering. In February, 1996 the Company completed the sale
of 2,000,000 shares of Common Stock in an underwritten public offering at a
per share price of $_____.
-8-
<PAGE> 10
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of each Selling Stockholder as of January
4, 1996 and the number of Shares offered hereby. The Shares are being
registered to permit public secondary trading of the Shares, and the Selling
Stockholders may offer the Shares for resale from time to time. See "Plan of
Distribution."
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned
Prior to Offering Number of
--------------------------- Shares
Name and Address Number of Being
of Selling Stockholders Shares Percent(1) Offered(2)
---------------------------------- ---------- ------- ----------
<S> <C> <C> <C>
Julian C. Baker (3) 17,586 * 17,586
Biotech 1 Investment LLC (4) 373,560 2.7% 373,560
Biotech 2 Investment LLC (4) 265,036 1.9% 265,036
Biotechnology Value Fund, L.P. (4) 447,014 3.2% 447,014
Four Partners (3) 158,245 1.1% 158,245
Grant Harshbarger (5) 18,045 * 18,045
Michael M. Harshbarger (5) 6,015 * 6,015
Martha S. Harshbarger (5) 6,015 * 6,015
Investment 10 LLC (4) 191,582 1.4% 191,582
- ---------------------------
<FN>
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Calculated based on the number of shares of Common Stock outstanding
as of February 8, 1996. As of such date, the Company had outstanding
13,797,807 in shares of Common Stock, excluding as of such date 3,391,615
shares of Common Stock issuable upon the exercise of outstanding stock
options and warrants, and excluding an additional 440,000 shares of
Common Stock issuable upon the exercise of recently granted stock options
that are subject to shareholder approval.
(2) The Common Stock being offered by each Selling Stockholders is the
only Common Stock of the Company owned by such Selling Stockholder.
(3) The address for each of Julian Baker and Four Partners is 667 Madison
Avenue, New York, New York 10021.
(4) The address for each of Biotech 1 Investment LLC, Biotech 2 Investment
LLC, Biotechnology Value Fund, L.P., and Investment 10 LLC is c/o
Grosvenor Capital Management, L.P., 333 West Wacker Drive, Suite 1600,
Chicago, Illinois 60606.
(5) The address for Grant Harshbarger is 701 Locust Avenue, New Canaan,
Connecticut 06840. The address for Michael M. Harshbarger and Martha
S. Harshbarger is c/o Healthcare Capital Investments, Inc., 37 West
222 Rte. 64, Suite 250, St. Charles, Illinois 60175. The shares offered
by these Selling Stockholders pursuant hereto were acquired upon the
exercise of warrants issued in connection with an offering by the Company
in March 1994 of 601,504 shares of Common Stock. Each such Selling
Stockholder received such warrants as designees of the placement agent
in such offering. In connection with such offering, the Company paid the
placement agent a fee equal to 5% of the aggregate purchase price of the
shares sold in the offering and issued warrants to purchase the number
of shares of Common Stock equal to 5% of the shares of Common Stock sold
in the offering.
</TABLE>
-9-
<PAGE> 11
PLAN OF DISTRIBUTION
The Shares offered by the Selling Stockholders may be sold from time to
time by the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest of the Selling Stockholders. Such sales may be made in
one or more transactions on the Nasdaq National Market or otherwise, at prices
and at terms then prevailing or at prices related to the then current market
price, or in negotiated transactions. The Shares may be sold by one or more of
the following (a) a "block" trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholders (and, if they act as agent for the
purchaser, from such purchaser), which commissions may, in certain situations,
be negotiated and in excess of customary compensation in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers, and any
other participating brokers or dealers, and certain of the Selling Stockholders
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In addition, any Shares covered by this Prospectus
which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this Prospectus.
Upon the Company being notified by a Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Shares through a block trade, special offering, exchange distribution or
secondary distribution, or a purchase by a broker-dealer as principal, a
supplemental Prospectus will be filed, pursuant to Rule 424(b) under the
Securities Act, setting forth (i) the name of each Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of Shares involved, (iii)
the price at which such Shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, and (v) other
facts material to the transaction.
The Company has agreed to pay the cost of the registration of the
Shares and the preparation of this Prospectus and the Registration Statement
under which it is filed. The expenses so payable by the Company are estimated
to be approximately $30,000.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities, including liabilites arising under the
Securities Act.
The Selling Stockholders have agreed not to sell or otherwise transfer
an aggregate of 1,083,098 of the Shares offered hereby for a period of 120 days
after __________, 1996.
The Company has agreed to use its best efforts to keep the
Registration Statement of which this Prospectus is a part continuously
effective for a period of two years from the date of this Prospectus or until
the Shares covered by this Registration Statement have been sold.
-10-
<PAGE> 12
LEGAL MATTERS
The validity of the Shares of Common Stock offered hereby will be passed
upon for the Company by Ropes & Gray, Boston, Massachusetts.
EXPERTS
The audited consolidated financial statements and schedule as of August
31, 1994 and 1995 and for each of the three years in the period ended August
31, 1995 incorporated by reference in this Registration Statement have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
-11-
<PAGE> 13
- ------------------------------------------------
No dealer, salesman, or other person has
been authorized to give any information or to
make any representations not contained in this
Prospectus in connection with the offer
contained herein and, if given or made,
such information or representation must not be
relied upon as having been authorized by the
Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication
that there has been no change in the affairs of
the Company since the date hereof or since the
dates as of which information is set forth
herein. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in
any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction.
-------------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
Available Information..................... 2
Additional Information.................... 2
Incorporation of Certain Documents by
Reference.............................. 2
The Company............................... 3
Risk Factors.............................. 4
Selling Stockholders ..................... 9
Plan of Distribution ..................... 10
Legal Matters............................. 11
Experts................................... 11
</TABLE>
================================================
1,483,098 Shares
GENOME THERAPEUTICS
CORP.
Common Stock
-----------------------
PROSPECTUS
-----------------------
, 1996
------------------
================================================
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be borne by the
Company in connection with the offering of the securities being hereby
registered.
<TABLE>
<CAPTION>
ITEM COST
---- ----
<S> <C>
SEC Registration Fee ................ $ 4,634
Blue Sky Fees and Expenses .......... 2,000
Accounting Fees and Expenses......... 5,000
Legal Fees and Expenses ............. 15,000
Miscellaneous ....................... 3,366
-------
Total .......................... $30,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is organized under the laws of The Commonwealth of
Massachusetts. The Massachusetts Business Corporation Law provides that
indemnification of directors, officers, employees, and other agents of another
organization, or who serve at its request in any capacity with respect to any
employee benefit plan, may be provided by the corporation to whatever extent
specified in its charter documents or votes adopted by its shareholders, except
that no indemnification may be provided for any person with respect to any
matter as to which the person shall have been adjudicated in any proceeding not
to have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation. Under Massachusetts law, a corporation can
purchase and maintain insurance on behalf of any person against any liability
incurred as a directors, officer, employee, agent, or person serving at the
request of the corporation as a director, officer, employee, or other agent of
another organization or with respect to any employee benefit plan, in his
capacity as such, whether or not the corporation would have power to
itself indemnify him against such liability.
The Company's Articles of Organization provide that its directors shall
not be liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except to the extent that the
exculpation from liabilities is not permitted under the Massachusetts Business
Corporation Law as in effect at the time such liability is determined. The
By-Laws provide that the Company shall indemnify its directors and officers to
the full extent permitted by the laws of The Commonwealth of Massachusetts. In
addition, the Company holds a Directors and Officers Liability and Corporate
Indemnification Policy.
ITEM 16. EXHIBITS
The following is a list of exhibits filed as a part of this registration
statement.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 -- Restated Articles of Organization.(1)
3.1.1 -- Amendment dated January 5, 1982 to Restated Articles of Organization. (2)
- -----
3.1.2 -- Amendment dated January 24, 1983 to Restated Articles of Organization. (3)
- -----
3.1.3 -- Amendment dated January 17, 1984 to Restated Articles of Organization. (4)
- -----
3.1.4 -- Amendment dated December 9, 1987 to Restated Articles of Organization. (5)
- -----
3.1.5 -- Amendment dated January 24, 1994 to Restated Articles of Organization. (6)
- -----
3.1.6 -- Amendment dated August 31, 1994 to Restated Articles of Organization. (6)
- -----
3.2 -- By-Laws of the Company. (1)
- ---
3.2.1 -- Amendment dated October 20, 1987 to the By-laws. (7)
- -----
3.2.2 -- Amendment dated October 16, 1989 to the By-laws (8)
- -----
4.1 -- Specimen Certificate for shares of Common Stock, $.10 par value of the Company. (9)
- ---
5 Opinion of Ropes & Gray.(9)
23.1 Consent of Ropes & Gray (contained in its opinion filed as Exhibit 5 hereto).(9)
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included in the signature page of this Registration Statement).(9)
<FN>
- ------
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1 (No.
2-75230) and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended February 27, 1982 and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended February 26, 1983 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended February 25, 1984 and incorporated herein by reference.
(5) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended November 28, 1987 and incorporated herein by reference.
(6) Filed as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1994 and incorporated herein by reference.
(7) Filed as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1987 and incorporated herein by reference.
(8) Filed as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1989 and incorporated herein by reference.
(9) Previously filed with the Commission on January 10, 1996.
</TABLE>
II-1
<PAGE> 15
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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 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 provisions described under "Item 15 -
Indemnification of Directors and Officers" 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, 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 the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-2
<PAGE> 16
<PAGE> 61
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of
Massachusetts, on this 12th day of February, 1996.
GENOME THERAPEUTICS CORP.
By: /s/ FENEL M. ELOI
-----------------------------
Fenel M. Eloi
Vice President, Treasurer
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ROBERT J. HENNESSEY* Chairman of the February 12, 1996
- ------------------------ Board of Directors,
Robert J. Hennessey President, and Chief
Executive Officer
(Principal Executive
Officer)
/s/ FENEL M. ELOI Vice President, February 12, 1996
- ------------------------ Treasurer and Chief
Fenel M. Eloi Financial Officer
(Principal Financial
and Accounting Office
/s/ ORRIE M. FRIEDMAN* Director February 12, 1996
- ------------------------
Orrie M. Friedman
/s/ PHILIP LEDER* Director February 12, 1996
- ------------------------
Philip Leder
/s/ LAWRENCE LEVY* Director February 12, 1996
- ------------------------
Lawrence Levy
/s/ DONALD J. MCCARREN* Director February 12, 1996
- ------------------------
Donald J. McCarren
/s/ STEVEN M. RAUSCHER* Director February 12, 1996
- ------------------------
Steven M. Rauscher
*By: /s/ FENEL M. ELOI
--------------------
FENEL M. ELOI
Attorney-in-Fact
</TABLE>
II-3
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our reports dated October 4, 1995 (except with respect to the
matter discussed in Note 10(b) as to which the date is December 6, 1995) and to
all references to our Firm included in or made part of this Registration
Statement.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
February 9, 1996
